Republican leaders in the Texas Legislature have already declared 2011 a no-new-taxes legislative session. With that in mind, one Democratic lawmaker wants to make sure his House colleagues are using the right definition of the word "tax."
State Rep. Richard Peña Raymond, D-Laredo, plans to file a constitutional proposition that would classify fees, surcharges and other revenue-generating measures as taxes. With the state facing an estimated $15 billion to $28 billion budget shortfall, Raymond expects that lawmakers will look to those money-making methods to help close the gap. "Before you go starting to double or triple or quadruple what somebody pays for a driver's license, for a birth certificate, for a hunting license," he says, "I think we need to be honest with the people and call them taxes."
Raymond says tough budget years often lead to such backdoor fee increases — and they're not uncommon. Eva DeLuna Castro, a budget analyst at the Center for Public Policy Priorities, a progressive think tank, points to the Telecommunication Infrastructure Fund, which was created in 1995 to help provide internet connections to rural communities, schools and hospitals. But by 2003, it had done its job.
"In 2003, legislators kept that fee going — again, it's a tax you had to pay on your phone bill to raise another $250 million," DeLuna Castro says. "It didn't go anymore to pay for internet connectivity. It just paid for the technology allotment in public schools. It was used for something technology-related but basically just filled a gap that there was in school finance."
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And this isn't just an issue for Democrats. Michael Quinn Sullivan, president of Empower Texans, a conservative policy group that advocates for low taxes and smaller government, said earlier this year that he'd like to see fees, especially user fees, help close the shortfall. But, he said, "you have to be careful with user fees, because it's very tempting to hike a fee so high for an activity that you use that excess dollars to fund other things."
Plenty of state-collected fees could be raised to pay for other parts of the budget. DeLuna Castro has her own watch list for the upcoming session. "Anything related to owning a car. Anything related to occupational licenses. Tuition — they may give permission for that to go up again, although legislators are pretty upset with how much tuition went up since 2003," she says.
Whispers around the Capitol suggest that increases to car-tag fees may be used to help state road projects. Raymond's not necessarily against the idea of building new roads with a higher car-tag fee — he just wants politicians to be honest about what they're calling the money raised.
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