As Texas begins the third year of its unprecedented oil and economic boom, there is finally talk in Austin of having some of that surplus trickle down to you and me in the form of a sales tax cut, 1200 WOAI news has learned.
"We have been running a surplus the last couple of years," Former State Rep. Talmadge Heflin, who is now the Director of the Center for Fiscal Policy at the Texas Public Policy Institute, a conservative leaning think tank. "And looking at the way the economy is going we know in 2015 there is likely to be an even larger surplus."
So Heflin has a released a blueprint for returning some of that surplus to the people, in the form of a sales tax cut, possibly a half a cent.
"That is the broadest tax in the state," Heflin said. "Everybody pays it if they buy something."
Amazingly, state law makes it difficult to cut tax rates once the State Comptroller has 'certified' the state's available cash, as she does every two years before the start of the session.
Once a spending bill is voted out of committee, there is 'no management way; to reduce the level of spending.
"At this point in the process, members in both the House and the Senate face an almost insurmountable task when it comes to reducing spending," said Dr. Vance Ginn, an economist at the Center for Fiscal Policy. "In truth, due to this process, spending levels almost always increase above introduced bills."
So Heflin's proposal is to create what he calls the 'STAR Fund,' or the 'Sales Tax Relief Fund.' That way lawmakers could use that fund to pay for projects, and the money that is saved because the STAR Fund, and not general revenue, is paying for projects would allow money to be returned to taxpayers.
"Rather than giving the Legislators an incentive to spend it all, we are trying to come up with an incentive to return it to the taxpayer," Heflin said.
The STAR Fund could also calm the fears of Tea Party conservatives, who, while supporting tax cuts, are concerned about spending money from the 'rainy day fund' and other sources.
In the 2013 session, there were plenty of gasping hands anxious to grab the surplus that the state was running, due to higher tax receipts and the gushing oil and gas severance fund. Money went to schools, to water projects, and roads.
Heflin says next time, the money should go to the people.
He says the sales tax cut proposed by the TPPF would affect the state budget only and would not affect the sales taxes which are rebated to cities, the University Health System, and other sales tax receiving entities.