Saturday, April 23, 2011

Fixing the Structural Deficit

Now you see? This is what I have been talking about. Here we have a state legislature poised to pass a job-killing budget bill and a governor poised to sign it into law, and not one thing is being done to correct the structural deficit that got us in this fix in the first place. You’d think that would be enough, wouldn’t you? You’d think that the Republican-dominated state government couldn’t come up with more ways to ruin the state’s finances.

And there you would be wrong. A bill to extend business tax cuts to businesses with less than $1 million per year in revenue has just been voted out of committee. At a time of budget shortfalls, school closings and massive teacher layoffs 8 of the 11 members of the House Ways and Means Committee voted to deny the state of $150 million in revenue over the next two years.

Absolutely astounding.

From the Austin American-Statesman:
“The bill by Rep. Harvey Hilderbran, R-Kerrville, would continue a tax break that will cost the state almost $150 million over the next two years. Under the original business franchise tax, only companies with revenue of less than $600,000 a year were exempt from the tax.”

The structural deficit was created several years ago when Republicans decreased property taxes and sought to recover the lost balance by creating the business tax. A tax that didn’t quite make up for the loss in revenue from property taxes. So they are going to solve this problem by increasing the amount of money that the business tax doesn’t collect.

Republicans are in transition from doing a bad job raising revenue to pay for basic government services like health and education to doing a worse job.

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