Category Archives: Franchise Tax

Slap shot silence

You may remember that in October the Kountze School District had been slapped with a temporary injunction (an order which restrains a person from effecting a legal action or orders redress to an injured party) to prevent the display of banners with a Christian message. Public school high school cheerleaders had used their own money, made the banners off-campus, and unfurled the banners at football games.  The school district, concerned that the student-led Christian display was an Establishment Clause violation, had banned the cheerleaders from displaying the messages. The First Amendment prohibits the government from making any law “respecting an establishment of religion” and forbids the government from establishing an official religion and prohibits government favoring one religion over another.

Wednesday, a state district judge disagreed with the school district and held that the school could not prohibit such displays.  The school district will now have to appeal.

One legislator displayed his unhappiness with the Travis County District Attorney by criticizing one of its lead attorneys Rosemary Lehmberg who pled guilty to drunken driving in April and who is due for early release (serving less than your full sentence because of good behavior while incarcerated).   Rep. Phil King (R-Weatherford) called for District Attorney Lehmberg’s resignation and proposed HB 3153 to transfer the state’s public integrity unit (currently housed in the Travis County District Attorney’s office) to the Texas Attorney General’s office when the local District Attorney (like Lehmberg) is convicted of a crime.  King called it a “shot across the bow” to force Lehmberg to resign.

And speaking of cheap shots, the budget battle turned into a war of words when Rep. Sylvester Turner (D-Houston) went after Rep. Harvey Hilderbran (R-Kerrville) who authored HB 500—a bill giving $661 million in tax cuts to businesses including specific industries (e.g. insurance, hospitals, and oil and gas).

The two sparred over whether the tax cuts were at the expense of public education. Hildebran argued that strong business growth through tax incentives (reductions in taxes that businesses would have to otherwise pay) would fuel more taxes long-term into education. Turner challenged cutting the franchise tax because he favors restoring funding for over $5.4 billion in education cuts made last biennial session (two year legislative cycle).

At one point Turner accused Hildebran of not being truthful and questioned his competency by making a veiled reference to Hildebran’s public  statement that he is considering running for Comptroller of the Public Accounts (the chief of the state’s finances,  tax collections,  accounts, revenue estimations, and treasurer).

The quip caused the legislature to go to go unusually silent. Turner later apologized.

Governor Rick Perry is not apologizing for pushing hard to get HB 500 passed because it is a cornerstone of his legislative agenda this term.  He has threatened to call a special session (a short 30 day term called by the Governor to address specific issues) if legislators fail to pass “significant tax relief” this year.

Take that!

Opening the doors and shuttering the windows

Governor Rick Perry, acutely aware of time winding down on this biennial session (the 140 day period that Texas has to complete the passage of all legislation until 2015), has asked the legislature to open wider the doors to bring business to Texas.  Perry has proposed that the legislature find $1.6 billion in tax relief for businesses.  Two key components of that are: 1) limiting the franchise tax (the tax rate charged to corporations and other businesses as part of doing business in Texas) to five percent; and 2) making permanent a $1 million deduction for businesses that have up to $20 million in gross receipts.  Both measures are designed to make it more likely that businesses in another state close up shop and move here by giving tax incentive subsidies (tax breaks that are designed to encourage businesses to engage in certain types of behavior).   The Governor’s “open for business” call came after his return from another out-of-state-trip (to Illinois) to encourage businesses to re-locate to Texas. In a paid ad, the Governor suggested that the business climate in Illinois was collapsing because of “rising taxes and government interference”.

And speaking of closing up shop, 37 of Texas’ 47 abortion clinics may have to shut down depending on the votes of two key Democrats in the Senate regarding Senate Bill 537. Sens. Carlos Uresti (D-San Antonio) and Judith Zaffirini (D-Laredo) are opposing an abortion bill which would require abortion clinics to have additional equipment  and infrastructure (e.g. X-ray machines, anesthesia pipelines, larger rooms for post-operation recovery, etc.).  Opponents of the bill say it is trying to force abortion clinics out of business by increasing expenditures on unnecessary equipment.  Supporters of the law argue that they are trying to ensure the clinics have adequate medical facilities.

Senators Uresti and Zaffirini have broken ranks from fellow Democrats on party votes (voting the publicly stated position that your party has endorsed).  Last biennial session they voted with Republicans on one of the more controversial laws involving vaginal sonograms for women seeking abortions, but it remains to be seen whether they will do so again.

Right now the bill has 20 supporters (all 19 Republicans and 1 Democrat), but under the Senate rules, the chamber needs 21 votes or a supermajority (requirement that a proposal garner a vote specified at a greater level of support than a simple majority of 51%). Under Senate rules, 2/3rd of the Senators must agree that a bill can be considered by the Senate. So if either of the 2 Democrats change their mind, then the bill can be voted on (where it is likely to pass because legislation only needs a 51% vote.

Get out while you still can seems to be the message of the week.