Wednesday, April 20, 2011

Billions apart, but idea is same

House, Senate panels use some accounting tricks to ease shortfall
April 19, 2011

AUSTIN — House and Senate budget-writers may be billions of dollars apart when it come to how much they are looking to spend on state services, but they are looking at the same accounting maneuvers to help fill part of a massive revenue shortfall.

Sen. Robert Duncan, R-Lubbock, on Tuesday outlined a much-anticipated list of so-called non-tax revenue items that would add more than $4 billion to spending.

Two big-ticket revenue items match those backed a day earlier by House budget-writers: delaying the state's payment to schools just long enough to push it into the next fiscal cycle, freeing $1.8 billion, and speeding up tax collections to get more than $1 billion.

Neither creates money, but each would change the time frame in which money would be paid or collected so lawmakers can use the funds in the coming two-year budget period.
Small-business fears

Sen. Dan Patrick, R-Houston, voiced concern over speeding up business-tax payments, contending it would be a "disaster for small business" because companies will have to pay even if they have not yet collected the money.

Duncan said the proposal has been vetted, noting that House budget-writers had letters of support from business groups.

The list in Senate Bill 1811 also includes smaller items that could create a flap, such as changing the way little cigars are taxed, so the levy is equivalent to that on cigarettes. That would bring in $25.1 million.

The bill also would eliminate a sales tax exemption for those who have long hotel stays, raise the customs brokers' stamp fee, sell under-utilized state property and have unclaimed property revert more quickly to the state. The last item already was OK'd by House budget-writers.

Unlike the measure approved by the House Appropriations Committee, the Senate measure does not contemplate the elimination of the annual back-to-school sales tax holiday.
Panel set to vote today

In addition to the nearly $4.2 billion worth of items listed in the bill, Duncan said the state can get another $593 million from items that do not require changes in law.

The Senate Finance Committee is expected to vote on the bill today, along with other measures to help pay for a spending proposal expected to substantially exceed the House-backed budget proposal. A favorable vote will send the legislation to the full Senate for consideration.

The $164.5 billion House budget for the next two years would cut $23 billion from current state and federal spending, a 12.3 percent reduction.

House Appropriations Committee Chairman Jim Pitts, R-Waxahachie, said when the House passed its budget that he would work to add funding to key areas, including education and nursing-home rates. He said he thinks the House could add between $4 billion and $5 billion to its plan, but that the Senate plan would be too expensive. The full House could take up its revenue legislation, which amounts to more than $3 billion, next week.

The state is facing a budget shortfall of $15 billion to $27 billion through the next two years.

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