The new state margins tax that allows for the deduction of payroll costs - but not payments to independent contractors - has raised concerns in the technology sector, where many executives hire non-permanent workers for short-term projects.

While well-established companies often hire full-time professionals to perform duties like accounting and human resource services, high-tech start up companies frequently have not developed the revenue stream that allows them to hire professionals full time for those services. Start-ups are more likely to contract for such services.

Now tech executives are arguing that the new state tax unfairly targets their contracting expenditures and should exempt those from the tax, just as the payroll costs of well-established firms are exempt.

They will likely be joined by other business executives who are examining the tax, which must be paid beginning in mid-2008, to determine how it will affect their operations.

Key lawmakers have promised to listen, but also expressed caution about overhauling the new tax, which will be essential to paying for a one-third cut in school property tax rates that will take full effect later this year.

"Quite frankly, there may be some businesses that have to change the way they do business," House Ways and Means Committee Chairman Jim Keffer said. "That's always the result of any tax change. But people are very resilient and very smart."

The new business tax, called a "margins tax," will help replace more than $14 billion in local school property taxes over the next two years. The margins tax is applied to 1 percent of the total revenue that a business brings in during the year. Companies can deduct from that amount either their salary and benefit costs, or their production costs.

Business leaders in the service arena point out they may be hard hit because they contract with short-term workers and provide services, not goods.

But former Comptroller John Sharp, who headed a commission that recommended the new tax, said the panel hoped the way the tax was structured would encourage employers to hire full-time employees. "The commissioners were very unanimous in wanting to make sure we encouraged health care, we encouraged employee benefits and we encouraged permanent jobs," Sharp said.

Lone Star

Todd Staples· Commissioner of Agriculture

Career highlights and education: Served as state vice president of the Texas FFA in 1981-1982; Graduated from Texas A&M University with honors, 1984; State Senator; elected in November as Commissioner of Agriculture.

What I like best about my job is: Problem solving. Serving as commissioner of agriculture allows me to work directly for citizens in every part of Texas. The theme that is going to guide us at the Texas Department of Agriculture is "Partners for Progress." By working honestly, listening actively and conducting business with integrity, the people at TDA will strive to improve the lives of all Texans.

Best advice I've ever received for my current job: Prior to riding in the grand entry at the Fort Worth Livestock Show, I was told if I happen to fall off my horse, to lie still on the ground, grab my chest and wait for the paramedics to arrive and cart me off!

Advice you would give a new hire in your office: Get ready to work. Whether it is ensuring our schoolchildren have access to a healthy, balanced diet, promoting all commodities grown or processed in the state or encouraging rural economic development across the Texas countryside, TDA is going to be tackling issues that impact all Texans.

People would be surprised to know that I: I've always wanted to be in a western!

If I snuck out early, I could probably be found: I would be working from home or out at the farm.

One thing I wished more people knew about my job: Texas agriculture is truly a powerhouse of production generating about $73 billion throughout the state's economy. Many people don't know that the state's agriculture industry employs one out of every seven working Texans or how much agriculture impacts their daily lives.

Book, magazine or newspaper article I've read recently that really influenced my thinking: David McCullough's John Adams. One of the most interesting things was the fierce and intense jockeying for position by our early elected officials. It is sometimes disheartening to citizens to observe the legislative and public policy-making process as controversial. We must understand this has been a part of the course since our early days as a nation. We must recommit ourselves to serving for the public good and be a part of the solution to the challenges that face our generation.

Each week, the Texas Government Insider profiles a key government executive or decision-maker in state government. If you would like to suggest a “Lone Star,” please email us at editor@spartnerships.com. We’re also interested in hearing about promotions, reorganizations, awards or other news related to work inside Texas state agencies. Drop us a line!

Dewhurst announces committee assignments

Lt. Gov. David Dewhurst stuck with veterans in making committee assignments, keeping Sen. Steve Ogden as chair of Finance, Sen. Florence Shapiro as chair of Education, Sen. Robert Duncan as chair of State Affairs, Sen. Jane Nelson as chair of Health and Human Services, Sen. Troy Fraser as chair of Business and Commerce, Sen. Royce West as chair of the Intergovernmental Relations Committee, Sen. Rodney Ellis as Chair of Governmental Organization and Sen. John Whitmire as chair of Criminal Justice.

Other appointments include Sen. Kim Brimer as chair the Senate Administration Committee, Sen. Kip Averitt as chair of the Natural Resources Committee and Sen. Kyle Janek as chair of the new Subcommittee on Emerging Technology and Economic Development.

"After personally contacting all 31 senators late Friday evening, I thanked them in advance for the hard work they will put in over the course of the next five months for the people of Texas," Dewhurst said in a statement. "I believe the lineup of these committees puts the right people in the right places."

