Differing Views on Display at Senate Tax Relief Week

Sen. Jane Nelson, R-Flower Mound, announces property tax cut measures embedded in SB1 the budget bill filed on Feb. 24, 2015.
Sen. Jane Nelson, R-Flower Mound, announces property tax cut measures embedded in SB1 the budget bill filed on Feb. 24, 2015.

It’s been Tax Relief Week at Senate Finance, to use the branding fashioned by Chairwoman Jane Nelson, R-Flower Mound, for this week’s hearings.

But one thing became apparent after several days: Tax relief means different things to different people.

On Monday, conversation among Senators exposed fears among some of Nelson's fellow budget writers that she's moving too fast on tax cuts.

Sen. John Whitmire, D-Houston, was among the most critical. He pointed to big-ticket needs like health care for retired teachers and widespread problems at state agency facilities as reason to be concerned that Nelson's proposed $4.6 billion in cuts may be too high.

“I am concerned that if you do the tax cuts first and identify an arbitrary figure, we are not addressing the basic needs that we have already identified," Whitmire said.

State Sen. Paul Bettencourt, R-Houston, and lead author of most of the property tax cut bills under consideration at Monday's hearing, said some of his colleagues were ignoring political reality.

“Elections have consequences," Bettencourt said. "This was campaigned on to a great degree across the state."

Several senators expressed regret on Tuesday about having passed the business margins tax in 2006, advocating instead for the tax’s abolishment.

In fact, the thrust of the conversation seemed to be directed not about how to reform the tax but how lawmakers could pay for getting rid of it.

Even though the tax has never performed as originally expected, getting rid of it would blow a hole in the budget to the tune of $4.7 billion annually, or about twice that for the state's two-year fiscal cycle.

That led Nelson to quip, “If anybody’s got $9 billion laying around, let me know.”

Business groups the next day told senators, though, that they were focusing on the wrong thing with the margins tax if the intent was to provide meaningful relief to businesses.

Dale Craymer, president of the business-backed Texas Taxpayers and Research Association, perhaps best summed up the business interests’ position when he said, “The biggest sore thumb that faces Texas is the property tax, not the business tax.”

So as the week comes to a close, the resolve among Senate Republicans to create “meaningful” tax relief remains undiminished. And with their numbers, a tax relief package is sure to be sent to the House.

But the hearings themselves have also demonstrated that it’s tougher to create consensus on the best way to do this, even among the groups the relief is intended to help.

Welcome to the House (and Senate)

Leighton Schubert R-La Grange as he is sworn-in as Texas Representative for district #331 on March 3rd, 2015.Next to him is his wife Brittany
Leighton Schubert R-La Grange as he is sworn-in as Texas Representative for district #331 on March 3rd, 2015.Next to him is his wife Brittany

It was new member week in the Legislature as the House on Tuesday welcomed three new members: Diego Bernal, D-San Antonio; John Cyrier, R-Lockhart; and Leighton Schubert, R-Caldwell. A day later, state Rep. José Menéndez was sworn in as a state senator, taking the seat previously held by Leticia Van de Putte.

The San Antonio Democrat’s departure from the House triggers a vacancy in HD-124. Gov. Greg Abbott has set March 31 as the date for an emergency special election to fill the empty seat.

Candidates wishing to run in the special election have until March 10 to file. Early voting in the election begins March 23.

Nathan Alonzo, a 32-year veteran of the San Antonio Fire Department, signaled Thursday afternoon that he would run for the seat. He has also served as legislative director for the San Antonio Professional Fire Fighters Association, Local 624, for the past decade.

*****

Republican operative Austin Barbour is expected to lead a Super PAC that would support former Gov. Rick Perry's likely 2016 presidential campaign, The New York Times reported Monday.

The formation of a Super PAC would mark Perry's latest move toward a second bid for the White House. The group would allow the former governor's allies to raise unlimited amounts of money to boost him.

Barbour is the brother of Henry Barbour, a longtime Perry ally. The brothers are related to former Mississippi Gov. Haley Barbour.

