Wednesday, October 22nd, 2014

Perry-O-Meter

Oppose and veto tax increases


Will "oppose and veto any and all efforts to increase taxes."

Updates

Perry opposed state tax increases

In October 2009, Gov. Rick Perry signed a pledge to "oppose and veto any and all efforts to increase taxes.”

Certainly, as we've noted, the 2012-13 state budget did not draw on any general tax increases.

Also, after this year's regular legislative session, Perry vetoed two tax-connected measures, according to an online compilation of legislation considered by the tax-writing House Ways and Means Committee.

One vetoed proposal, House Bill 2403, clarified that all retailers doing business in Texas — including, say, Amazon.com — must charge state sales taxes. In his veto message, Perry said the "legislation risks significant unintended consequences,” which he didn't detail.

His message continued: "My strong preference is to conduct a thorough policy discussion with Texas lawmakers, consumers, retailers and technology experts — and with other states and even the federal government — about interstate commerce and the structure of state sales taxes. That conversation is under way, and I believe that a consensus can and should be reached that balances the competing interests, respects federalism, and is fair and equitable.”

The other vetoed measure, HB 2972, would have allowed cities where at least 66 percent of voters had authorized a sales tax for street maintenance to put the tax up for a revote every eight years rather than every four years as existing law requires.

Perry's veto message said, "Texans should have the right to vote on tax measures sooner rather than later.”

Yet we paused on declaring this a Promise Kept after noticing that several measures related to local communities imposing hotel-motel occupancy taxes made it into law.

Some background: The state levies a 6 percent tax on hotel rooms costing $15 or more a day, according to the state comptroller"s office. Local taxing authorities may impose an additional hotel tax. State law gives more than 25 counties permission to levy a county hotel occupancy tax. Depending on the county, rates can range from 2 percent to 8 percent. The law also specifies how the collected taxes can be spent.

In measures that made it into law this year, a few of the state"s 254 counties were allowed to impose hotel occupancy taxes, increase existing rates or earmark proceeds for projects such as sports facilities.

Samples: Senate Bill 1185, approved by Perry, allows Henderson County to impose a hotel occupancy tax of up to 2 percent, potentially yielding that county $176,000 in added revenue in 2012-13, according to the legislation"s fiscal note.

Also, a possible change in municipal hotel occupancy taxes also came to Perry"s desk. House Bill 1315, signed into law, permits Longview and Tyler to increase their municipal hotel occupancy tax rates by 2 percentage points, potentially yielding the cities $794,000 and $1 million, respectively, in added 2012-13 revenue, per the measure's fiscal note.

We asked the sponsor of the anti-tax pledge signed by Perry, Americans for Tax Reform, for its take on Perry's OKs of hotel occupancy tax increases and didn't hear back.

Scott Joslove, president and CEO of the Texas Hotel and Lodging Association, told us in an interview he doesn't view Perry"s approval of the measures as busting his pledge to oppose and veto tax increases. Joslove's point: Each permitted hotel tax increase remains up to each county to put in place and also, he said, hoteliers in each affected community supported legislative proposals permitting the hikes.

"The state is not imposing any tax,” Joslove said. "They are allowing the locals to adopt it if that's what they want to do.”

Then again, couldn't future hotel guests affected by the authorized increases fairly say the increases undercut Perry"s pledge to oppose tax increases?

Perry spokeswoman Catherine Frazier told us by email that the hotel-tax measures reflected locally controlled decisions. "The fact remains that (Perry) signed a balanced budget that did not raise taxes,” Frazier said, and upheld his pledge.

Frazier pointed out that Perry did not sign off on any change in the state's 6 percent hotel occupancy tax. She called the hotel occupancy taxes "essentially user fees at the local level,” adding: "These are different from state taxes because they are collected and spent locally.”

She said too that any proposal to authorize changes in local hotel occupancy taxes is offered by a legislator only "when the local jurisdiction asks that this be done.” Also, she said, "the localities do not have to impose it but if they do, these (laws) set the maximum rate — this is local control.”

Ultimately, we're willing to assume the governor's pledge was intended to reference statewide tax increases even though it's not worded that narrowly. With that assumption, this is a Promise Kept.

Sources:

Gov. Rick Perry, veto statements, House Bill 2403, May 31, 2011, and HB 2972 June 17, 2011 (accessed July 25, 2011)

Telephone interview, Scott Joslove, president and ceo, Texas Hotel and Lodging Association, July 26, 2011

Texas Legislative Council, House Bill 2972 (2011 Legislature), fiscal note, May 13, 2011