May 1st, 2015
Greetings Friends, Constituents and Supporters:
Tax Bills HB 31 and HB 32
The Texas House gave overwhelming preliminary approval Tuesday to a pair of bills that would reduce the tax burden on Texans. House Bill 31 would reduce the state sales tax rate from 6.25 percent to 5.95 percent. House Bill 32 would reduce franchise tax rates by 25 percent. Following the votes, Speaker Joe Straus (R-San Antonio) released the following statement:
“Today the House voted to provide all Texans with tax relief that encourages job creation and economic growth. The House looks forward to a productive conversation with the Senate about how best to deliver results on this issue and the many others that matter to our economy and to Texas families.”
The passage of HB31 and HB 32 is a path toward eliminating the franchise tax which I believe is an unfair tax on citizens of Texas. Following the 83rd Legislature, the franchise tax rates were already reduced (respectively to 0.475 percent and 0.95 percent ) but these decreases expire on December 31, 2015. House Bill 32 would further reduce the rates and make the decrease in the rate it proposes permanent.
House Bill 32 also has provisions that would modify Sec. 171.1016 of the Tax code regarding the E-Z Computation method. It would increase the maximum total revenue under which a taxable entity can file the franchise tax using the E-Z computation method from $10 million to $20 million, and would reduce the rate used from 0.575 percent to 0.331 percent.
Transparency Legislation HB 1378
This week the House of Representatives passed HB 1378 which is the third major transparency bill I have been able to generate support and passage. This legislation specifically requires many levels and types of governmental organizations to simply report their levels of debt and put that information for you the taxpayer online to see.
In the 2012-13 biennium, the Legislative Budget Board fiscal estimated that Texas has a total debt service expenditure of $3.265 billion or approximately 1.9% of total appropriations. This is an approximately 19% increase from the 2010-11 biennium and approximate 284% increase from the 2000-01 biennium.
More worrisome, Texas has extremely high levels of local debt- some of the highest in the nation. According to the Texas Bond Review Board local governments have almost 200 billion in local outstanding bond debt and it is worth noting that local debt makes up 83 percent of all public debt in Texas. School Districts in particular now have an estimated outstanding debt of over 111 billion dollars and 21 school districts with more than a billion dollars in debt each.
To ensure voters are adequately informed about any new debt they are being asked to approve transparency of the levels of debt, payments and per capita burden need to be disclosed on a regular basis. To be fair to all Texas voters, these transparency requirements should apply to all political subdivisions including cities, counties, school districts and special taxing districts. There are many concerns among taxpayers that legislation is needed to ensure greater transparency in open government and HB1378 does this by establishing guidelines for a political subdivisions completion and distribution of annual financial reports.
Texas cannot continue to bury itself in local debt that is in the hundreds of billions of dollars. We must enhance the transparency of political subdivision debt obligations as a means to allow the citizens of Texas a method to see what they are voting for and what it does to debt on themselves and their child and grandchildren before they vote.
This week I also laid out House Concurrent Resolution 61 which urges Congress to reimburse the State of Texas for bearing the financial burden of the federal government’s responsibility to secure the Texas-Mexico international border. I am glad that my fellow members are united in the determination to defend the border and take action when the Federal Government has refused to do so.
I also wanted to let readers know that HB91-our raw milk bill, and HB 150-daylight savings time bill, have been passed out of their respective committees and are on their way to Calendars Committee.
It remains my pleasure and honor to represent all the people of House District 2.
My staff and I continue to welcome your input and your questions.
You can contact our office; mailing address: P.O. Box 2910, Austin, TX 78768. Email:District2.Flynn@house.state.tx.us.
Phone Number: 512-463-0880
May God continue to bless you and the Great State of Texas!
Dan Flynn, State Representative, District 2