4/19/2011 6:42 PM
At today’s Senate Finance Committee hearing, Sen. Robert Duncan (R-Lubbock) unveiled $4.17 billion of cash management techniques (i.e. accounting maneuvers) and other changes to help balance the budget. In other words, Duncan actually came up with specific ideas to generate what some would call “non-tax revenue.”
His omnibus fiscal matters bill (SB 1811) is set for a vote tomorrow along with an omnibus school finance bill. On Thursday, Senate Finance is tentatively scheduled to consider an omnibus budget.
Duncan’s bill contains 20 articles. We’ll include a brief summary below, but we’ll also have a more complete discussion in our weekly issue.
* Delay one-month of Foundation School Program payments from August 2013 to Sept. 2013. This saves $1.8 billion on the current biennium. It only effects the timing, not the amount, of payments to school districts. When it was last tried in 2003, it was reversed in 2007.
* Speed up tax collections. This does not affect the amount of the tax. Just when it has to be paid. In most cases, SB 1811 advances the due date of one quarter of one month of the tax. Taxes affected include the following: motor fuels, alcohol tax, sales tax, and franchise tax. Sen. Dan Patrick (R-Houston) -- a frequent critic of the revised franchise or margin tax -- blasted accellerating collection of that tax, arguing it would hurt small business.
* Change unclaimed property rules. This would accelerate when businesses have to turn over unclaimed property to the state and when unclaimed property would escheat (become property of the state). A series of unclaimed property changes generates about $300 million.
* Close sale for resale loopholes. Goods intended for future resale are exempt from sales tax, because they are taxed at the final sale. Some legislators are concerned that some wholesalers game the system so sales tax never becomes due. Changing the law regarding the circumstances under which a good is classified as sale for resale would generate $200 million.
* Charge agencies 1 percent for health insurance. This would levy a one percent fee to each agency for the state’s group employee benefit plan. With federally funded programs, this could draw down additional funds. It is estimated to save $165 million.
* Delay payment of gas tax revenues into public education and state highway funds. This deferral frees up $193 million.
* Tobacco tax changes. The bill taxes small cigars at the higher cigarette tax rate. This change will be controversial with small cigar manufacturers. It also reduces the stamping allowance on the cigarette tax. The two changes generate $25 million and $47 million, respectively.
* Petroleum delivery fee continuation. This provision generates $59 million by continuing an existing petroleum delivery fee.
*Use tobacco settlement money to pay debt service on cancer research bonds. This proposal would save $100 million.
There are a few other, smaller proposals such as selling surplus state land and repealing a few tax exemptions.