Fri April 17, 2015 3:13 pm By R.G. Ratcliffe

Texas Governor Greg Abbott today released his income tax return for 2014, and it is something of a shocker. Abbott paid just $1,752 in taxes on $131,251 in adjusted gross income.

The low tax payment was because he had paid $51,778 in property taxes on his home in Austin and $44,257 in mortgage interest. His mortgage interest was almost ten times as much as the $4,495 in charitable donations he made.

His office tried to put a positive spin on the governor’s multimillion dollar home, though, by claiming his state, federal and local tax burden was 39.96 percent of his income.

 

Fri April 17, 2015 12:03 pm By R.G. Ratcliffe

Michael Quinn Sullivan is using his Empower Texans influence machine to push the Senate’s property tax cut plan over the House sales tax plan, but there also is a connect the dots exercise involving Sullivan that Speaker Joe Straus’ Republicans might want to play before a new state ethics bill comes up next week.

Sullivan’s influence in House politics is indisputable. He has networked various tea party groups to defeat some entrenched Republicans, especially those who support Straus, in primary elections. During the 2013 session, a so-called dark money bill to dampen Sullivan’s financial influence was vetoed by then-Governor Rick Perry, and Sullivan has had an on-going fight with the Texas Ethics Commission over whether he should register as a lobbyist a fight prompted by House Republicans.

So it should come as no surprise that Sullivan has cranked up his network on behalf of Lieutenant Governor Dan Patrick’s property tax cuts. Sullivan gives some faint praise to the House plan, but he’s really pushing the Senate approach. 

With the Senate having already passed out a tax relief package, one is left to wonder why the Republican-controlled House didn’t take up that measure – even as a base from which to swap out property tax relief for sales tax relief. It would have sped up the process to ensure the legislative clock doesn’t run out on tax relief.

On the Empower Texans web site, Sullivan posted the transcript of a telephone call that obviously is targeting voters in Republican districts where the House member voted in favor of electing Straus as speaker.

This is with Empower Texans with an important call to action for taxpayers. Lieutenant Governor Dan Patrick and the conservative Senate have so far passed a bold agenda, including spending limits, tax relief and gun rights. But liberal Republican House Speaker Joe Straus refuses to do his constitutional duty and refer these hundreds of bills to House committees. Press 1 to be connected with your state representative – who voted to put Straus in office. It’s time for Straus to stop obstructing the conservative agenda of Texas taxpayers. So press 1 to tell to demand that Joe Straus immediately refer the hundreds of bills passed by the Senate. 

Now, for the connect-the-dots exercise to the proposed ethics bill. The House is preparing to vote on a bill to remove ethics investigations of legislators and statewide elected officials from the Travis County public integrity unit and give the duty to the Texas Rangers. Similar legislation already has passed the Senate. 

The House bill had been scheduled for debate Thursday, but got temporarily derailed on a point of order. But hours before the debate, Texas Department of Public Safety Deputy Director Robert J. “Duke” Bodisch Sr. sent House members a copy of a letter that DPS Director Steve McCraw sent to Travis County prosecutors critical of them for not completing an criminal investigation of a DPS no-bid contract from 2006. 

Aside from being one of two deputy directors at DPS under McCraw, Bodisch also is the No. 2 man in charge of the Texas State Guard, an unarmed official state militia that does search and rescue and is activated in disasters.  From March 2010 until September 2013 Major Michael Quinn Sullivan was a public affairs officer for the Texas State Guard, and his duties included giving some internal affairs coverage to Bodisch.

If you take a look at the command-and-control structure of the Texas Department of Public Safety, you’ll see Bodisch does not have direct control of the Texas Rangers, but is on an equal footing with deputy director in charge of law enforcement operations. Bodisch in the past was a political operative, working in the 1990s doing opposition research for several statewide Republican candidates. He also worked in the administrations of former governors George W. Bush and Perry.

All of this probably is no more than coincidence and is just proof that Austin is one very large small town. But with a Texas State Guard connection between Major Sullivan and DPS Deputy Director and Major General Bodisch, Straus’ Republicans might want to think twice about whether the Texas Rangers will be less political than the Travis County district attorney.

Thu April 16, 2015 1:28 pm By R.G. Ratcliffe

Texas Department of Public Safety Director Steve McCraw today proved he can be every bit as political on ethics issues as any Travis County district attorney.

Just hours before the House is set to debate a bill to take public integrity investigations away from the Travis County Public Integrity Unit and transfer that authority to McCraw’s Texas Rangers, McCraw distributed to legislators a letter he sent to the Travis prosecutors demanding they conclude an investigation into a no-bid contract at his agency.

If power to investigate the contract had been under McCraw, as proposed by HB 1690, he could have ordered the Texas Rangers to stand down a long time ago.

I understand the frustrations of Republican officeholders at the prospect of a complaint against them being investigated by a Democratic district attorney and heard by a grand jury likely made up of partisan Travis County Democrats. But moving investigations to the Texas Rangers will be no less partisan. McCraw worked for former Governor Rick Perry prior to taking charge of the state police agency in 2009. The entire Public Safety Commission is appointed by the governor. And McCraw’s chief deputy, Robert J. “Duke” Bodisch Sr., was an opposition researcher in the mid-1990s for Republican statewide political campaigns.

