When you find yourself in a hole, go ahead and keep digging

So Texas has this big budget shortfall. You’ve probably heard about it. A big part of that shortfall is structural, thanks to the 2006 property tax cut that was supposed to be funded primarily by the business margins tax. Unfortunately, that tax was projected from the beginning to fall short, and it has turned out to perform even worse than originally expected. This has led to a deficit of about $10 billion for this biennium, and more of the same for the future until the Lege does something to fix it. To his credit, Senate Finance Committee Chair Sen. Steve Ogden is willing to attack this problem. Unfortunately, he can’t do anything about it because tax legislation must originate in the House. As it happens, the House Ways and Means Committee is talking about the business margins tax, and is considering legislation to amend it. The only problem is, the legislation they’re considering would make a temporary exemption for the tax to businesses that gross less than $1 million a year permanent. This would add another $75 million to that structural deficit. Makes perfect sense, right? Go read Burka and Abby Rapoport for the details and marvel anew at the way our state government works.

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