On Tuesday, tax negotiators in the Texas House announced a tentative agreement with the Senate over how to go about cutting taxes this session. But an effort to postpone when those cuts take effect may send both legislative bodies back to the negotiation table.
It’s been months of back and forth between members of the Texas Senate and House charged with negotiating a deal on which tax plan would make it to Gov. Greg Abbott’s desk by the end of the session.
Originally, the House had been asking that the plan include a cut to the state’s sales tax and a reduction in the tax on businesses. But eventually, the House agreed with the Senate’s plan to cut property taxes this session.
House Ways and Means Committee chair, Angleton Republican Dennis Bonnen, said House members agreed to drop their plan to cut sales taxes if the Senate was willing to delay when the property tax cuts would go into effect. The reasoning, he said, was because it would require cities to hold a separate election close to the 2016 presidential election, which isn’t funded by the state.
“The first issue is that it’s very difficult for them to even get the September election done, it creates a local cost,” Bonnen pointed out.
Bonnen said the timing of when those cuts go into effect seemed to be the only sticking point for lawmakers. The House would like to see the cuts go into effect in 2017 rather than a year earlier. “And it’s not like we don’t want to do it for next year, but when our local officials are tasked with the job of making it work, [and they’re] telling us it’s not realistic … The last thing that I want is taxpayers having tax bills that are not accurate,” Bonnen explained.
The Senate’s original proposal called for $4.4 billion in tax cuts, while the House called for $4.9 billion in cuts to the state’s sales and franchise taxes. Bonnen said tax negotiators have decreased the total package to $3.8 billion after the Texas Comptroller expressed concerns about the original dollar amount. He said that was a number all parties, including the governor, agreed with.
Bonnen also said that shouldn’t reduce the size of a tax plan, because the $1.2 billion plan to cut property taxes was a permanent one. Senate negotiators, however, called the change in effective dates a deal-breaker.
