AUSTIN (KXAN) - Where would Gov. Rick Perry like to see tax relief, as pitched to lawmakers on the opening day of the Texas Legislative Session? His answer is broad but definitely boils down to business, something the state's other top leaders seem willing to hear.
"It makes sense to give some relief to those who have created this great economic climate," Perry told KXAN on Thursday.
While discussing the Comptroller's better-than-expected outlook for state revenue and the ever-growing rainy day fund, the governor hinted at an option for a tax cut – in the oil and gas industry.
See the full interview in three parts by clicking the video box to the left.
The Economic Stabilization Fund – better known as the rainy day fund – is replenished from revenue in that sector. Comptroller Susan Combs projects the balance to be approximately $11.8 billion, absent any legislative appropriations by the end of the 2014-15 biennium.
The fund's projected cap – based on budget formulas – is $13.6 billion. Though Lt. Gov. David Dewhurst has suggested using $1 billion from that account for water infrastructure projects, Perry has warned lawmakers against tapping beyond that particular use.
"Yes, the most important use of that rainy day fund is to keep your hands off of it so that we keep a substantial savings account there and the bond decision-makers that in turn allow us to borrow money at the lowest rate will keep Texas as the highest bond rating it can be," he said.
But as the fund grows closer to its cap, Perry suggested one option is to ease up on the industry keeping the account alive.
"The reduction of the cost of doing business – whether it's in the oil and gas industry or whether it's small mom and pop business – makes abundance good sense to me," he said. "The oil and gas industry is putting a lot of people to work in the state of Texas, and I don't have a problem with having a conversation about if we allow them to keep more of their money so they can put more Texans to work."
As another example of the type of relief lawmakers should consider, Perry pointed to an idea within his budget compact that would make a tax exemption for certain small businesses.
"(These are) businesses (with) up to $1 million in proceeds exempt from that business tax," he explained. "All of it's on the table. I think it's wise for us to not preclude anything from the standpoint of relief, whether it's regulatory or legal or our tax structure."
As school finance lawsuits continuing playing out, the legislature will likely be unable to tackle education funding this session. Dewhurst has suggested setting money aside to handle the possible outcome after a decision comes down.
However, Perry did not commit immediate support to that idea, instead saying he expects other ideas from both lawmakers and citizens to arise.
"At this particular juncture, I think to limit your options is not necessarily wise," he said.
When asked about the need for a special session to hash out the details after May, Perry said "there's no reason we have to."
"There are a lot of ways to address this issue that would preclude any special session," he said.
While Perry has yet to announce any specific emergency items – legislation lawmakers can begin tackling within the first 60 days of the session – there has been speculation surrounding at least two proposed measures for which the governor has expressed his support – a bill to address "fetal pain" relating to abortions and another bill to require drug testing for welfare applicants.
But actually naming them as emergencies might have to wait, as the governor pointed to an "unstructured" House.
"The Speaker hasn't named committees, hasn't named chairmen yet," he said. "Until that happens, you can't even have hearings… The speed at which they happen is going to be a snail's pace until the House is fully structured to hear bills."
As talk of a "sanctuary cities" bill floats through the Capitol, Perry also discussed the possibility of fast-tracking a revival of his failed emergency item from the last session.
"If there are any entities that would try to go outside the bounds of our laws – whether it's the federal level or it's at the state level – then we have a problem with that," he said. "I haven't made any decisions yet about what is or is not going to be an emergency item, so that one is under the veil of haven't made any decisions yet."
While Perry said he would have a "definitive" answer about his own possible 2014 run for governor in July, he was hesitant when speaking about the race for lieutenant governor. After a failed run for U.S. Senate, Dewhurst has recently indicated his interest in running for the state's second highest post again.
Land Commissioner Jerry Patterson and Agriculture Commissioner Todd Staples have both said they are running for the position, and Comptroller Susan Combs has also expressed interest.
"I have no idea," Perry said when asked about who would make the best candidate. "David Dewhurst is doing a fine job of leading the Senate. He has given indication that he is going to run for re-election. I take him at his word."
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