For a complete list of the Senate's committee assignments, click here.Some Senate committees have already begun scheduling hearings; the schedules are available online.

Telecom subsidies to get legislative scrutiny

A Texas Public Utility Commission study on the Texas Universal Service Fund suggests that subsidies to big phone companies for providing "high cost" service to rural or hard-to-reach areas are outdated.

Not only have some areas formerly considered rural become suburban, but Internet and cell phone access present questions on how much money should be spent on providing land lines to rural areas.

All phone customers with Texas area codes pay a 5 percent fee on long distance calls made within the state to contribute to the Texas Universal Service Fund. The fund ensures land line service to rural Texas, and also ensures that low-income and disabled Texans have access to affordable service.

But PUC consumer advocate's attorney Roger Stewart said, "There is really no accounting for how this money is spent" by the phone companies receiving it.

Rep. Phil King said that he would hold hearings into the administration of the fund, noting that "changes in technology and the changes in Texas demographics suggest that the fund may not be allocated properly today."

Denton County invests in hybrid vehicles

Denton County officials plan to replace nine gas-guzzling SUVs with hybrid vehicles designed for fuel-efficiency and lower pollution output. The purchases will be assisted with grant money from the North Central Texas Council of Governments that encourages counties to purchase hybrids by covering 80 percent of their total cost.

"In areas where we can use a hybrid vehicle and it's not going to compromise what it's being used for, then we should do it," said County Judge Mary Horn.

This year, the county has chosen Ford Escape hybrids, quasi-SUVs, including two for the Sheriff's Office and the third to the health department. They will be used as light-duty vehicles, not patrol cars.Over the course of the three-year project, the county will replace three Crown Victoria sedans, two Ford Expeditions, one Ford pickup, one Jeep Cherokee, one Ford Explorer and a Chevy minivan.

The vehicles being replaced get anywhere from 11 to 25 miles per gallon, while the Ford Escape hybrid gets between 31 and 36 miles per gallon, according to county documents. "It makes good economical sense, and it's just one more thing we can do to help the environment," Horn said.

UTA opens new center

The University of Texas at Arlington will offer a plethora of college programs at its new Fort Worth Center, located in the historic Santa Fe Freight Building in downtown Fort Worth.

The 68-year-old building will house eight classrooms with cutting edge technology for teachers and students and a library with more than 40 computers, but no books. Students will be able to pursue preparation courses for master of science degrees in engineering management and health care administration. The center will also offer the university's new executive MBA, as well as continuing education classes in subjects including Spanish, project management and supervisory training.

Jim Johnson, director of downtown development for Downtown Fort Worth Inc., called the move "tremendous."

"Getting UTA in there solves lots of problems," Johnson said. "We put some life into that part of downtown Fort Worth. I think they're going to have that place packed."

Denton turns to search firm

Denton city officials have hired an executive firm to help them fill multiple vacancies in top city positions.

The city is searching for a new police chief, chief financial officer and planning and parks directors. It also very shortly will need a new electric utility director as the current director is planning to retire this year.

"If you had only one spot that you're trying to fill, we could probably proceed" without a search firm, Mayor Perry McNeil said. "But there are five positions that are vacant, and to try to do that all at once is just overwhelming."

The multiple openings were created by recent resignations: Chief Financial Officer Diana Ortiz resigned last June to take a position with the city of Grand Prairie, Police Chief Charles Wiley and Planning Director Kelly Carpenter left later that year to pursue jobs in other cities, and former parks leader Janet Fitzgerald retired Dec. 31 after 15 years with the city.

Angelo State presidential search narrowed

The committee appointed by the Texas State University System to search for a new Angelo State University President has named four finalists.

The successor for Angelo State University President James Hindman will be named by this summer, officials said.

The finalists are: Dr. Ronald J. Ambrosetti, provost and dean of St. John Fisher College, Rochester, N.Y.; Dr. Donald Coers, provost and vice president for academic and student affairs at Angelo State University; Dr. Khosrow Fatemi, president of Eastern Oregon University in La Grande, Ore.; and Dr. Joseph C. Rallo, provost and academic vice president at Western Illinois University in Macomb, Ill.

The search committee will interview the four candidates in early February. The candidates will also meet with faculty, staff, students, alumni and community members during their two-day visit. TSUS Chancellor Charles R. Matthews (pictured) will consider feedback from the visits in making his recommendation to the Board of Regents.

State senator proposes statewide smoking ban

State Sen. Rodney Ellis will propose legislation for a statewide ban against smoking in all public buildings in Texas - including restaurants, bars and workplaces. If approved, Texas would become one of 18 states with sweeping bans on smoking.

"It is a public health crisis and a very expensive one," Ellis said. But the proposal will face stiff opposition from defenders of smokers' rights who believe that the government has no role in regulating what they say is a personal choice.

