Gov. Rick Perry signed a law Tuesday assuring that revenue from new, higher state taxes will help pay for school property tax reductions and, he said, promote "greater tax fairness."
But Democratic challenger Chris Bell said the measure was misdirected and should be repealed.
House Bill 2 is the second of five tax and education-related bills approved during the recent special session to get Perry's signature. It would spend all the revenue from a new, expanded business tax, a $1 per pack increase in the cigarette tax and tightened sales tax collections on used cars to help recoup the revenue lost from cutting school operating taxes in most districts by about one-third over the next two years.
After that, two-thirds of the revenue generated by those taxes will pay for further property tax cuts and one-third will be spent on the public schools.
Bell said he generally supports the new business tax. But repeating concerns expressed by Democratic legislators and some educators, he said some of the additional money should be spent to boost school funding, not just to lower property taxes.
"I think that (House Bill 2) is one of the measures that's going to need to be undone, if we're going to be able to realize any new revenue to face the problems that we have here in Texas," he said.