Triumph in the Lege?
Lawmakers could pass tax legislation before it's curtains on Tuesday, handing the governor and lawmakers something to crow about when they return to the campaign trail
By Amy Smith, Fri., May 12, 2006
Don't hold your breath, but the umpteenth special session on school finance just might be a success – if by "success" we mean that the Legislature could pass something before it's curtains on Tuesday, thus handing the governor and lawmakers something to crow about when they return to the campaign trail. Next year they may be eating crow – the legislative package would represent the biggest tax bill in Texas history – but the rousing "We cut property taxes!" line always sells in an election year.
On Tuesday, Lt. Gov. David Dewhurst returned to his "we're close to an agreement" script from sessions past, and, according to one wag, called Gov. Rick Perry bright and early Wednesday morning to assure him that he had the votes in the Senate to "run over" Sen. Florence Shapiro, R-Plano, and pass the property tax bill (HB 1), at least on first reading. Shapiro, who chairs the Senate Education Committee, threw things akilter last week when she stormed out of a Senate Finance Committee meeting and took a handful of other Republican committee members with her. She was angry about a dispute over school equity funding and threatened to block the bill from the Senate floor.
On the House side, meanwhile, the conservative anti-tax Rs are still fuming over passage of the business tax bill (HB 3, sitting on Perry's desk), so Speaker Tom Craddick is supposedly hatching a plan to provide some political cover for them. Assuming that Perry expands the session's agenda to address tuition revenue bonds to pay for higher education, the bill would carry a provision, so goes the buzz, that would prevent any tax dollars from going to a university that engages in stem cell research. So much for higher learning.
As of press time Wednesday, here's how the scorecard looked on the five-part tax package:
HB 1: The Senate was scheduled to debate the bill Wednesday afternoon with Dewhurst optimistically predicting its passage. The bill would cut property tax rates by about a third over two years and raise teacher pay by $2,000 a year. The state would provide $4 billion to schools to help pay for the cuts. The biggest hurdle centers on disagreement over how the money would be distributed to all school districts.
HB 2: Back in the House Wednesday night after a tough round of kickball between the House and Senate. The bill would dedicate revenue from tax increases to replace money lost from cuts in property tax rates. The House rejected the Senate's amendments last week, but the two sides have since worked toward semiresolution.
HB 3: The nemesis of the anti-tax crowd, this bill, awaiting the governor's signature, replaces the loophole-riddled franchise tax with a new, improved loophole-riddled "margins tax." Businesses would pay 1% of their gross receipts (retailers and wholesalers would pay 0.5%), while allowing for certain deductions. General partnerships, sole proprietorships, and businesses with annual revenue of less than $300,000 would be exempt.
HB 4: Passed and sent to the governor, this bill would require used-car buyers to pay a sales tax on at least 80% of the vehicle's blue book value.
HB 5: The proposed $1 cigarette sales tax hit a bump in the Senate, so it's uncertain at press time whether it will move to the floor for debate. The sticking point is the amount of the proposed tax, as well as a desire by some lawmakers to dedicate the tax revenue to health-care services rather than to property-tax cuts.
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