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John Davis

Bad ideas never die

And so we find ourselves once again talking about tax breaks for yacht buyers.

Just think how much you would save on this baby

From capping the sales tax on yachts to phasing out the state business levy, some lawmakers are pushing for tax breaks even as others say the system is already riddled with too many special-interest exemptions.

The breaks are most often cast as a driver for economic development, and a Monday hearing on the yacht tax break was no exception.

Senate Bill 862 “is not about giving tax breaks to the rich. It is all about jobs and protecting our Texas economy,” said Sen. Larry Taylor, R-Friendswood, who pitched it before the Senate subcommittee on fiscal matters as necessary for the state to compete for boat business.

The subcommittee, which left the bill pending, is trying to have hearings on at least a representative sampling of the tax breaks that have been proposed, said its chairman, Sen. Glenn Hegar, R-Katy. “Obviously, the question always becomes do they, at the end of the day, provide a benefit to the taxpayers overall?” said Hegar.

[…]

A similar measure sank two years ago. Backers emphasized then, as they are now, a decision by Florida to cap its sales and use tax at $18,000. They said that has prompted buyers to purchase and keep their boats in Florida.

As filed, the legislation would cap the amount of boat tax at $15,625 per retail sale, the amount typically paid for a $250,000 yacht. Taylor has a substitute to change that to $25,000.

The subcommittee left the bill pending while it awaits a new fiscal note on the change.

As noted, a similar bill was introduced last session, but it did not pass. The fiscal note for SB862 says it would cost $2,893,000 for the upcoming biennium, which is slightly more than the fiscal note of the previous bill. Perhaps the Legislative Budget Board is forecasting more yacht purchases for this biennium, or maybe it’s just that yachts are more expensive these days. In either case, I doubt that Taylor’s substitute bill will make that much difference in this department.

I expended all the snark I have on this two years ago. There’s only so much time available in a legislative session, and it really says something about John Davis and Larry Taylor that they think this particular issue, which would greatly benefit a very small number of people at the expense of the general revenue fund, is worth their limited time and energy. I haven’t even seen a bogus “economic benefit” report on behalf of the yachters, making the usual dubious claims about how much more money this would actually mean for Texas despite the fiscal note, which is telling in itself. As Rodney Ellis says in the story, our tax code is already an unmanageable jumble of bizarre, obscure, and often needless tax breaks that cost billions for no clear reason. We don’t need to add to that.

Sorry, yacht owners

Your champion has failed you.

Rep. John Davis, R- Houston, said he’s given up for this session on capping the sales tax for big yachts to try to compete with Florida’s more favorable tax laws. But Davis said he’s still trying to find a legislative vehicle for a “safe harbor” provision that backers also say is meant to help keep jobs in Texas. The safe-harbor provision would exempt the vessels from the sales tax if they’re bought by non-residents and taken out of Texas within 10 days. It also would allow people to bring yachts to Texas to be repaired or remodeled and keep them here until the work is done without incurring the use tax, which kicks in after 90 days. With an eye toward floating the tax cap again in the 2013 session, Davis said he would like his Economic and Small Business Development Committee to study and develop data on the drift of yacht sales to Florida.

Poor babies. In a world where our schools were fully funded, where Medicaid was on solid financial footing, and where our tax code could reasonably be described as adequate to meet the state’s needs, I’d be perfectly fine with the “safe harbor” and yacht-repair provisions that Davis is still pursuing. In the world we currently inhabit, one wonders if there aren’t any higher priorities he could be pursuing – things that might actually help a larger portion of the population than the yacht-owning portion of it – in the extremely finite time remaining in the session. And I trust that if the data the Economic and Small Business Development Committee develops shows that the demand curve for yacht sales is not significantly affected by the sales tax rate that this will be the last we hear of this ridiculous issue. Right?

What we need right now

Is a tax cut on yachts.

As some lawmakers look high and low for money to ease cutbacks in education and human services, the House Ways and Means Committee has approved a tax break for big yachts.

The committee voted 8-3 Thursday for House Bill 2187, which Rep. John Davis, R-Houston, casts as an effort to preserve the economic activity that goes along with having big yachts purchased and kept here.

Other states — most notably Florida — have limited their yacht taxes and Davis said that means Texas is losing out on sales and service.

