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Texas manufacturers oppose gutting franchise tax

At Weir SPM in White Settlement, machinist Martin Ramos in 2011 worked to manufacture one of the powerful pumps used in the hydraulic fracturing process of gas and oil wells. (Tom Fox/Staff photographer)

Jockeying over tax cuts intensified Wednesday when the Texas Association of Manufacturers came out against repealing the state’s franchise tax on businesses.

In its top 10 priorities list, the group said lawmakers instead should concentrate on property tax relief and spending more on infrastructure, such as roads and water supplies.

“TAM believes the Texas Franchise Tax is a fair system that provides necessary revenue while allowing all businesses to share in the cost of running our state,” the group said in a separate position paper on the franchise tax.

As I reported in this story in Wednesday’s paper, Gov.-elect Greg Abbott is interested in trimming, and perhaps eliminating, the franchise or “margins tax.”

Tony Bennett, president of the Texas Association of Manufacturers (2013 courtesy photo)

Lt. Gov.-elect Dan Patrick has stressed reducing property taxes, though in the past he has championed measures that exempt a lot of small businesses from having to pay franchise tax.

As the manufacturers group pointed out, the small businesses paid six percent of all franchise taxes collected before 2006, when a massive tax swap was passed to allow the state to escape a school finance lawsuit. Today, the smallest businesses are off the hook. And there has been other relief granted, the manufacturers group noted.

But it warns that increasing property tax bills “will soon scare away future business and industry growth.” That is in its position paper on property tax.

The old franchise tax zapped manufacturers and refineries because it taxed assets. They have lots of assets. The 2006 changes, by contrast, not only reached out to bring under the tax limited partnerships and professional associations, it shifted some of the burden away from capital-intensive industries. Some of that fell on the retail and service sectors of the Texas economy. So the manufacturers association is quite happy, thank you. Please, refrain from further nibbling around the edges of the margins tax, it all but said Wednesday.

For those following the early tax-cut posturing, there are two lessons here: 1) It’s not about personality. While at first blush the manufacturers might appear to favor Patrick’s emphasis over Abbott’s, they actually don’t like some of Patrick’s ideas, either. For instance, their paper warned of a “split tax roll,” where either homeowners or businesses are treated differently. Patrick has strongly backed tighter caps on growth in home appraisals, which industry fears would shift more of the local property tax burden on it. 2) It’s about the bottom line. That varies by sector and by individual company. Which is what makes tax fights so much fun.

“Texas is the No. 1 state to do business,” said association president Tony Bennett. “We look forward to working with Texas lawmakers to keep Texas on top.”

Of course, everyone has a different prescription on how to do that.

Patrick names transition team

Lt. Gov.-elect Dan Patrick, during his victory speech in Houston Tuesday (AP Photo/Pat Sullivan)

Lt. Gov.-elect Dan Patrick has named his long-time aide Logan Spence as head of his transition team, which will include Dallas insurance executive Roy Bailey.

“After 15 months of arduous campaigning, the hard work has only begun,” Patrick said in a statement.

He said Bailey, who signed on last fall as one of his top campaign money men, “will bring his business acumen and perspective to the transition team.”

Dallas businessman Roy Bailey (2002 photo by Richard Michael Pruitt/Staff photographer)

The team “will help me carry our conservative vision to the lieutenant governor’s office in January,” Patrick said.

Patrick, now a state senator from Houston, quickly ticked off his priorities of border security, property tax cuts and “making our schools the best in the country.”

Houston GOP campaign guru Allen Blakemore, who was chief strategist for Patrick’s first statewide race, will assist the effort, along with San Francisco GOP media consultant Bob Wickers and Texans for Lawsuit Reform publicist Sherry Sylvester, Patrick said.

He said people interested in working for him in the lieutenant governor’s office can apply here for jobs. That’s part of Patrick’s new website, www.PatrickTransition.com.

Poll: Patrick entered Tuesday losing Hispanic vote by 39 points — so he won landslide among non-Hispanics?

Texas GOP lieutenant governor candidate Dan Patrick speaks to the media before his watch party in Houston Tuesday. (AP Photo/Pat Sullivan)

An election eve poll sponsored by national Hispanic groups suggests — at least, by inference — that Republican Dan Patrick captured a towering percentage of Tuesday’s non-Hispanic vote in the race for lieutenant governor. And that Hispanics probably didn’t vote in increased numbers, as Democratic diehards hoped.

