Structural Deficit
Senate Finance Chairman Steve Ogden said on Tuesday that the legislature could address the structural deficit by reviewing the state’s business tax, also referred to as the margin or franchise tax. The state’s business tax failure to perform as originally predicated is “the biggest component of the structural deficit,” noted Ogden.
Ogden said senators could go back to the “old franchise tax” and look at a proposed constitutional amendment to clarify that the state can tax business income.
For more on his interview: http://www.texastribune.org/texas-legislature/82nd-legislative-session/texas-needs-to-address-structural-deficit/
Property Tax Breaks – SB 1590
The budget discussion continued with Ogden’s bill regarding property tax breaks, SB 1590, which would address local school districts offering the breaks to lure economic development. Ogden’s bill, among other changes, would limit the state’s liability for such breaks to $225 million annually. The bill would let decisions on the tax breaks move from the local trustees to the state comptroller.
State Fiscal Matters Bills – In House Appropriations
In other budget discussions this week, House Appropriations Chairman Jim Pitts has said he believes the House might be able to come up with more revenue by deferring state payments into the opening days of the next budget cycle, speeding up business tax collections and making more state land money available for spending.
More details are expected to emerge after several bills relating to State Fiscal Matters are discussed in committee tomorrow. House Appropriations will meet tomorrow morning at 8am in E1.030 and will take up the following bills below relating to fiscal matters.
All of the bills either give the agency related to the article or all state agencies the ability to adopt and collect fees or charges to “cover any costs the agency incurs in performing its lawful functions.” Read below for additional details on what else these bills establish/change:
Article I – HB 3665 by Otto
Elements of the bill include:
- Allows for leasing of state-owned parking lot or garage to private individuals.*
- Limits state debt payable from general revenue (GR) and establishes computation of debt limit.*
- Permits the Attorney General to charge a toll project entity a reasonable fee for certain reviews.*
Article II – HB 3666 by Zerwas
Elements of the bill include:
- Supplemental Nutrition Assistance Program (SNAP) – Discontinue use of electronic fingerprint-imaging or photo imaging of applicants.*
- Further study and other issues surrounding “Telemonitoring”*
- Commission to determine whether the Medicaid Enhanced Care program’s diabetes self-management training telemonitoring pilot program was cost neutral or select a new program that would be cost neutral.*
- Develop and implement a cost neutral telemonitoring pilot program for conditions other than diabetes.*
- Memorandum of Understanding (MOU) of Public Assistance Reporting Information System (PARIS) between several agencies for the purpose of coordinating and collection information about the use and analysis of data received and develop new strategies for state agencies to use system data in ways that generate fiscal savings for the state.*
- Develop an assessment process for use in assessing the needs of a Medicaid recipient for acute nursing services and implement process within fee-for-service (FFS) model and managed care model (PCCM) and STAR and STAR+PLUS managed care programs.*
- Therapy Service assessments may be developed after assessment process for acute nursing services.*
- A study to evaluate physician incentive programs that attempt to reduce hospital emergency room use for non-emergent conditions for recipients under medical assistance program.*
Article III – HB 3639 by Pitts
Elements of the bill include:
- Reduces state contribution for retired teachers by a half percent to equal .5 percent of the salary of each active employee.*
- Amount of state revenue to school district in regards to the weighted average daily attendance (WADA) is capped at $8,000.*
Article IV – HB 3648 by Otto
Elements of the bill include:
- Addresses fees for process server certification.*
- Addresses fiscal matters relating to judicial and court personnel.*
Article V – HB 3649 by Otto
Elements of the bill include:
- Revises theft prevention statutes including grant details.
- Addresses fiscal matters regarding municipal and county jails.
- Supervised re-entry program.
- Wine Marking Assistance Program – statute which providing funding repealed.
Article VI – HB 3418 by Darby
Elements of the bill include:
- Petroleum Industry fees – fiscal years ending and beginning dates are struck.
- Funding for state sites – for-profit partnerships addressed as well as other park provisions established.
- Coastal Erosion funding is addresses.
- Commercial Vessel Docking Fee is established.
- Establishes certain funding for implementing Subchapter H, Ch 33, of Natural Resources Code.
- Establishes a program to support Air Quality research.
- Funding for certain TCEQ programs are addressed (clean school bus, clean fleet, health effects study, air quality planning, etc).
Article VII – HB 3417 by Darby
Elements of the bill include:
- Maximize Federal Funds for transportation improvements.
- Department may evaluate highway use to determine if damage is caused by over size/weight vehicles and if fees are adequate to offset cost.
- Fee shall be determined by vehicle weight and distanced traveled.
- Office of Rural Affairs is established within the Department of Agriculture.
Article VIII – HB 3419 by Darby
Elements of the bill include:
- Committee established to review outcomes and cost containment health care strategies*
- Health Care pilot*
- Health care entity or individual may submit to the “Health Care Payment and Delivery Reform Committee” a proposal for a pilot program to design and implement a new health care payment or delivery system.
- Those participating in an approved pilot may employ a physician.
- Health Insurance Connector established and detailed.
All Articles – HB 3790 by Pitts
This bill contains all the items above that have an (*) and the bill also has some additional elements such as:
- Accelerator issues reported on in previous HillCo Client Advisory which applies to gasoline & diesel fuel tax collections, certain franchise taxes, and mixed beverages taxes and fees on certain alcoholic beverages.
- Addresses cigarette and cement tax.
- Requires a governing board of a public retirement system to make an annual contribution to the Pension Review Board (PRB) of 50 cents for each active member and certain annuitant.
- Sets a school district wide average at 21 students instead of 22 students for grades K-4.
- Addresses teacher salary formula.
Senate Finance Subcommittee on Fiscal Matters – Hearing on Thursday, April 7
The Subcommittee on Fiscal Matters will meet upon adjournment of the Senate Finance hearing to receive findings from previously assigned research groups. The subcommittee has been appointed to look for $5 billion in non-tax revenue.
The research areas are as follows:
- Maximize utility of all state assets
- Maximize use of general revenue dedicated (GRD) funds
- Consider statutory changes embedded in HB 1 Committee Substitute
- Review State fees
- Improve efficiency of tax collections & Review utility of existing tax exemptions
- Explore other non-tax revenue options
The subcommittee is currently scheduled to meet at 1:00 PM or 30 minutes upon adjournment of Senate Finance in E1.036 (Finance Room). There will not be any public testimony taken during this hearing.