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State Leaders Discuss Tax Changes, Not Hikes

A man uses a digital calculator to figure percentages. (credit: Chip Somodevilla/Getty Images)

A man uses a digital calculator to figure percentages. (credit: Chip Somodevilla/Getty Images)

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AUSTIN (AP) - Top lawmakers are discussing changes to the troubled Texas business tax, but they promised Wednesday not to use any tax legislation to soak up a huge budget shortfall.

Gov. Rick Perry, Lt. Gov. David Dewhurst and House Speaker Joe Straus — all Republicans — met for breakfast and told reporters later they would balance the strained Texas budget without new taxes.

But Perry held the door open to legislation reforming the state’s business tax, which has provided far less revenue than originally projected. His comments came on the second day of the 2011 legislative session and a day after an influential GOP senator warned that local property taxpayers eventually would face increases unless lawmakers fixed the ailing Texas Franchise Tax.

“We are always open to fixing any inequities that may be there,” Perry said at a news conference outside his office in the Captiol. The governor said a “revenue neutral” bill — meaning it wouldn’t produce a net gain in revenue to the state — would generally not be described as one that raises taxes.

Perry said it was too early to start talking about what would or would not constitute a tax hike.

“Getting bogged down in the semantics of `oh yes, that is a new tax, or yes that is not a new tax,’ is not particularly constructive,” Perry said.

Texas lawmakers, according to projections released Monday, face a possible revenue shortfall of at least $15 billion for the next two-year budget, compared to current spending.

(© Copyright 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)