Dewhurst and Perry, not on the same page.
Signaling deep differences on the threshold of a special session, Lt. Gov. David Dewhurst said Friday the Senate wants to enact a more comprehensive overhaul of education funding -- including deeper, immediate cuts in school property taxes -- than Gov. Rick Perry has proposed.
The two leaders also indicated differences over vouchers, should that subject arise during the session. Perry on Friday refused to rule out the possibility of private-school voucher legislation emerging from the session on school funding. But Dewhurst said vouchers would encounter strong opposition in the Senate.
"I would not block a member bringing it (a voucher bill) up, but I'm not going to let school finance crash on this one issue," Dewhurst said.
Dewhurst said the Senate favors a major tax trade-off that would cut school property taxes to 75 cents per $100 valuation -- half the present cap -- and replace the revenue with a broad-based state tax that would tap Texas' expanding service economy.
The Senate unanimously approved a similar bill during last year's session, but the measure died in the House. That bill would have raised the state sales tax and expanded it to many services that are now untaxed.
As a possible alternative to higher sales taxes, Dewhurst said, senators are studying a business tax that would lower the rate of the current franchise tax but expand its coverage to many service industries.
Dewhurst said it would provide for fairer taxation. He said more than two-thirds of the state's service businesses don't pay franchise or sales taxes now.
Perry has said he opposes an expanded business tax because it would discourage job growth.
The Texas Constitution requires that any tax bill originate in the House. Speaker Tom Craddick, R-Midland, has had little public comment on the special session, but he told the Midland Reporter-Telegram on Wednesday that he is considering cutting the basic school property tax to somewhere between 75 cents and $1.
That would put Craddick in close agreement with Dewhurst's ideas for deep property tax cuts.
I'll say again that I don't endorse the Dewhurst plan, because I don't believe that raising and expanding a non-deductible tax in order to finance a cut in a deductible tax makes good sense. However, Dewhurst at least has the right general idea - any tax that does make sense must be as broad and as shallow as possible. Perry's plan fails on all counts, and it deserves the ignominious defeat that I believe is in store for it.Posted by Charles Kuffner on April 17, 2004 to Budget ballyhoo | TrackBack