Texas House Bill HJR19

Texas 2015 - 84th Regular

Caption

Proposing a constitutional amendment requiring any increase in a rate of the franchise tax be approved by two-thirds of all the members elected to each house of the legislature.

Impact

If enacted, HJR19 would significantly impact how tax policy is managed in Texas. This amendment would mean that increasing the franchise tax could only proceed if it garners substantial legislative agreement, making it more challenging for future legislatures to impose higher taxes. Proponents argue that this constitutional requirement will protect taxpayers from potential punitive tax increases while ensuring that raises in taxes are justified by a broad legislative consensus. Conversely, critics may view this as an obstacle to adequately funding public services, particularly during economic downturns when adjustments to tax rates could be required to meet budgetary needs.

Summary

HJR19 proposes a constitutional amendment to require that any increase in the rate of the franchise tax be approved by a two-thirds majority of all members elected in each house of the legislature of Texas. This measure aims to enhance legislative control over tax policy, potentially curtailing the ability of lawmakers to raise taxes without a significant consensus. The amendment adds a new section to Article VIII of the Texas Constitution, specifically addressing the increase in the franchise tax rates applied to taxable entities engaged in retail or wholesale trade. As it stands, the current law enables tax rate increases that may be enacted with a simple majority, which has raised concerns among certain legislators and stakeholders regarding unchecked taxation powers.

Contention

Debate surrounding HJR19 centers on the balance of power between legislative control and necessary tax flexibility. Supporters, primarily from fiscal conservative factions, contend that this regulation will curb excessive and frequent tax increases, providing a safeguard for economic stability. However, opponents argue that the necessity to achieve a two-thirds majority can lead to gridlock, especially in closely divided legislatures. This could hinder the government's ability to respond effectively to immediate financial crises or changing economic conditions, which could ultimately disadvantage the state's fiscal health.