Ogden vents frustration at business over taxes; Allaway says remarks 'unfair'

"We've got a tax system that is no longer equal [and] uniform, and it's not very efficient," Ogden said. "I would feel a little bit better if businesses who are here testifying against us would help us fix the business tax . . . "

He also said they should try to stop the hemorrhaging of the revenue base through tax giveaways

Note: There's nothing new about Texas' business taxes and public school financing being unstable. Question is, will our lawmakers in the Legislature properly fix things as they should before their end of May adjournment.

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By Robert T. Garrett/Reporter
dallasnews.com
rtgarrett@dallasnews.com
April 6, 2011

Sen. Steve Ogden, R-Bryan, said (last week) that Texas has a tax and school-finance system "that's fundamentally unstable." A day earlier, Ogden, the head of the tax- and budget-writing Senate Finance Committee, scolded business lobbyists before him for blocking every effort he's made this session to put the state's fiscal edifice on a firmer foundation.

But a veteran business lobbyist, who'd testified against an Ogden bill not long before the senator sounded off, said it isn't fair to label the business lobby as obstructionist on the question of sound tax policy.

"Yesterday, Senator Ogden was feeling a little bit beat down," said Bill Allaway, senior adviser to the business-backed Texas Taxpayers and Research Association. "He got voted down two or three times on the Senate floor and then people didn't stand up and salute his [tax abatement limitation] bill [in committee]. He was feeling a little down at that point."

Ogden said Tuesday that he wasn't directing his criticism at any particular segment of business. But he stood by his remarks Monday night that Texas is hobbled by "a large structural deficit," created when lawmakers permanently reduced available state revenue by inadequately offsetting local property tax cuts they pushed through in a 2006 special session.

Ogden said lawmakers are "failing in our duty to the public" by not taking a hard look this session at tweaking the state's business tax, which produces $2 billion a year less than expected when lawmakers five years ago broadened it to apply to all businesses and cut its rate.

He also said they should try to stop the hemorrhaging of the revenue base through tax giveaways.

Late Monday (last week), Ogden's committee heard testimony on his bill to cap a school property tax break used in some major economic-development deals – a break the locals give away but the state reimburses them for, to the tune of $200 million a year.

A long list of potent business lobbies, from petrochemicals and utilities to tech companies and wind farms, came out in force against Ogden's bill. He fired back, saying his bill may look "hard to pass" but his principles remain valid – tax subsidies distort markets, and a good system treats everyone alike.

"We've got a tax system that is no longer equal [and] uniform, and it's not very efficient," Ogden said. "I would feel a little bit better if businesses who are here testifying against us would help us fix the business tax. But it just seems like, well, we can't fix that, either. So we're continuing to struggle to get a budget that will work."

Allaway, though, said business groups are willing to discuss how the state should raise money for "legitimate needs." He continued, "Part of the problem is that the Legislature has systematically spent more money than it had for the last few years ... digging a deeper and deeper hole."

"I'm not quite sure what he wants the business community to do that it hasn't done – to volunteer to bail the state out?" Allaway said, referring to Ogden. "... The guy's gotta lot of strain on his shoulders. And I'm not sure that he's getting all that much help from his colleagues."