Bill Launches Property Tax Talks in House

Bill launches property tax talks in House
Selling lottery tickets at the pump is one proposed option for relief
By JANET ELLIOTT
Copyright 2005 Houston Chronicle Austin Bureau

AUSTIN - Smokers would pay more, businesses would ante up and drivers could buy lottery tickets at service station pumps under a House plan to cut school property taxes.

Rep. Jim Keffer, chairman of the Ways & Means Committee, on Thursday filed House Bill 3 as a "shell bill" to begin discussions on property tax relief.

The bill's highlights were listed in a press release sent late Thursday after the Legislature had adjourned for the week. The text of the bill was not available.

When the Senate outlined its school finance proposals Jan. 12, Lt. Gov. David Dewhurst and all 31 senators held a news conference and answered questions. The Senate has not yet filed a bill incorporating the ideas it discussed that day.

Similar to a plan unveiled by the Senate two weeks ago, local school property taxes would be lowered to $1 per $100 valuation. The state would need to raise more than $5 billion to pay for such a cut.

Keffer's bill proposes raising the cigarette tax by $1 per pack and a minor expansion of the sales tax base.

It also would continue the Telecommunications Infrastructure Fund, a fee assessed on phone service and would authorize the sale of lottery tickets at service station pumps, allowing motorists to use credit cards to play the lottery.

The corporate franchise tax, currently paid by only one out of every six businesses, would be eliminated and replaced by an unspecified business tax.

"We want to start looking at a uniform business tax," said Keffer, R-Eastland. "What the ingredients will be in that we don't know."

Keffer said the payroll tax he proposed during last spring's special session on school finance may be one option.

Labor-intensive companies argued that a payroll tax would unfairly burden their business.

The more specific plan outlined earlier by the Senate would rely on increases in sales, tobacco and alcohol taxes, and closing a loophole on sales taxes for used cars.

The Senate would replace local school property taxes for maintenance and operations with a statewide property tax. The House would leave the local school property tax in place but lower the cap from $1.50 to $1.

House Speaker Tom Craddick said this week that he personally favors a statewide property tax because it would end court challenges by school districts over inequities in property wealth. But he said some rural lawmakers are opposed to a statewide tax and he might have trouble getting the needed two-thirds vote to place the issue on the ballot.

The Senate also proposed spending $1 billion to raise teacher pay. The House will be handling teacher pay issues and other educational changes in a separate bill that is expected to be filed next week by Public Education Committee Chairman Kent Grusendorf, R-Arlington.

janet.elliott@chron.com

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