Franchise Tax Bill Could Be Disastrous

This headline from the Texas Tribune says it all: “Texas House votes to cut business tax that funds public schools.”

Last Thursday, Texas Republicans brought forward a bill that would eventually phase out the franchise tax. Built upon the idea of a fake surplus, the bill would count GR-dedicated funds as “extra” money, and use those calculations to create a total by which the state would cut the franchise tax. The Legislative Budget Board analysis found that the bill could create as much as a $3.5 billion hit to our state’s general revenue fund and, thus, our public schools in just a few years.

I was proud that House Democrats stood up and fought against this fiscally irresponsible legislation. As that Texas Tribune story noted:

Democrats, arguing that the tax cut would cause lawmakers in later years to underfund crucial public programs, railed against the proposal for nearly two hours. They offered a series of amendments that would have lessened the extent of the tax cut or redirected funds for college tuition, pre-kindergarten and other priorities.

We will be sure to keep everyone up to date on the progress of this legislation as we move through the final four weeks of session.