House committee abandons parts of a proposed
tax plan
By John Moritz
Star-Telegram
The special House committee
studying ways to overhaul the state's education finance system also abandoned
a proposal to have the state collect school property taxes.
Under the revised plan that
is expected to be considered by the House Select Committee on Public Education
panel today, local school property tax rates would be set at $1.05 per $100
of assessed value, substantially less than the current cap of $1.50 per $100.
Local school boards would be allowed to add 2 cents per $100 in assessed value
for enrichment programs each year until the additional levy reaches 10 cents.
"I believe that the
education reforms in the proposal are innovative and will enable
The changes are among several
modifications to the sweeping package of taxes, surcharges and a video gambling
initiative that committee leaders unveiled Tuesday. Lawmakers are in the second
week of a special 30-day legislative session called by Gov. Rick Perry to
end the decade-old share-the-wealth school funding plan nicknamed "Robin
Hood."
But under the latest modifications
that will be debated today by members of the select committee, the Robin Hood
concept would live on in a dramatically scaled-back form.
State Rep. Dan Branch, a Dallas Republican who represents
the wealthy Highland Park school district, said the new plan would require
a handful of the state's richest districts to give money to the state to redistribute
to poorer areas.
"I think that would be far preferable to the current
system," said Branch, a member of the committee. "Property taxes
would be much lower and so would the amount that is subject to recapture by
the state."
The plan calls for raising
the sales tax rate to 6.75 percent, up from 6.25 percent. Motor vehicle taxes
would rise from 6.25 percent to 7.75 percent, as would the tax on boats and
motors.
Private employers would
be required to pay a tax of $500 per year for each worker on the payroll,
or 1.25 percent of the total payroll, whichever is less. The franchise tax
on corporations would be abolished.
Like the proposal unveiled
Tuesday, the latest version would allow video gambling at race tracks and
on Indian reservations and would increase the tax on cigarettes by $1 per
pack and on smokeless tobacco by 40 percent. Tickets to such amusements as
movies and sporting events would be subject to a $1 surcharge.
Newspapers and magazines
would also be subject to sales taxes for the first time.
Under the new plan, the
total tax burden on Texans would increase by $1.5 billion annually and the
amount of money available to the state's school districts would increase by
$1.35 billion annually.
Service providers such as
lawyers, public relations specialists, accountants, architects, hair stylists
and decorators were dropped from the earlier plan to subject their services
to the sales tax.
Scott McCown,
who heads the liberal-leaning Center for Public Policy Priorities, called
the proposed tax plan misguided because it would hit poor and middle-class
families too hard.
"People with low incomes
and moderate incomes will pay a disproportionately higher share of these new
taxes, and that's regressive," said McCown,
who has advocated a state income tax to finance public education. "So
I think the committee is headed in the wrong direction."
Perry said it is too early
to embrace or condemn elements of any plan being considered by lawmakers because
all legislation is subject to constant revision in both the House and Senate.
Although he has repeatedly warned against broad tax increases, the Republican
governor left the door open to a minor increase in the sales tax rate.
"I'm not going to get pinned down here at this early stage in the process of telling you what that level is," he told reporters during a visit to a private home near
Austin to promote lower
property taxes. "But, you know, a minor increase is not going to have
that much impact."
However, Perry appeared
cool to the proposal to tax employers' payrolls.
"I've said all along
that I think we need to be careful about whatever type of funding scheme,
whether it's a payroll tax, whether it's a business activity tax ... if it
jeopardizes job creation in this state," he said.
House leaders were hoping
to vote a school funding plan out of the committee Wednesday so that the floor
debate, which could rage for several days, could begin Monday.
But Wednesday's hearing
was postponed until today as key lawmakers, lobbyists and interest groups
huddled privately to hash out the details in the new package.
Meanwhile, the head of the
conservative Americans for Tax Reform, issued a statement urging Craddick
to honor the no-tax-increase pledge that he, Perry and 39 other
Also Wednesday, gambling
opponents held a news conference to make their case that
lawmakers should find ways other than expanding gambling to finance public
schools.
Tom Gray, executive director
of the National Coalition Against Legalized Gambling, argued that gambling
depresses legitimate businesses and increases welfare costs and crime.
Sen. Jane Nelson, R-Lewisville,
threatened to filibuster the video gambling proposal, if necessary, to kill
it. She said that's a "pitiful" way to fund public education.
Staff Writer Jay Root Contributed
to This Report.