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January 7, 2009 (512) 463-0300

FINANCE COMMITTEE FINISHES INTERIM WORK

(AUSTIN) -- The Senate Finance Committee adopted recommendations Wednesday from interim studies conducted over the past 18 months. These will be considered by the committee during the upcoming 81st legislative session, and many will be rolled into prospective legislation. While the state economy has fared relatively well in recent months, lawmakers are still concerned about how the state spends its money as the national economy continues to cool. Approved recommendations covered all aspects of the state's budget, from transportation to health care.

The committee adopted a recommendation to increase transparency in transportation funding and to make the Texas Department of Transportation more accountable to the legislature. Should TxDOT wish to move money around in its budget, from one line item to another, it would have to have approval from the Legislative Budget Board. It would also require the department's budget to reflect project costs beyond construction, including maintenance and other costs for future years. In an effort to decrease diversions of state money dedicated to transportation to other purposes, the committee adopted a recommendation to study ways to focus state highway fund dollars on highway construction and maintenance.

A more controversial recommendation was one to allow cities and counties to raise the local sales tax rate by a quarter-cent in order to provide property tax relief. This increase is subject to approval by the local voters and is contingent on reducing the rollback rate from 8 to 5 percent. Some committee members worried that increasing the sales tax increases the tax burden on lower-income individuals. " I really, truly don't believe that Texas families would see proportional property tax relief, compared to the financial impact of an increase in the sales tax," said Brownsville Senator Eddie Lucio, Jr. "Furthermore, the increase in the sales tax would negatively impact local economies because of the increase in the cost of goods and services." Committee Chairman Senator Steve Ogden of Bryan noted that this increase could only occur if the local voters approved.

These recommendations may or may not become part of Texas law. They would be subject to approval by committee, then both chambers of the Legislature before the Governor could sign them into law. Interim studies are intended to look at problems facing the state and to direct debate as the Legislature moves into the upcoming session.

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

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