MEMBER UPDATE
April 25, 2008
COMPTROLLER GIVES BUSINESSES ANOTHER 30 DAYS
FOR FRANCHISE TAX RETURNS AND PAYMENTS
The Comptroller's office is giving businesses an additional 30 days to submit their returns and payments under the state's revised franchise tax, or margins tax. The due dates are May 1 for initial reports and May 15 for annual reports, but the office is waiving the 5% penalty for reports filed and payments made no more than 30 days late, so the new deadlines are June 2 and June 16. You can get more information at www.cpa.state.tx.us .
TEXAS CEC members should be acutely aware that the franchise tax was changed substantially by the Legislature in 2006 as part of the effort to fund local property tax relief and is now paid on a formula of gross receipts less subconsultant passthroughs and employee compensation. This filing, for the calendar year 2007, is the first year the new tax is in effect.
TRANSPORTATION DEBATE ROLLS ALONG
The Texas Transportation Commission this week approved funding levels for the 2009-19 Unified Transportation Plan. This is significant because one of the options under consideration would have directed all available funding to system preservation and rehabilitation projects, leaving no money for new capacity projects. In the end, the Commission redirected $4.5 billion over the 11-year period from maintenance into various mobility categories. This is only $350 million per year, but it is a positive step. Hopefully, it will also give TxDOT districts a greater sense of certainty about moving forward with 2009-11 design and construction projects.
The funding level projects to an annual letting of around $2.8 billion per year. This is a baseline projection and could be modified upward or downward depending on legislative and congressional action in 2009.
At the policy level, Governor Perry gave a speech at a state transportation conference this week staking out a strong position in favor of private toll road concessions as the primary answer to Texas' mobility funding problems and criticizing the Legislature for its inaction, diversions of money from the Highway fund, "addiction to gas tax money" and inclination to use debt.
The Longview News-Journal reviewed the speech and said: "The real problem is Perry's conclusion that the state is unable to perform one of the most basic functions of government since before the invention of the horseless carriage: The construction, maintenance and operation of vital public infrastructure. The governor's fear of taxes in any form is so visceral that he finds himself unable to conclude that there is any other way to build much needed public highways than to turn the process over to private enterprise."
The Senate Transportation Committee held a hearing on these issues - toll roads and comprehensive development agreements - this week, and members of that panel were generally skeptical of upfront concession fees as the total solution, recognizing that concession fees are borrowed money with a cost of carry. The committee discussed indexing the fuel tax, funding Proposition 12, providing toll equity or bridge financing for local toll entities, or local options. Public or private, tolls or gas taxes, said Chairman John Carona, "either way it's the drivers' money."
It's not hard to see a trainwreck developing for the 2009 session. The Governor's Office is promoting concession CDAs as the solution, but the authority to do CDAs (except for a handful of projects) expires in 2009 at the same time as the existing legislatively imposed moratorium. Thus, for this to happen, some extension of CDAs must pass the Legislature. The legislative leadership seems focused on other solutions. In the meantime, as one observer recently wrote: "That leaves the engineering and construction community caught in the middle of a giant high-stakes poker game."
IN THE NEWS
Go to the Members Only section of www.cectexas.org for newspaper articles from around the state on engineering, construction, environmental issues, public works, legislative matters and more, including:
- Trademark Property announced plans for a $100 million project in Fort Worth.
- The Denton County Transportation Authority approved environmental studies for a rail project.
- The Arlington City Council is considering a road bond proposal including sidewalks near schools.
- Montgomery County and Conroe will partner on roadway expansion projects.
- UTSA landed a grant to support a statewide summer pre-engineering program.
- Austin and Cap Metro unveiled a new proposal for light rail.
- Lt. Governor Dewhurst told a group that he might support give local voters the right to expand the sales tax cap for transit and transportation.
- The Lt. Governor and key legislators helped facilitate a breakthrough in negotiations between NTTA and TxDOT that will allow the toll authority to initiate work on SH 161.
- and much more . . .
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