The Texas Observer An Independent-Liberal Weekly Newspaper A Window to the South Volume 53 TEXAS, JULY 22, 1961 15c per copy Number 16 Compromise Squeezes By $5 Deductible Advances to Third Reading AUSTIN Speaker James Turman cast his second crucial tie-breaking vote of the 57th legislature on taxes Friday and by a 71-70 vote the House sent to third reading a compromise program of Austin Rep. Charles Sandahl staked mainly on a two percent sales tax on items over $5. The House was to consider the $328 million packagewhich also includes a $24 million levy on natural gas pipelines Saturday morning, after this issue goes to press. Willie Morris A switch of 12 liberal and “administration” votes carried the Sandahl Substitute to third reading Friday. The same measure had been ground to death between hardcore conservative and liberal opposition only 32 hours before, when it was defeated 77The Sandahl Substitute, which one liberal supporter described as “a compromise between what the governor wants and what the House will accept,” differs mainly from the Daniel tax package in the sales tax approach. As the substitute now stands, food, medicine, and farm machinery are exempt, but not clothing. A large portion of the sales tax revenue would be derived from a two percent tax on construction materials and power-driven objects. The rest would be on items over $5. Besides the pipeline tax, the measure now includes a watereddown franchise tax, a drivers’ license increase, and a transfer of funds from the permanent to the available school fund. A $16 million section equalizing the tax on utilities gross receipts, which provoked a hot controversy in the package’s first test early Thursday, was stricken from the TIPRO Hears Daniel Won’t Help Pipelines AUSTIN In a move that surprised many for its boldness, the executive committee of the Texas Independent Producers and Royalty Owners Assn. decided not to oppose the tax on dedicated reserves of natural gas aimed at the major pipelines. The decision brought into the open as seldom before the breach between independents and majors. Speaker James Turman and Rep. Tony Korioth accepted speaking invitations from the group, and Korioth was in the middle of his talk when Gov. Price Daniel entered the conference room. Daniel, a longtime critic of the pipelines lobby and an advocate of the Eckhardt tax, set forth his reasons for endorsing the measure. After he had spoken, the committee voted to continue its opposition to any gas production tax increase, but agreed “not to oppose the so-called dedicated re measure by Sandahl Friday in an effort to get votes. The substitute measure was devised in a series of conferences over the weekend. It is known primarily as the work of liberal Tony Korioth of Sherman and Sandahl, a moderate. Korioth argued Friday that the House should not deny responsible members “an attempt to compromise.” Reed Quilliam, Lubbock conservative, countered that the $5 exemption merely continued a slipshod system “of selective sales taxes.” If the package is approved and sent to the Senate Saturday, many observers believe the Senate will stand firm and throw back a tax program similar to their version of HB 334 in the regular session. The uneasy one-vote margin coalition in the House which defeated that tax on the last night is still around, but only barely; only rigorous work on liberals who find the $5 deductible distasteful got the Sandahl Substitute to third reading Friday. Here is the story of the tax fight, which began Wednesday morning. Reps. Max Carriker of Roby and Bob Eckhardt offered the first major substitute package of the two-day debate, an aggregate of taxes that included corporate income, graduated oil, utilities, excise, utilities gross receipts, gas pipelines, dividends and interest, ton-mile, billboard, trading stamp, insurance, and gift levies. “There are people both within and without the legislature,” Carriker said, “who say we can’t solve our financial troubles without passing a sales tax or an income tax. This package is an answer to those people. This is a complete package designed to do the whole job.” The corporate income tax included in the package, Carriker said, “does away with the wholly inequitable franchise tax.” The graduated oil levy “lessens the burden on small independents, slightly increases it on larger independents, and levies a considerably increased burden on the large majors importing foreign oil.” The ton-mile tax seeks “to equalize the burden between commercial and non-commercial users of our highways and is based strictly on use.” Sam Parsons, conservative from Henderson, took the back microphone. “I’ve got more oil and gas wells than I’ve got houses in my district,” he said. “They’re clos ing down all over. You don’t know what a pitiful shape they’re in.” “I’ve never counted whether we have more oil wells than houses in my district,” Carriker rejoined, “But I’ve noticed the houses are closing down my way.” Jack Connell, conservative from Wichita Falls, argued that the Carriker-Eckhardt package would raise taxes by 30 percent on the oil and gas industry. “That’s not fair,” he said. Defending the corporate income tax, Eckhardt said the levy “requires those corporations operating interstate to pay an equitable tax compared with domestic companies. Champion Paper and Fiber Company, for instance, today pays a minute franchise tax because of its great sales outside the state. Yet it utilizes state facilities, farm-to-market roads, it cuts down the pine and hardwood of East Texas, it utilizes our school system, without paying their share of state taxes. They’re virtually going scot free. “The people of Texas,” he said, “ought not pick up every cent of the tab with a general sales tax. It’s just as simple as that.” The Eckhardt-Carriker proposal was tabled by a vote of 112-34. The 34 who voted not to table: Alaniz, Bailey, Barlow, Bass, Berry, Caldwell, Carriker, Collins, Cotten, de