Davis’ bill initially would have limited the the amount of boat tax to $15,625 — the amount normally due on a $250,000 vessel — regardless of sales price. He changed that to match Florida’s $18,000 maximum.

The bill next goes to the full House, where Davis said he’s optimistic about its chances.

Voting against the bill in committee were Reps. Wayne Christian, R-Center; Trey Martinez Fischer, D-San Antonio; and Mike Villarreal, D-San Antonio.

Here’s some background on this ludicrous piece of legislation. According to the fiscal note attached to HB2187, it will cost the state $2,782,000 over the next biennium. (That works out to just over 25 teachers, at $55K per year, for the biennium.) Without any way to pay for it, of course, because tax cuts always pay for themselves. It’s a law of the universe, I believe. Anyway, if you’re in the market for a new yacht, as most of us are, be sure to wait till this new law passes so you can save yourself a few bucks. It’s the economy-boosting thing to do. A statement from the “flabbergasted” Rep. Villarreal is here. Hair Balls has more.

Election tidbits for 9/30

While it’s an interesting story, I don’t quite see what the fuss is about Rick Perry using monetary rewards for volunteers who get people to sign up with his campaign. As the story notes, rewards of some kind, usually campaign swag, are common enough. In this case, he’s got a jillion dollars on hand, and TV advertising seems like an extravagance given the tiny voter population he’s aiming for. Yeah, the jokes write themselves, but if it works, what does he care?

Republican State Rep. John Davis has a primary opponent.

Not elections-related, but the ribbon-cutting ceremony that had been planned for this Saturday for the MKT Rails to Trials project has been postponed till December.

Take a look at the Issues pages for Annise Parker, Peter Brown, and Gene Locke. Now take a look at the issues pages for City Controller candidates Pam Holm, Ronald Green, and MJ Khan. I don’t know about you, but that gives me a whole other level of insight as to why the latter race is so much lower profile. Fear not, you’ll get to hear all of them speak in much greater detail next week when my interviews with them run.

It’s not a TV ad, but the Gene Locke campaign is putting out door hangers.

Just a reminder, this coming Monday, October 5, is the registration deadline for this election. If you have not registered to vote by then, you will not be able to. Texans Together will be holding a 48 hour registration marathon at Katz’s Deli at 616 Westheimer from noon Friday through noon Sunday, and will be at all of the 9 Multi Service Centers in the Houston area. For more information, contact Dee at 281-702-7864 or email Dee.young@texanstogether.org

House passes budget, slaps Perry

State Rep. Chris Turner, on Twitter:

At 3:56 am, the House unanimously passed the budget.

Believe it or not, that was earlier than was originally anticipated. The pregame chatter was that the House would have to reconvene today to finish the job, given the vast number of amendments that needed to be slogged through. It helped that the debate was largely civil, with many contentious amendments, the kind that get inserted to force record votes for future campaign fodder, got withdrawn.

“The real story tonight is that we all worked together, arm in arm, to pass a budget that we can all be proud of. We have shown that working together, we can do what is right for Texas and for Texans,” said Appropriations Committee Chairman Jim Pitts, R-Waxahachie.

The mostly sedate debate – there was a random “bring it on!” when one lawmaker questioned another’s amendment – ran the gamut of sometimes hot-button subjects while intentionally steering clear of a couple of sensitive issues.

House members voted to ban public funding for private school vouchers, bar the Texas Department of Transportation from hiring lobbyists, pay for rail relocation to pave the way for a high-speed passenger train from San Antonio to Dallas under an amendment by Rep. Ruth Jones McClendon, D-San Antonio, and change teacher incentive funding to give local school districts more control under an amendment by Rep. Mike Villarreal, D-San Antonio.

The Republican governor would see losses on two fronts under the proposal approved at 4 a.m.

The measure would drain most of the operating funds for Perry’s office, instead using it to pay for community mental health crisis services and veterans’ services under amendments by Rep. Jessica Farrar, D-Houston, and John Davis, R-Houston.

In addition, if Gov. Rick Perry carries through on his vow to block some $555 million in stimulus funds for unemployment benefits, he would lose the $136 million in the Enterprise Fund.

That budget amendment by Reps. Armando Walle, D-Houston, and Yvonne Davis, D-Dallas, would transfer the money to the unemployment trust fund that pays benefits to workers.

