Senate sends tax bill to Perry

May 3, 2006, 2:38PM

SPECIAL SESSION

Senate sends tax bill to Perry

Lawmaker from La Porte stalls the measure after constituents call

By JANET ELLIOTT and R.G. RATCLIFFE
Copyright 2006 Houston Chronicle Austin Bureau

AUSTIN - The Senate voted 16-14 Tuesday to send a business tax bill to the governor, after a Houston-area senator jeopardized passage of the bill with last-minute opposition.

Sen. Mike Jackson, R-La Porte, ended up casting the key vote that allowed Lt. Gov. David Dewhurst to bring the bill up for a final vote. Four hours earlier he had stalled action by voting against bringing the bill to the floor.

At issue was a Senate rule requiring two-thirds of senators present to allow a bill to be debated. The rule is designed to get bipartisan consensus on legislation being brought before the Senate.

Jackson said he has had hundreds of calls from his district and decided to vote against bringing up the tax bill for debate because he thought it would have little permanent impact on reducing property taxes while raising new taxes on businesses.

"I started looking at calculating how little people would receive from the first stage of this property tax cut," Jackson said. "If school districts were able to raise their property tax rate 6 cents without a vote and then we have appraisal creep ... you come out with a wash in the first year."

Jackson said he used his ability to block the bill to gain "concessions" from Gov. Rick Perry and Dewhurst on having language to limit growth in school district spending put into another bill.

He said the restriction should limit the growth in property taxes unless a school district holds a vote of the people.

Jackson voted against final passage of the bill.

Passage means that the state's Republican leadership may finally have come to a school finance agreement that has eluded them in four attempts over the past two years.

Last chance at leadership

Senate Finance Chairman Steve Ogden, who sponsored the business tax, said with a June 1 deadline set by the Texas Supreme Court, this is the last chance for the governor and legislative leaders to show the public they are capable of leading the state.

"This special session will not only be declared a success but will be viewed a success by the people of Texas," said Ogden, R-Bryan.

House Bill 3 is key to Perry's plan to cut local property taxes. It would generate about $3.4 billion in new funds when it is first collected in May 2008.

The Senate also gave final passage to two other bills. One dedicates most of the revenue from the business tax and other new taxes to property tax relief, and the other collects more sales tax from used car sales by basing the tax on 80 percent of the vehicle's blue book value.

The Senate made changes in those bills, so they will go back to the House, which can concur or ask for a conference committee.

The Finance Committee still has to act on bills hiking cigarette taxes and another using budget surplus for property tax cuts and teacher raises.

'Gold mine' for Strayhorn

Harris County Republican activist Steven Hotze, who has been working against the business tax, said passage of the bill was "disappointing."

He said it would be a "gold mine" for one of Perry's re-election challengers, independent Comptroller Carole Keeton Strayhorn. He said Republicans in general will suffer at the ballot box after the business tax takes effect in 2008.

"I believe it's going to be a disaster and a calamity in the long run for the Republican Party," Hotze said.

Hotze denied rumors that he got Jackson to change positions by promising him the nomination for the congressional seat held by U.S. Rep. Tom DeLay, R-Sugar Land. DeLay has said he plans to resign by June.

"I don't even live close to that district. I don't have any influence there," Hotze said. "There's no way I could promise anyone that I could help them."

Jackson said he is interested in running for DeLay's seat, but he said he and Hotze never discussed it in relation to the tax bill.

janet.elliott@chron.com

r.g.ratcliffe@chron.com

http://www.chron.com/disp/story.mpl/metropolitan/3836573.html