Texas has taken aim at smoking with the recent $1-per-pack cigarette tax increase.

Metro to phase in Q-card

Scuttling plans to switch to a new fare structure and "Q Card" payment system in early February, Houston's Metro has decided to gradually phase in both new concepts in hopes of working out bugs and softening the shock to transit riders. The switchover is expected to take until summer.

"We're planning a rolling start rather than dumping an entire new system on patrons at once," said Metropolitan Transit Authority spokeswoman Raequel Roberts. "It's just such a massive thing that to start Feb. 4 and expect everybody to be on board would have been too overwhelming. We don't want people getting on the bus and having all kinds of problems."

Metro adopted the new fare structure and stored-value Q card (the Q stands for quick) to replace its complex system of discounts and passes. Officials have recruited about 600 riders from all parts of the transit system - including local bus, Park & Ride bus, MetroRail and MetroLift - to use the new cards and report any glitches.

These riders -- called "Q Boosters" -- will be issued Q Cards with $10 of stored value on them. They will be asked to use the new system and fill out forms about their experiences.

Two East Texas towns merge chambers of commerce

The Quinlan Chamber of Commerce and the Tawakoni Chamber of Commerce will merge under a new name: the Lake Tawakoni Regional Chamber of Commerce.

Jim Johnson, the new chamber's co-president, said the merger made sense since the two bodies had overlapping membership. Now, he noted, both cities have "a bigger force to help the whole community."

For the next year, both elected boards will jointly lead the newly merged chamber. Later this year, a joint election will be held to narrow the Board of Directors to its normal size.

Retirement prompts position's move

With the recent retirement of a Lufkin-based Texas Forest Service administrator, agency officials have determined the vacant position will be relocated from Lufkin to College Station.

Lufkin-based Bobby Young retired after 35 and a half years of service promoting wildfire protection. He joined the agency upon his graduation from Louisiana State University.

He held many positions throughout his career with the agency, and ultimately was named associate director over forest resource protection.

UTEP takes aim at teacher shortages

The University of Texas at El Paso has begun a new program to increase the number of qualified math and science teachers with the help of private donation.

The corporate gift of $600,000 gift to UTEP's Math and Science Teachers (MaST) Academy, which works in partnership with area high schools.

"We are honored by and grateful for the support provided for this innovative program," said UTEP President Diana Natalicio. "Preparing today's UTEP math and science students to be highly effective teachers will enable future generations of El Pasoans to compete successfully with their peers across the globe and contribute significantly to the future development of this region."

The gift will also used to reward deserving students and teachers. Selected scholars will be awarded a stipend of $3,750 per semester. Ten undergraduates majoring in math or science and minoring in secondary education have been selected for the spring semester. Selected MaST Mentor Teachers will also receive a stipend of $500 per semester and professional development support.

FEMA urged to extend housing aid

The Federal Emergency Management Agency said this week it was considering appeals from community groups and members of Congress to extend housing assistance, now scheduled to expire in February and March, to victims of Hurricanes Katrina and Rita.

FEMA is still paying rent for more than 14,000 evacuee households in the Houston area, down from a peak of about 34,000 last year, said Robert Johnson, program manager for the city's Joint Hurricane Housing Task Force. Almost all are Katrina evacuees.

Advocates say the slow pace of reconstruction efforts in New Orleans means most evacuees can't return home, where they would be more likely to get help from families and other support systems.

Last October, 24 nonprofit groups in Gulf Coast states signed a letter to federal officials urging the extension.

"It is critical to recognize that many displaced families, and especially those who continue to depend on FEMA for housing assistance, have very low incomes that make the likelihood of requiring continued FEMA assistance beyond February and March of 2007 a near certainty," the letter stated.

Dallas police start crime analysis center

Dallas police have begun a crime analysis unit, called the Metro Operations Support and Analytical Intelligence Center, that will collect and analyze crime tips and trends to use in dispatching police manpower.

Modeled after a concept called "intelligence-led policing," the center seeks to pinpoint trends and criminal activity and assign patrol squads and detectives to neutralize their effect.

Hopefully, it will allow us to better target areas with usable, actionable information," Dallas Police Chief David Kunkle said, "and we'll have a more effective understanding of what strategies work and generate the best results."

Dallas auto pound to get more security

Plagued by repeated break-ins, Dallas police want to spend more than $184,000 on security upgrades at the city auto pound, including the installation of a 13-camera, motion-sensitive surveillance system that they estimate will cost about $173,000.

City officials also are proposing spending $11,238 to improve lighting at the auto pound to combat the rampant crime. Last year, thieves stole at least $90,000 worth of property from the auto pound in West Dallas.

Thieves have found the auto pound offered an easy supply of custom wheels and tires and high-end electronics.

If the City Council approves the security upgrades, officials expect to have the cameras and additional lighting in place by mid-April.

