Posted on 05/18/2006 6:52:36 PM PDT by Dubya
IRVING — Republican Gov. Rick Perry signed into law today legislation that restructures the state business tax to help pay for public schools and accompanies a major property tax cut.
The measure is a major component of Perry's plan to revamp the way Texas pays for public education before a court-ordered deadline of June 1. The new law will help deliver a record $15.7 billion property tax reduction over three years, Perry said.
"It is the largest of its kind in America and significantly reduces the impact of Robin Hood," he said, referring to a state system that distributes some money from wealthy districts to poorer ones.
The measure is one of five school-finance bills passed during a 29-day special session that adjourned Monday.
"Our entire school finance plan will lead to better schools, a stronger economy and a better future," he said before signing the bill.
The law establishes a $3.4 billion tax expansion for next year and changes the state's business tax so more companies have to pay it.
Perry praised the law as a reliable source of funding for schools and fairer to employers than the previous loophole-ridden franchise tax.
The old tax system allowed businesses with good accountants to avoid paying taxes, meaning other businesses carried an unfair load, school districts struggled and local school property taxes skyrocketed, Perry said.
Assorted business groups, including manufacturers, retailers and service industry companies, endorsed the new business tax.
The legislation levies a tax on 1 percent of a company's gross receipts while retailers would pay at a rate of 0.5 percent. It allows deductions for either the cost of goods or employee benefits such as salary and health care.
Perry said the deductions serve as an incentive by rewarding businesses for offering additional benefits to their employees.
Businesses who hire illegal immigrants couldn't claim those tax deductions and face federal sanctions. However, policing for companies who hire undocumented workers would remain the federal government's responsibility.
Sole proprietors and general partnerships are exempt from the tax, as well as businesses whose gross receipts total $300,000 or less and those whose tax bill is less than $1,000.
Independent gubernatorial candidate Carole Keeton Strayhorn, also the state's chief financial officer, criticized the tax measure. While it requires some 200,000 additional businesses to pay taxes, it doesn't pay for the promised property tax cuts, she said.
The $2,000 teacher pay raise is small, and the property tax relief would vanish quickly, Strayhorn said in a release Thursday.
"This law leaves Texans with a $23 billion hot check," she said. "It is bad public policy, and I will blast it off the books after I am elected governor."
On Thursday, Perry said some of those opposing the plan are trying "to keep from paying their fair share."
Republican Rep. Dan Branch of Highland Park said any problems in the bill can be addressed in the 2007 legislative session because some businesses will have had a chance to analyze its effects by then.
State Rep. Jim Keffer, an Eastland Republican who sponsored the measure, joined Perry for the bill-signing in Brownwood. Then Perry planned to travel around the state holding ceremonial signings of the same bill.
The governor hasn't yet signed any of four other bills in the school finance package, which include a $2,000 across-the-board pay raise for teachers, more teacher performance bonuses and additional money per high school student.
Under the school finance plan, property taxes on the average-priced Texas home would drop by nearly $2,000 over the next three years.
Districts would get to keep nearly a $1 billion more from property taxes by 2008. Also, many districts wouldn't have to pay in some of their tax revenues to the state.
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The business tax bill is HB3.
They will go down for a couple of years, but before long they will be right back to where they are today. All government knows how to do is tax, tax, tax. There is a revolt brewing at the grass roots level, once that will dwarf 94.
CUT SPENDING.
Because a house is a home not a 401k. People live in thier homes until they die. They never see an benifit from raising rates, all they see is bigger and bigger tax bils.
This would be a good start. I am HTML impaired, so I could only provide the link to this $75 MILLION facility. I've called my reps, gone to school board meetings, etc...The local school boards are one of the most tyrannical organizations that I can think of. It makes me cry to think that not only do we have to pay exhorbitant property taxes, but now our business will be taxed exhorbitantly as well to pay for crap like this.
http://www.houstonarchitecture.info/haif/index.php?showtopic=5193
If education spending is out of control in your school district, gripe to the school board!
How much money does your district pour into high school athletics: multi-million dollar stadiums, endless bond issues that have to be paid back, regardless of future revenues?
You're just like everybody else on this thread: all blow, no go.
Come up with a solution, pal. Kinky ain't gonna do any better 'cause he's got no idea where he is, at any given time, and Strayhorn wants to fund schools with undesignated "spending cuts."
You guys are a joke.
Take it up with your school board.
Right...when has money EVER solved a problem with public schools?
All this does is take from businesses, which in turn tehy will pass it on to everybody else. It's nothing but a shell game.
It may be mandated but why the hell should I have to pay for schools when I don't have kids, never have and never will?
It is taxation without representation, pure and simple. If I had kids then I could see it. Maybe.
Do you own a home?
Why should apartment owners have to subsidize your mortgage?
The tax system is a trade-off. I'd bet you'd be paying for schools no matter what state you lived in.
I just built my house and I'm not planning on selling it any time soon. The value only matters if you're selling. However, I'm not in disagreement with what the property is valued at, I'm not happy with the tax rate.
When my kids started school it became obvious to me that a lot of troubled children were monopolizing the teachers time and that the school was teaching to the "lowest common denominator", so I pulled my kids out and I have them in a private school. I am fortunate to have been blessed with the resources to cover their tuition, but on top of an annual tuition bill of over $17,000 I'm also paying over $8,000 a year in school taxes.
I have some family who live in a million dollar home in Arizona whose property tax bill last year was $2,500.
Yes, I do. As far as apartments are concerned, the rent they pay helps cover the aprtment's property tax.
But still, it's crap. I get screwed every which way because I'm single and because I have no kids. Put yourself in my position, you would be pissed.
Well, if you're single, it's not true that you're getting screwed every which way.
Sorry, I couldn't resist that one!
I've been in your position, though it's been a while ago. The tax code is slanted toward families, as I think it should be.
Somebody else's kid's money is going to fund your social security when you need it.
Why, are you a realtor?
Some candidates with a lot of bucks learn that the hard way. Do all the signs, billboards and automated phone messages you can but without a base you almost will never win.
Once a Democrat, always a Democrat.
Do we have a stupid question of the day award?
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