The "Get Out Of Dodge" plan

House Bill 1, known not-so-affectionately as the "Get Out Of Dodge" plan, has passed out of committee.

House Bill 1 by Rep. Warren Chisum, R-Pampa, would use $2.4 billion of the state's $8.2 billion surplus for a 12 percent property tax cut. Perry is proposing a one-third cut paid for with a new business tax, higher cigarette taxes and $1 billion of the surplus.

The vote was 8-1 with committee Vice Chairman Mike Villarreal voting no. He criticized a section of the bill that allows districts to raise taxes for local enrichment, saying it would benefit a few property wealthy districts that could raise three times the amount of money for each penny of tax than could less wealthy districts.

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Chisum said Perry's business tax still is important and he plans to vote for it when it comes to the floor. House Speaker Tom Craddick said he expects all the tax bills to be debated by the full House early next week.

"This is kind of the safety valve," Chisum said. "If we can pass this and get it parked here, then there's no way the session can fail to meet the Supreme Court requirements."

But a witness opposed to Chisum's bill warned the committee that it should not pass the bare-minimum plan first.

"If you pass a get outta Dodge bill, who's left in Dodge to pass the other bills?" asked Scott McCown, director of the Center for Public Policy Priorities, a group that advocates for low-income Texans.

Kathy Walt, Perry's press secretary, said the governor thinks that just using the surplus to lower taxes will leave the state in a hole for its future budget needs.

"If they don't fix the tax structure there's not going to be money for (teacher) pay raises, there's not going to be money to put additional money into education," she said,

Chisum's bill would lower school operating taxes by about 17 cents per $100 valuation. Local school boards could raise them three cents this year and as much as 14 cents next year with voter approval.

It's still too early for me to have a feel for how likely it is that the TTRC plan will pass. Since it's really five separate bills, many things can go wrong. The temptation to use a safety net like this, especially with pressure coming from Astroturf advocacy groups, will grow as the session grinds on. One thing to keep in mind:

It's only the second day of the special session. With so many different groups coming out in support of the governor's plan does that mean it's a done deal?

"They are pretty much stuck with about 15 votes short," News 8 Austin Political Analyst Harvey Kronberg said.

Lawmakers found out Monday the state has an $8 billion surplus. One group of Republican House members say they'd rather use that money to lower property taxes instead of expanding the business franchise tax. Under the Perry-Sharp plan limited partnership businesses, like some law and doctor's firms, would have to pay the tax.

"You've got 15 to 20 Republicans who won't vote for a tax increase especially when there's a budget surplus," Kronberg said.

As Eye on Williamson notes, that means some Democratic support is going to be needed to pass the TTRC plan. Without some guarantees about the level of school funding that will ultimately result from all this, I sincerely hope the Democrats will hold out.

One last item:

On Tuesday Assistant Attorney General Ted Cruz told lawmakers the Perry-Sharp plan is constitutional and would pass the Supreme Court's litmus test.

As with the Abbott ruling, that's fine and good until it actually comes back before the Court. I'll wait to hear from the plaintiffs before I consider that a closed matter. For sure, though, the TTRC plan is more in line with the Supremes' opinion than the Get Out Of Dodge plan is. I still wouldn't bet on the plaintiffs letting that one slide. If they ask for an injunction, watch out.

Posted by Charles Kuffner on April 20, 2006 to Budget ballyhoo | TrackBack