TSCPA Governmental Affairs

Will primaries make a difference?

Yesterday we posted news items from across the state about House primary races. Does anybody care? A valid question is, what difference does it make?

There are a total of 25 incumbents being challenged in the primary elections, 8 Democrats and 17 Republicans. According to an article in the San Antonio Express-News,the Republican races find the candidates arguing over who is the most conservative candidate. And I guess the Democrats are just arguing. In the long run the primary races are unlikely to change the winning party in the November general election. But in what appears to be unprecedented anti-incumbent voter sentiment, there will undoubtedly be a few fresh faces to vote for in November. If you want to know who they might be, check out the article for a list of the incumbent contests.

Primary races are in the news

Austin American-Statesman’s Austin Bureau Chief Jason Embry’s First Reading post today identifies House incumbents most likely to lose in the primary elections. His picks:

• HD 11 - Rep. Chuck Hopson (R-Jacksonville
• HD 83 – Rep. Delwin Jones (R-Lubbock)
• HD 43 - Rep. Tara Rios Ybarra (D-South Padre Island)
• HD 92 – Rep. Todd Smith (R-Euless)
• HD 100 – Rep. Terri Hodge (D-Dallas)

The Quorum Report suggests that Hopson and Jones are headed for primary runoffs and highlights the funding sources in the Smith and Rios Ybarra contests. Evidently Smith’s opponent in HD 92 is highly-funded by home builders as well as oil and gas interests; the Fort Worth Star-Telegram’s PoliTex blog reports the details of political contributions in the HD 92 race. QRalso points out that the Rios Ybarra race is a funding fight between tort reformers and trial lawyers. The Lubbock Avalanche-Journal reports that one of Jones’ opponents raised slightly more money than Jones in the HD 83 race.

Many other primary races are highlighted in news stories across the state. Here are a few for you political junkies:

• The Dallas Morning News reports that the HD 66 race in Plano is getting ugly, with three Republicans fighting to replace Rep. Brian McCall who is not running for re-election.
• The Texas Tribune reports on campaign shouting in the Valley’s HD 36, where Sandra Rodriguez and Sergio Munoz are battling for the open seat left by Rep. Kino Flores's decision not to run for re-election.
• The Fort Worth Star-Telegram reports on the heated HD 98 contest to unseat incumbent Rep. Vicki Truitt (R-Keller).
• The Houston Chronicle reports on the unusual contest in HD 146, where incumbent Rep. Al Edwards is facing Borris Miles, who defeated Edwards in the 2006 election and served one term before gun-waving behavior allowed Edwards a comeback in 2008.
• The El Paso Timesreports that the funding for HD 76 candidates, where newcomer Naomi Gonzalez, an assistant El Paso County attorney, is challenging incumbent Norma Chavez, seems to reflect a battle between tort reformers and trial lawyers much like the HD 43 race in the Valley.
• The Austin American-Statesman’s PolitiFact Texas rates as "barely true" the claims of one of the three Republican primary candidatesvying for the right to run against Democratic incumbent Valinda Bolton.
• The Fort Worth Star-Telegram’s PoliTex blog reports on races where incumbents benefit from Speaker Joe Straus’ PAC contributions. Most of them are races mentioned above.

Tired of negative political ads? Expect more, not less.

If you think the Texas Republican primary race for governor is just one negative ad after another, there may be a reason: you can’t get away from them. TV and radio are full of one candidate telling you all the bad news about the other. Despite  the Austin American-Statesman’s truth-testing PolitiFact Texas site that proves many negative ads are filled with half truths and outright lies, the ads continue. Why? Because they work!

The Texas Tribunetested two negative ads - one by Perry and another from Hutchison - and discovered that they influenced undecided voters substantially, and even decided voters to some extent. In the article Accentuate the Negative the Tribune explains their methodology and demonstrates that undecided voters were moved by as much a nine points in favor of the campaign running the negative ad.

That’s all well and good, but why doesn’t someone run a test on positive ads to see if they work? Maybe they can’t find any to test.

Fort Worth Star-Telegram Endorses CPA Senator Who is Not Running for Reelection

You may recall an earlier postabout CPA Senator Kip Averitt's health-driven withdrawal from his State Senate District 22 race. Averitt withdrew after the filing deadline and therefore his names stays on the primary ballot. We mentioned the possibility that Averitt could win the election even though he has withdrawn.

Evidently the Fort Wort Star-Telegram thinks that’s what should happen. Their editorial endorsement of Averitt explicitly expresses their concern over the only candidate left in the race, Darren Yancy. Check it out here.

If TSCPA member Averitt does win the primary, he could choose to serve or not. If he declines to serve, the Republican and Democratic parties would be allowed to name a candidate for the general election and the Republican candidate would not necessarily have to be Mr. Yancy. There is currently no Democrat in the race.

Another victim of partisanship

Sen. Evan Bayh (D-Indiana) announced Monday that he would not stand for re-election, saying “I do not love Congress.”

Bayh is just the most recent in a series of members of Congress who are not running because of the rampant partisanship in Congress. Or as Politico puts it, "Even politicians are sick of Washington."

House Ways and Means Hearing Includes Presentation on Taxing Services

On Feb. 10, 2010 the Texas House Ways and Means committee held a hearing on sales tax exemptions and Sales Taxation of Services. Invited testimony on sales taxes on services included a presentation by Dick Lavine from the Center for Public Policy Priorities on behalf of Michael Mazerov from the Center on Budget and Policy Priorities in Washington D.C. who was unable to appear due to the DC weather, TTARA’s John Kennedy and Talmadge Heflin representing the Texas Public Policy Foundation. Mr. Lavine’s testimony was based on a 2009 study by Mr. Mazerov titled Expanding Sales Taxation of Services: Options and Issues.

The testimony of all emphasized that sales taxes should primarily be focused on household services and not business services. One of the interesting points made during the testimony is that Texas already taxes more services than most states.

At the close of the meeting Chairman Oliveira (D-Brownsville) stated: “I believe there are some services we could add to the sales tax.” He did not specify which ones he is considering, but Mr. Levine did list the household services that Texas does not tax:

• Veterinary
• Horse boarding and training
• Self-storage
• Investment counseling
• Residential electricity and natural gas
• Barbershops and salons
• Dating services
• Personal instruction
• Automobile washing, road service, parking, repair labor
• Private limo services

As for CPA services, most would be considered business services; however, personal tax preparation and financial planning services might be considered household services. In Mr. Mazerov’s paper, accounting is listed as both a business and household service. Mazerov suggests that a state should start with household service and move to services used by both households and business if more revenue is needed, reserving business to business services as a last resort.

Testimony was also taken on exemptions covering equipment for export, bottled water, Internet access service, information services and data processing, aircraft, certain ships and ship equipment, coin-operated machines, coins and precious metals, cooperative research and development ventures and services by employees of property management companies and contract computer programming.  There was no indication from committee members which, if any, of these exemptions might be eliminated.

No actions or recommendations were considered during the hearing.  The committee will continue hearings on the other sales tax exemptions on Mar. 25, 2010.