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April 19, 2006
House Could Be Finding Majority Support
Elusive in Push for Tax Reform Package
By
Mike Hailey
Capitol
Inside Editor
Speculation based on tentative internal polling
results indicates that Texas House leaders are
about a half-dozen votes short of majority support
for the special session tax package that they
plan to debate on the floor Monday. The tax package
- including a stopgap property tax cut proposal
approved Wednesday night by the House Ways and
Means Committee in an 8-1 vote - has drawn opposition
from some conservative Republicans and criticism
from Democrats who are threatening to oppose the
plan unless it's revamped substantially to meet
their demands on additional public school funding.
Membership polling that's being conducted by
GOP leadership lieutenants reportedly shows about
70 votes of support for the tax package, which
the Ways and Means Committee zoomed in on during
a four-hour hearing that ended with votes to reduce
the school tax rate and to dedicate funds raised
by a reform plan to permanent tax relief for property
owners. But as the tax swap plan played to mixed
reviews offered by witnesses at the House panel's
hearing, informal polling results sparked differing
opinions on whether the support that the package
has so far is solid or soft and capable of unraveling
before the full House gets a shot at it five days
from now.
State Rep. Mike Villarreal,
a San Antonio Democrat who's the Ways and Means
vice-chairman, cast the lone dissenting vote against
Republican State Rep. Warren Chisum's
tax rate reduction plan. Democratic State Rep.
Vilma Luna of Corpus Christi
and Villarreal both voted against a bill by Appropriations
Committee Chairman Jim Pitts
to reserve proceeds from a tax reform package
for property tax relief into the future. The tax
dedication fund measure was sent to the floor
by the committee on a 7-2 vote. The Chisum bill
is viewed as a backup proposal to give lawmakers
a way to use some of the state's $8.2 billion
surplus for property tax cuts that would ostensibly
get the state out of hot water with the courts
for the time being if the more ambitious business
tax plan fails in the special session this spring.
While House leaders tried to get a handle on
what kind of support to expect for the plan on
the floor next week, Governor Rick Perry's
push for a revamped business tax along
with tax hikes on cigarettes and used cars to
finance property tax relief received a major boost
when the state's largest organization for doctors
dropped its opposition to the package and endorsed
it instead. Perry's point person on taxes - former
Democratic Comptroller John Sharp
- negotiated endorsements from the Texas Medical
Association and 18 other groups of health care
professionals with a sweetner that would give
physicians and facilities with large numbers of
Medicaid and Medicare cases a break from a new
business tax that would replace the antiquated
and loophole-laden state franchise tax.
Despite growing support from business associations
and lobbyists for doctors, lawyers and other professional
groups, the most imposing challenge seems to be
in the House where some conservative members appear
unwavering in their opposition to an expanded
business tax and other revenue measures while
Democrats remain equally uncooperative because
the funds generated would be limited exclusively
to tax cuts at a time when they say public schools
and teachers need more money.
At a press conference Wednesday, Mexican American
Leadership Caucus members argued that the tax
package as currently drafted was a product of
misguided priorities among lawmakers who'd campaigned
on promises to improve public education before
losing interest after the elections were over.
MALC's chairman, Democratic State Rep. Pete
Gallegos of Alpine, said Hispanic House
members aren't interested in helping Republican
leaders pass a tax package when they've been given
no input in how they money it raises should be
spent.
While the leadership has reportedly come close
to securing support for the plan from several
House Democrats who represent conservative districts
with Republican voting majorities, the threat
of opposition from a large number of the 64 Democratic
members is one of several potential problems that
when combined could undermine the effort. High-profile
proposals that appeared to have significant support
in the House failed last year after Democrats
joined conservative Republicans to block a push
for video lottery terminals at racetracks then
teamed with moderate GOP members to kill the leadership's
school finance plan in special session. Some of
the same Republican House members who were ironclad
in their opposition to gambling are now opposing
the tax plan that Perry and Sharp have been promoting
and House leaders such as Speaker Tom
Craddick have decided to support. A group
of conservative House members contends that the
state's surplus should be refunded to taxpayers
and that the state spending process should be
reformed before new ways to raise more revenues
are approved.
The first installment in a five-part House tax
package - a bill to reduce the current $1.50 per
$100 valuation school tax rate for maintenance
and operations by 17 cents - ran into immediate
resistance in the Ways and Means Committee. After
Ways and Means Chairman Jim Keffer said
the Chisum bill was designed to do nothing more
or less than meeting the state Supreme Court demands
in the school finance case, Villarreal pointed
out that the measure would also eliminate the
Robin Hood recapture provision for additional
funds that school districts could raise through
local discretion on top of state allotments. Villarreal
argued that such a provision would undermine equity
because wealthier school districts would have
more to spend.
Equity Center Director Wayne Pierce
told the committee that the Supreme Court had
lauded the recapture provision in the state's
current school finance law despite declaring the
system of public education as a whole to be unconstitutional
because it's effectively become a statewide property
tax. Republicans have made calls to eliminate
Robin Hood a central message in campaigns for
the Legislature in recent years - and their hopes
of eliminating it or reducing the amount of funds
shifted from rich to poor schools were buoyed
when the high court did not say that wealth-sharing
was a necessary element for a constitutional system.
Villarreal voted against the plan to lower the
school tax rate after the committee's Republican
members resisted an amendment he offered to help
poorer districts get a break similar to the benefit
that wealthy districts would enjoy with a reduction
in responsibilities under recapture. Villarreal
suggested that he might have been a yes vote on
the tax plan if the amendment had been accepted.
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