The Latino Decisions pollshowed Hispanics in Texas broke decisively in favor of Patrick’s Democratic rival, fellow state Sen. Leticia Van de Putte. She had 68 percent to his 29 percent, in the poll sponsored by the Latino Victory Project, National Council of La Raza and America’s Voice.

The poll was conducted Thursday through Monday among Hispanics who had already voted or were certain to vote. Texas was among 10 states in which pollsters interviewed a larger number of Hispanic voters, to obtain a statistically reliable sample. The margin of error was plus or minus 4.9 percentage points.

So Van de Putte’s 39-point margin among Hispanics theoretically could have been as small as 29 percent.

Meanwhile, with three quarters of precincts reporting Tuesday, Patrick was beating Van de Putte by 21 points — 59 percent to 38 percent.

Updated: Lieutenant governor-elect Patrick says liberals “picked wrong battleground”

Dan Patrick and Leticia Van de Putte, Texas Senate colleagues and rivals for lieutenant governor (AP pool photo, Sept. 29 KLRU debate)

Update at 9:45 p.m.: Dan Patrick said his election reaffirms the state’s conservative tilt.

“Texas voters sent a powerful message to the rest of the country – the liberal, Washington-style agenda my opponent so proudly boasted simply has no place in Texas,” he said in a written statement. “Tonight’s decisive victory proves they picked the wrong battleground.”

Van de Putte told supporters that she called Patrick and offered “sincere congratulations on a well-disciplined campaign.” Van de Putte, who didn’t have to give up her Senate seat to run statewide, added that she assured Patrick “I would continue in my public service.”

Update at 8:28 p.m.: Van de Putte has conceded, congratulating Patrick for “running a disciplined campaign.”

In a statement, she thanked supporters and said she looks “forward to continuing to serve my community and this great state.” See note below about how she retains her Texas Senate seat.

“This campaign and my service have always been about securing the future for the next generation, para mis hijos y nietos,” Van de Putte concluded.

Update at 8:16 p.m.: AP has called the race for Patrick.

Original item at 8:08 p.m.: Republican and tea party darling Dan Patrick established a solid lead over Democrat Leticia Van de Putte in Tuesday’s tally of the early vote for lieutenant governor.

With more than 2.1 million early votes counted, Patrick is leading Van de Putte with 56 percent to her 41 percent.

Playing rope-a-dope in the fall contest, Patrick avoided gaffes and lowered his public profile. This was after he ran a highly combative campaign to capture the GOP nomination earlier this year.

But while Patrick coasted through the general election, he didn’t tone down his staunchly conservative views.

Au contraire.

Seizing full advantage of the summer’s influx of unaccompanied children from Central America, the rise of the Islamic State in the Middle East and the arrival of Ebola in Dallas, Patrick hewed to his hard line on immigration and border security.

He raised the prospect of Islamic terrorists crossing the Texas-Mexico border in his fall TV ads.

In other ads and his single televised debate with Van de Putte, he also stood firm against abortion, under any circumstance; and for school voucher-like proposals to shake up public schools.

Van de Putte, not well-known beyond her San Antonio base, didn’t raise the big money that fellow state Sen. Wendy Davis did in the governor’s race.

But as Patrick’s senior colleague in the Texas Senate, Van de Putte soon could be in an interesting position: Last year, she drew a four-year Senate term and thus did not have to give up her seat to run for lieutenant governor. If she loses to Patrick, she can sit back and watch him preside — and offer critiques, if she chooses.

Simmons’ widow, daughter split picks for lieutenant governor

Serena Simmons Connelly, center, is a major Democratic donor, despite being the daughter of the late GOP uber donor Harold Simmons. (2008 photo by Lara Solt/Staff photographer)

The late Dallas billionaire Harold Simmons may have been a Republican mega donor but his family is splitting its political bets this fall.

In checks written on the eve of the election, Simmons’ widow, Annette, gave Republican lieutenant governor hopeful Dan Patrick $25,000, while his daughter, Serena Simmons Connelly, gave Democrat Leticia Van de Putte $10,000. For the year, that brought Serena’s financial backing of Van de Putte to $17,500, according to Texas Ethics Commission records.

