News from the Capitol

Republican Jill Dutton Narrowly Defeats Brent Money in Texas House District 2 Runoff

Republican Jill Dutton has won the special election runoff for Texas House District 2, a seat vacated by former Republican Rep. Bryan Slaton, who was expelled for sexual misconduct with an aide. Dutton beat fellow Republican Brent Money by 111 votes, or 0.82 percentage points, according to unofficial results.

Dutton, a former school board trustee and construction consultant, had the support of major business groups, such as Texans for Lawsuit Reform, Associated Republicans of Texas, and allies of House Speaker Dade Phelan. Money, a former city council member and attorney, had the backing of Republican leaders, such as Governor Greg Abbott, Attorney General Ken Paxton, US Senator Ted Cruz, and Agriculture Commissioner Sid Miller. Money has also been a vocal critic of House Speaker Dade Phelan and called for him to resign. When asked whether he would support Dade Phelan for reelection or accept campaign contributions from him, Money told a candidate forum in Van Zandt County, “Not only no, but Big Texas H E double hockey sticks NO!”

The runoff was seen as an early test for the GOP’s warring factions in the March primary, where Dutton and Money will face each other again for the full term in the northeast Texas district. The district covers parts of Hopkins, Hunt, and Van Zandt counties.

Trump Endorses Speaker Phelan’s Opponent

David Covey, challenger to Texas House Speaker Dade Phelan in the primary election for House District 21, received an endorsement from Donald Trump. Trump wrote that Phelan “led the fraudulent impeachment of the recently re-elected, in a landslide, Attorney General of Texas, Ken Paxton.”

In a response, Speaker Phelan wrote “Unfortunately, my opponents have sought this endorsement in yet another attempt to get retribution against me for holding public officials accountable and defending the Texas House against outside interests.”

State Revenue Outlook

Texas Comptroller Glenn Hegar today said state sales tax revenue totaled $4.02 billion in January, 2 percent less than in January 2023. The majority of January sales tax revenue is based on sales made in December and remitted to the agency in January.

“For the second time since pandemic restrictions were lifted, monthly state sales tax collections fell compared with the same month the year before,” Hegar said. “A contributing factor was higher-than-normal refund activity, but several sectors that have been trending downwards in recent months continued to show weakness in January.

“Remittances from the wholesale trade sector were down for the ninth time in 10 months, and receipts from manufacturing were down for the fourth time in five months. Receipts from the oil and gas mining sector were down for the second month in a row. In the major sectors driven primarily by business spending, remittances from the construction sector were the lone positive standout, increasing by mid-single digits compared with a year ago.

“Overall, receipts from the consumer-driven retail trade sector were just slightly above last year, but with receipts from most retail subsectors down. Receipts from electronics and appliance stores were down the most, followed by declines from clothing and apparel stores. Remittances from home improvement centers and furniture and home goods stores continued to decline significantly, as has been the case in recent months following the pandemic-spurred boom in those categories. Receipts from general merchandisers also fell. Receipts from online merchants were the bright spot among the large retail trade subsectors, with remittances coming in strongly over January 2023 totals.

“Receipts from restaurants grew in the mid-single digits and slightly higher than the inflation rate for food away from home.”

Total sales tax revenue for the three months ending in January 2024 was up 1.6 percent compared with the same period a year ago. Sales tax is the largest source of state funding for the state budget, accounting for 57 percent of all tax collections.

Texas collected the following revenue from other major taxes:

  • motor vehicle sales and rental taxes — $618 million, up 9 percent from January 2023.
  • motor fuel taxes — $307 million, down 1 percent from January 2023.
  • oil production tax — $500 million, up 3 percent from January 2023.
  • natural gas production tax — $188 million, down 41 percent from January 2023.
  • hotel occupancy tax — $25 million, down 54 percent from January 2023; and
  • alcoholic beverage taxes — $154 million, down 1 percent from January 2023.

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