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Texas Gov. Perry Proposes Returning Excess Taxes


Gov. Rick Perry wants to tap the Rainy Day Fund to spend $3.7 billion on critical water and transportation systems in the state.

In his State of the State speech on Tuesday, Perry said there is more money in the fund than is needed, and that the state should not accumulate any more. He said tapping the fund for a one-time investment in infrastructure was needed to ensure a high quality of life.

Perry also called to use road funding only on transportation projects.

The Republican has for weeks called on the Legislature to cut taxes and continue to hold down government spending -- even though Texas' economy is booming. He also called for $1.8 billion in tax relief and said how to do that was still open for consideration.

One of Gov. Perry's plans called for amending the Texas Constitution. It would allow the state to return unused tax dollars to the taxpayer.

The governor said Texas puts too much of a burden on its taxpayers and the state now has more than enough money. This plan would allow for surplus tax dollars to go back to the taxpayers it came from. But it's a plan that would have to change Texas law.

"We also need to do away with the practice of using dedicated funds and specific fees for anything other than the purpose for which they were intended," Gov. Perry said in the House chambers. "Today, I'm calling for a mechanism to be put in place so when we do bring in more than we need, we'll have the option of returning tax money directly to the people who paid it."

Democrats, who spoke in a news conference directly after Gov. Perry's speech said that money should go toward restoring deep cuts made by the legislature two years ago, like when the state slashed more than $5 billion from public education.

"We need to be candid and transparent about where our real needs are," Senator Kirk Watson said. 

Voters, like Alvin Collins, who said he supports Gov. Perry, have mixed feelings about taking back tax dollars.

"It's one thing to say that but the reality is our government still needs money," he said. "My gut feeling is that it’s a political ploy."

Returning money to taxpayers would require a constitutional amendment and needs two thirds support of the House and Senate. Then it must be approved by a majority of voters. Collins said he'll believe it when he sees it on a ballot.

"It would be so shocking to get something from the government, we probably couldn't live with that," he said while laughing. 

By Katerine Stolp

(AP contributed to this report.)