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Tick tock, tick tock…

You know the drill…Still no agreement, but they’re oh so close. Today is the drop-dead day for any kind of agreement, and then they still have to get it passed without it being filibustered to death.

Here’s a brief roundup. I’m sure there’ll be more soon.


The House passed a full cent increase, but agreed Sunday night to meet the Senate midway at three-fourths of a cent. The House also agreed with a Senate provision to increase the $15,000 homestead exemption by $7,500.


Lawmakers have been working to find a way to lower local school property taxes and replace that money with higher state sales and business taxes. They have agreed to close loopholes in the existing corporate franchise tax that about 10,000 companies use to avoid the tax, but have dropped plans for a broad-based business tax that would reach law firms and other professional partnerships.

Oil and gas firms and petrochemical companies that pay the franchise tax oppose it.

Jon Fisher, senior vice president of the Texas Chemical Council, said it’s unfair to single out corporations rather than broadening the business tax base.

Lawmakers spent a fourth full day negotiating behind closed doors on a separate bill to spend $2.6 billion in new money to boost teacher salaries and improve student performance.

House Public Education Chairman Kent Grusendorf, R-Arlington, noted that the education and tax bills narrowly passed the House earlier during the special session.

“We don’t really have a lot of votes to spare,” he said.


With three days left in the special session, the oil and gas industry’s opposition to the tax swap plan also drove debate Sunday. Lawmakers said they had been told by lobbyists that more than 85 of the 150 House members are committed to voting against any measure that would require more corporations to pay the state’s franchise tax.

“The longer we wait, the harder it is, but it’s never over till its over,” said Senate Finance Committee Chairman Steve Ogden, R-Bryan. “It’s harder to score with one minute left in the fourth quarter than it is with 15 minutes left in the fourth quarter.”


At least three key pieces of the tax swap remained unresolved Sunday, according to Ogden and House Ways and Means Committee Chairman Jim Keffer, R-Eastland.

•How much to raise the state’s 6.25 percent sales tax.

The measure that cleared the House would raise the tax by a penny. The Senate says that would hurt low-income Texans and, instead, wants to raise it by just a half-cent.

The sides inched closer Sunday, with House negotiators pitching a 7 percent sales tax and Senate leaders saying they would accept a 6.95 percent tax but only if the House backs higher tax exemptions for residential property.

•How much to increase the residential property tax exemption.

The first $15,000 of the value of most homes is exempt from taxation. The Senate Finance Committee approved a constitutional amendment Sunday that would increase that to $22,500, though Democrats wanted to raise it even more to help the owners of less expensive homes.

House leaders said late Sunday that they’d be willing to back the increase to $22,500.

•Whether to include goods that are sold out of state in determining a business’s tax.

Both chambers have broadly agreed not to create business taxes but to require more companies to pay the corporate franchise tax. The Senate has included a provision to stop taxing out-of-state sales. The House has no such provision.

Morning News

The House tax negotiators had their offer printed as a bill and said they planned to sign it and send it to the Senate. But Mr. Ogden protested that that amounted to “sending ultimatums back and forth.” He confronted Mr. Keffer on the House floor and asked that the two sides present their tax plans in a public meeting this morning.

“The House needs to explain their proposal and try to do this in a more professional manner,” Mr. Ogden said. “I don’t think you should be passing tax bills by just having bills fly back and forth by carrier pigeon.”

Mr. Keffer said he had hoped to conclude a deal Sunday but “didn’t give an ultimatum.” He agreed to meet today.


While few lawmakers wanted to have the special session, many fear that Gov. Rick Perry will immediately order another if they don’t pass the two bills by Wednesday.

“We really don’t want to be here during the month of August,” said House education committee Chairman Kent Grusendorf, R-Arlington.

Asked if Mr. Perry will call another session if this one fails, Mr. Craddick said: “I have no idea what he’ll do.”

Mr. Dewhurst was expected to use the threat of a prolonged stay in Austin to try to persuade Democratic senators not to filibuster any compromise. But Sen. Gonzalo Barrientos, D-Austin, warned that he and three colleagues stand ready to try to talk the tax bill to death because, they say, it would benefit only the rich.

Star Telegram

Officials say the session is teetering on the brink of failure over a couple of key issues. For example, the House plan would tax bottled water, something the Senate has resisted. And the Senate plan would raise alcohol taxes, but House negotiators say that idea is dead on arrival in their chamber.

Another major dividing line: how much property tax money a small number of super-wealthy districts, including Highland Park in Dallas, would keep under a system that relies more heavily on sales and business taxes.

House negotiators — led in part by state Rep. Dan Branch, R-Dallas, whose district includes Highland Park — have been advocating a formula that allows those districts to keep more of their property tax money than the Senate negotiators want, officials said.

“The issue is fairness, and the exorbitant tax rates in districts,” Branch said before going into a meeting with House Speaker Tom Craddick, R-Midland. The speaker said later that capping the amount that the wealthy districts have to give up for poorer ones is necessary to pass the legislation.

State Rep. Pete Gallego, D-Alpine, said the proposal would allow a few wealthy enclaves to spend more on their students than other districts — at lower property tax rates.

“All this leadership seems to be about is widening the gap between the haves and the have-nots in school finance, between the first-graders that have access to a good public school education, and a first-grader who doesn’t,” he said. “It’s all a matter of ZIP codes.”

El Paso Times

As negotiations draw down to the wire, senators planning to talk the legislation to death have a better shot at success.

If compromise is reached today, Sen. Eliot Shapleigh, D-El Paso, who has vowed to fight the plan he calls “the great Texas tax shift,” would need to remain standing and talking for about 36 hours to kill the bill.

Death to the current school finance proposals would be a best-case scenario for local schools, said Paul Colbert, a lobbyist for the El Paso Independent School District. He said the planned $3 billion in new money for schools doesn’t even come close to meeting their needs.

“It doesn’t matter how you slice and dice it, what they’re giving is insufficient money,” Colbert said.

Express News

Senate and House leaders also were haggling over equity issues in the separate school-funding bill, HB 2, with the House insisting on limits in the amount of money that property rich school districts must share with poor schools.

House leaders want to limit that amount to 35 percent of tax revenues raised in property wealthy school districts.

“This is basically saying there will be a limit to how much of your money you send back to Austin, Texas,” said House Public Education Chairman Kent Grusendorf, R-Arlington.

The Senate opposes any limit, but there were indications Sunday evening that Senate leaders were willing to back down from that position.

The sharing requirement was established in response to a court ruling to even out funding available to school districts in the system, which relies heavily on local property taxes. Lawmakers now are laboring under another district judge’s ruling that the system is unconstitutional.

Grusendorf said House negotiators could not compromise much on the 35 percent figure because the bill only passed by three votes in a first-round vote earlier this month. About 15 House members from property-wealthy areas remain adamant about limits on the tax revenue their districts are losing.

Stay tuned.

UPDATE: Missed this before – Aaron Pena thinks the Lege will not have an agreement on school finance before the session ends.

UPDATE: The Quorum Report says that there’s agreement on HB2, but not yet on HB3. As the latter is the bill to pay for HB2, the whole thing dies if HB3 goes down. And of course, agreement in the joint committee is not the same as being approved by the House and Senate. So as before, stay tuned.

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  1. […] tax cut for a sales tax increase goes back to at least 2005, when then-Speaker Tom Craddick tried to get one through the Lege as a preemptive “solution” to the forthcoming West […]