By Jennifer Bendery, GalleryWatch.com
Austin, TX – Comptroller Carole Keeton Strayhorn today proposed a new plan called "Returning the Favor" to divide any future state budget surpluses into a rebate for taxpayers and a boost for the state's Rainy Day Fund. Strayhorn also endorsed a tougher spending cap proposal, and said both concepts are necessary fiscal discipline tools for Texas' state budget.
"Our last Sales Tax Holiday saved Texas families about $30 million. If we'd had 'Returning the Favor' and tax limitation in place two years ago, Texas families would have saved about 20 times that amount - each of the last two years," Strayhorn said. "In times like these, just imagine the benefit 'Returning the Favor' would have been for Texas families, Texas merchants, and the Texas economy."
"It may seem unusual to be talking of returning tax dollars to their rightful owners "But today's headlines mask the fact that just two years ago, the Legislature started out with a surplus of nearly $3 billion and then spent every dime available to boot."
Strayhorn's "Returning the Favor" plan would take several steps to implement. First, each January at the beginning of a legislative session, the comptroller's revenue estimate would not only predict how much revenue the state could expect in the upcoming biennium, but would also note any surplus that would be remaining at the end of the current biennium.
At the end of the biennium, the surplus would be split in half between the Rainy Day Fund and the "Returning the Favor" fund. The "Returning the Favor" dollars will finance a new sales tax holiday, with an expanded list of items eligible for tax savings, during the following two Christmas seasons. Its length would be determined by the extent of available surpluses.
The plan would require a constitutional amendment to proceed. When asked if it seemed contradictory to focus on building up a Rainy Day Fund instead of using the fund during tight economic times, Strayhorn said, "Absolutely not. The Rainy Day Fund is there for when we have a major crisis. What we have now is not a major crisis; it's a serious budgetary challenge. The first thing we need to do now is cut, cut, cut." Strayhorn has been a consistent proponent of toughening state spending guidelines, beginning with her warning two years ago that, in spite of beginning the session with a $3 billion surplus, the last legislature had crafted its budget in such a way that created a shortfall for this legislature.
Strayhorn also endorsed Rep. Carl Isett's (R-Lubbock) legislation that would expand the state's current spending cap to cover all state generated revenues and raise the bar to break the spending cap form a simple majority to a two-thirds vote (although Strayhorn advocates requiring a four-fifths vote).
Today's proposal comes after Strayhorn's recent unveiling of 179 recommendations that she says would provide savings of $3.7 billion in all funds - with $1.7 billion of that in general revenue - all with no new taxes.