*****

Ted Cruz has made a hire who could further help him in Iowa. The Des Moines Register reports that Bryan English has been brought on board to be a senior adviser to the Cruz-connected PAC the Jobs Growth & Freedom Fund.

English, the paper noted, has worked for a conservative advocacy group, the Iowa Family Policy Center, and has worked as a staffer for Iowa Congressman Steve King.

*****

With two days until the election to replace Texas GOP chief Steve Munisteri, the inside word is that there’s no clear front-runner. There are four announced candidates:

•    Robin Armstrong, Republican National Committeeman from Texas

•    Wade Emmert, chairman of the Dallas County Republican Party

•    Tom Mechler, treasurer for the Texas Republican Party

•    Jared Woodfill, former chairman of the Harris County Republican Party

The 64-member State Republican Executive Committee will pick Munisteri’s replacement Saturday. The committee will hold as many rounds of voting as needed until one candidate wins a majority.

The candidates will have one last chance to make their cases Friday during a forum the party is hosting in Austin.

*****

Houston attorney Bill King officially kicked off his campaign for mayor on Monday morning, laying out what he called a “Back to Basics” platform: "Fix the streets. Catch the crooks. Balance the budget."

He joins other high-profile entrants into the race, including state Rep. Sylvester Turner and former Congressman Chris Bell.

A Twitter Follow Leads to a Recusal

Michael Quinn Sullivan, president and CEO of Empower Texans and Texans for Fiscal Responsibility, at a 2012 Texas Tribune event.
Michael Quinn Sullivan, president and CEO of Empower Texans and Texans for Fiscal Responsibility, at a 2012 Texas Tribune event.

Did Twitter bias the judge?

That’s the question being raised after a new judge was assigned to the legal fight between conservative activist Michael Quinn Sullivan and the Texas Ethics Commission.

A Denton County district judge, Steve Burgess, sided last month with Sullivan in his request to dismiss an Ethics Commission ruling from over the summer that he failed to register as a lobbyist in 2010 and 2011.

The Ethics Commission afterward cried foul, saying that Burgess wasn’t impartial because he followed Sullivan on Twitter.

On Tuesday, a visiting judge ordered the removal of Burgess and returned the case to the administrative judicial region to be assigned to a different judge.

According to Sullivan attorney Joe Nixon, the case has been dismissed and all that remains to be done is to issue a final written order and to award attorneys fees.

Burgess, though, had not yet signed the order, and it is a point of disagreement between the two sides as to how much of Burgess’ work must be accepted by the new judge.

The Ethics Commission’s attorney, Eric Nichols, said the agency “looks forward to the day when the issue of Mr. Sullivan’s failure to register as a lobbyist can be adjudicated on the merits.”

*****

There’s been no shortage of great tributes to the life and career of Bob Armstrong, who impressed as much with his character as his accomplishments.

This appreciation by Joe Holley in the Texas Observer is well worth checking out.

We spoke with Harold Cook on Monday, the day after Armstrong passed away, and he shared this memory of his friend:

One of Armstrong’s legacies is Big Bend Ranch State Park, the designation of which he pursued through his legislative career and one he was able to fulfill as a parks and wildlife appointee of Gov. Mark White.

Last year, the park’s visitor center was named for Armstrong. And he was able to attend its dedication.

We’ll let Harold take it from there:

“I’ve never ever seen a man happier than Bob was that day. And I remember thinking, you know, this is a pretty good deal.

“Usually for people who are in the public eye all their lives, they only really say the nice stuff about you after you’re gone. And yet here he was sitting in the front row at this ceremony.

“People of all stripes and political leanings were there, all making a big deal out of Bob. Essentially, they were saying the great things about him while he was still there to hear them.

“And I just thought that’s the best deal I’ve ever seen anybody get.”

Inside Intelligence: About Tax Relief and Those B2B Fights...

We started off this week’s survey of politics and government insiders with questions about the future of tax relief efforts in the Legislature. We also asked about a handful of high-profile conflicts between businesses.

A slight majority of our insiders believed tax relief passed this session would survive a future effort to fashion a school funding fix. Nearly two in five, though, thought it wouldn't.

