Miscalculation Throws Tax Reform IntoTexas Limbo
AUSTIN, Texas - (03/23/05) -- The tax reform bill carefullycalibrated during weeks of debate in the House was thrown in doubtTuesday when the state comptroller said the bill falls billions ofdollars short--$4.1 billion over two years--of being revenueneutral, a key goal of the legislation. The main goal of the billwas to produce $6 billion in new state revenue to offset areduction of $6 billion in local school property taxes each year.The revenue shortfall could put the credit union exemption back onthe table for debate when the bill moves over to the Senate for itsdeliberations on the reform. Buddy Gill, chief lobbyist for theTexas CU League, said he expects the Senate to discuss the creditunion exemption but is confident the exemption will survive. "Theyhave consistently said they are going to protect not-for-profits,including credit unions," Gill told The Credit Union Journal.Still, he said, Senate leaders are almost sure to change the billsignificantly because they don't like the payroll tax component ofthe measure. The bill passed last week by the House givesbusinesses the option of paying the state's current franchise taxor a 1.15% payroll tax on salaries up to $90,000 a year.