Abbott Refuses to Take Sides on Tax Cuts

Gov. Greg Abbott refused to pick sides Wednesday in a growing squabble over how best to cut state taxes, and moved away from an earlier promise to “insist” that Texas lawmakers cut property taxes before the session ends on June 1.

Gov.Greg Abbott outlines his plan to  reduce the Texas business franchise tax at a press conference at vcfo on April 15, 2015

*Editor's note: This story has been updated with comment from Lt. Gov. Dan Patrick.

Gov. Greg Abbott refused to pick sides Wednesday in a growing legislative squabble over how best to cut state taxes, and moved away from an earlier promise to “insist” that Texas lawmakers cut property taxes before the session ends on June 1.

At a press conference coinciding with the dreaded April 15 income tax filing deadline, Abbott hailed the Legislature’s heated debate over taxes as a sign of fiscal health when other states are struggling financially.

“The good news about Texas, which is different than other states, is now we are having a robust discussion about other ways to reduce taxes,” Abbott said. “I feel there is going to be at least one, maybe more than one, way that we reduce taxes ... looking for a total tax reduction of about $4 billion.” 

Abbott said he still feels property taxes are too high and noted that cutting them is “definitely on the table.” He was referring to the $2.15 billion property tax proposal being pushed by Lt. Gov. Dan Patrick, the Tea Party Republican who presides over the Senate.

In a statement Wednesday afternoon, Patrick repeated his support for the property tax cut.

"I agree with Governor Abbott that I too will not support any budget that does not have franchise tax relief," Patrick said. "I also will not support any budget that does not have property tax relief, as well."

But in his remarks to reporters, Abbott also suggested that sales tax cuts — being pursued by House leaders who have battled with Tea Party-backed lawmakers and activists — represent another legitimate alternative.

“There is the possibility of property tax reduction. There is the possibility of sales tax reduction on top of the margins tax reduction,” Abbott said.

House Speaker Joe Straus, R-San Antonio, issued a statement saying he was "certain the House and Senate will work well together in the final weeks of the session."

Abbott reiterated his vow to veto any budget that doesn’t contain a cut in the business franchise tax, commonly known as the margins tax. But he said he won’t apply that same threat to property tax cuts despite declaring in February in his State of the State address that he would “insist on property tax reduction.”

“The only veto declaration I’ve made clear is I will veto any budget that does not include the margins tax. With regard to the veto word, I don’t want to go throwing that out there loosely,” Abbott said. “I’ve thrown down my one veto threat. I’ll leave it at that right now.”

Shortly before Abbott spoke, more than 100 conservative activists rallied outside the Capitol to mark Tax Day, the impetus for some of the original Tea Party protests several years ago. Michael Quinn Sullivan, leader of the conservative advocacy group Empower Texans, hailed the ongoing discord over tax relief as a sign of how much the Tea Party has come to influence the legislative process.

"Today this chamber and this chamber are in a fight over what taxes to cut and who can do the biggest tax cut," Sullivan told the activists. "You are winning." 

Patrick Svitek contributed to this report