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TribBlog: Are Tax Holidays Over?

The Legislature's starting budget will apparently include proposals to cancel popular back-to-school sales tax holidays, cut discounts for retailers who remit sales taxes early, allow sales of liquor on Sundays to increase revenue from taxes on alcohol, cut the state's subsidy of dependent insurance premiums for state employees and lower the tax breaks for energy companies that take on certain high-cost gas drilling projects, sources say.

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The Legislature's starting budget will apparently include proposals to cancel popular back-to-school sales tax holidays, cut discounts for retailers who pay their sales taxes early, allow sales of liquor on Sundays to increase revenue from taxes on alcohol, cut the state's subsidy of dependent insurance premiums for state employees and lower the tax breaks for energy companies that take on certain high-cost gas drilling projects.

Those are among 76 proposals — worth around $1 billion in savings and new revenue — recommended by the Legislative Budget Board to help the state balance its budget, according to sources who've seen some of those ideas. Canceling the sales tax holidays, for example, would bring in approximately $100 million in revenue for the state. 

The proposals — along with the starting budget from the LBB — will be distributed to lawmakers this evening and made available to the public sometime Wednesday morning. Appropriations Chairman Jim Pitts, R-Waxahachie, has said the budget introduced this week will be balanced without a tax increase, without tapping the state's $9.4 billion Rainy Day Fund, and without spending more than what Comptroller Susan Combs estimates Texas will bring in during the two-year budget period.

The House is leading the way on the budget this year (it alternates with the Senate), but the Senate will introduce its own opening proposal next week, and Gov. Rick Perry says he'll have his version out before the first week of February.

The state doesn't have enough money to keep doing what it's doing now, by all accounts. The question is over the size of the gap, which is variously estimated at between $15 billion and $27 billion.

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