The Cup Doth Not Floweth Over
Why the sexually oriented business surcharge won't pay for real sexual abuse survivor programs, and never could
By Richard Whittaker, 3:48PM, Mon. Mar. 9, 2009
As anyone that has followed the famous Titty Tax can tell you, there's a basic problem with the $5 per head surcharge on sexually oriented businesses: It's an unconstitutional tax on content.
But let's put that to one side for a moment. There's another big problem with the tax. It was supposed to pay for sexual assault survivor programs statewide. It doesn't, it won't, and even the most optimistic predictions leave the state short of projected revenue and needs.
In 2007, the original tax passed by Rep. Ellen Cohen, D-Houston, under House Bill 1751 was supposed to produce $87 million, $25 million of which was for the sexual assault program fund. That would be roughly $1 per Texan: Compare that to Iowa, where they spend about $2 per person, or Massachusetts, where it's closer to $6 a head including domestic violence funding.
What HB 1751 actually produced, in the last 14 months, is $11.2 million. Projected revenue for the biennium? $19 million, which isn't even close to $87 million, and isn't even the $25 for sexual assault funds.
So why the massive shortfall, and what's being done to fix it?
Bill Kelly, Cohen's chief of staff, admits that there was no real study of sexually oriented businesses available in 2005 when the tax was first proposed, or in 2007 when HB 1751 was passed (short hand: they pulled the numbers out of thin air.) In addition, he said, "I think a lot of clubs are betting on the court case, and they're going to be responsible for that money, whether they've collected it and turned it in or not."
Even if all that money was available (as Kelly noted, it's tied up because the Texas Entertainment Association is daring to challenge the state's appeal to have the original judgment kicking out as unconstitutional. Damn due process) it would still be a fraction of what was hoped for two years ago.
Cohen's got a reform bill, HB 2070, which proposes cutting the surcharge to $3, but her office expects that it would produce $18 million a year. So a $5 surcharge producing $19 million in two years become a $3 surcharge producing $36 million in two years. Interesting.
Rep. Senfronia Thompson, D-Houston, has filed her own tax bill, HB 982, which would levy a 10% tax on cover charges for strip joints. Cohen's office says they estimate it will only raise $1 million, but then again Thompson's bill has the advantage of being, oh, what's that word. Oh, yes, constitutional.
But there's a far more basic problem. As Thompson's people noted, go back to 1993, when the sexual assault program fund was first established. Back then, it was going to be paid for by parole and probation fees from sexual offenders. But when courts stopped paroling sexual offenders, that cash stream dried up. If the groups pushing for all 175 strip joints in Texas to shut down get their way, guess what? No revenue. And the sad fact of life is that, you can shut all the strip joints in the world, there will still be sexual abuse. And the programs will go unfunded. Again.