Posted on 07/11/2005 10:23:01 AM PDT by SwinneySwitch
AUSTIN — After scaling back its promised property tax relief and the number of businesses it would hit, the Texas Senate early Monday approved a bill to raise state taxes by billions to cut local school property taxes.
Because of the change in the proposed expanded business tax, the tax relief would be provided mainly through increases in sales, cigarette and alcohol taxes.
To substitute the scaled-back business tax for a broader version, Lt. Gov. David Dewhurst was forced to cast his first-ever vote and break a 14-14 tie.
The bill was approved 20-8 after 3:30 a.m. Monday after senators met through the night in a debate that finally started at 8 p.m. Sunday after hours of delays.
Dewhurst, in anticipating approval of the less ambitious bill, said it would be a "victory" even though it wouldn't go as far as he originally hoped.
Although he would have liked to see a deeper initial local property tax cuts and "reform of our business tax system," Dewhurst said, "... in reality that's not possible today in light of the governor's comments and the House's position."
Gov. Rick Perry met with senators to urge them to vote against the proposal to broadly expand the state business tax to encompass partnerships, Perry spokesman Robert Black said.
"He believes if you introduce a new element like this broad-based business tax, you are going to bring some uncertainty that could do some damage to the job creation climate we have," he said.
In addition, Black said, Perry told them there was no point in voting for a plan that would die anyway in the House.
Besides scaling back relief, the amendment would do away with the franchise tax in 2008 in an effort to force lawmakers to come up with a replacement.
Senate passage of the tax-swap bill starts a race to negotiate remaining differences with the House — which earlier passed its own tax measure — before the special session on school finance must end July 20.
Sen. Steve Ogden, R-Bryan, Senate Finance Committee chairman, had said the “entire agenda of the special session is in jeopardy” unless the bill were passed.
Not all Republican leaders in the GOP-majority Senate signed on to the compromise, meant to answer concerns by some Republicans that the expanded business tax would amount to an income tax on partnerships. Backers of the bill disagreed with that assessment, including Ogden, who said he was disappointed in the compromise language.
Some senators were concerned that the compromise amendment would wipe out an earlier-approved, Democrat-sponsored amendment pushed to increase the homestead exemption, which would have provided more property tax relief to homeowners than a straight rate reduction.
Democrats also looked with caution at the bill's proposed sales tax increase, with some wanting a better commitment that the half-cent on the dollar increase in the Senate measure wouldn't be jacked up in negotiations with the House if they passed it. The House has backed a 1-cent increase.
The Senate measure also would increase cigarette taxes by $1 a pack and alcohol taxes by 20 percent. The House measure wouldn’t raise alcohol taxes.
South Texas lawmakers voting for the Senate measure were Sens. Ken Armbrister, D-Victoria; Juan Hinojosa, D-McAllen; Eddie Lucio, D-Brownsville; Frank Madla, D-San Antonio; and Jeff Wentworth, R-San Antonio.
Voting against it were Democratic Sens. Leticia Van de Putte of San Antonio and Judith Zaffirini of Laredo.
The agreement on the business tax came after hours of closed-door meetings, with Perry in the middle of the fray.
Perry has pushed a more limited business tax expansion and other elements that he said have a chance for approval in both chambers. He called lawmakers into special session on school finance after they failed to reach agreement in the recent regular session.
The scaled-back Senate proposal would cut the maximum maintenance-and-operations school property tax rate from $1.50 per $100 valuation to $1.30 this year and then to $1.25. Senators originally hoped for a reduction to $1.11.
Like a House bill passed earlier, it would close provisions that allow some businesses to avoid the current franchise tax. But unlike Senate leaders earlier envisioned, it would not attempt a more thorough revamp.
Sen. Eliot Shapleigh, D-El Paso, said the bill would mean an overall tax increase for nearly 94 percent of the families in his district and asked Ogden what he would tell them.
Ogden, noting the reduction in property taxes, said, "I would tell them the cost of owning a piece of the American dream just went down."
-------------------------------------------------------------------------------- pfikac@express-news.net
AUSTIN – Hours after the Senate convened Sunday to consider a measure to raise billions in state consumer and business taxes to cut local school property taxes, there was agreement on one thing.
Sen. Ken Armbrister's cobbler was pronounced quite good.
Armbrister, D-Victoria, shared his grandmother's cobbler recipe with the Senate chef and supervised its preparation as consideration of the tax bill was stalled for hours.
Senators snacked on the sweet blackberry treat while Senate leaders sought to round up enough votes for the tax bill in the face of opposition from Republicans and Democrats to different aspects of it.
Later, walking briskly through the Senate with a piece of paper in hand, Armbrister explained, "They all wanted my recipe." (exerpt)
http://www.mysanantonio.com/news/stategov/stories/MYSA071005.online.lege.en.93a9eb0e.html
"Senators snacked on the sweet blackberry treat while Senate leaders sought to"
A sweet treat for the Texas politicians...a bitter pill for the Texas taxpayers.
Blackberry Cobbler Ping!
So we're losing local control of school financing; does ANYone really think there'll be a net reduction in their taxes?
Well, with increased sales taxes at least the wetbacks will be paying a little bit towards education.
"After scaling back its promised property tax relief and the number of businesses it would hit, the Texas Senate early Monday approved a bill to raise state taxes by billions to cut local school property taxes."
Not good. This is always a prelude to a shell game where it makes it more difficult to achieve accountability at the local level, and sends school costs out of control.
No, we still have Robin Hood. "Redistribution" from high-valued and property rich districts to the abject failure districts. See Wilmer-Hutchins ISD.
I agree. My school taxes are over $7,000 per year and I spend an additional $15,000 per year to send my children to private school because the public schools are inadequate.
It's time to stop making homeowners bear the burden and let all the taxpayers pay their share. Remember, we don't have an income tax in Texas.
And we don't want one. Let them pass one and we will just get hit three times instead of twice.
The primary problems in Texas are 1) school administration is making off with tax money like a bunch of bandits causing 2) an explosion in appraisals to keep up with their thievery. No, appraisals aren't supposed to be driven by anything but market values, but it is clear that in a lot of areas they are driven by how big a raise the local superintendent wants next year.
Want to fix the school finance crisis? Tie the administrators salaries to the teachers. Want to fix property taxes? Cap appraisals.
AMEN!
What is this I heard that if the Taxes Legislature doesn't pass their budget, the public school can't open? I have heard this mentioned several times lately, but can't determine (at least yet) if this is true.
If this is true, I say adjourn the session now and let the schools stay closed. Take that off the property taxes and presto: instant tax relief.
Otherwise, we will be paying more, no matter how they disguise it. Paying more for less -- seems to be a common theme these days.
I agree with that. I have one question - is the salary for coaches still tied to administrative salaries? At one time, the principal could not be paid less than any theacher - meaning the more a coach was paid, the more the p was paid.
My tax bill went up to $8,300 this year and I can't see that we get anything better with the increase than we had before.
At least the payroll tax is off the table. Still, it would be nice to see some appraisal caps and school reforms(vouchers, 65%+ of school budget designated for teachers/students).
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