McCraw’s letter critical of the Travis County public integrity unit was delivered to legislators and their staffs under Bodisch’s signature.

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Thu April 16, 2015 3:25 am By Erica Grieder

On Tuesday, on a 30-1 vote, the Senate passed a budget for the forthcoming 2016-17 biennium. Their version, which proposes $211.4 billion in all-funds spending for the two-year cycle, is almost two billion dollars larger than the House’s, which passed on April 1st, but the spending breakdown is similar, and broadly sound. The most notable and controversial budget-related discrepancy between the chambers has to do with tax cuts. The House is calling for $4.9 billion in biennial tax cuts, as laid out by Ways and Means Chair Dennis Bonnen: a 25 percent cut in the franchise tax rate plus a cut in the state sales tax rate. The Senate proposal, which works out to $4.6 billion, proposes franchise tax cuts and property tax relief.

Both proposals are ominous from a certain perspective. Democrats in both chambers have argued that the money would be better used for critical priorities like public education, higher education, roads, or water. And even Republicans have agreed; Kevin Eltife, in the Senate, has been the most vocal skeptic of the session’s tax-cut fever, arguing that it would be better to use the revenue available to tackle the state’s fiscal obligations, such as public pension liabilities. As I’ve written before, I’m with the skeptics; Texas already has one of the lowest average state tax burdens (and one of the lowest average tax rates) in the country, and one of the lowest rates of state spending per capita. We could always aspire to spend less, like Wyoming, but we have five million children enrolled in public school, and their enrollment is closer to five; more concretely, no one has proposed $4.7 billion in biennial spending cuts, or admitted that they’re happy to let their counterparts in the future take the blame for proposing the tax hikes that will be inevitable in the absence of such cuts.

On the other hand, if you’re in the “death to all taxes” camp, the two proposals may seem equally appealing, because they’re about the same size; as Senate Finance Chair Jane Nelson put it, “we’re both right.” And Governor Abbott is apparently similarly agnostic. Back in January, he threatened to veto any budget that didn’t include some business tax relief, and in his state of the state he specifically called for $2.2 billion in property tax cuts. But yesterday, as R.G. wrote, he offered the clarification that he wouldn’t necessarily veto a budget that doesn’t include property tax relief, and indicated that he is open to considering either tax-cut package.

In my view, this was an unnecessary clarification on Abbott’s part. He had never threatened to veto a budget that doesn’t include property tax relief and—state of the state notwithstanding—it doesn’t really make sense to demand that the state cut a tax that it is constitutionally barred from levying in the first place. However, it was probably a worthwhile clarification, because the House and Senate are apparently prepared to go to war over this. Last week, on the day that Bonnen (joined by most of the House Republican caucus) laid out his preferred tax cuts, Lieutenant Governor Dan Patrick issued a blistering statement about that chamber’s proposal, and yesterday he reiterated the arguments on behalf of the Senate’s plan. Since Nelson is the chair of Senate Finance, her expressed agnosticism is telling. But since Patrick is the lieutenant governor, the Senate can be expected to follow his lead.

In the end, I expect the House to prevail, because Bonnen’s plan is better than Patrick’s for at least half a dozen reasons.

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Wed April 15, 2015 3:58 pm By R.G. Ratcliffe

From the outside, Governor Greg Abbott since his state of the state address in early February has seemed like the man out of the mix in the legislative session. But then maybe Abbott has been like the great and powerful Oz, a man behind the curtain making things happen unseen.

“I am involved in the process on a daily basis. An easy example is I had an hour-long meeting this morning” with Lieutenant Governor Dan Patrick, Speaker Joe Straus and Comptroller Glenn Hegar, the governor told reporters earlier today.

But on one of the biggest issues of the session—the debate between the House wanting sales tax cuts and the Senate wanting property tax cuts—Abbott wouldn’t take sides today. He wants a substantial cut in the state franchise tax for business, but otherwise the fight is up to the Legislature.

“The strategy here is we want to reduce taxes in a way that will most profoundly lead to job creation,” Abbott said. “Now, we are having a robust discussion about other ways to reduce taxes. There is the possibility of property tax reductions, the possibility of sales tax reductions on top of the margins tax reduction. I feel there’s going to be at least and maybe more than one way to reduce taxes in Texas.”

Abbott said the only thing he absolutely will not accept is a budget that does not cut the business franchise tax. “With regard to the veto word, I don’t want to go throwing that out there loosely,” Abbott said, though he gave a bigger nod to property tax cuts than sales tax cuts. “Property tax relief is important to Texas, and property taxes are too high in Texas.”

On his key issues, Abbott said he is happy with the Legislature’s progress. He said the House and Senate budgets are close; border security legislation is just a question of how much to spend; and his staff continues to work with lawmakers to pass ethics legislation.

“We’re reaching agreement on virtually every meaningful issues that we’re dealing with some small gaps to close,” Abbott said.

(Photo: Governor Greg Abbott/By Bob Daemmrich)