REAL Republicans are for Strayhorn

Tuesday, May 30, 2006

Perry Tax Scheme Alienates GOP Faithful

Houston Chronicle reporter R.G. Ratcliffe says "Perry's political clout facing convention test - The governor's tax package causes grumbles among the GOP faithful".

Here's an excerpt:

The Texas Republican convention next weekend will be a major test of whether Gov. Rick Perry has alienated the GOP base with a property tax cut package that was paid for with a major business tax increase....

Several Houston delegates to the state GOP convention are pushing for a party platform plank denouncing the new tax. At the very least, they say they hope to send Perry a message of Republican disgruntlement.

This anger might ... create a disillusionment that causes some voters to stay home.

That could spell disaster for a governor seeking re-election in a race that likely will be decided by less than a majority of the voters.

"They'll either skip the governor's race, or they'll end up voting for the little grandma (independent candidate Carole Keeton Strayhorn) to let the governor know that, even if you win, we do not approve of what you are doing," said Langston Gillum, a Houston delegate on the platform committee.


Houston grass-roots activist Steven Hotze and businessman Norman Adams pushed a resolution through the Harris County Republican Executive Committee denouncing the new business tax, and they are asking the state convention to adopt it as part of the party platform.

"He (Perry) has jeopardized his position, and his status has fallen with grass-roots conservatives across the state, particularly here in Houston," said Hotze.


Parro acknowledged, however, that there is a national "unrest" among the Republican grass roots that could translate into poor voter turnout in November.

"The sense that Republicans are going to suffer in November is quite strong all across the nation," Parro said, citing immigration issues as the biggest concern for Republican voters.

Kirk Overbey of Austin, chairman of the platform committee, said he believes there is "angst" among Republicans across Texas about the tax package.

Past opposition

"There is a lot of concern about the whole tax package put together by a Republican Legislature and signed by a Republican governor," Overbey said.


Thursday, May 25, 2006

Love Letter from Carole to Rick re: The Perry Tax Scheme

Texas Comptroller of Public Accounts
May 15, 2006

The Honorable Rick Perry
Governor, State of Texas
Capitol Building, Room 2S.1
Austin, Texas 78701

Dear Governor Perry:

The Legislature is concluding its work on your tax plan. Your plan is fiscally irresponsible -- it includes an unconstitutional income tax on partnerships and unincorporated associations, the largest tax increase in Texas history and leaves the largest hot check in Texas history. What you should do is show true leadership and veto this legislation.

As the state's chief fiscal officer, it is my responsibility to spell out exactly what the Perry Tax Plan means to our state's fiscal integrity. As you have known since it was made public, your plan simply does not pay for itself. As of this moment, this legislation is a staggering $23 billion short of the funds needed to pay for the promised property tax cuts over the next five years.

In 2007, your plan is $3.4 billion short; in 2008 it is $4.3 billion short; in 2009 it is $5.4 billion short; in 2010 it is $4.9 billion short; and in 2011 it is $5 billion short. These are conservative estimates.

At best, your plan is a prelude to another huge tax bill in the next regular session, one that will not only be heaped on Texas businesses but will fall heavily on the same taxpayers you claim to be helping now. At worst, it will relegate Texans to Draconian cuts in critical areas like education and health care for at least a generation. This is not a victory for taxpayers. It is a sham, and Texans will see it for what it is.

There is no economic miracle that will close the gap your plan creates. Even if every single dollar of the current $8.2 billion surplus was poured into the plan, it would not cover the plan's costs for more than two years, 2007 and 2008. The gap is going to continue to grow, year by year. There are only two ways to close a chasm of that magnitude -- future tax increases that you are hiding from Texans now or massive cuts in essential state services -- like public education -- already devastated by your past fiscal indifference.

I have outlined $7.7 billion in long-term "Strayhorn Solutions" to finance needed programs, such as a significant teacher pay raise, real property tax cuts and fully restoring the Children's Health Insurance Program. Those solutions include reinstating e-Texas Performance Reviews and the Texas School Performance Reviews to the Texas Comptroller's office, implementing video lottery terminals, closing corporate loopholes in the franchise tax, eliminating the taxpayer-funded Texas Enterprise Fund and Emerging Technology Fund, and a $1-a-pack increase in the cigarette tax tied to vital health-related programs.

Texans deserve relief from high property taxes, but they do not need it at the expense of future tax hikes and more cuts in public education. Educators are justifiably skeptical of this program because they know that when the state controls the purse strings, rather than locally elected school boards, the result will be devastating to our schools.

The property tax relief contained in the bill, if it can be financed past 2008, will be quickly eroded by rising property values, and increases in local tax rates forced on local school districts struggling to keep up with rising costs. In as little as five years, the state could be right back in court.

Finally, your plan represents the largest tax bill in Texas history, includes an unconstitutional income tax, represents a 200 percent tax increase on Texas businesses at a time when the state has taken an $8.2 billion surplus out of the pockets of hardworking Texans, and does not pay for itself as required by the spirit of our Texas Constitution's "pay-as-you-go, no-deficit-spending" provision. That is unconscionable.

Governor, we should be working to improve state services for Texans and to reduce the burden of government on businesses and individuals. This plan creates a rolling mess that will take 20 years for future leaders of the state to untangle. Texans will recognize this plan for what it is -- a short-term, smoke-and-mirrors patch at best.

I urge you to show true leadership and veto this legislation. Texas needs a school finance plan that provides long-term, pay-as-you-go solutions for education.


Carole Keeton Strayhorn,
Texas Comptroller

c: The Honorable David Dewhurst, Lieutenant Governor
The Honorable Thomas R. Craddick, Speaker of the House
Members of the 79th Legislature

Tuesday, May 23, 2006

Perry Defies Real Republicans Over Big New Tax Law

The Harris County Republican Party passed a resolution pleading with Rick "Biggest Tax Hike in Texas History" Perry to veto House Bill 3:

Resolution Opposing House Bill 3

Whereas, the Texas Legislature recently passed House Bill 3 (HB 3), which enacts a new Business Tax, expanding the Franchise Tax, during its current Special Session, and,

Whereas, the Republican Party of Texas has opposed the current State Franchise Tax in its State Party Platform for the past 14 years, specifically stating the following: "The party urges the repeal of the State Franchise Tax, which is nothing more than an income tax," and,

Whereas, the Texas State Government has the largest surplus, $8.2 billion, in its history, which could be used to buy down the property tax rates without requiring this new Business Tax, and,

Whereas, HB 3 is a new and permanent Business Tax which expands the current Texas Franchise Tax to hundreds of thousands of businesses, and,

Whereas, Texas will be the only state in the nation to tax businesses on their gross margin, which is extremely inequitable due to diversity of businesses, and

Whereas, a Margin Tax means that even if a business makes little or no profit, or loses money, then that business would still have to pay the Margin Tax, and,

Whereas, this dramatic business tax increase would be shouldered on the backs of small businesses, which create most of the new jobs and drive the engine of our state's economy, leading to an economic decline and the loss of jobs for Texans, and,

Whereas, HB 3 is the largest tax increase in Texas history and it is a permanent tax which will likely be increased in future legislatures, and,

Whereas, HB 3 is an end run around the Texas Constitution's prohibition against a state income tax and an attempt to confiscate the citizens of their income by government fiat without allowing the citizens of Texas to exercise their constitutional right to vote on whether on not they will allow the state to tax their income, and,

Therefore, Let It Be Resolved, that the Harris County Republican Party opposes the new Business Tax enacted in HB 3 and calls upon Governor Perry to veto it.

You just know that this resolution fell on Perry's deaf ears -- Perry is no real Republican!