Meanwhile, the insiders were nearly evenly split on whether lawmakers would throttle back on tax relief to provide funding for other priorities, such as debt reduction or catching up on deferred maintenance at state buildings. Forty-five percent predicted moving some money away from tax relief, while 46 percent said such a diversion wouldn't happen.

On the business-to-business questions, the insiders sided with established interests in two of the three conflicts.

Nearly half thought that the liquor stores would prevail in Wal-Mart's attempts to change the law to allow the retail giant to sell liquor. And nearly 60 percent thought the auto dealers would prevent Tesla's efforts to make it easier to sell their cars outside the current dealer structure.

But nearly 60 percent thought that ride sharing companies Uber and Lyft would win in their showdown with cab companies to more freely operate in Texas.

We collected comments along the way, and a full set of those is attached. Here’s a sampling:

.

Will tax relief granted to businesses this session via changes to the margins tax survive a future public school funding fix?

• "Probably, but here's a better question: 1) will tax relief granted to property owners this session be noticed by property owners, and 2) will that relief survive a future public school funding fix?"

• "If they need more money to satisfy the Supreme Court, watch for a sales tax increase."

• "You're assuming that tax changes will actually pass. The two chambers are miles apart on this. Only Abbott might be able to pull them together."

• "Tax cut won't survive, but it's like Vitamin B shot that'll help keep the patient, whose economy is getting hammered with energy shutdowns, healthy."

.

Will lawmakers scale back on tax relief to address lowering the state’s debt burden or catch up on deferred maintenance on state buildings and other infrastructure?

• "Members will want to claim they lowered taxes. Debt and deferred maintenance are out of sight and therefore out of mind for most."

• "This isn't a tough decision - school children shouldn't be exposed to rodents, and drivers shouldn't fear traveling over bridges. The fiscal conservative moniker is tired and poorly applied."

• "They will maneuver so that the cost of the tax cuts don't count against the spending limit, then do little or nothing on catching up - except maybe a bit for paying off debt and starting to deal with pension costs."

• "A state employee had to get a rabies shot because she was bitten by at bat at WORK? We MUST catch up on our maintenance!"

.

Who wins in the Capitol showdown between Wal-Mart and existing liquor stores?

• "The liquor stores win this round, but their prospects in the long run are bleak."

• "Hard to say. Unlike the car dealers, the liquor industry distribution has become so concentrated in just a few hands they do not have the constituent muscle of previous legislative fights."

• "Would appear that Wal-Mart's filing of a constitutional attack on the law in federal court pretty much amounts too a waving a legislative white flag. Can't imagine how they could seriously pursue a bill while that lawsuit is pending."

• "Liquor store, my friend. All politics is local. Crude analogy, but think of them like school boards. Everyone goes to the liquor store. Yes, even, wait, especially the Baptists."

.

Who wins in the Capitol showdown between Tesla and the auto dealers?

• "100 years of car dealer community and political activism in communities all over the state trumps 'I want to sell my $200,000 cars differently from everybody else.'"

• "They might work out a compromise, but it won't happen this session. Auto dealers have the clout and legislative know-how to stop it today. But eventually..."

• "Not even a fight. Every member of the Lege has multiple car dealer supporters/constituents that have helped them win elections. A carpetbagger from California doesn't stand a chance."

• "The dealers have lost their clout. Tesla is in the midst of a classic capitalist process of market disruption just like Uber and others."

.

Who wins in the Capitol showdown between Uber/Lyft and the cab companies?

• "This is about FREEDOM! That's what members will say, anyway."

• "Can't stop progress; you can only slow it down. Ultimately, the future always arrives."

• "All of these issues relate to free enterprise. It will be interesting to see if the 'conservative' legislator is really committed to capitalism or preserving and protecting out-of-date statutes that limit business growth."

• "The turd in the punchbowl will be insurance companies who won't pay out when you have an accident and they learn that 'Uber' drivers used a personal vehicle for a business venture."

