Why Did Texas Democrats Support a Measure that would Erase Billions from State Budget?
State Senator Jane Nelson, a Flower Mound Republican who chairs the powerful Finance Committee, is prepared to take Texas over a fiscal cliff with a proposal that could eventually abolish one of the state’s main sources of revenue.
A handful of Senate Democrats are right there with her, ready to jump. And they’re fairly reluctant to say why.
In March, four Democratic senators — Juan Hinojosa of McAllen, Eddie Lucio Jr. of Brownsville, Carlos Uresti of San Antonio and Royce West of Dallas — threw their support behind Nelson’s Senate Bill 17. Despite potentially blowing a multi-billion dollar hole in the state budget within a few years, the legislation was only discussed for 20 minutes in Nelson’s committee. On the Senate floor, there was no debate, and the bill passed on a 23-7 vote.
Under Nelson’s bill, the state’s main business tax would be slashed when the Texas economy performs relatively well. (For you wonks, the specific formula is that the state would set aside for franchise tax cuts half of all general revenue-related funds that exceed 5 percent growth over the previous biennium.) For years, many legislators have been itching to do away with the unpopular franchise tax, one of the state’s largest sources of revenue. But there isn’t the political will to do it all at once. Instead, SB 17 kills the tax incrementally and punts the fiscal pain to future legislatures. As Senator Van Taylor, R-Plano, put it in a Senate Finance Committee hearing, Nelson’s bill puts the franchise tax on a “glide path to death.”
Read more: https://www.texasobserver.org/texas-democrats-support-measure-erase-billions-state-budget/