p • FROM THE OFFICE OF GOVERNOR WILLIAM P. CLEMENTS JR. October 14, 1980 For Immediate Release: Governor Bill Clements today ruled out any effort by top state officials to increase the state's gasoline tax or the severance tax on oil during the 1981 legislative session. "After extensive discussions with Lt. Gov. Bill Hobby, House Speaker Bill Clayton and leaders in the House and Senate, it has been decided that it would not be appropriate to increase either of these taxes': Governor Clements said. The Governor pointed out that the so-called windfall profits tax pushed through by the Carter Administration will siphon out of Texas $13 Hllion a year--$2 billion more than the total state budget--for the next 10 years. "All options were explored to find a method by which these funds could be kept in Texas (through severance tax adjustments deductible from federal windfall profits payments)," Governor Clements continued. "But an acceptable and reasonable program could not be finalized." The Governor noted that soaring inflation rates reflected in doubled gasoline prices during the last year and the subsequent movement toward fuel-efficient cars resulted in declining gasoline user tax revenues for the highway system. "This has created a $300 million deficit in the highway construction and maintenance program," Governor Clements said. "However, the mechanics of increasing the gasoline tax and providing an offsetting tax credit in some other area to bring the highway account back into balance are too tedious for the coming legislative session. "Therefore, I am opposed to increasing the gasoline tax. The original option which we explored was only on the basis of an offsetting tax credit, since, with a large state surplus in sight,we do not need additional overall revenue.'
