Property Comes First

Tax plan progress?

Bills that sailed through the House last week appeared to stall in the Senate this week, as Senate seas parted along partisan lines on Tuesday.

The Republican leadership had a game plan to make this session short and sweet: Divide the bills into palatable components, get them through the House quickly, drop in a teacher pay-raise on the Senate side to sweeten the deal, and avoid conference committees at all costs. The goal was to be out of the Capitol by this Friday. While a number of House Democrats crossed over for the business tax – Austin Reps. Mark Strama and Donna Howard included – the votes were much tougher in the Senate, where independent-minded rural Republicans have no problem voting against bills with the Democrats, if for different reasons. Early in the game, the bloc of 10 Senate Democrats made it clear that they intended to oppose the Republican package, offering a rare chance to see Texas Democrats voting against new taxes on big business.

"In voting against the tax bills today, we are sending a clear message that we believe our school children should come first," the Democratic caucus wrote in a joint statement. "With no guarantee that a substantial amount of the additional revenue will be invested in our public schools, or that funding equity levels will be improved, we are not compelled to raise taxes on countless Texans."

Radio talk-show host and soon-to-be Senator Dan Patrick is putting plenty of pressure on lawmakers from his home turf in Houston, especially those who might be considering a run at U.S. Rep. Tom DeLay's open seat. While such "no tax" pressure appeared to have limited effects on the House, it may have turned at least one Houston-area senator against the tax bill, causing the chamber to spend most of Tuesday afternoon at ease, while arms were twisted to get the votes to bring the centerpiece of the Perry-Sharp tax plan, the revised business franchise tax, to the floor for a final vote.

There were other skirmishes. Democrats asked to carry the tobacco tax bill – Senators Judith Zaffirini of Laredo and Juan "Chuy" Hinojosa of McAllen – balked when it became apparent that a second bill would mean that all new revenue would go toward property-tax relief, now and forevermore, with no consideration of health-care spending, such as smoking-cessation programs. Sen. Ken Armbrister, D-Victoria, likely on his way to a job in the Governor's Office, finally was drafted to carry the bill, which has yet to make it to the floor.

The bill with the biggest challenge – and the only new spending on education – has yet to make it out of Senate Finance Committee. Bogged down with 45 possible amendments, CSHB 1 – a hybrid bill that provides 17 cents of tax relief and a $2,000 across-the-board teacher pay-raise – was scheduled for a hearing Wednesday morning. The main sticking point is Robin Hood or, more specifically, that aspect of the school finance system that requires property-wealthy school districts like Austin and Eanes to send tax dollars to the state. Sponsor Sen. Florence Shapiro of Plano represents a number of property-wealthy districts and would like to see recapture of tax dollars minimized or eliminated. Poorer districts say that could be fine – as long as the state puts more money into school finance so the fewest number of dollars are recaptured.

Since the state is working under a constitutional spending cap – this special session can cost no more than $3.8 billion – finding those extra dollars might be tough. Analyst Dick Lavine of the Center for Public Policy Priorities also has made it clear that spending this money now could mean no money for a supplemental spending bill prior to the next session, unless the role of the new tax dollars (as a budget swap rather than a budget addition) is made clear during the current session.

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Special Legislative Session, 79th Legislature, Mark Strama, Donna Howard, Dan Patrick, Judith Zaffirini, Juan Hinojosa, Ken Armbrister, Florence Shapiro, Dick Lavine

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