April 24, 2007
Combs rescinds Strayhorn's question about the business tax

Boy, does this ever raise a bunch of red flags.

Former state Comptroller Carole Keeton Strayhorn more than a year ago asked Attorney General Greg Abbott for a legal opinion on whether the state's expanded business tax amounts to an income tax.

Her successor, Susan Combs, has taken Abbott off the hook.

"Last year, my predecessor submitted a request to your opinions committee. In a letter from First Assistant Attorney General Barry McBee, your office answered all questions raised. ... Therefore, I withdraw that opinions request," Combs said in a February letter.

Okay, first question: Why are we only hearing about this now, in April? What'd she do, send it by Pony Express?

Let's review a little history here. Last April, at Governor Perry's request, Attorney General Greg Abbott issued an opinion saying that the new business tax that was about to be adopted during a special legislative session, did not constitute an income tax, which would require it to be ratified by the voters of Texas. Except that the opinion wasn't signed by Abbott but by his First Assistant AG Barry McBee, which prompted then-Comptroller/independent candidate for Governor Carole Keeton Strayhorn to call it inadequate and ask for another opinion by Abbott himself. Which, as you can see at that link, is something Abbott was supposed to do within 180 days, or before Halloween of 2006.

So, we then have to ask: What is the deadline for an Attorney General to issue an opinion when one is requested? What happens if the AG does not do so by then? And why, after ten months had passed, did now-Comptroller Combs ask to drop the matter?

You may argue that McBee's opinion was sufficient - certainly, Strayhorn's request was as much political theater as anything - but if so, then why did Combs bother to rescind the request?

I happen to think that the original opinion was correct, and that Strayhorn was posturing. But you know, it really should have been Greg Abbott's signature on that sucker, and Strayhorn was right to try to hold his feet to the fire. It's appalling that this went into the memory hole, and that Combs, who is a Pomeranian to Strayhorn's Rottweiler, quietly dropped the matter. Say what you want about Strayhorn - and Lord knows, I have - she was still the biggest counterweight to Rick Perry for his prior term in office; the Lege at least has done some pushback this session. Combs has been the rag doll I feared she'd be.

A legal challenge to the business tax could be filed when the state begins collecting it next year.

"It is expected that with any new tax law, you're going to see a number of lawsuits that sort of define the tax around the edges," said chief economist Dale Craymer of the business-based Texas Taxpayers and Research Association.

I'll be shocked if there isn't a lawsuit at that time. At least then we'll finally get Greg Abbott on the record. Stay tuned.

Posted by Charles Kuffner on April 24, 2007 to Budget ballyhoo