In this election cycle, Annette Simons has given Republican candidates $120,000, the commission’s records show. Half went to unsuccessful attorney general candidate Dan Branch of Dallas.

Since January 2013, Serena Connelly has given more than $358,000 to state Democratic causes, according to commission records. Of that, more than $120,000 went to gubernatorial nominee Wendy Davis and the Texas Victory Committee, the Davis campaign’s joint project with voter-organizing Battleground Texas; more than $90,000 to ActBlue, the Democratic internet fundraising tool; and $25,000 each to the Planned Parenthood Texas Votes PAC and the Texas Organizing Project.

Annette Simmons, shown with her late husband Harold at a Dallas ball in 2013. (Kelly Alexander)

Her sister, Lisa Simmons, also has supported Democrats, though without as many zeroes on her checks.

Lisa Simmons, president of the Harold Simmons Foundation, has given Davis and Battleground Texas $4,000 since May. Serena Connelly is the foundation’s executive vice president.

The sometimes surprising “left turns” of the foundation and Simmons’ daughters were chronicled last year in this piece by the Center for Public Integrity. Among them was its donation of $600,000 to Planned Parenthood and its North Texas affiliate.

Serena Connelly and Lisa Simmons together control nearly 94 percent of Dallas-based Contran Corp., a closely held company with subsidiaries producing a chemical used in house paint and rayon clothing as well as manufacturing security products and recreational marine components, according to this February story by Bloomberg BusinessWeek.

Since Oct. 25, when candidates filed their last detailed reports on contributions and expenditures, Patrick has raised about $330,000 in late money, to Van de Putte’s $211,000. That’s not out of line with their overall financial effort. Though Patrick has outraised and outspent her, Van de Putte has kept it relatively close. And while Patrick aides complain she’s received major in-kind donations from Planned Parenthood, TOP and Battleground Texas, it was a major gift from one conservative PAC, $125,000 from Texans for Lawsuit Reform, that kept Patrick ahead in the “telegram” reports on last-minute contributions.

Dan Patrick rakes in late money from PACs

Lieutenant governor candidate Dan Patrick banked nearly $300,000 in campaign donations in the last day–largely fueled by a $125,000 check from Texans for Lawsuit Reform.

Texas Lieutenant Governor hopefuls state Sen. Dan Patrick, R-Houston, left, and state Sen. Leticia Van de Putte, D-San Antonio, right, shake hands following their televised debate, Monday, Sept. 29, 2014, in Austin, Texas. (AP Photo/Eric Gay, Pool)

Patrick, R-Houston, pulled in $25,000 contributions from AT&T Texas PAC, Annette Simmons, the wife of late Harold Simmons, and Robert Rowling, the Dallas billionaire who owns Omni Hotels and Resorts.

The lt. governor presides over the Senate as its president, appoints Senate committees and controls the flow of legislation in the chamber.

Patrick’s Democratic opponent Leticia Van de Putte, D-San Antonio, raised nearly $100,000 in the last day. More than $70,000 of that came from in-kind contributions for staffing and canvassing provided by Planned Parenthood.

Other notable donations:

For Dan Patrick

Devon Energy Corporation: $10,000

Texas Restaurant Association: $10,000

Dallas attorney Trevor Pearlman: $10,000

For Leticia Van de Putte

Houston philanthropist Wilhelmina Robertson: $5,000

Democracy for America: $5,000

 

Carona makes peace with Patrick, Van de Putte pulls more Planned Parenthood help

Sen. John Carona talks with a supporter in Dallas on primary night in March. (Kye R. Lee/Staff photographer)

Update at 3:25 p.m.: Have corrected date of Paul Reyes’ and Helen Carona’s contributions to Patrick: They gave on the same day in 2013, not this year.

Original item at 12:43 p.m.: Dallas state Sen. John Carona has continued to make peace with fellow Republican and lieutenant governor candidate Dan Patrick.

The political action committee at Carona’s business Associa Inc., which manages homeowners’ assocations across the country, gave Patrick $5,000 earlier this week, according to telegram reports to the Texas Ethics Commission.

As my colleague Terrence Stutz reported here nearly 2 1/2 years ago, Carona called Patrick a “snake oil salesman” and a “narcissist that would say anything to draw attention to himself.”