Our thanks to this week's participants: Gene Acuna, Cathie Adams, Clyde Alexander, George Allen, Jay Arnold, Amy Beneski, Andrew Biar, Allen Blakemore, Tom Blanton, Chris Britton, Raif Calvert, Lydia Camarillo, Kerry Cammack, Thure Cannon, Corbin Casteel, William Chapman, Elna Christopher, Harold Cook, Kevin Cooper, Randy Cubriel, Denise Davis, Eva De Luna-Castro, June Deadrick, Nora Del Bosque, Tom Duffy, David Dunn, Jack Erskine, John Esparza, Jon Fisher, Tom Forbes, Bruce Gibson, Kinnan Golemon, Daniel Gonzalez, Jim Grace, John Greytok, Clint Hackney, Wayne Hamilton, Bill Hammond, Ken Hodges, Steve Holzheauser, Mark Jones, Robert Kepple, Richard Khouri, Tom Kleinworth, Dale Laine, Nick Lampson, Pete Laney, Dick Lavine, James LeBas, Luke Legate, Ruben Longoria, Matt Mackowiak, Mike McKinney, Steve Minick, Mike Moses, Nelson Nease, Pat Nugent, Todd Olsen, Nef Partida, Gardner Pate, Jerry Philips, Tom Phillips, Wayne Pierce, Richard Pineda, Allen Place, Gary Polland, Jay Pritchard, Jay Propes, Karen Reagan, Tim Reeves, Patrick Reinhart, David Reynolds, Carl Richie, Grant Ruckel, Tyler Ruud, Jason Sabo, Andy Sansom, Barbara Schlief, Stan Schlueter, Bruce Scott, Robert Scott, Ben Sebree, Nancy Sims, Jason Skaggs, Ed Small, Martha Smiley, Larry Soward, Leonard Spearman, Dennis Speight, Tom Spilman, Bob Strauser, Colin Strother, Tom Suehs, Sherry Sylvester, Sara Tays, Gerard Torres, Trey Trainor, Corbin Van Arsdale, Ware Wendell, Ken Whalen, David White, Darren Whitehurst, Angelo Zottarelli.

Disclosure: Tesla, Wal-Mart and Uber are corporate sponsors of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.

The Calendar

Friday, March 6

  • Third Annual American Constitution Society Student Convention, with featured speakers Cecile Richards and Wendy Davis; University of Texas School of Law, 727 E. Dean Keeton St., Austin (March 6-7)

Saturday, March 7

  • Voting Rights Training Institute; University of Texas School of Law Auditorium, 727 E. Dean Keeton St., Austin (4-6 p.m.)

Sunday, March 8

  • Daylight Saving Time starts

Monday, March 9

  • Roast and toast of House Speaker Joe Straus, benefiting the Texas Legislative Internship Program presented by Texas Southern University; 110 E. Second St., Austin (6-8 p.m.)

Tuesday, March 10

  • On the Road: A Symposium on Water; Texas State University, 601 University Drive, San Marcos (8 a.m.-2:45 p.m.)
  • Art of Leadership VIP reception, featuring state Sen. Rodney Ellis, D-Houston; 112 Academy Drive, Austin (7-10 p.m.)

Wednesday, March 11

  • U.S. Rep. Sam Johnson, R-Richardson, breakfast fundraiser; 110 E. Ninth St., Austin (8-9 a.m.)
 

The Week in the Rearview Mirror

After grilling Gov. Greg Abbott’s three University of Texas System regent appointees last week, the Senate Committee on Nominations on Thursday recommended all of them to the full Senate for confirmation. Two of the nominees received "no" votes from Sen. Konni Burton, R-Colleyville, who had pressed them on the UT Law School Foundation.

After meeting behind closed doors for almost seven hours, the University of Texas System Board of Regents did not name a finalist to replace Bill Powers as president of the University of Texas at Austin on Wednesday.

The House Appropriations Committee on Thursday tentatively approved $105 million in funding for hundreds more DPS troopers, but not before some border lawmakers on the panel questioned how the DPS would prove the money is being spent wisely.

