By J. Lyn Carl, GalleryWatch.com
Austin, TX –
"In my mind, it's still alive," said Rep. Jim Keffer (R-Eastland) of HB 3, moments after he expresses his and fellow House members' "shock and utter disbelief" regarding a letter released today by State Comptroller Carole Keeton Strayhorn.
Strayhorn's letter to Keffer, author of HB 3, and House Speaker Tom Craddick (R-Midland) noted that the bill "changed substantially" during floor debate, and as passed does not achieve a balance between state revenue raised and the proposed local school property tax reduction.
Strayhorn claims that in the first year of implementation (FY 2006), the bill would raise $2.8 billion in new taxes while providing no property tax relief. In 2007, the first year of property tax relief, says the comptroller, the property tax reduction of $5.8 billion exceeds the offsetting increase in state revenues of $4 billion by $1.8 billion. She claims that in 2008, the property tax reduction exceeds state revenue by $2 billion and increases by $2.3 billion in 2009 and continues to grow thereafter.
Strayhorn lays the blame on Section 2 of the bill, which deals with business taxes. In giving taxpayers a choice between a payroll tax base and a franchise tax base, the bill does not provide for a minimum tax. That, says the comptroller, will allow taxpayers a way to "plan around the tax" as they currently do in the franchise tax.
Keffer said at a press conference today that he wonders if the comptroller is "inept...purposely misleading the public...or if this is just plain politics."
He called her letter and announcement that the bill does not achieve balance and is billions short "a complete surprise." He said bill proponents spent a complete weekend at the Capitol "working on and improving" amendments to Article 2 of the bill. He said during those deliberations both members of the comptroller's staff and the Legislative Budget Board (LBB) were there. He said the comptroller's staff told them that the bill was "revenue neutral" and that "they assure us it was balanced."
"Here we are a week later," said Keffer, with the comptroller saying it is not balanced. "How can that be?" He said the bill was only brought to the floor because the comptroller and the LBB "blessed it."
He said he does not know "what kinds of games" are being played, or what the underlying motive is for Strayhorn to now send a copy of her letter to the media and accuse the House, the Ways and Means Committee and the House Speaker of having "a bad bill."
Other members of the House also decried the Strayhorn late announcement. Rep. David Swinford (R-Dumas) said House members were "assured" the bill was revenue neutral. "We would not have made that assumption on our own," he said.
The House members' hands are "tied when the calculator we rely on changes its mind," said Rep. Mike Villarreal (D-San Antonio). He said the comptroller led House members down a path one day "only to change her mind the next day."
"The most difficult thing we do is pass tax bills," said Rep. Warren Chisum (R-Pampa). "I've seen many fall apart on the floor." He said for the comptroller to change her mind "after the fact" is "unacceptable." He noted the legislature cannot do its business without the cooperation of the comptroller. "She should be ashamed," said Chisum.
Keffer described the Comptroller's letter as "extremely negative on a process that we believe in." He said he is in shock and cannot believe "the cooperation is so negligible out of that office." "I am disappointed and disheartened by the announcement that Comptroller Strayhorn issued regarding HB 3," said Craddick. "We were all completely taken aback by her actions today." He further stated that once the bill is passed, it will be a " sound property tax reduction bill and it will be up to the Comptroller's office to collect the taxes to fund this relief.
"Maybe she is playing politics or maybe she and her staff are inept. Either way, I assure you that we stand by this bill. The Comptroller's office certified it and we are going forward with HB 3 as is."