May 12, 2006
Still not over - HB5 kicked back to the Senate

And we're still not finished yet: Late yesterday, Speaker Craddick promised to send HB5 back to the Senate for being insufficiently doctrinaire.

Speaker Tom Craddick said the House will reject the Senate version of the tobacco bill because it dedicates 5 percent of a $1-per-pack cigarette tax increase to health care instead of spending all of the money to replace revenue lost from lowering school taxes.


Craddick said he thought the cigarette tax will pass, but a parliamentary objection will be made today to health care dedication.

He said he will uphold the objection and send the measure back to the Senate.

"They (senators) knew when they sent it over it was coming back," Craddick said. "They can change the rate and the date, but they can't change where it's dedicated."

According to QR, Al Edwards performed one last act of service for Craddick by raising the point of order against HB5. Nothing like giving tobacco lobbyists something to do with their time and money. Back to you, Dewhurst. (DMN link via Aaron Pena.)

Meanwhile, I solicited some feedback on that CPPP analysis of the Senate's version of HB1, also known as CSHB1 (the CS, I believe, stands for "Committee Substitute). Here's the response I got from Rep. Trey Martinez-Fischer:

H.B. 1 as amended would place the Legislature in a dire spot. The critical element to remember here is that the revenue created by H.B. 3 may only be dedicated to property tax relief pending the outcome of H.B. 2. The
Williams Amendment to H.B. 1 guarantees two things: 1) that future Legislatures will be drowning in deficits, and 2) they will not have the tools necessary to overcome those deficits.

The math is very simple. Today, every penny in property tax relief requires at least $120,000,000 in taxes to make up for that lost revenue. That is something on the order of $4 billion dollars that has to be taken out of the General Revenue in order to keep funding up to its current levels. With the spending cap, this would force future legislatures to cut the State budget 16% a year. That means there will be cuts in schools, CHIP, healthcare for seniors, and environmental enforcement just to increase property tax relief.

If only there was an easier, cheaper way to provide property tax relief to Texas homeowners. Well, there is and it's something that won't be spoken of during this session, because of the machinations of the Leadership of the Texas Government. The Learn & Live plan as proposed by Houston State Representative Scott Hochberg would have provided more property tax relief for the average homeowner by tripling the homestead exemption at a fraction of the billions of dollars that Williams' amendment costs.

I am truly concerned about Republicans who claim to be fiscal conservatives, yet pilfer the treasury and the surplus at the expense of Texas children, teachers and taxpayers. It's as if we have not learned our lesson from our Federal counterparts. I for one do not advocate trying to drown the baby in the bath water of crippling deficits.

One more piece of analysis from the Public Eduation Advocates' Report:

The Senate finally passed CSHB 1 after several days of negotiations, walkouts and assorted drama. There are some good things in the bill (a $1,500 techer pay raise – almost enough to make up for lost ground since 1999, a modest gain for equity in a higher guaranteed yield on up to four cents' worth of new tax effort) but this is still a bad bill and the House should not concur in the Senate amendments:

  • CSHB 1 creates two statewide, grand-scale programs of incentive pay that will intensify the already-excessive focus on the TAKS exam, stressing "pay for test scores" as the measure of teachers' merit. The bill pours hundreds of millions of dollars into this ill-conceived incentive program, instead of providing teachers the minimum $3,000 pay raise needed to make up for the erosion of teacher pay since the last state pay raise in 1999.
  • CSHB 1 could turn more than 1,200 neighborhood public schools across the state over to private education organizations.

    • It would allow private, for-profit corporations like Edison Schools, Inc., to take over our public schools.
    • It allows charter schools to take over management of neighborhood schools. This could massively expand this already mismanaged and troubled program.
    • These private education management organizations WILL NOT be accountable to local voters. The mechanism ignores the “local control” mantra of many state leaders:

      • The commissioner’s decisions are unappealable and unaccountable.
      • There’s no mechanism for allowing a school, once taken over, to be “given back” to the local districts.

Since CSHB1 is a lot different than the Get Out Of Dodge HB1, expect the debate over it in the House to be much more heated, and the final vote to be fairly close. It's conceivable that it could fail, if enough Republicans object to this provision or that enough to vote against it. I don't think that will happen, but you never know.

UPDATE: See, this is why predictions are bad:

By a 136-8 vote, Representatives concurred with the Senate rewrite, which includes a $2,000 pay raise for every public school teacher, new money earmarked for high school improvements and a requirement that the school year start in late August every year starting in 2007.

Perry, who’s told political supporters he’s happy to see the measure progressing, will likely sign it into law. His spokeswoman, Kathy Walt, stopped short of saying so before the House action today, but said: “The Legislature can be proud of what they’ve done.”

