Legislators Not United on Tax Changes

The San Antonio Express reports on the reaction to the Perry/Sharp tax plan by lawmakers on the House Ways and Means Committee. The story indicates a mixed reaction Monday from these key lawmakers in whose committee the tax bill must originate.

"We don't know that this is going to be the answer to the maiden's prayer, as far as policy for the state of Texas, but ... certainly we will take it seriously," said Rep. Jim Keffer, R-Eastland, chairman of the House Ways and Means Committee.

Keffer went on to say the Perry-backed plan was sound at it's core but that legislators needed to iron out difficulties. We are learning the tax bill may be divided into five bills.

As noted in the story here is the proposal:

"The Sharp panel proposed a plan to provide $5.9 billion to allow school districts to lower property taxes to $1 per $100 valuation for maintenance and operations

The property tax cut would be funded largely by an expanded business tax that would replace the current franchise tax, which is paid by only one in 16 businesses.

The new tax would be based on gross receipts, with exemptions for sole proprietors, general partners and those making less than $300,000 and for deductions for the cost of goods sold or employee compensation. It would apply to law firms and health care practices, among others.

The plan also would be financed by measures including a $1-a-pack increase in the cost of cigarettes and the use of $1 billion in surplus funds. The plan would need $1.4 billion annually from revenue growth the next two years to balance because it is a net tax cut."

Some concern is being voiced about the use of the surplus. Some have voiced concerns that using the surplus would siphon funds from other needed programs. Others take the opposite view, preferring to use an increaded amount to lower property taxes. That would push the tax overhaul until next year's regular session, after the elections in November. Although reservations are expressed this seems to be a fallback option if other ideas can't be worked out.

What I am picking up from my colleagues is a sense of cautious optimism that we will come away with a plan by June. People are concerned about different proposal options. What options are proposed may determine support or non-support of the plan. It's a lot like that first junior high dance experience, you know, you got a general idea of what your going to do when you get on the floor, but you don't know how you or your partner are going to react when you put your hand around her waist. If you get too close will she coil back or give you a slap across the face.

I for one am looking forward to the dance. I'll be there dressed and ready to go on Monday. Let's hope I don't get slapped.