School Funding Bill is OK'd

EL PASO TIMES
Thursday, March 10, 2005

Gary Scharrer
Austin Bureau

AUSTIN -- More than 90 percent of El Pasoans could end up paying higher taxes under legislation designed to pay for lower school property taxes, according to an analysis of the tax bill that Texas lawmakers will consider today.
The tax measure pushed by House Republican leaders would partly swap school property taxes for new and higher sales taxes and a payroll tax. It follows a narrow (76-71) House vote Wednesday night for a controversial school-funding plan.
All five House members from El Paso voted against the school-funding measure, House Bill 2, which requires final but routine action today before it advances to the Senate.
El Paso grandparent Richard Morales made a trip to the Capitol to tell lawmakers "no thanks" to the school property tax cut they are proposing because, he said, he can't afford it.
"I am highly disappointed at what I'm seeing. It's a double whammy and a bigger burden for the people who can least afford it," Morales said. "Thanks, but no thanks."
Morales said the school finance bill and the tax bill both harm lower-income families: "I am definitely frustrated, and I'm getting pretty angry because we've been fighting for more equity on the border.
"We're trying to get more equity for poor school districts, such as we have in El Paso," said Morales, who has four grandchildren. "My concern for them is, what will they do for their education? My concern, obviously, is the future of the younger generation."
Only households making more than $100,593 a year would pay fewer taxes if House Bill 3 passed, according to a report by the Legislative Budget Board. Families earning less than $100,000 would pay more taxes than they do today.
Only about 6 percent of El Paso households had incomes of more than $100,000 in 2003, according to Census Bureau estimates.
Put another way, 94 percent of El Paso households would see their total tax bills go up under HB3, based on census estimates and the budget board analysis.
El Paso's median household income was just under $30,000, suggesting that the typical El Paso family would incur about a 5 percent increase in their tax payments under HB3.
Morales, a member of the El Paso Interreligious Sponsoring Organization, said he was pleased that El Paso legislators are opposing both the school-funding plan and the tax reform proposal.
The school-funding bill will become void unless lawmakers approve the even more controversial tax measure that counts on more sales taxes and a new payroll tax.
In addition to benefiting wealthier Texans at the expense of middle- and lower-income families, the tax bill has also come under assault by an assortment of consumer and conservative groups.
Lawmakers who vote for the tax bill do so at their own political peril, Rep. Paul Moreno, D-El Paso, said.
"I suppose there will be some empty seats here come next election," he said.
But Republican leaders are pushing GOP legislators to support the tax bill.
"To ensure that the effort to reform our education system and to reduce property taxes stays on course, it is vital that the members of the House follow the leadership of Speaker (Tom) Craddick and Chairman (Jim) Keffer and pass HB3," Gov. Rick Perry said Wednesday night. "I urge the House of Representatives to pass HB3 and send the entire education reform proposal to the Senate so that work can continue and the process can proceed."
Sen. Eliot Shapleigh, D-El Paso, has warned for months that state leaders would try to pass a tax plan that hurt lower-income Texans more than others.
"This debate should be about great schools, not tax cuts for the wealthy," Shapleigh said. "What HB2 and 3 do is the great Texas tax shift. The top 3 percent win, and everybody else loses. In the end there's nothing for schools. I see no support for HB3 in the Senate."
One of the few groups actively supporting the tax plan is the Texas Association of Realtors, which cites economic studies showing that proposed property tax cuts would create jobs.
"Many are ignoring that the benefits of the property tax cut for those in lower-income groups," said Tom Morgan, a spokesman for the Texas Association of Realtors.
"If someone earning $20,000 a year purchases a $100,000 home, they will save $500 on their property taxes with the tax cut. That is close to a third of one month's paycheck, which is a significant savings and makes them that much more able to afford the house."
House members this week are tackling two of the most contentious issues in the Capitol -- taxes and school funding.
The vote against the school-funding plan was easy for El Paso legislators, partly because the measure did not address a court order to spend more money on students who are harder to teach -- those from low-income families and students who are deficient in English. About 75 percent of El Paso's 165,000 students come from low-income families.
The school-funding bill is "just not good for El Paso, simply because it creates a caste system," said Rep. Chente Quintanilla, D-El Paso, a retired school administrator.
But Rep. Kent Grusendorf, R-Arlington, said his school-funding bill takes "a historic step toward creating a world-class education system."
"This legislation adds $3 billion new dollars for teacher pay, schools, and students, cuts local school property taxes by a third and creates new standards for more efficient spending of education dollars," Grusendorf said.
Every education and teacher group opposed the plan.
"HB2 is not an education bill. It is an empty promise. It promises a pay raise -- without the money to make it happen. It promises a health insurance stipend -- but not to the people who need it most," said Donna New Haschke, president of the Texas State Teachers Association.
"In the final analysis, it is really a scheme that uses our schoolchildren to promote a tax system to reward only the wealthiest Texans," she said.
Gary Scharrer may be reached at gscharrer@elpasotimes.com; (512) 479-6606.
Inside
* How our representatives voted 2A
* How the tax proposal will affect Texans 2A
* Details of HB3 2A
* Senate bill would penalize universities that increase tuition 2A
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