Thursday, June 23, 2005

"Which governor is that?"

This is a pretty devastating comment by Jim Keffer to the status of Gov. Perry's school funding proposal. I heard a rumor today that Perry is likely to call 3 special sessions if that's what it'll take in order to get something passed. Who knows what'll happen...?

I testified today in the Senate Committee on Education on the end-of-course exams that are currently being proposed within the current school finance plan (see today's other post). Click here to get a draft of SB2 and here for HB2. The versions are really similar to each other. Unfortunately, these exams and many other are going to slip into the final legislation without any real public debate over these. Legislators seem pretty demoralized at the moment.


June 23, 2005, 7:08AM
House committee puts aside Perry's tax plan for its own
Panel may vote today on overhaul of school finance

Copyright 2005 Houston Chronicle Austin Bureau

AUSTIN - As Gov. Rick Perry prepared to hit the airwaves and the road to promote his plan to lower school property taxes, the House Ways and Means Committee set it aside, at least for now, in favor of its own, more-extensive tax overhaul.

"Which governor is that?" Chairman Jim Keffer retorted when a reporter asked the status of the governor's proposal.

Keffer, R-Eastland, signaled irritation at being called back into special session by Perry only three weeks after House and Senate leaders had failed to reach a school finance agreement during the regular session.

"Absence does make the heart grow fonder. I just wish there had been a little more absence," he said.

Keffer said the Ways and Means Committee, which must initiate action on a tax overhaul, will vote today or Friday on a package of higher consumer and business taxes that would enable local school property taxes to be cut by 40 cents per $100 valuation during the next two years.

It is similar to a bill approved by the House in March but rejected by the Senate, and Keffer noted there still is "no agreement whatsoever" between leaders of the chambers.

Committee approval would send the measure, House Bill 3, to the full House for a possible vote next week.

Under the state constitution, the House must take the first action on a tax bill, but the final version of a tax overhaul — if there is one — will be negotiated later by a House-Senate conference committee.

The legislation would increase the state sales tax by 1 cent per dollar, expand the sales tax to include bottled water, auto repairs and some computer goods and services, and add $1 per pack to the cigarette tax. It also would expand the franchise tax to cover some partnerships, which now are untaxed, as well as corporations.

General partnerships, passive investment partnerships and sole proprietorships would be excluded. All other forms of businesses would have the option of paying the existing franchise tax or a new tax based on 1.15 percent of a company's payroll. Each company, however, would have to pay a tax equivalent to at least half of the greater option.

The measure would provide slightly more property-tax relief overall than the governor's proposal, which, among other things, would impose a lower increase in the sales tax — seven-tenths of 1 cent per dollar — and close loopholes in the franchise tax rather than expand it.

But according to the Legislative Budget Board, only families with annual incomes of more than $100,500 would realize any net tax savings under the House committee's proposed tax swap.

The bill approved by the full House in March had similar inequities, mainly because lower-income people pay a larger portion of their incomes on sales and other consumption taxes than wealthier people do.

The governor's proposal hasn't been analyzed by the Legislative Budget Board, but it also is heavily dependent on higher sales and cigarette taxes.

Perry's re-election campaign, meanwhile, unveiled a radio ad promoting the governor's school finance proposal. The 60-second commercial, which debuts today, encourages Texans to ask legislators to support the "Perry Plan."

"I believe so strongly in this plan that I am willing to put substantial campaign resources on the line to earn a victory for our schoolchildren and property taxpayers," Perry said.

The governor also will visit Houston, San Antonio and Irving today to promote the proposal, which, he said, would lower local school taxes by $7 billion in the next two years and give teachers an average $1,500 pay raise.

Comptroller Carole Keeton Strayhorn, who is challenging Perry in next year's Republican primary, said the governor appears worried about the reception his plan is getting in the Legislature.

Perry had lunch Wednesday with several House and Senate members who will play crucial roles in the school finance effort, and spokesman Robert Black said the meeting "went very well."

Though no key legislators have yet pledged support for the governor's plan, they haven't told him they won't back it either, Black said.

Chronicle reporter Polly Ross Hughes contributed to this report.

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