Posted on 03/15/2005 10:30:36 AM PST by SwinneySwitch
Legislation cuts school property taxes, shifts $5.4 billion per year.
The Texas House voted to approve a $5.4 billion-a-year shift in state taxes late Monday by agreeing to cut school property taxes by a third while boosting and expanding the state sales tax and modifying business taxes.
The House approved the bill with a 78-70 vote, largely along party lines. Final passage in the House, which is likely to follow today, will send the juggernaut that is school finance reform to the Senate, where lawmakers will provide their own ideas about how to change the state's school and tax systems.
Before Monday's final vote, the House approved a change to a business tax proposal that leaders had crafted over several days. The proposal had reached the floor late last week, but debate was put off because House leaders said they wanted to give lawmakers more time to digest it. Under the plan, companies will have the option of paying a payroll tax or the state franchise tax, in which a company pays a tax on its capital or its net income. Most companies in Texas have legally avoided paying the franchise tax in recent years, but the House bill would force entities such as general partnerships to pay the franchise or payroll levy.
Rep. Mike Villarreal, D-San Antonio, said about 150,000 businesses in Texas now pay the franchise tax. He said about 475,000 businesses will pay the franchise or payroll tax under the House plan.
"If you do business in this state, you're going to have to pay your fair share," said Rep. Jim Pitts, R-Waxahachie.
Many Democrats have spoken against the bill because, according to a Legislative Budget Board analysis of an earlier, but similar, version, it would raise taxes for most low- and moderate-income Texans. The bill would raise the state sales tax to 7.25 percent from 6.25 percent, add $1.01 to the tax on a pack of cigarettes and apply an additional 3 percent "snack tax" on some foods and sodas. Those changes are intended to replace money that schools would lose through a decrease in the cap on state property taxes from $1.50 to almost $1 per $100 of property valuation.
"This bill is only a tax savings for the people in the highest income brackets," said Rep. Scott Hochberg, D-Houston. GOP Reps. Todd Baxter of Austin, Dan Gattis of Georgetown and Mike Krusee of Williamson County voted for the bill.
Rep. Terry Keel, R-Austin, voted against it. Also voting against it were Democratic Reps. Patrick Rose of Dripping Springs and Dawnna Dukes, Eddie Rodriguez, Elliott Naishtat and Mark Strama of Austin.
Lawmakers considered dozens of changes to the bill during a debate that lasted well into Monday night.
One change they approved would end the sales tax on diapers, as well as parking at medical facilities, and apply it to cosmetic surgeries not related to medical conditions or injuries.
"I think most people will see vanity surgery as a luxury item and will see diapers as a necessity," Hochberg said.
The House plan would expand the sales tax to cover bottled water, billboard advertising and car washes and repairs. Rep. Charlie Howard, R-Sugar Land, proposed leaving water tax-free and lowering the snack tax on sodas but raising by 3 percent the sales tax for beer, wine and ale. The House overwhelmingly rejected that idea.
House leaders had planned to expand the sales tax to newspapers as well, but the House removed that language from the bill Monday.
The House also voted to make insurance companies subject to either the franchise or payroll tax. The companies are now exempt from the franchise tax, and the tax bill passed out of committee last week said they could deduct their payroll taxes from the taxes they pay on gross premiums.
Rose led the effort to tax the insurance companies, saying they should not be exempt from a tax that falls on the rest of the Texas economy. His amendment also would bar insurance companies from using the new business tax to justify higher rates to the Texas Department of Insurance.
"My intent is to make sure that insurance companies pay their fair share," Rose said.
But other lawmakers said the companies were not included because they already pay the premiums tax. Adding another tax on top of that would discourage companies from locating and expanding in Texas and hurt competition, they said.
Rodriguez offered an amendment that would require landlords to pass 75 percent of their school property tax savings on to renters in the form of rebates or lower rents. But the House defeated his effort.
The measure's opponents said market forces would trigger lower rental rates.
The tax bill is the second component to the House's attempt at changing the way Texas pays for public schools. Last week, the House passed a bill that would rewrite the formulas that determine schools' funding and impose new mandates on local districts.
Considering they were predicting a "short fall" and are saying the new bill is "revenue neutral", does that mean we are getting a hidden net tax INCREASE in the bargain?
The payroll tax is an income tax in disguise.
