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Saturday, July 16, 2005

Deadline Looms Over School Finance Talks

OK, the session is winding down. The problem with this tax bill overall is that both bills take some of the tax burden off the weaoty8est 20% and shift it to the rest in our state. Average middle-class folks in medium-priced homes will see a decrease in property taxes, but not enough to justify much of a shift for most. This might mean, for example a decrease to as low as $1.10 per $100.00 valuation by 2007, saving this family a mere $125.00 or so.

In return, the sales tax could go up to 7.25 cents on the dollar, giving Texas the highest tax rate in the country. This is very regressive. An analysis by the Legislative Budget Board demonstrates that unless one belongs to a household that earns more than $140.000.00 per year, the 1 cent tax increase will cost more to us personally than the property tax "saving" will put back. Where's the much-needed leadership in our state who will fight not only for the working- but also the middle-class families of our state?

Even with these proposals, the business establishment is resisting, not wanting to get "hurt" Business wants to have it both ways, paying the least amount possible into public education at the same time that they want a well-educated citizenry and workforce that will minimize their workforce training/educating costs.

In the meantime, the Texas Supreme Court is considering the constitutionality of the current school funding law, so school finance promises to loom as a concern for sometime.

-Angela


Negotiators hope to pick up speed.
By Jason Embry
AMERICAN-STATESMAN STAFF
Saturday, July 16, 2005

Facing renewed pressure from businesses and a looming legislative deadline, lawmakers entered a critical weekend of negotiations over school finance reform Friday. With the 30-day special session scheduled to end Wednesday, it was clear that talks about proposals passed in the House and Senate would go down to the wire. Key lawmakers have been meeting behind closed doors all week but have not announced any agreements on legislation to send back to their chambers for final approval.

Lawmakers are trying to pass two major pieces of legislation: One focuses on education reforms and spending increases, the other on cutting billions of dollars in property taxes while raising sales and business taxes.

"Everybody knows the clock is ticking and we've got to get this done," Gov. Rick Perry said. "I think the alternative is not acceptable."

Negotiators working on the education proposal have met for several hours a day this week, at times going until midnight. Some of the key differences have been how to structure teacher pay raises and how much money to spend on technology.

Perry and Lt. Gov. David Dewhurst sounded upbeat when they stepped out of a meeting on the education proposal Friday night, although they did not specify the remaining sticking points.

"We're down to four or five issues," Dewhurst said. "(Perry) and I walked in and threw out some solutions to help both the House conferees and the Senate conferees reach an agreement."

Tax negotiators met publicly twice on Friday but remained at odds over how much they should increase the sales tax, whether there should be increases in alcohol taxes and how much they can cut in property taxes.

Sen. Steve Ogden, R-Bryan, said the two sides need to reach an agreement by early Sunday to avert a filibuster attempt by tax bill critics in the Senate.

He and his House counterpart, Ways and Means Committee chairman Jim Keffer, R-Eastland, bemoaned the fact that Texas lawmakers will not cut property taxes as much as they had talked about earlier this year because neither side passed a sweeping reform of business taxes.

"Sometimes you've got to go in increments," Keffer said.

One House negotiator, Rep. Warren Chisum, R-Pampa, said the House wants to cut the maximum property tax rate for school maintenance and operations by at least 20 percent over the next two years.

While lawmakers did not extend the state's general business tax, the corporate franchise tax, to partnerships as some had hoped, about 10,000 corporations that have set up partnerships to avoid it will have to start paying it under both the House and Senate versions.

Perry and Dewhurst acknowledged that some oil and gas companies that would have to pay the franchise tax for the first time are trying to persuade lawmakers to vote against the tax plan.

"I would not want to be a member of the Legislature to go back to my district and to say that I could not support a revenue shift to those companies that should have been paying the franchise tax for the last decade," Perry said.

jembry@statesman.com; 445-3654

http://www.statesman.com/news/content/shared/tx/legislature/stories/07/16finance.html

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