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Texas Legislature Reconvenes with $9 Billion Boost in Revenues

-Could Still Fall Short Addressing Crises, Surging Population

Texas’ top money man, Comptroller of Public Accounts Glenn Hegar, announced this week that state lawmakers will have $9 billion more to build the state’s next two-year budget. That doesn’t mean, however, that important business sales and franchise tax exemptions are safe from being watered down or eliminated. Legislative leaders’ promises to improve public schools and fix the state’s broken Robin Hood school property tax scheme alone could suck up all the new money and then some.

With major crises continuing to unfold in the state’s health and human services programs and prison system, lawmakers will be challenged to fulfill the only responsibility required of them by the Texas Constitution before the session ends May 27. Barring a special session which only the Governor can call, they won’t reconvene again until January 2021.

Texas broadcasters should be prepared to defend the broad range of tax policy that TAB has secured over the past several years that put our industry on an equal footing with other industries. The first opportunity to do so is at TAB’s Legislative Day conference on Jan. 22 in Austin. The event concludes with a luncheon where broadcasters are seated with their local lawmakers to discuss local issues without distracting speeches.

All industry groups are watching closely for potential efforts to draw down additional revenues by reducing or eliminating sales and franchise tax exemptions and exclusions. The Comptroller just a couple months ago released an updated report showing how much revenue each exemption costs the state; the total is $59.8 Billion.

Partisan Shift Could Fuel Compromises
Though Republicans still control the Legislature, the blue wave that swept the General Election extended to the Texas House where 12 Democrats flipped seats held by Republicans for what is now an 83-67 split. The D’s flipped two seats in the Texas Senate, resulting in a 19-12 split, leaving the R’s with no margin for error as Senate rules require 19 votes to bring up legislation for debate.

Many of the wins caught observers by surprise, hence all industry groups’ defensive posture when it comes to tax and general state policy issues.

Generally, though, the shift likely means the most extreme elements of the social agenda advanced last session – transgendered Texans’ access to bathrooms, further family planning restrictions – won’t gain much traction which could help foster a more convivial atmosphere under the dome.

What to Do with the “Rainy Day” Fund?
That’s the question Hegar also asked again in the new biennial revenue estimate.  In 2017 the Comptroller convinced lawmakers to change the state law that required his office to keep billions of dollars in the state’s Economic Stabilization Fund (ESF), commonly known as the Rainy Day Fund, in non-interest earning financial instruments.

Now he’s proposing using a portion of the ESF to create the Texas Legacy Fund which would be used to establish an endowment that could generate more revenue to address Texas’ long-term financial obligations. The measure would retain a healthy balance in the ESF to ensure the state can protect its finances in hard times.


Questions? Contact TAB’s Oscar Rodriguez or call (512) 322-9944.

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