Texas Pols get five strikes
79th Legislature: Special Session
Stakes higher than ever as lawmakers hunker down with Perry tax plan
Deadline to cut off schools' money adding pressure on legislators to succeed in fifth try to change finance system.
April 17, 2006
By Jason Embry
Austin-American Statesman
Copyright 2006
The people running Texas these days have closed a budget gap, limited lawsuits, required moments of silence in schools, voted to ban gay marriage (twice), stopped setting college tuition rates, created toll roads and raised their own retirement pay.
But they've been unable to do what many of them were sent to Austin to do: lower property taxes and change the state's school finance system.
Lawmakers are not supposed to meet in even-numbered years, but they'll return today for a 30-day special session that Gov. Rick Perry called to give them one last crack at finding a new way to pay for public education.
They tried to do it four times in the past two years. Each time they failed. They fail this time, and the Texas Supreme Court says it will shut off state funding for public schools, potentially keeping schools from reopening after summer break in August.
"A lot of the districts aren't going to have money to pay their teachers come July if they don't do something," said Clayton Downing of the Texas School Coalition, a group of school districts with high property values.
Politically, nobody has more to lose than Perry, who went so far as to enlist his one-time political nemesis — former Comptroller John Sharp, a Democrat — to help him create a tax-swap plan that lawmakers could support.
Perry is pushing lawmakers to reduce property taxes for school maintenance and operations by one-third, replacing that money with a broadened business tax (called the margins tax), a higher cigarette tax and about $1 billion from the state's surplus.
"I am as optimistic about the overall approach to this as I have been in the 5 1/2 years that I have been the governor," Perry said.
The owner of a $100,000 home stands to save about $425 a year in school property taxes under Perry's plan, a savings that could start to diminish if school boards and other local governments raise their tax rates.
The margins tax is the most ambitious and controversial of Perry's proposals. It would replace the corporate franchise tax and pick up about 50,000 businesses that now legally avoid paying the franchise tax, the state's general business tax.
Businesses in the service sector — doctors, lawyers, architects — that often avoid the franchise tax because they are partnerships and not corporations would start paying.
Most of the state's 2.4 million businesses, however, would not have to pay the tax because it would exempt sole proprietorships and those with annual gross receipts of $300,000 or less, and most businesses are small businesses.
The House, where all tax proposals are constitutionally required to begin, will start working with Perry's plan, and changes are likely to ensue. The Senate will wait for the House to send a bill over, and in the meantime, senators will try to tackle a couple of education reforms in the hopes they'll be added to the session's agenda.
Last year, the two chambers disagreed on such broad issues as whether to rely more on the sales tax and other consumption taxes or business taxes and how much money the state's wealthiest school districts should have to share with others.
Perry has said he will give lawmakers an agenda focused narrowly on changing the tax structure.
If lawmakers can reach consensus there, other issues could surface, including teacher pay raises, increased education spending and limits on local tax increases.
Even if lawmakers answer the Supreme Court's call for a new school finance system, some of their original campaign promises may stay unfulfilled.
Many lawmakers pledged as candidates to end or severely rein in the share-the-wealth nature of the state's school finance system, dubbed Robin Hood by some. Even if Perry's plan passes, schools with the highest property values in the state will continue to share some of their revenue with other districts.
The courts have ruled that system to be legal.
© 2006 Austin American-Statesman: www.statesman.com
Stakes higher than ever as lawmakers hunker down with Perry tax plan
Deadline to cut off schools' money adding pressure on legislators to succeed in fifth try to change finance system.
April 17, 2006
By Jason Embry
Austin-American Statesman
Copyright 2006
The people running Texas these days have closed a budget gap, limited lawsuits, required moments of silence in schools, voted to ban gay marriage (twice), stopped setting college tuition rates, created toll roads and raised their own retirement pay.
But they've been unable to do what many of them were sent to Austin to do: lower property taxes and change the state's school finance system.
Lawmakers are not supposed to meet in even-numbered years, but they'll return today for a 30-day special session that Gov. Rick Perry called to give them one last crack at finding a new way to pay for public education.
They tried to do it four times in the past two years. Each time they failed. They fail this time, and the Texas Supreme Court says it will shut off state funding for public schools, potentially keeping schools from reopening after summer break in August.
"A lot of the districts aren't going to have money to pay their teachers come July if they don't do something," said Clayton Downing of the Texas School Coalition, a group of school districts with high property values.
Politically, nobody has more to lose than Perry, who went so far as to enlist his one-time political nemesis — former Comptroller John Sharp, a Democrat — to help him create a tax-swap plan that lawmakers could support.
Perry is pushing lawmakers to reduce property taxes for school maintenance and operations by one-third, replacing that money with a broadened business tax (called the margins tax), a higher cigarette tax and about $1 billion from the state's surplus.
"I am as optimistic about the overall approach to this as I have been in the 5 1/2 years that I have been the governor," Perry said.
The owner of a $100,000 home stands to save about $425 a year in school property taxes under Perry's plan, a savings that could start to diminish if school boards and other local governments raise their tax rates.
The margins tax is the most ambitious and controversial of Perry's proposals. It would replace the corporate franchise tax and pick up about 50,000 businesses that now legally avoid paying the franchise tax, the state's general business tax.
Businesses in the service sector — doctors, lawyers, architects — that often avoid the franchise tax because they are partnerships and not corporations would start paying.
Most of the state's 2.4 million businesses, however, would not have to pay the tax because it would exempt sole proprietorships and those with annual gross receipts of $300,000 or less, and most businesses are small businesses.
The House, where all tax proposals are constitutionally required to begin, will start working with Perry's plan, and changes are likely to ensue. The Senate will wait for the House to send a bill over, and in the meantime, senators will try to tackle a couple of education reforms in the hopes they'll be added to the session's agenda.
Last year, the two chambers disagreed on such broad issues as whether to rely more on the sales tax and other consumption taxes or business taxes and how much money the state's wealthiest school districts should have to share with others.
Perry has said he will give lawmakers an agenda focused narrowly on changing the tax structure.
If lawmakers can reach consensus there, other issues could surface, including teacher pay raises, increased education spending and limits on local tax increases.
Even if lawmakers answer the Supreme Court's call for a new school finance system, some of their original campaign promises may stay unfulfilled.
Many lawmakers pledged as candidates to end or severely rein in the share-the-wealth nature of the state's school finance system, dubbed Robin Hood by some. Even if Perry's plan passes, schools with the highest property values in the state will continue to share some of their revenue with other districts.
The courts have ruled that system to be legal.
© 2006 Austin American-Statesman:
posted by Porkus Maximus Tex: at Monday, April 17, 2006
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