PROPERTY TAX RELIEF - Will the sixth time be the charm?
Yesterday as the Texas Legislature opened a special session to fix the unconstitutionality of our property tax system which funds our public schools, more than 2,000 real estate agents lined the South lawn of the Capitol, toting blue signs that said, "We need property tax relief now!" They are right!
Texas lawmakers who only meet once every two years in regular session have been called to Austin for a 30 day special session because theTexas Supreme Court has struck down the way the state funds its schools and gave the Legislature until June 1 to fix the problem. Lawmakers must reduce property taxes and replace the $6 billion that it will cost with some other tax.
Now one would think that this would be an easy task since every single major political post, starting with the Governor, Liutenant Governor, the Senate and the House are all controlled overwhelmingly by one party, the GOP. Yet after five, yes five, tries to revamp the system they have failed miserably each time. Well this time Governor Perry seems to think he can pull together the support to get it done and he is spending $6 million in advertising to convince people. He does have the backing of the powerful Texas Association of Business. It's an unprecedented level of business support, but many lobbyists will still work tirelessly to protect their clients. You see, Texas is a business friendly state and any changes to the endless loopholes that keep the majority of businesses from paying any state taxes will be difficult to close. But its not just the businesses that have to be appeased. "When you're dealing with school finance and taxes, there's not any part of society you're not touching" says former House Speaker Pete Haney.
The tax-swap plan devised by Gov. Rick Perry's commission:
- Restructured business tax - $4 billion
- State budget surplus - $1 billion
- $1-per-pack increase in cigarette tax - $800 million
- Taxing auto sales based on a standardized vehicle value - $75 million
- New auditors in comptroller's office to help collect taxes - $50 - 60 million
- Total - $5.9 billion
The proposed property tax cut - The maximum rate of $1.50 per $100 of property value would be reduced to $1.30. Schools would receive enough state money to lower the rate to $1.
Incidentally Perry's chief opponent in this years election, the State Comptroller, announced Monday that there is actually an $8.2 billion surplus.
Mr. Perry's tax plan – which would lower property taxes, expand the business tax and increase the cigarette tax – was filed in the House as five separate bills. Also Florence Shapiro of Plano, the Senate education chief, filed a school reform bill that would give school employees a $2,000 pay raise and would give money to high schools to boost graduation rates and curb dropout rates. Teachers in this state have not had a raise in six years.
Stay tuned, my guess is that on May 31 we will finally have a plan.
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