HB 2 Debate

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This is the bill to finance the property tax cut.

Coleman questions Chisum –Back in 06, we raised three taxes to pay for the bill, cigarettes, used cars, business margins. How much did that raise? Chisum says $8B. Coleman–How much is the tax cut? Chisum says $14.1B. Coleman–Where does the difference come from? Chisum says GR. Coleman makes the point that the tax bill was not a tax swap, as it was described, but really “deficit spending.”

One thing about Chisum. The more you paint him into a corner, the more confident he sounds. No grudging admissions. “Absolutely,” he’ll say, or “That’s right.

Now Coleman wants to know, are the priorities of the state going to be met, other than tax relief? Enrollment growth in pub ed, CHIP, Medicaid. You have financed the tax cut by taking surplus that could have been used to meet those priorities. Chisum says we have $5.2B in surplus that was not appropriated by the LBB.

So, Coleman says, we did not pay for the tax cut in perpetuity, GR will to be used. Was that always your intention? Yes, says Chisum.

It’s hard to remember from one session to the next which cup the pea is under. I distinctly remember lots of rhetoric about this being a tax swap, not a tax increase. But I also remember a business lobbyist telling me that the fiscal note had the cost of the tax cut to GR as $3 billion a year. That’s $6B. Surely Coleman knew this. Maybe there is more than one pea in this shell game.

Then Dunnam had questions: Do you know how much of a teacher pay raise will be funded, our teachers are still below the national average? Will you still fully fund textbooks? How much money will there be to add additional children to the CHIP rolls? This is just a tax swap, right? State money for local property tax money. There’s no new money for the classroom, isn’t that the case? Chisum–There will be more money than the base bill.

Why are we doing this now? Dunnam wants to know. What’s the rush?

This seems to be a frequent question by Democrats this session.

Chisum’s answer to Why now? is that if we don’t pass HB 2, we can’t know how much there is left to spend in HB 1, the Appropriations bill. We’d have a huge hole in the budget. Hochberg perseveres: Why do HB1 and HB 2 separately? (No good answer to this question. Chisum says, We have never stood before you with a $14B tax cut. We have to get it off the table. Hochberg fires back: But you could have a line item in HB1 that would be HB2, right? Chisum concedes that it is.

This is pretty typical of how things have been going since 03. The Democrats win the debates, the Republicans win the votes.

The point the Democrats are making is that all the priorities of the state should be considered at the same time. For example, Yvonne Davis says, Doesn’t doing it this way limit our ability to address the needs that state agencies have identified? Chisum says no, we have the same $5.2 billion to spend. But of course it limits their ability to maneuver on the floor. For example, if all the appropriations were in the same bill, the Ds could take a leaf from Dan Patrick’s book and suggest that the property tax rate be higher than $1, requiring less reimbursement to school districts and thereby leaving more money for teachers, CHIP, Medicaid, and so on.

Burnam raises a point of order against the bill, the ever-handy error in the bill analysis. Craddick overrules without the courtesy of an explanation or a “respectfully” overruled.

Hochberg has just made a parliamentary inquiry. As he reads the statute concerning the LBB and the spending cap, the LBB can’t recommend appropriations that exceed the spending limit they adopt. So why are we here without an official vote of the LBB to exceed the spending cap? This is a great question. Of course, we know the true answer to Hochberg’s question is that Dewhurst didn’t want to vote to suspend the spending cap, because he’s worried it will come back to haunt him in his race for governor. Craddick would have done it in a heartbeat.

Hochberg’s question is more than theoretical. If the LBB has to vote, this may have to go back to square one.

They are now “waiting for amendments.” This has been going on for awhile and shows no sign of forward progress, so I’ll just post this.

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