On the Lege

Government by Committee

The revenue proposals were running fast and furious this week before the Select Committee on Public School Finance, which has abruptly become a surrogate for not only the Appropriations Committee but apparently the entire Lege, both chambers of which met briefly Monday only to adjourn for another week. It makes practical sense, since no legislation is yet ready for the floor, but the question hangs in the air why the 29-member committee charged with preparing the bills hadn't done so by the time Gov. Rick Perry called the session.

It's not exactly a mystery – in the absence of consensus, everybody's filing his or her own bill, and in the back rooms the leadership is trying to set a financing smorgasbord with something for everyone, while members and the lobby react to the latest entrée. Reviews are mixed, to say the least. Following the barrage on racetrack slot machines Monday and Tuesday – plans offered by Reps. Jim Pitts, R-Waxahachie, and Ron Wilson, D-Houston, were far more extensive than even the anti-gambling coalitions feared – the House leadership offered a multibarreled shotgun, including not just the slots, but: a uniform state property tax; increased and expanded sales taxes; vehicle, boat, and tobacco taxes; and a new business payroll tax. As laid out before the committee, the plan would raise an additional $1.7 billion for schools but also bring down property taxes 50 cents (to a capped $1), and there are various proposed cap appraisals as well. As described, the plans seem as much a tax shift as an increase – away from residential property owners and toward consumers and small businesses, in a state that already has one of the most regressive tax systems in the country.

Some of these elements were in Gov. Perry's original plan, but without an official sponsor his plan appears to be dying on the vine. He released a statement saying the House substitute deserves "thoughtful and thorough consideration" while reiterating his own priorities in what has been only intermittently a session on public school finance: "I will judge any bill based on whether it provides real and lasting property tax relief, improves our schools and funds education equitably without jeopardizing Texans' jobs."

Some Republicans are objecting to particular aspects of the proposals floated thus far, especially the expansion of gambling – in a spasm of too much information, Lewisville Sen. Jane Nelson said she'll wear a catheter if necessary to facilitate a filibuster against the slots – and several Democrats have pointed out that most of the taxes considered thus far offer relief for the wealthiest at the expense of middle- and working-class Texans. For that reason among others, the Mexican American Legislative Caucus has been calling for a cap on sales taxes (Laredo Rep. Richard Raymond has introduced a constitutional amendment calling for a permanent exemption on food and medicine), and others have pointed out that even the payroll tax contemplated as a substitute for the disappearing franchise tax will effectively hit hardest at labor-intensive small businesses, who, like their corporate behemoth brethren, will pay a tax based on the number of employees.

Sen. Eliot Shapleigh, D-El Paso, described the combination of taxes contemplated in the House plan to Quorum Report as effectively "a perfect storm" against the economy of middle- and low-income Texans and especially South Texas. "The payroll tax kills small businesses that have many employees at low wages because you are now being taxed per head," Shapleigh said. "We'll have a payroll tax on employees against the lowest income levels and we will effectively transfer taxes to the middle class. What Texans aren't hearing in this debate is the shift in taxes that goes to the middle class."

Other representatives raised similar questions about Lege priorities. Laredo Sen. Judith Zaffirini introduced a bill to restore the health care stipend for school teachers and employees (cut in half or more last spring and persistently absent from the school funding priorities of the GOP leadership), and Reps. Garnet Coleman, D-Houston, and Elliott Naishtat, D-Austin, filed legislation aimed at restoring available funds to those cut from the Children's Health Insurance and Medicaid programs last spring. Citing comptroller's figures of $1.3 billion in available funds (more than matched by federal monies since sent back to D.C.), the legislators called for restoring $450 million to the programs slashed last spring. "CHIP and Medicaid cuts make no sense educationally or economically," said Naishtat. "I urge Governor Perry to lead by taking action. Help every child reach his or her potential by ensuring access to health coverage. Place this important issue on the call. We must restore the cuts to these critical services immediately."

Needy horse- and dog-track operators have been duly entertained before the Public School Finance Committee, which has yet to hear from schoolchildren without insurance.

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Legislature, 78th Legislature, public school finance, Rick Perry, Jane Nelson, Eliot Shapleigh, Elliott Naishtat, Garnet Coleman

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