Senator Eliot Shapleigh - El Paso, Texas

On Tuesday, the Texas Senate passed a tax bill which lowered property taxes a few cents with little money for schools. The bill reduced property taxes from $1.50 to $1.10 by shifting to increased sales, business, cigarette, and alcohol taxes. The state sales tax rate will increase from 6.25 to 6.50% in 2006 and 6.75% in 2007. This rate of 6.75% will give Texas the fourth highest state sales tax rate in the nation and one of the most regressive tax systems in the nation. Combined with the local rate, many will see their sales tax climb to 8.75%. The legislation also included a new business income tax. Companies will now pay a .25 tax on gross receipts.

While touting property tax relief, the tax equity note presented by the Legislative Budget Board showed that only families with incomes over $140,000 a year would receive tax cuts. Meanwhile, after the tax shift 90% of Texas families would see an increase in total taxes.

"After all the rhetoric in Austin, what HB 3 is really about is tax cuts for the for the wealthiest Texans," Senator Shapleigh said after voting against the bill. "For us on the border, the business income tax and sales tax increases are a serious threat to job creation. Under HB 3, taxes on almost all El Pasoans go up; and when both business and sales taxes are lower in New Mexico, our businesses will look to move jobs across borders. We will remember this as 'The Great Texas Tax Shift' where billions in taxes were shifted to middle income families."

"HB 3 marked the passage from Robin Hood to Robber Baron."

For more information on HB 3,
read the analysis by the Center for Public Policy Priorities.