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Follow TURFLawmakers raid dedicated taxes to balance budget....AGAIN!
Link to article here.
Yet more diversions of road taxes to non-road uses. How many times have we been promised that lawmakers will end the diversions of gas taxes fro non-road purposes? So many I've lost count. If the Republicans can't get it done with a supermajority, then it NEVER will. Send these people home. They have not one SHRED of credibility as fiscal conservatives.
Texas lawmakers ease state budget cuts by holding back more dedicated taxes
ROBERT T. GARRETT
Austin Bureau
Dallas Morning News
03 July 2011
AUSTIN — Texas lawmakers, who will do almost anything to avoid raising broad-based taxes, balanced the budget this year with one of their favorite flavors of money: dedicated funds.
Budget writers set a record by refusing to spend $4.1 billion raised from fees and taxes that are designated for a particular area — about 40 percent of what’s available from those fees. This let them avoid deeper spending cuts in the overall budget because they could pretend they had that much more in general revenue.
In other words, just three-fifths of the $10.5 billion of dedicated funds, including past balances, will be available for the intended causes through August 2013.
Separately, lawmakers increased their “diversion” of gasoline taxes to agencies other than the highway department. And when it came time to dole out sales taxes from sporting goods, they spent 44 percent less on parks than they did last time. “Our budget situation has gotten out of hand, and we’ve become so dependent on this deception,” said Sen. Kirk Watson of Austin, recently chosen as the Senate Democratic leader.
The result is that programs intended to be fed by the designated money, from electricity discounts for the poor to incentives for medical students who practice in areas short of doctors, face deep cuts.
Watson, who has fought to limit and shed light on the dedicated-money maneuvers, said pledges that Gov. Rick Perry and other Republicans made five years ago to handle taxes in a more straightforward fashion have been hollow. Slight progress was made in boom times, he said, but the effort was scrapped as soon as the economy dipped.
“The state has become like the old drunk who says, ‘I’ll stop this by having one less drink per day,’ but unfortunately can’t even pull that off,” said Watson, who authored a provision now on Perry’s desk that would require Comptroller Susan Combs to publish an annual schedule of unspent fees and taxes once touted as dedicated to certain causes.
The governor essentially endorsed the budget maneuvers last month when he signed the two-year spending plan into law. Spokeswoman Lucy Nashed, though, said the Republican “continues to be a strong proponent of truth in budgeting and truth in taxation, so Texas taxpayers know their hard-earned tax dollars are being spent on their intended purpose.”
She noted that when the state was flush with revenue in 2007, Perry helped lead a successful push to end a 1.25 percent surcharge on telephone bills three years early, saving consumers about $600 million.
Chief budget writers Sen. Steve Ogden, R-Bryan, and Rep. Jim Pitts, R-Waxahachie, said not spending — and in some cases, rerouting — dedicated fees and taxes helped them ease a two-year budget shortfall of $23 billion without dealing out more pain to education and Medicaid.
“It looks bad, but it’s not a lot different than any other entity — when their operating revenues are running short, they withhold some of their savings,” Ogden said.
In a Senate debate with Watson in May, he acknowledged that “we are continuing to rely on excess fee revenues to balance our budget instead of reforming … our rickety tax system.” But he said last week that he believes voters endorse the tactics in tough times.
Rep. Warren Chisum, a former House Appropriations Committee chief, said much of the outrage lawmakers hear over the practice involves specialty license plates. Budget writers in the past wouldn’t spend all the funds raised from “Animal Friendly” plates supporting spay-neuter efforts at animal shelters and “Share the Road Y’all” plates supporting bicyclist safety programs.
“But that’s peanuts,” the Pampa Republican said of the money generated by the plates.
In the next two-year cycle, the nearly three dozen specialty plates mentioned in the budget are expected to raise $3.4 million, of which $3.1 million will be spent for the intended causes, said fiscal expert Eva DeLuna Castro of the Center for Public Policy Priorities, a center-left think tank.
In the just-finished special session, Rep. Geanie Morrison, R-Victoria, passed language on a stopgap spending bill that killed the budget’s call for the state to sit on half of the money raised by many of the plates.
“You can’t just hold that money,” she said, citing “very passionate” supporters of the plates. Abortion-rights opponents will soon join them, with the creation of a “Choose Life” plate.
Where the money doesn’t go
Health care lobbyists, environmentalists and advocates for the poor are angry at lawmakers’ hoarding of money that residents don’t fork over willingly. Some examples:
Most residential users of electricity in North Texas — except for Denton and Garland, which have city-owned utilities — pay a surcharge of about $1 a month to support a 10 percent discount on bills for elderly and poor people. But after Republicans gained control of the Legislature in 2003, they tightened eligibility and eliminated the discount for October through April, choking off help and building up a surplus soon to exceed $800 million.
“The Legislature preys on those who are voiceless and don’t have the resources to hire lobbyists,” said Rep. Sylvester Turner, D-Houston. He favors repealing the surcharge and giving discounts with the stockpile, which at current spending rates would last eight to 10 years.
Part of the “driver responsibility surcharges” added to major traffic tickets is supposed to go to trauma centers. But over the next two years, 47 percent of the money raised will go unspent, up from 37 percent last time. And that’s not touching $224 million that sat idle as of Aug. 31.
A chunk of the vehicle-emission testing fees collected in polluted urban areas such as Dallas-Fort Worth was intended to help low-income motorists repair or retire their smoke-belching “clunkers.” But in the next budget cycle, 49 percent of the money earmarked for that purpose will go unspent, after an unusually heavy amount of spending lawmakers approved in 2009.
A tax increase on smokeless tobacco passed two years ago is supposed to generate $60 million for general purposes and $60 million for doctor loan repayments over the next two years. Lawmakers, though, chose to spend only 9 percent of the money available to help pay off the loans of medical school graduates willing to practice for four years in underserved communities.
Three-quarters of the state’s gasoline tax of 20 cents a gallon is supposed to go to road-related activity, with the rest earmarked for public schools. The fuel tax and registration fees go into a state highway fund.
But the Texas Department of Transportation calculates that in the next two years, $1.357 billion — or 18 percent — of the revenue will go to non-transportation uses. That’s up by just over $200 million from “diversions” approved in the 2009 session, with nearly half of the increase going to pay for stepped-up patrols at the border with Mexico.
Former House Transportation Committee chief Joe Pickett, D-El Paso, said the practice “is keeping [highway] projects from being built in communities all over Texas.”
Pitts notes, though, that 96 percent of the money not flowing to the highway department pays for the Department of Public Safety. He said that’s permissible because the state constitution allows spending on “policing” of the highways.
Another move considered by some a diversion involves a vague area of state law — an effort by lawmakers nearly two decades ago to help state and local parks. At that time, they stopped devoting part of the cigarette tax to parks, and substituted part of the sales tax on sporting goods.
Four years ago, Rep. Harvey Hilderbran, R-Kerrville, successfully pushed to remove a cap on the flow of sales-tax money to the parks.
The victory was short-lived, though. Parks spending from the sales tax zoomed 46 percent in the current cycle. But it will drop below 2009-10 levels in the next cycle.
“It reflects the times,” said Hilderbran, now the House’s chief tax writer. “It’s just the climate we’re in.”