How Senate Republicans Saved the Franchise Tax
In the end, the result of the debate over the package of tax cut bills considered by the Senate on Wednesday was pre-ordained—they’d pass. The three bills, beloved by Lt. Gov. Dan Patrick, would cut property taxes and franchise taxes to the tune of $4.6 billion. Even if they face an uncertain future in the House, they’d sail through this Senate, right?
But in the latest installment of this Senate’s continuing difficulties—Senate Republicans’ magical ability to make life harder for themselves than it needs to be—the tax debate on Wednesday produced one of the most revealing dust-ups of the session so far between the tea party caucus and its foes.
Right-wing Senate freshmen, led by state Sen. Don Huffines (R-Dallas), threatened to derail the whole thing by demanding that the Senate pass steeper tax cuts. And in response, state Sen. Troy Fraser (R-Horseshoe Bay) gave Huffines what amounted to a public dressing-down that threatens comity in the already uneasy Senate GOP caucus.
Huffines offered an amendment to Senate Bill 7, a franchise tax cut bill shepherded by Nelson and state Sen. Paul Bettencourt (R-Houston), that would phase out the franchise tax entirely over several years. Doing so would blow a giant hole in the state budget. Senate Republicans often talk about killing the franchise tax, and Huffines called their bluff.
Huffines’ amendment put Senate Republicans in the dangerous position of having to vote for the franchise tax—in other words, to keep it alive—or take a politically popular vote that would ruin the state’s finances in a couple of years. In effect, it poked senior Senate Republicans and Lt. Gov. Dan Patrick in the eye. His colleagues pleaded with him to drop it, but he steadfastly refused.
It took quite a while for SB 7 to come to the floor, the first hint of trouble. Senators spent hours on small, uncontroversial bills—like killing a tax on “combative sports events”—or doing nothing at all. Patrick, for his part, stayed away from the freshmen for most of the day. It should have been a proud day for him, but he seemed agitated and unhappy.
SB 7 came to the floor more than three hours after the Senate first came to order. Huffines’ amendment was first in line. But before he could introduce his amendment, Patrick directed the chamber’s attention to Fraser, who had a modest change to Huffines’ proposal. Fraser’s amendment would strike the lines about abolishing the franchise tax, and instead direct the comptroller’s office to study the issue. Fraser, in effect, put his boot down Huffines’ throat, with Patrick’s permission.
Fraser said he hated the franchise tax too, and this study would help them do away with it. State Sen. Royce West (D-Dallas) rose to have a little fun. “This guts the Huffines amendment, right?” he asked Fraser. Huffines, ready to speak, lowered his mic and looked away in frustration. “No, this helps Huffines’ amendment,” Fraser said. “So you would say this perfects his amendment?” asked West.
Eventually Huffines was recognized to speak, and he started to talk about his proposal. But Fraser immediately jumped on him, with the tone of a father straightening out a young child. Right now, he said, they could only talk about Fraser’s amendment, not Huffines’ amendment. And didn’t Huffines know about Fraser’s hearing problems? Fraser would be much obliged, he said, if Huffines would turn to face him when he spoke.
Huffines turned and spoke slowly. “Senator,” he said. “I move that we table your amendment.”
The motion to table Fraser’s amendment failed 7 to 24, and his amendment passed 20 to 11. In the end, only three Republicans, all freshmen, stood with Huffines and against the Senate leadership: Konni Burton, Bob Hall and Van Taylor. Seven Democrats, hoping to cause trouble, joined them.
With Huffines defeated, the bill passed easily. So why is this important? It says something significant about how this Senate works—or doesn’t.
The freshmen, who are pretty far to the right, have not been getting along with the Senate’s senior figures for quite some time. Behind the scenes, the two groups have been sharply, bitingly critical of each other. They’ve clashed publicly over issues like Abbott’s nominations to the University of Texas System Board of Regents, but this is the first time the division has played out so prominently on the floor. And the humiliation of a freshman senator by a senior one will be remembered.
The dust-up makes it even less likely that the freshmen will play along with their senior counterparts. The only reason Fraser was able to head off Huffines so quickly was because Huffines played by the rules and let his colleagues know his intentions—in the future, he and his friends may be more reluctant to do so.
The disappearance of the two-thirds rule as a factor in Senate negotiations makes these kinds of intra-party rifts more dangerous. Last session, the Republicans could put some blame on Democrats for watering down or killing legislation. Now the Dems are no longer a factor. But to get legislation out of the Senate on a party-line vote, Patrick needs the Republicans who sided with Huffines.
If Patrick were still a senator himself, the freshman would be his ideological allies. But now that he’s lieutenant governor, he needs them to fall in line. Here’s his limp spin on his efforts to preserve the franchise tax:
— Dan Patrick (@DanPatrick) March 25, 2015
Is this a terminal condition? Hardly. But it’s something to watch. Deteriorating relations within their caucus could push Senate Republicans in strange directions.
It’s also notable that the House leadership announced a plan to make fixes to the state’s dismal school finance system Wednesday morning, just an hour before the Senate went into session. Is the plan any good? That’s a subject for debate. But as the House and Senate begin to butt heads more seriously over the budget in the last two months of the session, the House is assiduously playing the role of the grown-up in the room. And the Senate is only too happy to help them with that.