Thursday, May 20, 2010

TSA Advocacy Update: Budget Shortfall Could Impact Professional Sales Tax Exemption

Yvonne Castillo
TSA General Counsel

Last week, the House Appropriations Committee chair dropped a bombshell when he announced that the projected budget shortfall is now $18 billion…yes, BILLION. That’s 20% of the overall budget for the biennium. This number came as a big surprise to everyone because the numbers we’d been hearing were more in the range of $11 – 12 billion, not great, but not THIS bad. 

Couple this new fact with the fact that the “rainy day” fund has (we’re told) about $8-9 billion and things start to look pretty grim for legislators next Session charged with balancing the budget. We’re hearing many legislators say they will not vote to dip into the rainy day fund, but I’m guessing that’s going to change pretty quickly when folks start getting desperate. 

While I’m not thrilled with the option of raiding the “rainy day” fund, I’m also very concerned that the professional tax exemption for architects and others is already being closely scrutinized as a possible source of revenue. I think I’d rather legislators consider it a rainy day under the circumstances but even if they do so, where are they going to come up with an additional $10-11 billion? Unfortunately, they’ve got to make some hard decisions regarding cuts but cuts won’t “cut it” by themselves (pardon the pun). They’re still going to need to find some revenue to balance the budget and right now they’re very focused on the current professional sales tax exemption. TSA members need to stay alert and heed any calls for action when they come. TSA is reconvening its 2006 “tax swat team” in June, the volunteer architects who helped with the tax effort relating to public education. We’ll be strategizing and making some decisions on how we want to approach the newest possible tax assault so stay tuned…

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