Not close at all. Color me a little puzzled here.

The Legislative Budget Board estimates costs to HB 1 through August 2007 of $3.9 billion, more than doubling to $8.7 billion the next year and $10.1 billion in ‘09 before dipping to $9.8 billion in 2010 and rebounding to $10.3 billion in 2011.

One yardstick: The state currently spends around $33 billion a year in state revenue on everything.

No one debating HB 1 on the House floor said gadzooks at the number. Nor did anyone say no problema.

Paying the costs of future tax reductions, said Rep. Warren Chisum, R-Pampa, the proposal’s sponsor, “is not going to be easy… It’s going to cost more when I wake up tomorrow than it will today.”

Rep. Jim Dunnam, D-Waco, chairman of the House Democratic Caucus, charged the Republican majority with fostering illusions for taxpayers in a session that has already seen proposals reach Perry creating a new business tax and a mandate that used-car sales reflect the actual value of vehicles.

Another illusion, he said, is the idea that intended changes will improve schools; he called language enabling private companies to take over schools lagging behind state performance expectations “vouchers steroids.”

At this point, all I can say is I hope they do something about this next session. Bear in mind that there's already talk about having to hike the sales tax another half-point. Isn't that something to look forward to?

From QR:

Rep. Scott Hochberg (D-Houston) tried to force the bill to conference committee but his motion was tabled. He noted the Senate version included school privatization that was comparable to vouchers -- an issue that could not survive a vote on its own in the House.

Rep. Senfronia Thompson (D-Houston) later raised a point of order on the bill on the germaness of such matters as self-administered medications in CSHB1, but Craddick did not sustain her objection.

Outgoing Rep. Carter Casteel (R-New Braunfels) warned that language getting the tax rate to $1 within two years will soon lead to other tax increases. She asked Rep. Warren Chisum (R-Pampa) if lawmakers were telling Texans that they'll have a property tax decrease now "but get ready, sister, because we'll be back for more?"

She said that the bill will lead to a funding shortfall approaching $5 billion in 2008 and in 2010, it could be twice that. "I'm thinking you didn't get a steak, you got a piece of bacon" with HB 1, she said.


Voting no were: Reps. Burnam, Coleman, Farrar, Noriega, Oliveira, Rodriguez, Veasey and Villarreal.

Lots of people expressing lots of concerns, but only eight Nays. What else is there to say?

UPDATE: Here's Rep. Garnet Coleman's statement on HB1:

State Rep. Garnet Coleman (D-Houston) said today that House Bill 1, which was approved today by the Texas House, cut $400 million in funds promised to Texas school children last year and used that money to pay for a tax holiday for big oil and big business. Under the tax plan, businesses will have their property taxes cut in 2007 but will not pay the new business tax until 2008, resulting in a windfall of $400 million for the big oil, insurance, and utility industries alone.

"Today, a Texas House majority sent Texas voters a message that giving a big tax break to Exxon is a higher priority than keeping a promise made to provide $1.8 billion for our children's schools," Coleman said.

"Fifty-eight House Members voted to send HB1 to a conference committee with the hope that we would put our children's schools first, but Exxon snagged a $400 million tax holiday almost as quickly as gas shot up to $3 a gallon," he added.

Coleman explained that last summer, the House voted for an Appropriations Bill that included a rider that locked away $1.8 billion for education. House Bill 1, as passed today, rescinded that $1.8 billion commitment and provided only slightly more than $1.4 billion for public education.

"Even with an $8.2 billion surplus and a $4 billion Perry tax plan, HB 1 cut $400 million from the amount the House promised to use for our children's schools just last year," Coleman explained.

Coleman explained that in 2003, the Legislature cut over $3 billion from proven educational improvement initiatives that prevent dropouts and enhance basic classroom instruction.

"Texans were told that this special session was about improving our children's schools, but instead, this session cut $400 million from education funds approved in 2005 and never bothered to address $3 billion that has been cut from education since 2003," Coleman said.

Coleman explained that schools and other critical state needs will suffer from the HB1 and HB2 tax scheme that will shoot a $5 billion "hole" in the budget for 2007-2208 and even larger potential deficits in the future.

"Our children's schools should be our highest priority, but this special session had everything to do with a tax cuts for the powerful special interests and gave our children's schools a little candy for one year while cooking up a recipe for long term starvation and failure," Coleman concluded.

I'm about ready to take this to the weekend. Look for some lighter stuff soon.

Posted by Charles Kuffner on May 12, 2006 to Budget ballyhoo | TrackBack

Nice call about the close vote in the House, which concurred 136-8.

Posted by: jim on May 12, 2006 2:25 PM