Thursday, January 12, 2006

An Eyewitness Account Of Monday's TTRC Forum

Jan Van Praag attened and has this synopsis of her experience:
I was lucky enough to be able to attend the third in this series of hearings around the state from 10:00 to shortly after 1 p.m., when I had to leave for another meeting. When I arrived, every seat of the City Council Chamber was taken and the area for standing room overflowed out into the Austin City Hall's lobby area. Fortunately, there are several built-in televisions where people can observe the proceedings, although of course it's much noisier out there. On my second try, I was able to sit inside but so far back that I still missed the names of most presenters. I have subsequently sent a request to the Commission's Administrative Assistant for a list of the presenters in the order in which they spoke, along with a query about availability of a transcript of same, including the possibility of seeing supplemental information provided by the presenters to the commission members. For instance an assistant to Ron Kirk, who spoke for a coalition of 18 prominent law firms, distributed to each an enormous expanding file folder (that included appendices) on their findings. However, I sent this request too recently to have a response in time for this summary of my impressions.

So, all I can feebly say is, a representative (Ted Cruz) of the Attorney General's office spoke about why this all came to be. Then George Bramblett, who was party to the suit of property-rich school districts filed against the state, explained the history of their case. And the four or so options that might be available (such as raising the ceiling or lowering the floor of the tax structure), which Commissioner Howard Wolf
declared interesting but not informative.

Then Ron Kirk and several other attorneys from this coalition stated they were for HB 13 as subsequently modified. There is some kind of choice between A (extension of the franchise tax) or B (extension of the payroll tax) or C (never less than existing tax on earned surplus). Partnerships would somehow be excluded. They are concerned that, with a payroll tax extension they wouldn't be as competitive in out-of-state business and would have a hard time collecting the tax from out-of-state clients, so would have to absorb that amount themselves. They believe the franchise tax is worth saving if certain loopholes are closed. Recognizing that these law firms brought in revenues of around 400 million a year, Chairman John Sharp asked about companies that made, say only 1 million a year, and assuming they spent half that in overhead, including health insurance and so on, what would be the tax on the remaining half-million? The answer was "at 15%, something between $4,000-75,000."

The next speaker was a gentleman dressed in jeans and a short-sleeved cotton pullover who deliberately compared himself to the "men in $3,000 suits" who had gone before him. He is opposed to property tax increases and offered this solution: go on and declare the vanishing middle class and poor of us to be slaves of the state, take everything from us, giving us back only enough for food (not restaurant food but sandwiches) and the gas to get to the workplace. Throughout his speech, as if suddenly all the air had been sucked away, the auditorium remained incredibly quiet, except for sporadic applause from the audience. While it could be said his manner was surly and hostile, it was also obvious he was fully informed about the processes leading up to this hearing. My impression was that if I were as knowledgeable as he, I might be surly and hostile, too.

I had to leave while another gentleman was speaking on the merits of raising tax on tobacco products.

I recommend going to the TTRC website, to read about the Commission's charge, its members, the hearings schedule, and the 2005 overview of Texas's major taxes prepared by the comptroller.
Thank you Jane.


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