AUSTIN, Texas (Reuters) - Texas Governor Rick Perry on Monday called for nearly $1.6 billion in tax cuts for businesses over two years.
“This is about making Texas be more competitive,” Perry said at a Tax Day press conference at the Austin Chamber of Commerce.
The proposal, which would require legislative action, would affect about 100,000 large and small businesses, the Republican governor said. It would be paid for from the state’s general revenue fund or possibly the rainy-day fund, Perry’s office said.
The plan calls for cutting the business franchise tax rate by 5 percent, providing a $1 million deduction for businesses with revenue up to $20 million, giving companies moving to Texas a one-time deduction for moving expenses and lowering the rate for businesses that file using an electronic system.
The governor had called for “tax relief” at the start of the legislative session that began in January and ends in May, but he did not offer specifics at that time.
“States that compete with us, our neighbors, they’re not sitting on their laurels,” Perry said on Monday.
He pointed out that Governor Bobby Jindal of neighboring Louisiana is seeking to remove personal income tax in his state.
But Jindal’s proposal - which sought to make Louisiana more competitive with no-income-tax states such as Texas - appeared dead on Monday, after a key committee chairman declined to hold hearings on proposals aimed at accomplishing Jindal’s goal.
Jindal, a possible 2016 Republican presidential candidate, had bowed to widespread public discomfort and “parked” his proposal when the Legislature convened last week. Instead, he called on lawmakers to pass their own plan.
On Monday, Louisiana House Ways and Means Committee Chairman Joel Robideaux, a Lafayette Republican, acknowledged that the support was not there, saying that unless the authors insist, “we should indefinitely defer consideration of these bills.”
Jindal said afterward that he hoped lawmakers might still change their minds.
Also on Monday, Perry announced that he was buying ads in business publications in Chicago, urging companies there to relocate to Texas. The $38,450 ad buy will be paid for by TexasOne, the state’s nonprofit economic development organization.
Earlier this year, Perry used radio ads to try to lure California businesses to Texas, prompting California Governor Jerry Brown to say that $24,000 effort was “barely a fart.”
“Get Out While There’s Still Time,” says a Texas ad on the website of Crain’s Chicago Business that features an emergency exit door.
Illinois is facing a financial crisis. The state legislature is considering proposals to cut pensions for retired state and local workers. The state has the lowest credit rating of any state analyzed by major debt rating agencies.
Reporting by Corrie MacLaggan; Additional reporting by Stephanie Grace; Editing by Jan Paschal