AUSTIN – Today, the Texas House of Representatives failed to protect taxpayers when it fell seven votes short of the 100 necessary to pass HJR 44 by Rep. Dan Branch (R-Dallas).
HJR 44 was a proposed constitutional amendment that would have required a two-thirds majority vote by each house of the Legislature to increase the rate of the margins tax adopted during last year’s special session. The resolution required 100 votes on third reading in order to pass; it failed on a 93-49 vote.
“The 80th Texas Legislature has been in session for 17 weeks,” said Byron Schlomach, the Foundation’s Chief Economist. “With today’s failure to pass HJR 44, the Legislature still hasn’t provided any meaningful long-term protections for Texas taxpayers.”
Many small businesses already face exponentially higher taxes due to the new margins tax. Requiring a two-thirds vote by the Legislature to raise the rate would ensure that such decisions reflect some level of bipartisan consensus. But instead, the fate of these small businesses will be left to a simple majority of the Legislature.
“The federal income tax started at a one percent rate,” Schlomach elaborated. “We have seen what happened when we failed to put a lid on that tax. Without this supermajority protection, the Legislature has left open the possibility for the margins tax to be taken through the roof.”
“But today’s defeat isn’t just about HJR 44,” he continued. “Despite record surpluses, the Legislature has done nothing to tighten the state’s constitutional spending limit, to strengthen taxpayer protections at the local level, or to rein in runaway appraisal increases.”
The House has until Thursday to pass HB 2785, the additional 9-cent property tax cut, and the bill keeps getting buried deeper on the House’s general state calendar. HB 735, the TIF tax repeal passed unanimously by the House, was referred to the Senate Finance Committee on March 29th, where it still awaits a hearing.
“Our legislators have three weeks left to demonstrate that taxpayers are a priority,” Schlomach said, “but they are quickly running out of time and opportunities.”
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