It will be surprising if major innovations emerge from Gov. Rick Perry’s new Texas tax study commission -- much less clear the Legislature.
That’s partly because of who appointed the commission, which held its first meeting Monday in Austin.

Skeptics read the study as more to save face and buy time to get Perry safely past re-nomination in the March 7 Republican primary than a genuine effort to find a tax system that fits the Texas economy and grows with it.
When he unveiled the tax commission, and surprisingly and brilliantly named a chief political foe, Democrat and former Comptroller John Sharp, to head it, Perry said an income tax would be off limits. He also said the commission wouldn’t deal with school finance – even though that jerry-rigged, underfunded system is the driving the need for a new tax system.

Some think Texas is over-spending on schools, and its people over-taxed. But the truth is Texas ranks well below the national average in spending on schools, and close to the bottom in state taxes per person.

Texas is one of just seven states with no income tax. (The others are Alaska, Florida, Nevada, South Dakota, Washington, and Wyoming.) That means we rely on two principal sources for most of our revenue: sales and property. Texas has the nation’s fourth-highest sales tax, and is 15th in property taxes.

Sen. Eliot Shapleigh, D-El Paso, has been traveling the state talking about an income tax to any group that will listen. If Texans will adopt an income tax styled on the Kansas model, with a top rate of 6.25 percent, the taxes for 80 percent of Texans will go down, Shapleigh says. That’s right, down – not up.
But even if you pass an income tax, how do you know it will be used to cut property taxes and help schools?

Because it’s not just the law, it’s in the state constitution. At the late Lt. Gov. Bob Bullock’s urging, the Legislature and voters in 1993 required a vote of the people to pass an income tax, with the proceeds earmarked two-thirds for school property tax reduction and one-third for education.
Is it possible Sharp and the other 23 commission members will consider an income tax anyway?

Not very.

Although Shapleigh says taxes for 80 percent of Texans would go down with an income tax, or families of four making $64,000 or less, probably Perry’s commissioners in the other 20 percent – for whom taxes go up. The commissioners, who are undoubtedly nice, well-meaning, talented people, are primarily current and former executives of companies, accountants, and others who personally benefit financially from the system as it is. (The commission includes no teachers, no “mother working two jobs to provide for her family,” Sen. Shapleigh complained.)
Not only do they probably top $64,000 a year; it would be surprising if every commissioner isn’t a millionaire – like our governor, Lt. Gov. David Dewhurst, and House Speaker Tom Craddick. In a government of and by millionaires, who is better off with a sales tax that hits the poor harder than an income tax that leans the other way?

Two previous tax study commissions considered an income tax. One in the 1980s suggested a personal income tax would reduce the taxes on business; the other, in 1991, led by the late former Gov. John Connally, by a 7-5 vote actually recommended an income tax, though Connally voted against it. So did then-Comptroller Sharp.

OK, so without an income tax, what will the Sharp group do?
Since property taxpayers are already screaming, the only remaining broad-based tax to make up the difference is the sales tax. It may be expanded to take in services like attorneys’ fees, and possibly the rate raised as well.
The commission will probably tinker with a franchise or business tax, at least to close gaping loopholes. And don’t be surprised if there are attempts to revive gaming (that’s gambling, folks).

Sen. Shapleigh says to raise the $24 billion additional he says is needed for good schools and property tax relief solely through raising the current state sales tax, unless it is broadened, from its current 6.25 cents per dollar to 17.3 cents. It would be far and away the highest sales tax in the country.

It will be interesting to see what the commission comes up with, and even more to see what happens to it in the Legislature.