How much does Rep. Dennis Bonnen (R-Angleton) hate Lt. Gov. Dan Patrick’s tax cut plan? Let him count the ways.
There’s his argument that Patrick’s proposed small break in school property taxes would be quickly swallowed up by higher appraisal rates, as a similar tax cut was in 2006. There’s his argument that’s it’s not really a tax cut at all, because the state can’t cut local property taxes. There’s his wonderment at the idea that the state giving local governments money to make up for their decreased tax revenues can really be called a “cut.” There’s his argument that, because the state can’t control local spending in the future, Patrick’s plan would result in more spending at the local level and more spending at the state level or, in his words, “spending $2 to get $1.”
Then there’s his political critique of Patrick. On Tuesday and Wednesday, at a meeting of the committee he chairs, House Ways & Means, and at a Texas Tribune event, he called Patrick, in essence, a fool. Bonnen, a Lege veteran, charged Patrick with making “some errors in his exuberance.” He laughed at the idea that Patrick offered his plan to boost local school districts. He suggested Patrick hadn’t done much “punching the numbers.”
We’re entering the last stages of one of the strangest and most consequential standoffs of the session: The fight over whether the crummy tax plan originating in the Senate or the crummy tax plan originating in the House should pass. The former would reduce property tax growth and cut business taxes, and the latter would cut sales taxes and business taxes.
Bonnen’s talk this week—along with op-eds he wrote for major Texas newspapers—are his way of laying down the law. He’s demonstrating, exhaustively, that property tax cuts will not pass the House this session—if there was any doubt about it before. (There shouldn’t have been, but some on the Senate side have been a bit slow on the uptake lately.)
In committee Tuesday, he emphasized something else: If the tax impasse results in a special session, the Legislature should be ashamed.
“I think there’s absolutely no excuse and we should all be embarrassed if we’re in a special session,” he said. “There’s no reason.”
But while Bonnen is shutting a door, he’s opening a window. In typical Lege style, he’s offered a compromise plan that’s even more ill-conceived than the two plans already on the table. His idea would be to do a tax cut package of a similar size to the two being discussed—about $4.5 billion—but make it all business tax cuts. In other words, individual Texas taxpayers wouldn’t see any tax relief at all, at least not directly. (There’s another plan being circulated now that would include a tiny amount of property tax relief as well, but the problem there is much the same.)
Dick Lavine, of the left-leaning Center for Public Policy Priorities, endorsed Patrick’s plan over the House plan in committee last night, because, while he thought both were bad, more money would go to individuals with the Senate plan. (Businesses that make lots of purchases are the primary beneficiaries of the sales tax cut, and big businesses especially so.)
Bonnen’s compromise, Lavine told the Observer after his testimony, is even worse in this regard. The state would shed a huge amount of tax revenue exclusively for the benefit of businesses. And because a substantial portion of franchise taxes are paid by out-of-state shareholders, the benefit wouldn’t even all stay in Texas to be reinvested here.
So to sum up, the two chambers are having an ego contest over two poorly constructed and faulty tax cut packages. Privately, most reps don’t really care about the House plan, and most senators don’t care about the Senate plan. Neither is enthusiastic about the policy particulars involved. But because neither wants to let the other “win,” we’re headed toward either a pointless special session in which both sides still can’t “win,” or a third option, Bonnen’s proposed compromise, that’s even worse. Take pride, ladies and gentlemen, in your 84th Legislature.