With lawmakers still scrabbling to make a Faustian deal for a mammoth state budget that is long on spending and short on tax relief, electric rate-payers aren’t going to be getting a rebate from an un-utilized fund for which we’ve been overcharged.

The good news: the “System Benefit Fund” is being eliminated. That’s really good news. Started in the late 1990s to subsidize electric bills for poor people, the fund has collected more than it needs and never really utilized for the intended purpose. It has been little more than a slush fund for budget gimmicks. Going forward, this is a $300 million in fees the state won’t be collecting.

According to State Rep. Sylvester Turner (D-Houston) in the Texas Tribune, the fee will disappear from your electric bill immediately but the SBF will be doling out the dollars for several more years.

So what about the nearly $1 billion in the fund right now?

That’s the bad news: rate-payers aren’t getting their money back.

Instead, the plan now is to hand out the cash to “low-income” Texans—a perverse version of the federal “earned income tax credit” where someone gets a refund for something they never paid. It’s a crass handout, pure and simple.

It’s like the grocery store giving your change to the guy in line behind you.

(About 80 percent of Texans saw the fee on their electric bills.)

Even worse: why lawmakers chose this particular course.

I asked one of the guys in the east wing of the Capitol why the System Benefit Fund dissolution “rebate” was now going out only as a benefit to low-income people and not as a general rebate to all rate-payers.

The response: because conservatives were saying plans to do a rebate were not the same as doing a tax cut!

Well… it wasn’t a tax cut: it was a rebate!

Yes, you could call it a fee cut; but it most definitely was not a tax cut. Fees and taxes are different, even if they both end up going into government coffers. We should keep a lid on fees, we should be careful about not letting fees rise. But a fee isn’t a tax.

Remember: the idea was to give back what Texans had already paid in. Getting back your change at the grocery store isn’t a price cut.

The System Benefit Fund should end; that’s just not an appropriate function of government. Since the fund is shutting down, the dollars should be returned to those who paid into it.

So follow along: because the conservative movement wouldn’t go along with falsely calling a fee-rebate from an un-utilized fund a tax cut, the GOP-driven state budget is handing out cash like Dems. Crazy.

One more reason to dislike this budget “deal.” It is really no deal at all, for taxpayers.

NOTE: An earlier version said the fee wouldn’t go away until 2017. That has been corrected. The fund will remain until 2017.

Michael Quinn Sullivan

Michael Quinn Sullivan is the publisher of Texas Scorecard. He is a native Texan, a graduate of Texas A&M, and Eagle Scout. Previously, he has worked as a newspaper reporter, magazine contributor, Capitol Hill staffer, think tank vice president. Michael and his wife have three adult children, and a dog. Check out his podcast, Reflections on Life and Liberty.

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