January 27, 2015 1:16 PM

Texas Senate leaders propose $4 billion in tax cuts

The Senate base budget slashes property and franchise taxes while investing in roads, border security, and funding enrollment growth for public ed

Texas Senate leaders on Tuesday offered up their vision for the state’s spending plan over the next two years and, unlike the House, the upper chamber is including “significant tax relief.” Under the Senate’s base budget unveiled Tuesday morning, Texans would see $3 billion in property tax relief and businesses would get $1 billion in franchise tax relief, said Finance Committee Chair Sen. Jane Nelson, R-Flower Mound.

Calling the document both “responsible” and “compassionate,” Nelson said the Senate’s proposed budget “meets our growing needs while remaining true to the policies of fiscal discipline that have led to our economic success and created the Texas miracle.” During a morning news conference alongside Lt. Gov. Dan Patrick, Sen. Nelson said this proposal is very much a starting point.

There are also a slew of bills in the works designed to make this budget – or something close to it – a reality, Patrick and Nelson said. SB 52, for instance, is aimed at making permanent a 5% exemption in the franchise tax, Patrick said.

The $205 billion two-year spending plan appropriates $101.4 billion in general revenue, a 6.6% increase over the current biennium. In contrast, the House base budget essentially flat-lines new appropriations with a 0.2% increase in general revenue spending.

Both base budgets, as one would expect, spend less than the $113 billion in revenue estimated by Comptroller Glenn Hegar. The proposals also come in under the $107 billion cap created by constitutional constraints, though the House is significantly lower because it includes no tax cuts. And that’s the biggest difference between the chambers as they get to work on the only thing they’re legally required to pass – a budget.

By Scott Braddock