Following a legislative session in which lawmakers debated whether to cut property taxes, business taxes, sales taxes or a combination of the three, Lt. Gov. Dan Patrick signaled an interest earlier this week, in continuing the conversation.
Patrick issued several interim charges to the powerful Senate Finance Committee aimed at rethinking most of the state’s tax revenue system. He asked the committee to study the property tax system, including appraisals, as well as the possibility of phasing out the business franchise tax — a concept the committee discussed during this year’s session before opting for a smaller tax cut.
Patrick also wants the committee to consider the state’s current suite of sales tax holidays. He notably did not request the committee look at cutting the sales tax rate, a proposal that got the House’s endorsement during the session but failed to draw enough support in the Senate.
“This list places a strong emphasis on the principles that have helped our economy succeed — fiscal discipline and responsible tax policy,” Senate Finance Chairwoman Jane Nelson, R-Flower Mound, said. “We will have a robust discussion of these issues over the interim period with the goal of finding solutions to better meet our needs, strengthen our economy and craft a responsible budget.”
After months of haggling, lawmakers approved a $3.8 billion tax cut deal in May that included property tax relief and a reduction in the franchise tax rate paid by businesses. The property tax relief requires voters approving an amendment to the state constitution in the Nov. 3 election.
Patrick also asked the committee to look again at the constitutional spending cap, which guides how much future state budgets can grow. The Senate passed legislation tightening the spending cap this session, but differences with House leaders on the measure led to its demise.
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