The 8,900 U.S. Border Patrol agents stationed on Texas’ border with Mexico can clock in next week knowing they’re still going to get paid after Congress on Tuesday voted to fund the Department of Homeland Security through September.

If voters approve, some of the taxes collected on car sales would be dedicated to building and fixing highways under the first two pieces of legislation to clear the Senate this session. Teachers might also see a pay boost under the measures.

Texas public high school seniors who failed the state's mandatory exams might still get to graduate this May under a bill pushed by state Sen. Kel Seliger, which passed Senate Education Wednesday.

Doctors, law enforcement officers, and family members of crash victims gathered Thursday at the Capitol to testify in support of a statewide texting-while-driving ban. Supporters are hoping the third time's the charm. Similar legislation was vetoed in 2011, and another bill in 2013 failed to gain traction.

Disclosure: The University of Texas at Austin is a corporate sponsor of The Texas Tribune. A complete list of Texas Tribune donors and sponsors can be viewed here.

Political People and their Moves

The Texas House Republican Caucus has named two members to its leadership team. State Rep. Jason Isaac of Dripping Springs was named chairman of the Caucus Fundraising Committee and state Rep. Rick Miller of Sugar Land was named chairman of the Caucus External Communication Committee.

Ahead of Saturday's election of the next Republican Party of Texas chairman, candidate Jared Woodfill announced his endorsement by conservative grassroots leader JoAnn Fleming. Woodfill, a former Harris County GOP chairman, is one of four candidates.

Land Commissioner George P. Bush has named six appointees to the Alamo Endowment Board, which will raise money for the state historic site. They are: Ramona Bass of the Fort Worth Bass family, engineering executive and former UT System Regent Jim Dannenbaum, Clear Channel Communications co-founder Red McCombs, Rackspace executive Lew Moorman, real estate broker and current UT System Board of Regents Vice Chairman Gene Powell and Houston real estate developer and University of Houston System Regent Welcome Wilson Jr.

Texas Medical Association has named Dave Spalding to be the chief operating officer of TMA PracticeEdge, the new physician services organization launched by the medical society. He most recently served as board chair of Availity, LLC, a company which facilitates information exchange between physicians, providers and health plans.

Deaths: Bob Armstrong, 82, who counted stints as state representative, land commissioner, candidate for governor and a presidential appointee at the U.S. Department of the Interior on a long and distinguished resume of public service.

•    Mike Higgins, chief of staff and legislative director for the Texas State Association of Fire Fighters.

•    Dudley Thomas, 76, who served as Department of Public Safety director from 1996-2000 as a capstone to a 40-year career with the agency.

Disclosure: The Texas Medical Association is a corporate sponsor of The Texas Tribune. Red and Charline McCombs are major donors to the Tribune. Linda Aaker and Bob Armstrong were donors to the Tribune. A complete list of Tribune donors and sponsors can be viewed here.

Quotes of the Week

I will say I wish I hadn’t voted for that franchise tax.

State Sen. Jane Nelson, R-Flower Mound, showing remorse for voting in favor of creating the business margins tax in 2006

I thought it was decoration, but, no, that’s to muffle the sound of the bathroom behind her wall, so you can’t hear people that are on the toilet.

Comptroller Glenn Hegar, on discovering an employee's real use for a quilt in her office. Problems created by deferred maintenance are surfacing at state facilities.

One of them refused to leave us, and we took all the marijuana around him, but his natural instincts to run were somehow gone.

Drug Enforcement Administration agent Matt Fairbanks testifying before a Utah panel on rabbits developing a taste for marijuana

Climate change is often seen through a political lens. I’d like to discuss it from a military perspective. … Climate change poses a serious threat to America’s national security.

Retired Air Force Lt. Gen. Ken Eickmann to a House panel this week on the danger posed by climate change

Once a politician, always a politician. To the end, he’d go over there and walk around and he’d say, ‘Hey, is that Bob Armstrong dip you’re eating? Well, I’m Bob Armstrong.’

Will Armstrong, son of former Land Commissioner Bob Armstrong, who passed away this week, on his other legacy: the bowl of queso that carries his name at Matt's Famous El Rancho in Austin