Chad’s Morning Brief: Texas Senate Leaders Propose Billions in Tax Cuts, Local Control Fight Brewing Between Elected Officials, and Other Top Stories
Here is your Morning Brief for February 25th, 2015.
Join The Chad Hasty Show from 8:30-11am at Premeir Sportsplex located at 90th and Memphis.
Tax Cuts Proposed
Lt. Governor Dan Patrick on Tuesday announced three pieces of legislation that if passed, would provide tax relief to homeowners and businesses in Texas. According to the Texas Tribune, Senate Bills 1,7, and 8 would combine for $4.6 billion in tax relief.
About $2.5 billion of that total would go toward increasing homestead exemptions from school property taxes. Currently set at $15,000, they would instead be 25 percent of the median home market value in the state. In 2016, when the median home market value is projected to be $134,500, that could mean as much as a $33,625 exemption.
Another $1.5 billion would stem from reducing the state's franchise tax on businesses by 15 percent.
State Sen. Jane Nelson, the Flower Mound Republican who chairs the upper chamber's finance committee, is carrying both of those measures, along with a resolution that would send a constitutional amendment to voters to enact the property tax break. Nelson said the resolution would also prohibit any future sales tax on real estate.
Yet another proposal, from state Sen. Charles Schwertner, R-Georgetown, would allow more small- and medium-sized businesses to qualify for exemptions from the franchise tax. It exempts businesses with a total revenue of $4 million or less from paying the tax, which Schwertner said would apply to 52 percent of the businesses in the state.
While tax cuts seem very possible during this session, not every Republican is ready to sign on just yet. State Senator Kevin Eltife of Tyler told the Tribune that before Senators commit to tax cuts, they have to deal with what he sees has other problem areas.
There are also other lawmakers that are concerned with education spending and that the state may not be spending enough.
While many in the Senate have embraced the tax cuts, it remains to be seen how the House would react.
The Fight Over Local Control
It seems as though more and more lawmakers are talking about local control these days. Even Democrats and big spending Republican city officials are talking about local control, though they use the term differently than many small government types.
The Dallas Morning News wrote about the fight over local control yesterday and the fact that there are lawmakers both statewide and locally that are on both sides of the issue.
But Abbott, in a speech before his inauguration, hammered away at cities for “unchecked overregulation” and argued that they’re causing Texas to be “California-ized.” He pointed specifically to shopping bag ordinances — such as the one Dallas just implemented — and Denton’s fracking ban.
Patrick’s push to effectively reduce growth in the amount of property tax revenue cities can collect has local budget-writers concerned. Supporters say that effort will provide Texans with long overdue property tax relief.
Some lawmakers are echoing the state leaders, even while trying to be diplomatic in addressing the cities they represent.
“Local control generally sounds good until you realize that some cities are out of control,” said Rep. Jeff Leach, R-Plano.
The tougher stance on local control takes aim at Texas’ home-rule cities — a group that includes every city in the state with more than 17,500 people, according to the Texas Municipal League.
Such cities have ample discretion to pass ordinances, so long as they don’t conflict with state law and the Texas Constitution.
But the property tax push would have a broader impact on cities and counties of all sizes.
If you look at it from the Governor's point of view, it makes sense. The State gives power to the cities but at times the cities need to be reigned in when liberties are infringed on. Right now it seems the only reason local officials are upset is because they would be losing out on money. I'm okay with that.
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