Patrick Slams GOP Leadership on the Business Tax
Wed June 18, 2008 12:26 am

The Houston senator and talk radio host, who played a prominent role in crafting the new Republican party platform, issued a release today that criticized the Republican leadership for not adopting his plan to let businesses delay filing and paying the business margins tax that the Legislature passed during the 2006 special session. Patrick proposed allowing the Comptroller to borrow money from the Rainy Day Fund. These and other funds in state government "could have replaced the franchise tax dollars until the payments were filed later in the year."

Media folks are often criticized for looking at the politics of an issue rather than the substance, but I'm going to go down that well trod path nevertheless. It is highly unusual for a legislator, even one with as much of a reputation as a maverick as Patrick, to criticize the state leadership of his own party. The last example of this kind of an attack that I can recall was that of another maverick legislator, Ron Wilson, who criticized fellow Democrat Ann Richards for her opposition to legislation authorizing the possession of handguns and backed a referendum on the issue. Richards' veto of the proposed referendum played a role in her defeat by George W. Bush in 1994. Make no mistake about it: Patrick's criticism of Rick Perry and David Dewhurst will be remembered if Kay Bailey Hutchison (who is also critical of the tax) -- or Patrick himself -- challenges Perry or Dewhurst in the 2010 Republican primary.

Patrick was able to persuade the state GOP to adopt a plank in the platform calling for repeal of the business tax. This puts the party squarely at odds with its own governor and it calls into question the party's support for public schools (again), because the business tax allowed the Legislature to reduce its reliance on the property tax to fund education -- something the Texas Supreme Court had said was necessary in order to keep the schools open.

Here is the full release. This is not the last time we will hear from Patrick about repealing the business tax.

IT'S RAINING TAX DOLLARS IN AUSTIN

State leadership refuses to assist businesses facing monumental franchise tax increase.

AUSTIN – Senator Dan Patrick developed a plan to give businesses more time to calculate and file their franchise taxes. Although this plan would have cost the state nothing, and did not require the gathering of legislators in a special session or for budget execution, state leadership refused to help the business community.

"Even though my plan could have given businesses more time to pay their taxes without requiring any state expenditures, the leadership refused to do anything," stated Senator Patrick. The Texas Constitution currently allows the Comptroller to borrow funds from the Rainy Day Fund to cover general revenue shortfalls. These funds that currently sit in state coffers could have replaced the franchise tax dollars until the payments were filed later in the year.

"The State of Texas has enacted the largest business tax increase in its history. I am especially concerned about the impact of this tax on small and mid-sized businesses," said Senator Patrick.

At the recent Texas Republican Convention, Senator Patrick submitted language ultimately adopted into the platform of the Texas Republican Party that calls for the repeal of the revised franchise tax. "The Republican party has always been, and must once again become, the party of freemarket philosophy and capitalistic economy. We have lost our way with this new business tax," stated Senator Patrick.

Senator Patrick is developing a plan to replace the current franchise tax system. He is working closely with industry groups and like-minded legislators to prepare for the upcoming legislative session.

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