$8 billion in YOUR taxes unspent in state budget; there's your highway money!

In a stunning paradox, a story on the front page of the Dallas Morning News opposite the story on the private toll moratorium going to the Governor’s desk, shows the total disconnect happening in public policy. You’ve got Perry using the starved gas tax as an excuse to sell our highways to the highest bidder (like third world countries) juxtaposed with record surpluses and his recommendation that the excess surplus returns to the taxpayers in tax relief. No reporter, no editor even caught the hypocrisy. It doesn’t take a rocket scientist to put two and two together and BA BING…you apply that unspent $8 billion to the starved gas tax you’ve raided for 20 years and it solves a MAJOR transportation issue while precluding the need for widespread tolling (and the need to raise the gas tax) and preserves the integrity of the public highway system. Local Hero Commissioner Lyle Larson has railed on the Legislature about this and has asked the Governor repeatedly to return the STOLEN money from this dedicated fund.

May 2, 2007
Perry pushes for more property tax relief

House and Senate leaders have been working behind closed doors to work out a final draft of the budget, negotiating the differences between the two chambers. Both houses have allocated money for the final phase of the one-third reduction in property tax rates that was enacted last year, but neither included an additional $2.5 billion that Perry asked for in January.

“Both the Senate and the House budgets leave roughly $8 billion sitting on the table,” Perry said. “I think it’s reasonable to take a third of that, give it back to the people … so they can spend it, they can deal with it as they see fit.”

Lt. Gov. David Dewhurst, who leads the Senate, called the governor’s proposal “imprudent.”

“I can’t believe that he said that because he knows as well as all of us that we’ve worked real hard this year to set aside the money to provide the local school property taxes,” Dewhurst said.

Asked if there were any way to give an additional $2.5 billion in property tax relief as Perry had requested, Senate Finance Chairman Steve Ogden said it wouldn’t be possible.

“The governor’s entitled to say whatever the governor thinks,” Ogden said.

Budget writers have set aside about $8 billion for future use. Some of that money would be put in the state’s so-called Rainy Day Fund and part of it would be set aside to fund the already-promised property tax cuts in the next two-year budget.

The one-third rate reduction that lawmakers enacted last year as part of a court-ordered overhaul of the state’s school funding system will cost about $14 billion every two years. A new business tax was enacted to replace the lost property tax money in the state’s education budget, but that doesn’t cover the $14 billion price tag of the tax cuts.

This year, lawmakers have a record budget surplus to close the gap, but state leaders can’t count on another surplus to bail them out in future budgets. That’s why lawmakers set aside some money to cover the difference in the 2010-11 state budget.

“We’re going to go cut property taxes by $14 billion — we’ve got to make it up with something,” Ogden said.

House Speaker Tom Craddick, who presides over the House, said many House lawmakers would like to give more property tax relief, and said he expects the chamber will get an opportunity to vote on such an effort, though it might be a lower amount.

Craddick also has been adamant that money be left on the table for future tax cuts.

But Perry said that money should be put back into the Texas economy.

“I am a fiscal conservative and I think it’s better for the people of the state of Texas to have the money in their pocket than it is for government to have it in an account,” Perry said. “Texans by and large know how to spend their money better than government does and to leave it sitting in an account doesn’t particularly make good economic sense to me.”

Further complicating matters, Comptroller Susan Combs has told lawmakers that the new business tax won’t raise as much money as they originally anticipated.

“I want to close all the loopholes so the business tax works the way it was intended,” Ogden said. “Then, I think the discussion on whether there should be additional tax cuts or not is appropriate.”

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