Texas’ business tax is bringing in $1.2 billion less than expected in its first year, the comptroller’s office said last week. That means the Legislature must find other sources to offset the shortfall in the tax that was designed to subsidize a cut in local school property tax rates.
The business tax, which was due for the first time in 2008, was part of a package passed by the Legislature in 2006 that lowered local school property tax rates to comply with a court order to change the state’s public education financing system.
Lawmakers are expected to have $10.7 billion in unallocated revenues when the biannual regular session begins in January. In addition to the lower tax revenues, the state will also have to pay for damages and cleanup from two hurricanes that hit the Texas coast in 2008 and fallout from the national economic downturn.
Officials expected to generate $5.9 billion from the business tax, but collections so far total almost $4.7 billion.
R.J. DeSilva, a spokesman for the comptroller’s office, said new tax generated about $4.5 billion by Aug. 31, the end of fiscal 2008, with an additional $195.7 million coming in later from businesses that filed for an extension.
The totals are not final because the extended returns, which had to be postmarked Nov. 17, continue to come in. A new revenue estimate will be issued Jan. 12, the day before the beginning of the Legislature’s 2009 session.
