Texas House Committee Begins Informal Interim Study Regarding Tax Exemptions and the Economic Condition of the State
On Wednesday, September 28, the Texas House Committee on Ways & Means met to discuss:
- current economic conditions and forecast;
- cost-efficiency measures and best practices in the Tax Code;
- a review of current sales tax exemptions.
Chair Harvey Hilderbran began the meeting by noting the committee is in the fact finding phase of its interim study. The actual interim charges will be released in the near future, but it is anticipated these issues will be addressed in the charges. The committee intends on meeting again next week to continue with its fact finding phase.
John Heleman, Chief Revenue Estimator for the Texas State Comptroller gave a cautious overview of the Texas economy. The Texas economy has fared better in some areas than the national economy. He noted there were no dramatic drops in housing values which is a factor to consider for the economy and as it feeds into Texas’ school finance model.
Members also asked Heleman to inquire at the Comptroller’s office in regards to recent media reports on tax abatements for pollution control property and its economic impact on school districts and the state budget. Sixteen requests from refinery owners have been filed with Texas Commission on Environmental Quality (TCEQ) for refunds on taxes on pollution control equipment enhancements from property tax. If abatements are awarded, the decision could result in a refund of over $135 million, according to recent media reports.
Bryant Lomax with the Texas State Comptroller’s Tax Policy Division, offered a highlight of various sales tax exemptions. Rep. Lanham Lyne proposed the committee should start with a clean slate and instead look for sales tax exemptions that the committee would like to keep. Chair Hilderbran also noted that in addition to what the exemption may cost Texas in tax dollars, the committee should also determine the result of economic activity generated as a result of the exemption.