HCC gets new chancellor

Houston Community College's governing board has made official Mary Spangler's selection as chancellor.

The trustees selected Spangler, a longtime educator who leads Michigan's largest community college, as the sole finalist for the job last month, but state law forced them to wait 21 days before finalizing the decision.

Spangler will replace Bruce Leslie, who resigned the $275,000-a-year post in June. Leslie has since accepted the top job at the Alamo Community College District in San Antonio.

School district, courts to share records to fight truancy

The Corpus Christi Independent School District plans to share student attendance records and grades with judges in an effort to cut down on truancy and increase court efficiency.

School district, city and county court staff have agreed that shared Internet access to students' past and current grades, attendance history, address, parents' address and any current absences will have facilitate court enforcement of school attendance laws.

Officials say that having immediate access to those records will allow them to keep track of students who move or continue to miss school after going to court. They hope the new program will reduce truancy rates, thereby improving the average daily attendance for CCISD students.

Software and training for the courts will be paid for by the district, and costs are expected to be negligible, school officials said, though they did not have an exact cost estimate.

Copperas Cove considering tax ceiling

Copperas Cove city officials are considering a property tax ceiling for seniors and disabled residents. At a recent workshop, city council members generally favored allowing voters to determine the fate of the proposal in an election.

If adopted, the tax ceiling would model proposals adopted recently by Coryell County, Central Texas College and the city of Gatesville, all of which have enacted property tax ceilings to help relieve the burden on aging taxpayers and the disabled.

But city officials have been warned that the tax ceiling could cripple the city's ability to raise revenue, with a nine-year projection showing the annual loss growing from $33,184 in 2008 to $411,467 by 2016.

Council OKs sex offender residency ordinance

The Wake Village City Council, following the example of other Texas cities, approved an ordinance prohibiting offenders registered with the Texas Department of Public Safety's Sex Offender Database from residing within 1,500 feet of any place where children gather.

The ordinance defines those places as public parks, playgrounds, schools, day care centers, public or private swimming pools and youth centers.

Wake Village City Administrator Bob Long said the city currently has no registered sex offenders residing within city limits. But, he said, "We have a lot of families and children who live here. We did this for the children's safety, and anything we can do for the children's safety, we'll do."

College Station still searching for planning chief

College Station officials continue to search for a director to lead the city's long-range planning department, though the effort has taken nearly nine months.

Since April, the city has been searching for a new planning director and the department's acting director has stated he doesn't want the job permanently. Meanwhile, the city has proceeded with plans to annex more than 3,000 acres and update its comprehensive land use and thoroughfare plan.

City Manager Glenn Brown called the failure to hire a director "not quite an emergency situation," but added, "but we do want to have someone on board by late spring or early summer."

San Antonio to get new bridge

The San Antonio City Council has approved $5.4 million to build a bridge over a low-water crossing that claimed a woman's life in 2004.

Floodwaters at the Northwest San Antonio location have been a continued problem. Two or three times a year, emergency workers have to rescue someone from the low-water crossing, local residents said.

The new bridge will be designed to withstand a so-called "100-year flood," calculated on the area's flooding history. San Antonio officials say the bridge is the first of approximately 168 low-water areas that need some attention.

Lawmaker vows to help nursing school

While Texas faces a nursing shortage, new educational programs for the profession are hamstrung by a lengthy accreditation process, and one Texas lawmaker has vowed to resolve the problem.

Rep. Mike Villarreal hopes to use the sunset bill for the Board of Nurse Examiners to assist schools attempting to get accreditation in Texas. For example, the Galen College of Nursing, which offers programs in San Antonio, wants to expand its licensed vocational nursing program to more advanced training for registered nurses. While the school runs the programs in two other states, it has been hampered from offering the training by the lengthy accreditation process required in Texas.

The Board of Nurse Examiners has agreed to allow Galen students to take registered nursing exams while it pursues accreditation, but Villarreal believes students are dissuaded from attending the school because of its unsettled status.

Villarreal believes the legislature should shorten the process for qualified schools to receive accreditation for badly-needed nursing programs.

City to purchase 1,800 new water meters

LaMarque city officials plan a huge purchase of new electronic water meters, hoping the move will help them recoup lost revenues and correct ongoing utility billing problems.

Using revenue from bonds issued in 1998 for water system improvements, the city will purchase an additional 1,800 meters.

City Manager Robert Ewart blamed faulty meters for creating havoc with billing and losing money for the city. "We have been losing money because many of our meters are either not working properly or have quit working all together," he said. "In some cases, we have been as much as two months behind on the billing."

Eventually, the city hopes to eventually replace all of the 6,000 water meters in the city, a process that started last year. With this latest meter purchase, the city will have more than 4,000 meters replaced.

He vowed that the city would begin an "ongoing meter repair and replacement program."