More on the alternate strip club tax

After publishing about the alternate strip club tax that passed the House yesterday, HB982, I had some correspondence with the offices of Rep. Ellen Cohen and Rep. Senfronia Thompson about the revenue estimates, which I noted seemed quite divergent. Rep. Cohen’s office sent me the following documents:

HB 982 revenue estimates (PDF) – This is a summary of the UT study referenced in the DMN story, which pegged the revenue totals in the $500K – $1.2M range.

Estimates for HB 2070 (PDF) – This is a similar study, by the same folks at UT, for Cohen’s bill that modifies the existing law that was struck down by the district court in Austin, HB 2070. This projects $16.5M in revenue annually from HB 2070.

TEA-Judgment (PDF) – This is a copy of the judgment the strip clubs won against the current law, which was HB1751 from last session. Rep. Cohen’s office asserts that HB2070 addresses the issues that the court specified in its ruling for the plaintiffs.

Rep. Thompson’s office sent me the following statement, which is taken from three separate emails:

The revenue estimate is based on a review of the books of 60 of the 175 strip clubs in Texas. The 60 clubs based on their actual collected cover charges for 2008 would have produced over $3 million. Taking into account the size and revenues of the other clubs it was projected that the clubs alone would produce $4 -$8 million dollars. Because no one is sure what revenue the other SOBs will produce that amount was not included in our estimate. This is a low ball estimate since the previous projection on HB 1751 was so much higher than actual revenue produced.

There is absolutely no reason the money already collected can’t be spent as soon as the AG drops the appeal of HB 1751. If HB 982 doesn’t pass the State is on the hook for more lawyers’ fees ($500,000 for the plaintiffs so far and $180,000 for the AG) plus interest on all money collected by the state so far. The plaintiffs in the suit had committed to Rep. Thompson that if HB 982 passes they will not further pursue the lawsuit against HB 1751 and will drop their tax protest when the AG drops his appeal of HB 1751, allowing the money already collected to be distributed this biennium. Further, the plaintiffs have told our office and Representative Cohen’s office that they will file another lawsuit if HB 2070 passes. It generally takes over a decade for a civil suit to progress from State District Court to a final U.S. Supreme decision. Rep. Thompson’s position has never been that HB 982 will raise more money than HB 2070, but that it will deliver money to these long underfunded programs this year, not next decade.

We would like to point out that Rep. Thompson passed the legislation that established the Sexual Assault Fund in 1993 that all the bills are intended to fund. She successfully fended off two attempts to roll the Sexual Assault Fund into general revenue in 1995 and 1997. She also passed the Omnibus Protective Order bill and the legislation that made the National Domestic Violence hotline possible. Rep. Thompson has a long record of standing up for women’s issues. Rep. Thompson’s concern all along has been that the state stop wasting money in court cases on unconstitutional taxes and concentrate on finding a source of revenue for these programs that will help this year not after a decade long court battle.

So there you have it.

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