Lawmakers failing crucial tax bill test
July 12, 2005
Both bills are hopelessly flawed. Neither offers any hope for true reform or equity in the state's tax system.
Written by Editorial, San Antonio Express-News
A House-Senate conference committee will soon be trying to work out the differences in tax bills passed by the two bodies.
The job will be about as pleasant as a day of shoveling in a stockyard. Both bills are hopelessly flawed. Neither offers any hope for true reform or equity in the state's tax system, or to provide adequate funding for public schools.
Gov. Rick Perry, Lt. Gov. David Dewhurst and House Speaker Tom Craddick share responsibility for failing to exert enlightened leadership in the effort to fix the state's school finance system and provide property tax relief.
The House passed its bad bill last week, and the Senate approved its mess in the early morning hours Monday.
Under the House plan, property taxes would drop from $1.50 per $100 valuation to $1.12 within two years, and the Senate plan would reduce property taxes to $1.25.
The House bill includes an excessive 1-cent sales tax increase. The Senate bill would increase the sales tax by only a half-cent. Both bills would raise cigarette taxes by a dollar per pack, and the Senate measure would increase alcohol taxes by 20 percent.
Neither bill includes a fair broad-based business tax. An attempt was made to close loopholes for corporations in the franchise tax, but partnerships, including law firms grossing hundreds of millions of dollars, continue to elude paying their share.
The Senate bill would end the franchise tax in 2008, forcing lawmakers to reconsider the business tax structure. It's a bad idea.
Texans have no reason to believe that the Legislature will have any more foresight then than now.
All of the wrangling is focused on giving the state's political leaders the ability to reduce property taxes — regardless of the bizarre contortions required to do so — without making significant structural changes in an antiquated tax system that is out of step with the state's service- and knowledge-based economy.
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