DALLAS - A new business tax designed to ease the school finance burden on Texas homeowners could fall about $1 billion short of projections, according to assessments from the state comptroller's office.
Officials note that the shortfall will be offset by other revenue sources that are running ahead of projections, particularly oil and gas income.
"There are some strong revenue streams out there," said comptroller spokesman R.J. DeSilva. "Sales taxes, so far this year, are running about 6.1% ahead of last year. Oil production tax is running 65% higher and natural gas production tax revenues are running about 33% higher."
But Sen. Steve Ogden, R-Bryan, chairman of the Senate Finance Committee, said that the faltering business tax revenues may cause lawmakers to reconsider the levy when they meet in their regular session in January.
Backed by Gov. Rick Perry, the business tax was passed in a special 2006 session of the legislature called in response to a court order to change the public education tax system.
The tax is coming due for the first time this year, and official tallies will not be known until November. However, Comptroller Susan Combs reports that the revenues through June were $4.3 billion, with a target of $5.9 billion by Aug. 31. Extensions for filing will delay the official number for three more months. Texas' fiscal year begins Sept. 1.
The business tax was designed to replace the franchise tax that contained major loopholes. Under the new formula, businesses pay either 1% or 0.5% on gross receipts after deductions for cost of goods sold or employee benefits.
Some businesses have complained that the new tax is unfair and higher than the old franchise tax that they paid regularly. At the same time, Texas school districts are complaining about low appraisal values of businesses in their district. While tax appraisal districts have access to home sales records, those of businesses are not available to the appraisers.
Ogden, who attended a meeting of the Legislature's Business Tax Advisory Committee on Monday, said that lawmakers would evaluate the fairness of the business tax when they reconvene.
Despite the shortfall in the business tax, Texas remains in enviable financial condition amid a national economic slowdown.
Combs sent July sales tax allocations totaling $467.8 million to cities, counties, transit systems, and special-purpose taxing districts, an increase of 4.8% compared to July 2007.
July city sales tax allocations of $311.9 million were up 2.6% compared to July 2007. So far this calendar year, city sales tax allocations are up 5% compared to the same time period last year. Texas counties received sales tax payments of $28.9 million, up 5.5% compared to last July. So far this year, sales tax allocations to counties are up 6.3 percent compared to 2007.
Sales tax revenues in July of $17.5 million to 135 special purpose taxing districts were up 19.5%, and 10 local transit systems received $109.3 million in sales tax allocations, an increase of 9.1%.
Texas has no personal income tax.