Patrick, R-Houston, said in an email to all senators that Carona had spread a false rumor that Patrick and his wife, Jan, were divorcing. Carona, R-Dallas, replied that Patrick should have first checked with him regarding the allegations before contacting their colleagues. Carona also raised the ante, mentioning rumors about Patrick’s sexual orientation as well. Patrick dismissed as “a lie” suggestions he is gay and demanded Carona apologize.

At the time, Carona didn’t. Late last year, though, the Associa PAC gave $30,000 to Patrick, even as Carona didn’t personally endorse him in the GOP lieutenant governor primary.

In March, Carona lost his Senate seat to tea party-backed Republican Don Huffines in a GOP primary. Since then, he has endorsed Patrick.

Dan Patrick and Leticia Van de Putte shake hands at their televised debate last month. (AP Photo/Eric Gay)

As I reported in a story in Wednesday’s newspaper, Associa executive Paul Reyes, a former Carona Senate staff aide, contributed $20,000 to Patrick. That was on top of $5,000 Reyes gave to Patrick in August 2013 — the same day Carona’s wife, Helen, chipped in $2,500 to the Patrick cause.

It appears that Associa may have some legislative irons in the fire.

Meanwhile, Sen. Leticia Van de Putte, Patrick’s Democratic colleague and opponent for lieutenant governor, reported more than three times as many late contributions as did Patrick.

This week, she took in more than $82,000, to about $23,500 for Patrick.

Just more than half of the contributions on Van de Putte’s telegram reports came from groups supporting abortion rights. Planned Parenthood’s PACs in New York City and Austin donated nearly $30,000 of staff time, phone calls and postage. Annie’s List gave the San Antonio lawmaker a $13,000 check.

As I noted in Wednesday’s story, Patrick strategist Allen Blakemore belittled Van de Putte’s matching Patrick’s fundraising haul of $2 million between Sept. 26 and Saturday. Blakemore noted that one-third of her money was in-kind donations from Planned Parenthood, the liberal group Texas Organizing Project and voter-organizing Battleground Texas.

On Thursday morning, Logan Spence, a long-time Patrick aide, seized on the late assists from Planned Parenthood PACs as a sign Van de Putte would try to lead the Senate in a very different direction on abortion than Patrick would. But then we knew that, didn’t we?

Here’s Spence’s tweet on the subject:

The great two-thirds rule debate has begun

Sen. John Whitmire, the dean of the Texas Senate (2008 AP Photo/Harry Cabluck)

Update at 4:00 p.m.: Checked tape, made minor changes to Whitmire’s and Nelson’s quotes.

Original item at 11:29 a.m.: The Texas Senate has begun its expected debate over whether to abandon a rule that for many decades has protected partisan, geographic and racial-ethnic minorities.

At a briefing on taxes for new Senate budget writers Wednesday, the chamber’s longest-serving member, Houston Democrat John Whitmire, launched a wry if somewhat backhanded defense of the “two-thirds rule.”

It can protect from attack things highly valued by rural senators, such as an exemption of agricultural equipment from the sales tax, Whitmire said at a hearing of the Senate Finance Committee.

The rule requires two-thirds of senators to agree before a bill can be taken up on the Senate floor.

Earlier this year, GOP lieutenant governor candidate Dan Patrick promised to reduce the influence of Democratic senators by weakening the rule and reducing the number of committees they chair. Patrick is a Houston senator.

On Wednesday, Whitmire interrupted a presentation by the comptroller’s office to discuss the sales-tax agricultural exemption.

He called it the “largest, broadest exemption we have.” Whitmire said urban tradesmen could view it as unfair, given they pay tax when they buy vehicles and equipment needed in their work. But the ag exemption has worked well, he said.

Then came the caveat.

“To preserve it, we need to make sure our rural members have a place at the table,” Whitmire said.

Senate Finance Committee Chairwoman Jane Nelson (2009 AP Photo/Harry Cabluck)

Sen. Robert Nichols, R-Jacksonville, said the Legislature tightened administration of the ag exemption in recent years. Beneficiaries have to attest they are engaged in food and fiber production, he said.

Whitmire, though, said that in the next revenue crunch, it and all other exemptions could be reviewed. The state may again face “challenges to find sufficient revenue,” putting the ag exemption at risk, he warned.

