News Room

School finance bill is a total disaster
March 9, 2005

The House plan contains an unhealthy stew of increased and new taxes guaranteed to upset just about everyone.

Written by Editorial, Bryan-College Station Eagle

News237

It would be easy to think that members of the Texas House of Representatives are kidding about the $10 billion school finance plan they are debating this week — except that we have the sad feeling they are serious.

The best hope Texas taxpayers have is that, if representatives don’t have the good sense to kill this terrible plan, then senators will throw it out and start over when it reaches their side of the Capitol. Many believe that is what senators would do, no matter what the House comes up with. Since tax bills have to begin in the House, though, senators have been waiting to get something, anything so they can start their efforts in full.

The House plan contains an unhealthy stew of increased and new taxes guaranteed to upset just about everyone. Local property taxes would decrease under the proposal, which Texans have said they want. Of course, the money lost to schools from the reduced property taxes has to be made up somewhere else. That’s where the plan gets ugly.

Already among the highest in the nation, the state sales tax would be raised by a penny, to 7.25 percent. In addition, the sales tax would be expanded to include things such as bottled water, car washes, billboard advertising and auto repairs.

Many cities, counties and other taxing districts add almost 2 percent on top of the state sales tax for local projects. Apparently, House members have forgotten or never realized that a sales tax is a highly regressive tax and that any increase in Texas would hurt the very folks the Legislature is under court mandate to help. Simply put, low-income Texans pay a greater portion of their income for sales taxes than do more affluent Texans.

Then House members would like to add taxes for things such as snacks, soda pop and cigarettes. The idea of a 3 percent snack tax was added to the House bill when lawmakers learned their finance plan was some $1.2 billion in the hole without it. The tax would be levied on bakery items, soft drinks, cookies, cakes, pies, chips and nuts and other things we all love — but not those bought in a restaurant.

A dollar increase in taxes paid on cigarettes is part of the proposed bill. This creates an interesting dichotomy. Texas spends a considerable amount of money urging us not to smoke and taking care of many of us who did. Now, in order to pay for schools, is the state telling Texans not to quit the nasty habit?

Another component of the House bill is a 1.15 percent payroll tax to be paid by employers on their workers who earn under $80,000 a year. This idea is so bad that even Gov. Rick Perry understood its negative implications on business recruitment when it was presented during the special session last year. The governor said then that he would veto any tax bill that included the payroll tax, and he hasn’t indicated that he has changed his mind in the months since.

Still looming over the entire Legislature is a court order to come up with a fair and equitable plan to fund schools by October or all state funding will be cut off until the problem is fixed. The House plan does not address the fair and equitable portion of the court order.

Perhaps lawmakers are waiting to see what the Texas Supreme Court will do now that it has agreed to take the expedited appeal from that district court order. But lawmakers shouldn’t wait for a court to force them to do what they know they should. Too often in the past they have let the courts take over a portion of state authority rather than face difficult and potentially politically explosive issues.

They must not duck and cover this time. Hopefully the Senate will do a better job on devising a tax bill we all can live with. It seems House members are incapable of doing so.

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