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Secretary of State Dies maintains that the state may well owe Platoro nothing at all, in view of the dubious nature of the absence of a license to do business in Texas. Sadler last month announced the deploying of a radar-equipped boat to guard the area of the sunken galleons. He said he had received reports from another radarequipped vessel of two two-man submarines lurking in the area. Representative Farenthold has since referred to the submarines as “Sadler’s yellow submarines.” The Yellow Submarine was the title of a recent musical -fantasy movie. The Austin American -Statesman has calculated that the boat Sadler hired will cost the state $12,500 for the 60 days the commissioner retained it. “This submarine business is a bunch of bull,” Cammie Williams, the harbor master at Port Mansfield, says. Port Mansfield is near the galleon site. “If there was a submarine they’d have the U.S. Navy out there,” Williams said. Johnson successfully added a rider to the. House appropriations bill that would require complete records as to the operation of the state airplanes to be filed with the Legislative Budget Board. The motion passed voice vote after a motion not to table carried, 80-61. Earlier, Johnson had sought to require the land office alone to keep full records as to the operation of its planes. The use of state planes is a touchy subject in Austin, it being generally understood that the craft are used, partly, to dispense favors to legislators and other influential people. Representative Braun called Johnson’s amendment the “Truth in Flying amendment.” Meanwhile, the Kilgore commission will continue its inquiries, planning to hear witnesses, particularly those involved in the Platoro salvage operations. Diver Jeff Burke of Rio Hondo has been quoted often as doubting the nature of the PlatoroSadler alliance. G.O. Once Again: $ $ $ Austin Texas lawmakers, called back to Austin July 28 to pass a two-year appropriations bill and the taxes to pay for it, immediately went to work. The task of preparing biennial budgets was accomplished during the regular session before Lt. Gov. Ben Barnes and House Speaker Gus Mutscher agreed to get behind a one-year tax-free appropriations bill so there was no need to hold extensive hearings on the state’s fiscal needs. Both the House and the Senate passed two-year bills before Aug. 5, the day on which Texas voters were to settle the questions of welfare expenditures and annual versus biennial sessions. On the third day of the session, the Senate passed a $5.8 billion bill which is very similar to the two-year bill it passed earlier in the year. The House followed suit the next day, approving a $5.7 bill measure of its own. The $99 million difference between Senate and House appro’priations mainly is in the amounts budgeted for higher education and pay raises for state employees. Neither bill provides the $30 million necessary if voters choose to raise the state’s constitutional ceiling on welfare from $60 to $80 million. \(The Aug. 5 vote was after the Observer’s AS PASSED, the Senate bill requires $327 million in new taxes; the House bill, $286 million. The tax program recommended by Gov. Preston Smith would raise $307 million for the biennium. Although the governor repeatedly has said he believes in dividing the burden of taxes equally between business and consumers, his tax proposals are overwhelmingly weighted on the consumers’ side: In an address to the Legislature, Smith called for a 1/2% increase in the 3% state sales tax to bring in about $159 million in the next two years. Just last summer the state sales tax was raised from two to three cents on the dollar. The year before that, the Legislature approved a 1% city sales tax. Smith also recommended: Increasing the motor vehicle sales tax Adding three cents to the current 11-cent state sales tax on cigarettes \($53.7 franchise tax automatically would return to its present level after two years. \(The franchise tax also was increased from $2.25 to $2.75 last summer, as a balance against “This is not the time . . . to argue theories [emphasis his] of government and taxation,” Smith said in his budget message. “It is time to bear down and pass some sort of tax bill. … Aside from the taxes on nonessential items and estimating that business pays up to 34% of sales taxes, the bill proposed here is a good division between direct taxes and indirect taxes on the consumer. We must remember that, if the profit system works properly, the consumer eventually pays virtually all taxes either directly as taxes or indirectly in the form of higher prices.” THE HOUSE APPEARED willing to accept most of Smith’s tax recommendations. The House Committee on Revenue and Taxation heard liberal Rep. Carl Parker of Port Arthur argue in favor of establishing a corporate income tax in Texas, but committee members were not impressed. Hank Brown, president of the state AFL-CIO, told the committee that the state needs both a corporate income and a personal income tax for future growth. He and other liberals think that the franchise tax hits small businesses instead of the large corporations, which, they believe, have never paid their just share of taxes in the state. Business lobbyists are not pleased with the proposal to increase the franchise tax, but they are ready to give all out support to an increase in the sales tax. Lobbyist Jim Yancy of the Texas Manufacturers Association offered the House committee statistics contending that businesses actually pay more consumer taxes than consumers do. According to the TMA, 51% of sales tax payments come from businesses while only 49% come from consumers. Rep. Ben Atwell of Dallas, chairman of the tax committee, offered his own tax plan which would put telephone and telegraph service, jewelry, appliance repairs, laundry service, amusements, and alcoholic beverages under the sales tax. The House seems ready to accept either Smith’s or Atwell’s sales tax bill, except for the part pertaining to liquor. \(Behind the opposition to taxing the alcohol industry is Speaker Mutscher, a man with very close Senate, however, is not ready to swallow another sales tax. In fact, some senators seem unwilling to pass any sort of tax plan at all. Some were predicting that if annual sessions are approved, the Legislature once again will pass a one-year, appropriations bill and leave town without levying new taxes. complained during debate in the Senate that the governor is forcing the Legislature to pass an unnecessary tax bill. “There is no reason for 181 legislators to be down here spending the people’s money,” he said. “We passed an appropriations bill. We did it without a tax bill. This $307 million will go down as Governor Smith’s tax bill.” Some other Senate liberals and moderates were thinking of introducing an alternative to the governor’s tax plan. Their best hope is to balance this year’s bill equally between business and consumer taxes. Thirteen senators recently met in Sen. Oscar Mauzy’s office to discuss a tax package the Dallas senator is drafting. Mauzy wants to increase the taxes on natural gas and sulphur, levy a one-cent-agallon tax on gasoline at the refinery \(thus levy an admissions tax on sports and entertainment events, and remove certain sales tax exemptions such as those on beer, liquor, cigarettes and farm machinery. Mauzy said that in addition to the 14 senators already interested in his tax plan August 15, 1969 5