Texas Tax Payments May Be Refunded Under Perry-Backed Plan

Texas Governor Rick Perry wants to amend the state’s constitution to allow taxes to be refunded to residents should money go unspent by the government.

In a speech today to the Texas Legislature, Perry, 62, a former Republican presidential candidate, also called for $1.8 billion in unspecified tax cuts over two years. The state estimates it will have an $8.8 billion budget surplus.

“When we do bring in more than we need, we’ll have the option of returning tax money directly to the people who paid it,” Perry said. “Currently, that’s not something our constitution allows. We need to fix that.”

Perry is joining other governors seeking tax reductions. At least eight governors, including Republican Sam Brownback of Kansas, said this month they want to cut or eliminate personal or corporate income taxes. Texas doesn’t have a personal income tax.

A constitutional change in Texas requires two-thirds support of the House and Senate, both controlled by Republicans, and it then must win approval from a majority of voters.

Perry’s constitutional proposal is a “political stunt,” said State Senator Rodney Ellis, a Houston Democrat, in an interview. The amendment won’t get support from Democrats, he said.

“We need to work toward a state budget that invests in the big needs of our state including water, schools and roads,” Ellis said.

Texas lawmakers will have $101.4 billion in general revenue over the next two years, Comptroller Susan Combs said on Jan. 7. Early budgets proposed by Senate and House leaders call for spending about $89 billion, in addition to more than $6 billion to pay education and health insurance bills deferred from the current fiscal year ending Aug. 31.

Texas won’t expand Medicaid health coverage for the poor under the federal Affordable Care Act, Perry said.

“Texas will not drive millions more into an unsustainable system,” Perry said.

To contact the reporter on this story: David Mildenberg in Austin at dmildenberg@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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