![BX145_21BD_9](https://webarchive.library.unt.edu/dentonfracking/20141114143900im_/http://trailblazersblog.dallasnews.com/files/2014/08/BX145_21BD_9-300x283.jpg)
Senate Finance Committee Chairwoman Jane Nelson, R-Flower Mound, shown at a Dallas-area GOP event with Lt. Gov. David Dewhurst in February. (Michael Ainsworth/The Dallas Morning News)
Update at 5:43 p.m., Wednesday: I’ve corrected the original post, which erred in saying the franchise-tax rate cut would continue next year at 2.5 percent. It actually will increase to 5 percent.
Original item at 6:34 p.m. Tuesday: As expected, Texas’ coffers are flush enough for a modest business tax cut to continue for another year — and grow in size — without unbalancing the two-year state budget, officials confirmed Tuesday.
Last year, the Legislature passed a temporary business tax break. It shaved 2.5 percent from the rate all businesses pay on the franchise tax, or “margins tax.”
The typical business used to pay 1 percent of gross receipts, after deductions. With the break, that business this year paid a rate of 0.975 percent. Cumulatively, Texas businesses saved $115 million.
But lawmakers had money enough to pay for only the first year. They approved a 5-percent rate cut for fiscal 2015, which starts Sept. 1, contingent on Comptroller Susan Combs’ certifying that state tax revenues have exceeded her estimates by enough to pay for the cut.
On Tuesday, prodded by newly appointed Senate Finance Committee Chairwoman Jane Nelson, a Combs aide confirmed at a Legislative Budget Board meeting that revenue growth has been strong enough for the 5-percent reduction to go forward.
“We expect we’ll have sufficient surplus …. to go ahead and do another [rate cut] for [fiscal] 2015,” said chief revenue estimator John Heleman.
Heleman said the spectacular growth of state sales tax revenues of recent years has slowed — and should be just 5.2 percent for the year ending Aug. 31.
But Nelson, R-Flower Mound, said that rolling forward the franchise-tax cut at least should help businesses maintain their current momentum.
On other topics, Heleman also said he also sees a plateau for what have been surging receipts from state severance taxes on oil and natural gas. With the explosion of “fracking” techniques in South Texas’ Eagle Ford Shale region and a strong resurgence of drilling activity near Midland-Odessa in West Texas, state oil production has more than doubled since 2007, to about 745 million barrels in calendar 2013, Heleman said.
“The revenue growth will be at a slower pace than in recent years,” especially in the Eagle Ford Shale region, he said.
But Heleman and Rep. John Otto, R-Dayton, pointed to two potential bright spots: Pipelines may be built to carry oil from the South Texas oilfields, which would boost sales tax receipts. And fracking techniques have yet to be widely applied in West Texas’ Permian Basin field, though Heleman said “it’s my understanding the geology is there for that.”
Oil and gas revenues collected in excess of the amount the state received in a year in the late 1980s go into the state’s rainy day fund. Heleman said that at the end of the next fiscal year, the fund should have $8.4 billion, even assuming voters this November approve a constitutional amendment that would shift $1.7 billion of the fund’s growth into highway spending.