The End Game
Here we are in the home stretch of the regular session, and this year, earlier than usual, the Lege is divided along chamber lines rather than party ones. Tax cuts, obviously, are the biggest point of contention between the House and the Senate. Both chambers have approved proposals that would cut the franchise tax collections by a bit more than $2bn each biennium; the rivalry there is not severe. The Senate, however, announced in February that it would seek an additional $2.1bn in “property tax relief”. The House took no interest in that scheme, and announced that it would, instead, seek $2.3bn worth of sales tax cuts.
On April 8th, Lieutenant Governor Dan Patrick launched a pre-emptive strike against Dennis Bonnen, the chair of the House Ways & Means committee, and the tax cuts he had proposed. At first, Bonnen declined to return fire, perhaps because he hadn’t even laid out either bill in the Ways and Means committee at that point. But by the beginning of this month, with both chambers having passed their bills, and Sine Die visible on the horizon, the Lege had clearly reached a impasse. Jane Nelson, the Chair of Senate Finance, sounded an optimistic note last week: “I think things are coming unstuck,” she told the Austin American-Statesman’s Kiah Collier. Meanwhile, Quorum Report noted that Patrick had made his position clear in private meetings with business groups: he had no interest in compromise. Over the weekend, Bonnen returned fire. Previously, he had been focused on advocating for his idea, on its merits; in an op-ed, he explicitly laid out why he opposes Senate’s property tax relief plan. This morning, when the Ways & Means committee took up SB1 and SJR1, he, along with the rest of the committee, politely but unmistakably eviscerated it.
This tax-cuts fight isn’t the only impasse between the chambers this year, but it is the one that has to be resolved, because the Senate’s property tax relief plan only works if the Lege passes a budget that authorizes a couple billion dollars in state money for local school districts. The House members on the budget conference committee, of course, have no reason to agree to that. Neither do the Senate conferees have much reason to insist on keeping that provision, beyond the political one: the lieutenant governor is the president of the Senate. Patrick issued a warning back in April: “Let there be no misunderstanding, I agree with Governor Abbott that I too will not support any budget that does not have franchise tax relief. I also will not support any budget that does not have property tax relief, as well.” That was an extremely ominous thing to say, because the lieutenant governor, unlike the governor, does not have veto power. But he could, perhaps, approximate the effects of a veto, by refusing to bring the conference committee’s budget up on the Senate floor if it displeases him. Three months ago, the suggestion that the lieutenant governor of Texas would consider such a ploy would have seemed absurd. Today, though? Everyone I’ve talked to, in both chambers, is apparently resigned to at least one special session, even though Abbott has given no indication that he wants to call one. That’s because the state constitution requires the Lege to pass a budget. If they fail to do so, a special session is automatic.
What’s especially insane about this possibility is that the Senate has already lost this particular fight and has no way to win it in if they insist on a rematch via a special session. I say that with no malice or schadenfreude. I’m glad that they made an effort to rein in property taxes and I commend them for having passed a significant property tax reform, in Brandon Creighton’s SB1760. SB1/SJR1, however, is obviously a swing and a miss. If you don’t already believe that, watch the video of the Ways & Means committee meeting this morning (starting at about twenty minutes in). If you still don’t believe it, it doesn’t matter, because even if the Senate conferees prevail on the budget bill, their plan can’t be implemented without House passage of SB1 and SJR1. And after today, it’s pretty clear that SB1 and SJR1 are dead in the House. The Ways & Means committee might send those measures to the floor, to give the whole House a chance to make a clear statement. If so, we know what that statement will be. Not a single representative has declared a preference for the Senate plan, and none of them work under Patrick. There is no scenario where a majority of the House votes for SB1. There is definitely no scenario where 100 representatives vote for SJR1.
And there is no reason to think that the House will be more pliable in a special session. If anything they’ll be more annoyed. Republicans in the Texas Senate, I hope, understand that this is not a House vs Senate game of chicken, or part of a coordinated campaign to pick on Dan Patrick or the chamber he leads. The House is not going to subscribe to the Senate’s property tax relief plan because it’s not a good plan. That’s all. That’s enough. If the Senate proceeds to ruin everyone’s summer on behalf of a plan that no one other than Patrick particularly cares about, I guess, the House might start to see this as a tribal issue. But as it stands the division isn’t House vs Senate. It’s Patrick vs Texas.
As for Patrick—for goodness’ sake, there’s no shame in trying, or even in failing. A person who never stumbles is a person who’s phoning it in. But if you trip and fall into a hole, or dig yourself into a hole, or just somehow end up in a hole, the usual advice is don’t dig in any further. Far better to find a ladder, like the one Creighton provided with his property tax reform bill, or the one Bonnen offered this afternoon, when he said that he’d be willing to table the sales vs property tax drama and focus on a sizable franchise tax reform—an idea that the House, the Senate, and Abbott could all support. Either way, Patrick has two options right now: he can continue to stand his ground, or he can accept the circumstances and try again in 2017. Put differently: he can do damage, or do damage control.