“He (Perry) is having a bad day,” said Rep. Jim Dunnam, D-Waco. “He might have to secede.”

But an effort to slash funding for Planned Parenthood was dropped, and lawmakers also decided to forgo consideration of a ban on embryonic stem cell research.

I’ll expand on some of these points in a minute, but first let me say that this, finally, was the kind of thing I had envisioned when Joe Straus was gaining momentum to knock off Tom Craddick as Speaker. The budget debate was substantive, it focused on real issues and not ideological talking points, and in the end it was passed unanimously. Does anyone think that would have happened if Craddick were still running the show? I sure don’t. Straus hasn’t been the end of the rainbow by any means, but he gets a ton of credit for this.

Now then. As fun as it is to contemplate a penniless Governor’s office – perhaps its functions can be privatized; I hear Accenture is looking for a new gig – that was just a bit of a shell game that will ultimately be rectified. Of much greater importance, and much more likely to have a real effect, was the amendment to zero out the Enterprise Fund.

Rep. Trey Martinez-Fischer proposed an amendment that would keep Texas companies from receiving money from the Enterprise Fund and the Emerging Technology Fund if they’d already been bailed out by the feds. (Withdrawn.) Rep. Marisa Marquez tried to keep Perry’s funds from bailing out corporations that laid people off while paying bonuses to executives. (Also withdrawn) And Rep. Joe Moody wanted to prohibit cash flow from Perry’s funds to companies that contributed to his, Dewhurst’s or Straus’ campaigns. Debbie Riddle killed that bit of fun with a point of order. (She’s good at that.)

Then, Rep. Armando Walle wanted to nix the $136 million appropriation for the Enterprise Fund in the 2010-11 biennium if none of the unemployment insurance bills pass. The idea here is that if the unemployment insurance bills don’t pass, then Texas won’t get the $555 million for the unemployment trust fund, which Perry rejected last month. And the Enterprise Fund siphons money from the trust fund. So what Walle wanted to do with his amendment is say to Perry, “Veto the unemployment insurance bills, and we’ll zero out your slush fund.” But that amendment didn’t fly, either. Died on a point of order.

So far, Mark Strama has been the only one of the bunch to have any success. His amendment, which passed, says that the Emerging Tech Fund should prioritize funding for energy-related R & D projects.

But stay tuned. Yvonne Davis’ amendment, which would completely eliminate funding for Perry’s Enterprise Fund, was temporarily withdrawn, but seems like it might have some success.

And in the end, Rep. Davis’ amendment was accepted. I’m not exactly sure how it differed from Rep. Walle’s amendment, but the bottom line is that as things stand now, if Perry vetoes SB1569, whose prospects for passing the House look better to me now, then he nixes his own slush fund. You gotta love that.

Other matters of interest: School vouchers go down again. Teacher incentive pay gets an overhaul. Various petty amendments bite the dust amid general good will and the liberal use of points of order.

The floor fights have been few and far between. We hear that House members on the left and right have struck a truce and agreed to pull down their most controversial budget amendments.

That includes Panhandle Republican Warren Chisum’s proposal to de-fund Planned Parenthood. Chisum’s amendment had family family planning providers worried. But the amendment never came up.

Leo Berman, the Tyler Republican, did bring forth two amendments aimed at illegal immigrants. One would have instructed state health officials not to issue birth certificates to children of illegal immigrants (who, under current law, are U.S. citizens). Berman also tried to tax money transfers sent from Texas back to Mexico, and Central and South America. Both of Berman’s amendments were shot down on points of order because they changed state law, which isn’t allowed during the budget debated.

All in all, it was a pretty good day. There were some more goodies and the requisite amount of silliness, as one would expect for an 18-hour marathon. I recommend you read Vince’s exhaustive liveblogging to get a feel for that. In the meantime, the budget now goes to the conference committee so that the differences between the House and Senate versions can be ironed out. Burka things the Senate has the advantage in that, so who knows how much of what the House did will ultimately survive. All I know is that having seen the budget process under Tom Craddick three times, this was a vast improvement.

UPDATE: From Texas Impact:

Among the most important improvements the House made on the floor were:

They call the House budget “a significant improvement over the Senate budget”. Let’s hope we can say the same after the conference committee. Link via EoW.