From the Office of State Senator Glenn Hegar, District 18

For Immediate Release
September 9, 2008
Contact: Lisa Craven
(512) 463-0118

Ending of TIF Tax a Great Start
Senator Hegar Commends Tax's Elimination, Calls for Further Steps to Increase Budget Transparency

September 1, 2008 was a historic day for Texas, marking the first time in 13 years that a state tax was eliminated. The Telecommunications Infrastructure Fund (TIF) tax had accomplished its purpose of funding information infrastructure improvements for public schools and libraries and was no longer a necessary tax in Texas.

"I supported the elimination of the TIF tax and joined my colleagues by voting to end it," said Senator Hegar. "I believe the state's expenditures should be easy to understand and accessible to the public. The practice of diverting taxes from their intended purpose must stop and funds must be spent on their main objectives or repealed altogether."

In 1995, the internet was something few had used and email had not yet become the ever-present tool most of us now take for granted. The Texas Legislature recognized the significant and costly improvements that our infrastructure needed and instituted the TIF tax. The tax, a 1.25% assessment on landlines, cell phones, and pagers, was dedicated to upgrading our broadband infrastructure over the next decade.

Overtime, $1.5 billion of TIF taxes were collected, which allowed our public schools and libraries to be outfitted to keep pace with modern technology. These upgrades gave many communities the ability to share in the economic advantage of computer technologies and in many ways helped contribute to the economic prosperity Texas has enjoyed in the ensuing years.

The elimination of the TIF tax will save Texans more than $600 million over the next three fiscal years. Since the tax had met its key functions, any assessment collected from it would have gone to fund other state priorities. Although many arguments can be made that these funds should be spent on other state programs, the change of the TIF tax from its intended use is disingenuous and similar diversions of tax dollars must be eliminated from our state budget.

"As Vice Chair of the Sunset Advisory Commission, I have argued that Texas government and its state agencies must be more transparent, open, and accountable. Texas government is run on taxpayer dollars and it is the taxpayer the legislature and state agencies must continually answer to. The state's accounting practices must hold up to the closest scrutiny and protect those who ultimately pay the bills-Texas taxpayers," concluded Senator Hegar.

Senator Hegar previously served two terms in the Texas House of Representatives and now serves as a Senator for Senate District 18. Senator Hegar is a sixth generation Texan, and earns a living farming rice and corn on land that has been in his family since the mid 1800s. He currently resides in Katy, Texas with his wife Dara, and their three children, Claire, Julia, and Jonah.

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