Speaking to supporters outside the Capitol in early May, Governor Perry told the crowd to expect the Legislature to be back for a Special Session dedicated to tax relief if lawmakers failed to deliver on substantive relief during the Regular Session. Putting a floor on the amount of tax relief he expected this session, the Governor laid down a marker of $1.8 billion.
“It should be no surprise that if folks want to go home at the end of this legislative session, send me $1.8 billion worth of tax relief,” Perry told reporters outside the state Capitol.
“Send me a balanced budget that has no fee increases for transportation and $2 billion for infrastructure for water, and everyone can go home and enjoy their summer,” Perry added.
He stopped short of saying he would veto a budget that passes both the Texas House and Senate without $1.8 billion in tax cuts – but not by much.
Fast-forward one month later and the 83rd Legislature has adjourned, either unable or unwilling to meet the Governor’s demand for $1.8 billion in tax relief, instead finding just $1.4 billion in tax and fee relief for Texans. Too, of the $1.4 billion in tax and fee cuts, less than $1.1 billion is permanent since part of the package is contingent on economic conditions remaining positive. So if a downturn occurs in the next two years and the Comptroller cannot certify that enough revenue exists to provide for those tax cuts, then the business tax rate reduction in the second year of the biennium disappears. And all rate reductions disappear after two years regardless.
So now the question becomes: Is it enough?
Is $1.4 billion in conditional tax relief enough to satisfy the Governor’s demand for $1.8 billion in presumably permanent tax relief? Is it enough that the Legislature has satisfied just 75 percent of the Governor’s demand?
The answer should come soon enough.