“The rural members should be mindful that the Senate rules currently allow them to block any consideration of repealing that,” he said.

Sen. Royce West, D-Dallas, interjected, “You talking about the two-thirds rule?”

Whitmire replied, “That would probably be the No. 1 thing that would come to my mind.”

A few minutes later, members of the panel began raising questions about the regressive effects of higher sales tax. Democrats mentioned Patrick’s proposal to decrease local school property taxes, perhaps by adding a penny or two to the state’s 6-1/4-cent sales tax.

Finance Committee Chairwoman Jane Nelson, R-Flower Mound, quickly cut them off, though.

She noted that higher sales tax is just one way to pay for property tax relief.

“Many of us would like to reduce property taxes,” Nelson said. “We’re going to look at a lot of different possibilities.”

Van de Putte edges Patrick, barely, in recent fundraising

Lieutenant governor rivals Dan Patrick, left, and Leticia Van de Putte shake hands last month at their only televised debate (AP Photo/Eric Gay)

Update at 12:48 p.m.: I have inserted the two campaigns’ reactions.

Original item at 11:27 a.m.: Democrat Leticia Van de Putte raised more money — barely — than her GOP rival for lieutenant governor, Dan Patrick, in the latest reporting period, according to reports posted Tuesday on the Texas Ethics Commission website.

Van de Putte banked $2.086 million in contributions, compared with $2.052 million pocketed by Patrick, the reports showed. So her edge was about $34,000.

“This is what an upset looks like,” Van de Putte campaign finance director Nikki Bizzarri said in a statement. More than 5,200 different donors gave to Van de Putte during the reporting period, which was Sept. 26 through Saturday.

Patrick, though, outspent her by nearly $1 million and enjoyed a better than $1.3 million cash advantage at the period’s close.

“We’re running hard, all the way to the finish line,” Patrick said in a statement. It said nearly 1,000 individuals gave money to him during the period.

Patrick entered the period with nearly $4.3 million, to Van de Putte’s $2.2 million. He spent $3.1 million and had just over $2.8 million in the bank as of Saturday.

She spent $2.2 million during the period and wound up with just less than $1.5 million in cash.

Patrick’s campaign still owes him more than $2 million. Van de Putte hasn’t borrowed for her campaign.

Both candidates are state senators — Van de Putte, from San Antonio; and Patrick, from Houston. They are competing to succeed Lt. Gov. David Dewhurst, whom Patrick ousted in a hard-fought Republican primary.

Miles and miles of Texas as Van de Putte finishes quest

Leticia Van de Putte, at San Antonio rally last week (Robert T. Garrett)

Democratic lieutenant governor hopeful Leticia Van de Putte had a shaky launch to her 6,000-mile, 30-city bus tour last week: Last Thursday, on the first full day of the tour, the bus broke down, just south of Falfurrias.

It didn’t faze the candidate, though. Van de Putte, a 24-year veteran state legislator who comes from a large family, is very comfortable amid frenzied activity by her aides, crowds small and large, and the zero privacy that attends traveling with documentary filmmakers and reporters on your bus. For background on her family, and a 1945 act of religious piety by her great-grandmother, which she says motivates her, see this story I had in Sunday’s paper. It ran as a sidebar to this overview of the race, by colleague Terrence Stutz and me.

Also, here are some photos I took in my two days with her last week. If Republican rival Dan Patrick, whose spokesman last week said he has no plans for a bus tour, changes his mind, we’ll try to hop aboard. Patrick, though, doesn’t share his schedule with the news media, so don’t hold your breath.

Top row, left: On stage in San Antonio, looking over her shoulder; right, the spot where the bus broke down. 2nd row, left, rope line in Edinburg, with actress Eva Longoria in sunglasses; in Corpus Christi, with sister Rosanne "Sonny" Valenzuela on her left and two Wesley Reed supporters. 3rd row, left, San Antonio rope line, with mother Belle San Miguel shown just above candidate's head, and Longoria to right; speaking at UT Pan American, with Tejano music star "Little Joe" Hernandez in black T shirt that says, "I Just Look Illegal." Bottom row, left, biting her tongue in Edinburg; right, along rope line in San Antonio, greeting two little girls. (Robert T. Garrett)