FINANCE CHAIR: STATE MUST ADDRESS UNDERLYING ISSUES OF BUDGET SHORTFALL

Lt. Governor David Dewhurst (left) and Finance Committee Chair Steve Ogden addressed the state's structural shortfall at the heart of the budget.

(AUSTIN) — While cutbacks might help lawmakers balance this biennium's budget, the state must make fundamental changes in its tax structure and funding strategies if it is to avoid a similar situation during the next session. This according to Senate Finance Committee Chairman Steve Ogden of Bryan, who along with Lt. Governor David Dewhurst Tuesday, called for changes in the state's gross receipts tax. When the Legislature enacted the new business tax in 2006, it was intended to make up for the revenue lost by a 33 percent cut in property taxes. Dewhurst said the tax is underperforming expectations by about $4 billion per biennium, that gap is at the heart of the current budget shortfall.

Senator Royce West of Dallas authored the bill that would make dealings between homeowners and homeowners associations fairer.

Because tax bills must originate in the House, that chamber must take the lead on any changes to the current business tax structure . Ogden and Dewhurst did suggest a possible solution, moving back to the old system of a tax on gross income, but with a broader base, drawing in more businesses to ensure the rate is as low as possible. Ogden doesn't think the Legislature was wrong to pass the business tax five years ago, but said the system needs to be fixed. "It's making a mistake not to adjust it when it's clear it needs adjustment," he said.

In floor action Tuesday, the Senate passed a bill intended to give homeowners a more level playing field in dealing with homeowners' associations (HOA). SB 142, by West, would permit homeowners to pay assessments levied by HOAs in installments. It seeks to increase transparency by requiring HOAs to disclose to home buyers all operational documents at the time of sale, including organization bylaws and restrictions. The bill would also require that any foreclosures initiated by the HOA must be conducted through the courts. An amendment added to the bill would prohibit a homeowners' association from foreclosing on a member of the military on active duty, or for nine months after the active duty period ends. The bill passed the Senate unanimously and now heads to the House for consideration.

The Senate will reconvene Wednesday, April 6 at 11 a.m.

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