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February 14, 2007 (512) 463-0300

SENATE VOTES TO GO BEYOND SPENDING CAP TO PAY FOR TAX CUTS

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Senator Steve Ogden votes for his resolution, SCR 20, which would authorize the Legislature to exceed its constitutional spending cap in order to pay for last session's property tax cuts.

(AUSTIN) -- The Senate approved a measure today that would permit lawmakers to spend more than $14 billion on promised property tax cuts passed in the last session. The state constitution mandates that the state budget not increase each biennium by more than the estimated economic growth for the next biennium, as determined by the Legislative Budget Board. This biennium, the state budget was capped at $62 billion in non-dedicated general revenue dollars, which is below the amount needed to buy down local school property taxes to $1 per $100 valuation. Bill Sponsor and Finance Committee Chair Steve Ogden said the best way the state can deliver on its promise and meet constitutional guidelines was to pass SCR 20. "If we are going to live up to our promises, which is to cut property taxes by $14 billion and pay for it with general revenue, and we are going to write a state budget that is at least as good as the base bill, we have got to vote to exceed the constitutional spending cap of $63 billion by at least $9 billion," he said.

SCR 20 would stipulate that $14.19 billion, the exact amount needed to pay for last session's tax cuts, could be spent in the current biennial budget by the Legislature for the express purpose of reducing property taxes. This would avoid either reneging on the tax cut down to one dollar, or cutting government services by $9 billion. "Its essential in order to permit us to provide local school property tax cuts to both homeowners and businesses and not shut down government," said Lt. Governor David Dewhurst.

Some members expressed opposition to the bills. Houston Senator Dan Patrick held a press conference before session to announce his opposition to exceeding the spending cap. He said he favors better fiscal discipline, some spending cuts, and not cutting the property tax rate all the way to a dollar. Patrick asked Ogden during today's debate if he was not worried by the precedent going beyond the spending cap would set for future Legislatures. "Are you concerned about our budget getting totally out of control and what can happen to the dollars in the future if the Legislature is not doing their job and being disciplined about where these dollars go?" he asked. Ogden replied that the money to pay for the tax cut, which will come from a revamped business tax, cigarette tax and other fees, is replacing dollar for dollar the money lost from the tax cut, and not to general government.

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(L-to-R) Senators Eliot Shapleigh, Steve Ogden, Kyle Janek and Chuy Hinojosa look at the vote tally for SCR 20 over the shoulder of Secretary of the Senate Patsy Spaw.

Other Senators wondered if there were not more worthy programs that need state money more than property tax cuts. Senate Dean John Whitmire of Houston said there are many critical services in the state that are under funded, and that maybe Texas would be better served by spending money there. "We're fixing to go outside the constitutional cap for property tax cuts, which has merit, but how are you going to explain all the other unmet needs that we do not take similar steps to address," he said. Ogden answered by saying that these extraordinary measures are justified because the Legislature was facing a mandate from the Supreme Court to reform Texas' education system, or risk a court-ordered closing of schools across Texas. Not passing this resolution, he said, risks not only the promised property tax cuts, but the constitutionality of the state's public school finance system.

Also today, Senator Leticia Van De Putte of San Antonio announced the filing of a bill that would require both carbon monoxide detectors and smoke detectors in all houses built or sold after January 2008. Van de Putte said she filed Senate Bill 338, called the "Frank Madla Act", in honor of former Senator Frank Madla, who died in a house fire, along with two family members, on the day after Thanksgiving last year. New carbon monoxide detectors range from $16 for stand-alone units up to $50 for carbon monoxide/smoke detector combination units, but Van de Putte says the cost, while low, should not be an issue. "Saving a loved one's life, far outweighs the minimal cost of installing these detectors and alarms," she said. Brownsville Senator Eddie Lucio, a close personal friend of Madla, said he thought this bill was a fitting tribute to the memory of his friend.

The Senate will reconvene Monday, February 19, at 1:30 p.m.

Session video and all other webcast recordings can be accessed from the Senate website's audio and video archive pages.

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