Cutting drink taxes for live music venues strikes wrong note

Posted Monday, May. 06, 2013  comments  Print Reprints

Topics: Music Concerts

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During a legislative session when securing adequate funding for imperatives such as public education and healthcare is a political knock-down-drag-out, along comes state Rep. Mark Strama wanting to give new tax breaks to bars so they’ll hire more musicians.

Could Strama, an Austin Democrat who’s announced he’s leaving the House at the end of this session, be playing for a mention on late-night comedy as the latest weirdness out of the Texas Capitol?

House Bill 3095 certainly does not bring music to taxpayers’ ears.

The bill would reduce the mixed-drink tax for clubs that stage live music at least five nights a week most of the year — provided that the establishments use that money to put on more concerts.

More live music is a fine thing to want if you like that sort of thing. And plenty of folks in Fort Worth, Dallas, Houston and other cities besides Austin do enjoy it.

But why should taxpayers subsidize this kind of entertainment, no matter how popular?

Proponents say that musicians are hurting and that this would give clubs more incentive to book them.

No one could legitimately argue that this is a core government function. And only someone who’d downed a few too many would imagine there’s any government interest at all in making sure plenty of bands are rockin’ plenty of joints.

Originally, the proposal would have cut the 14 percent mixed-beverage tax in half, but Strama amended that to a 10 percent tax on gross drink receipts for venues that get approved by the comptroller as live music presenters.

The revision substantially reduced the projected losses in tax revenue to state and local coffers. But still, the Legislative Budget Board estimated the measure would cost the state $20 million over the two-year budget cycle. Counties could be expected to lose up to $1.5 million a year over five years, and cities up to $1.3 million annually.

The proposal would also cost $2 million for an initial technology setup and would add six people in the comptroller’s office to keep up with the paperwork and enforcing compliance.

Despite HB3095’s obvious flaws, the House Ways & Means Committee approved it Thursday 7-0, with two members absent.

Surely the Senate won’t sing along.

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