All this will do is cost jobs.
http://www.wfaa.com/sharedcontent/dws/wfaa/latestnews/stories/wfaa050314_am_xgrskulfin.13ad7158d.html
-For example, a payroll tax on the 135 workers at the M Grill and Tap in Uptown and another restaurant owned by the same partnership would cost $40,000 a year.
The owner said they couldn't make it up in higher prices.
"We can't go from an $8 hamburger to an $11 hamburger," said restaurant owner Mark Maguire. "That just won't fly in the economy today - people are much more price sensitive in the last three years."
So, labor-intensive businesses said they would hire fewer people, and that would threaten job growth. -
But the cowards can't call it that because then the people of Texas would get to vote on the constitutional amendment a state income tax requires.
Businesses in this state already pay their fair share.
THEY PAY MORE THAN THEIR FAIR SHARE VIA A TON OF OTHER TAXES!
THE REPUBLICANS IN AUSTIN SCREWED US. ALL THEY DID WAS PUSH FOR TAXES.
Never once did they address the issue of cutting waste type spending from education.
COMPANIES DON'T HAVE KIDS THAT USE SCHOOLS. THEIR EMPLOYEES WHO ALREADY PAY TAXES DO.
Well, yeah. And you expected otherwise? They are, after all, politicians.
THIS WILL BE CHALLENGED IN COURT.
They can claim it by another name all they want....but it is a tax on income (payroll and tax on co income)...which flies in the face of the State Constitution.
THEY CAN'T DO THIS WITH OUT A VOTE, BY THE TEXAS PEOPLE, FOR A CONSTITUTIONAL AMENDMENT.
I am truely discussed by this bill, we ned tax relieve and spending cuts not this trash.
I am truely discussed by this bill, we ned tax relieve and spending cuts not this trash.
It's time to call and pressure the State Senators to pull the payroll and co income tax from the legislation........
AND DEMAND ACCOUNTABLILITY IN SPENDING BY THE EDUCATION FOLKS!!!!
WE HAVE TO TIGHTEN OUR BELTS........SO SHOULD THEY!
BTW,
MARY DENNY...State Rep (R) from the Flower Mound area.....was voting for the payroll tax the last time I checked.
Already done that and got a form letter back. Yippee. Nothing less than a bag of feathers and a bucket of tar will get it through to them.
Since the valuation is very loosely capped, it can go up 10% per year. So, if the valuation maxes out (which mine and a lot of other people's has done 4 years in a row) on a $150K house the state tax initially falls from $2250 per year to $1500 per year ($1.00 vs. $1.50 per $100).
4 Years later, without a cap on the valuation increase, the taxes are back at $2196 per year and these charlatans have both their Business Tax increase and their sales tax increase in addition to property taxes being right back where they started.
They should be tarred and feathered
Not to mention spell checking.
This bill will cost the state new jobs. Companies will be less likely to come here now.
Texas was just listed in another magazine group as the number one state for business....WELL, THAT'S ALL GONNA CHANGE NOW!
I am sick of the whinny bs out of the education lobbyist as well.
IF YOU ARE A CITIZEN IN THIS STATE, BUT DON'T HAVE ANY KIDS....YOU STILL PAY TAXES TOWARDS THE SCHOOLS!
IF A COMPANY EXISTS IN TEXAS (AND COMPANIES DON'T HAVE KIDS)...THEY PAY TAXES TO THE SCHOOLS!
IF YOU HAVE A KID...BUT SEND THEM TO PRIVATE SCHOOLS.....YOU STILL PAY TAXES TOWARDS EDUCATION IN THIS STATE.
They have enough money for public schools......they need to spend it in a wiser manner.....not waste it.
79th Lege Ping!
Bilingual teachers are in short supply nowadays.
Anybody know where to find the roll call?
exactly.
They will still screw us on property taxes.....
And now....they are gonna cause our insurance to go higher since they are hitting them with new taxes.
WE WILL BE PAYING MORE THAN WE DID BEFORE!
I say keep the old system before hitting us with this scam.
IT'S TIME TO VOTE AGAINST THE CURRENT REPUBLICANS IN THE PRIMARY!.
Mary Denny and Burt Solomons went along with this tax increase crap......VOTE THEM OUT!
This is America......English should be spoken here.
Schools waste tons of money, only 50 cents of every dollar spent on education gets to the classroom. The rest is eaten up in overhead and administration. Cut those two deeply and you can get better pay for the teachers , better quality of education for the kids and at a lower cost to the tax payers.
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