AUSTIN — Lawmakers working to generate state revenue to reduce local school property taxes outlined a proposal to colleagues Tuesday that would raise the sales tax by almost a penny on the dollar and expand it to include auto repair, among other items. It would add $1 per pack to the cigarette tax and impose a payroll tax on businesses of 1.1 percent of wages, with a cap, said two lawmakers familiar with the proposal — which still is evolving, a key member of the tax-writing Ways and Means Committee emphasized.

The state sales tax rate would be raised from 6.25 percent to 7.2 percent and be expanded to bottled water, billboard ads, car washes and auto repair. The sales tax rate for boats and motor vehicles would be higher, at 7.35 percent.

The state revenue bill is meant to raise about $11 billion over two years, lawmakers said.

"They're shopping it around," Rep. Robert Puente, D-San Antonio, said of the package of proposals. "It doesn't look good to me. It's a regressive tax."

The money would be used to cut school property taxes. A separate bill has proposed cutting the maximum maintenance-and-operations tax rate for schools from $1.50 per $100 property valuation to $1 per $100.

Legislative tax-writers are considering sharper restrictions on local property taxes imposed by entities other than school districts.

Under that proposal, a local election would automatically be triggered if taxes on the average house increased by more than 3 percent per year. Currently, voters can petition for a rollback election if the effective tax rate increases more than 8 percent.

Puente said he didn't favor it, adding: "If we wanted to run the city, we should have run for city council."

Rep. Mike Villarreal, vice chairman of the Ways and Means Committee, said he is working on ways to lighten the impact of that provision.

"This would devastate our ability at the local level to meet local government demands. ... I'd prefer it not to be there at all," he said. "I have some ways to fix it," such as by accounting for inflation and for unfunded federal and state mandates that are pushed to the local level.

Villarreal, D-San Antonio, said he was pushing to revamp a proposal for a payroll tax, which was proposed because many businesses now use a loophole to avoid the state's franchise tax.

Originally proposed at a rate at 1.25 percent, the payroll tax rate contained in the version shown to lawmakers had been trimmed to 1.1 percent with a $500 cap.

Villarreal said he'd like to get it down to 1 percent, with no cap, to ensure it isn't proportionately higher when imposed on firms with lower wage earners.

"This is an incremental process," Villarreal said, adding that lawmakers plan to meet again today.

The provisions are under discussion and subject to change, he stressed.

A committee vote might come Thursday, he said.