la Garza, Duff, Eckhardt, Gladden, Guffey, Haring, Harrington, Hinson, Hughes, Johnson of San Antonio, Korioth, Lack, Longoria, McGregor of El Paso, Markgraf, Pearcy, Richardson, Roberts of Hillsboro, Rosas, Spears, Springer, Ward, Wells, Whitfield, and Yezak. Sandahl Explains Sandahl was next up with his substitute package. “Never before have we been faced with a situation in which we had to raise $360 million,” he said. “That’s a staggering sum. You have to cut across all sorts of economic lines: you can’t be a purist on such vast AUSTIN When the new lobby-conthe House state affairs committee Monday night, why, a glance around the chambers would have been almost enough to convince anyone that the problem was nonexistent. The lobbyhow many hundreds of big-money lobbyists are registered in Austin ?just wasn’t there. It was very conspicuously absent. Except for two or three hardies: There was Bailey Jones of Lone Star Gas sitting way back at the rear of the chamber, with his dignified gray hair and dignified cigar, looking much like a college don; and sitting beside him, almost as though for comfort, were Walter Caven and Lawrence Henderson of the railroad lobby. And down front, but off to the side, Life Begins at $275 AUSTIN Texans who get tired of taking care of their aged parents will find there is no shortage of rest homesor nursing homes, or convalescent homes ready to board them. But there are pre-requisites: either more money than the average person can spare, or a dead conscience. An Observer reporter toured a dozen Central Texas rest homes this week. To get an authentic Bob Sherrill reception, he went not as a reporter but under the guise of a harried son who wanted to unload “Mom” in a decent way. The survey showed: A home in which the basic animal needs of an old person will be met charges an average of $135 a month. A charge of $150 a month is not uncommon, and there is no easily seen difference between these homes and those that charge $15 to $25 less. These prices are all for ambulatory patients, for “Mom” was described as being “up and around, able to feed and take care of herself; her only trouble is being 74 and showing her age.” Care of bedfast patients would of course come at a higher price. Two homes offered their services for $100 a month, but these services appeared to be those of a neglected boneyard. One of these homes smelled so strongly of urine that the odor penetrated even into the yard; a state health department certificate of approval hung on the front hall wall. On the Shelf But usually the minimum health standards as set by the state health departmentjudging by a cursory appraisalhad been met; after all, the minimum is not difficult to meet”one toilet for every 20 residents,” bathtubs at the same ratio, “proper” storage space for this and that, etc. But almost without fail there was one devastating failure: lack dressed in a bright red sport shirt and plain jacketso obviously he wasn’t taking this thing seriouslywas Harris Winfree of Gulf Oil, sometimes picking his nails, sometimes smiling shyly as he listened to testimony. Nobody else. “Section 6 seems to be the guts of this thing,” Rep. Bob Eckhardt, one of the bill’s authors, was telling the committee. “Down here where its says, ‘Any committee, association, or corporation or any other organization’read for that, ‘Citizens for Sales Tax’formed for the purpose of advocating or opposing legislation, or engaging in such activity, which receives contributions from other associations, corporations’ read for that, ‘Humble Oil Company”or organizations, or from an officer, agent trustee or representative of personal attention, almost complete lack of amusements, lack of contact with the outside. Section 9 of Article XIX in the state minimum standards code for nursing home reads: “It is recommended that operators provide opportunities for meaningful activities and social relationships. These may include holiday celebrations, parties, indoor or outdoor games, or personal hobbies. Educational or recreational sessions, sponsored by groups within the community should be encouraged and planned for with such community groups or agencies. Church groups should be encouraged to provide means for church attendance of ambulatory patients.” What weight does the recommendation carry? One Austin rest home said it is now building an addition whose occupants would even be taken on fishing trips. But the elderly people who live in that part of the home will pay $275 a month. In the part now in operation, charging $150, entertainment is limited to one television set. But even a high price does not always insure entertainment. At another Austin nursing home, built like a swank but gloomy motel, inmates are charged $250 a month, yet their entertainment is limited to the use of one TV set. The attendent was asked what services the inmates received for their $250. His reply: “Well, they are bathed once a day, and they are served their meals in their rooms. If they want to watch television, they can come down here \(a small corner room called a thereof, shall list the names of each contributor of $50 or more’ read for that, ‘$150,000”and the amount thereof, together with an itemized list of all expenditures in excess of $50 and the persons to whom such expenditures were made, as well as a list of persons to whom expenditures are contracted or agreed to be paid.’ ” Nobody laughed at Eckhardt’s translations of the verbal porrage, because he was pointing to the literal truth–House Bill 21 was inspired by the success of the Citizens for Sales Tax, allegedly backed heavily by major oil companies, in crushing through to near victory a general sales tax in the regular session. Tell All The Citizens for Sales Tax, di rected by Tom Sealy and Searcy Boredom Reigns In Nursing Homes * * A MOST CURIOUS HEARING
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