If the Senate Finance Committee can make it to Monday or Tuesday of next week with four or five of the school finance components intact, there's a good chance Texans will see a new business tax, a cut in school property taxes, teacher pay raises and a bag full of other legislative wonders. But it's gonna be a long weekend.
Full StoryThe House has 16 members who've never been through this before, including two who should be on your watch list:Yvonne Gonzalez Toureilles, D-Alice, and Hubert Vo, D-Houston. The Republicans they beat in November are contesting their elections, and could eventually unseat them. With that asterisk in place, the freshmen class includes 11 Democrats and five Republicans. Five of the newbies replace representatives from the other party, including three Democrats who knocked off Republicans and two Republicans who knocked off Democrats. If you count Melissa Noriega, who's filling in for Rick Noriega, D-Houston, while he's at war in Afghanistan, and Tracy King, D-Batesville, who returns to the House after a rematch with the guy who knocked him out two years ago, there are 18 new faces. The sophomore class, with 30 members, remains the biggest single class in the House. Ten state reps began their House service before 1980; three of those, before 1970. The regular elections changed absolutely nothing in the Texas Senate. Sens. Kevin Eltife, R-Tyler, and Kel Seliger, R-Amarillo, will be serving in their first regular session, but both won special elections in time to serve during last year's special session on school finance. An election contest against Sen. Mario Gallegos, D-Houston, was officially dismissed, so he took the oath again. It's a sea of familiar faces.
On a straight party-line vote, the Senate Finance Committee approved Gov. Rick Perry's new business tax proposal, 9-4.They approved the bill as the House passed it, with no changes, and they never looked at any amendments in committee. That means the Senate will get the bill on a take-it-or-leave-it vote next week. Amendments to tax bills can't be offered for floor debate unless they were presented in committee, and since none were presented, the Senate will probably vote the new tax up or down. Like any rule, however, this one's flexible; a two-thirds vote by the Senate would suspend the rule and open the bill for changes. Since they didn't change a comma from the House version, approval by a Senate majority next week -- without amendments -- would send the bill straight to Perry without a stop in conference committee. The senators heard testimony all morning before going behind closed doors for a good while. They didn't discuss the bill when they emerged from the back room; they simply took the roll, voted, and then disappeared behind closed doors again.
The main tax bill might be safe from tampering, but it's got a satellite that's built for hijinks.The Senate added a sidecar to the business tax bill, opting to leave the bill in the exact form it passed the House and to put any changes or amendments or fixes or tricky lobby schemes into a new piece of legislation, SB 6. As filed, that bill is pretty unthreatening. But Lt. Gov. David Dewhurst and House Speaker Tom Craddick are trading off a list of proposals that would go into that bill.
Some Republicans -- apparently including Gov. Rick Perry -- were initially alarmed about how the Senate was routing new tax money to school property tax reductions (See How About a Smack? elsewhere in our Notebook section).In the House version, any new tax money coming out of the special session would go into a special account, and all of the money in that account had to be used to cut local property taxes. The House made no reference to target tax rates and didn't require the state to lower school taxes to $1, as had been proposed by the Texas Tax Reform Commission. In the Senate version, the lockbox money is dedicated solely to property tax reduction until the school tax rates all reach $1 (like the House version, it doesn't require that the rates be lowered to $1 -- but the Senate decided to say what'll happen if they do reach that point). If the trigger is reached, additional lock box money would be split between local property tax cuts and education. The education money -- one-third of the money -- would be used to for "basic allotments" in school finance formulas, and to help balance school finance funds between rich and poor districts. If the money ever lowers local property tax rates to 75 cents, any additional money would go into those school formulas.
Gov. Rick Perry's new tax on businesses -- and a bill that sends that new money to school property tax relief -- is a notch closer to his desk. If the Senate gives the business tax the final nod tomorrow, it'll go straight to Perry for his signature.The "lockbox bill" that forces new state tax revenues from this special session to be used to cut local school property taxes won tentative approval from the Senate. They voted 21-10 in favor of the bill, though Democrats balked because they wanted at least some of the money to go into public schools. There are 12 Democrats in the Senate: Ken Armbrister of Victoria and Frank Madla of San Antonio voted with the Republicans on the lockbox bill. Neither will be in the Senate next year; Armbrister didn't seek reelection and Madla lost the Democratic primary in March. The Senate version differs from the House version; after final passage, it's headed for conference. This version of the legislation allows some education spending, but only after local school taxes have been cut to at least $1. Even at that point, most new money would go to cutting taxes. And number-crunchers inside and outside the Capitol -- read that to include the comptroller's office -- have raised questions about whether the tax receipts will bring in enough to cut taxes to that promised $1 level. The Senate voted down an attempt to sunset the dedication of the new taxes in 2012. And they shot down an amendment that would have dedicated more of the new money to education than to tax cuts; that amendment wouldn't have kicked in until local property taxes had reached $1. That bill is one of five passed by the House that raise state taxes and use some of the state's surplus to finance a cut in local property taxes. A sixth bill working in the Senate is a sidecar to the major business tax bill; supporters of that tax wanted to keep the main bill -- HB 3 -- clear of amendments, so they created a separate piece of legislation to carry any changes. That bill, as you might expect, has become a magnet for lobbyists seeking tax favors for their clients. HB 3 passed tentatively on an 18-13 vote. Democrats split on this one just as they did on the lockbox bill, with three Republicans -- Sens. Kevin Eltife of Tyler, Mike Jackson of La Porte, and Kyle Janek of Houston -- joining the votes against the bill. Legislation raising taxes on used car sales -- by forcing buyers and sellers to use blue book values instead of relying on their word about the sales price -- also won tentative approval. It's not the same as the House version and will have to be reconciled or approved as is by the House.
One constant throughout our country's great history has been the dogged determination of millions of people from every corner of the world to make a new and better life for themselves and their families here in these United States of America.That pursuit has cost many their lives while others have arrived here both legally and illegally, becoming productive and responsible citizens and making many significant contributions to our melting-pot society. The current fervor of debate -- on the street and in Congress -- on this issue has produced nothing of substance as to how we can best deal with this problem. Yes, we could build a wall along the Texas/Mexico border. Cost estimates run from the hundreds of millions to several billion dollars, depending I suppose, on how many undocumented workers would be employed on the project. Most folks, experts and otherwise, agree that such a wall is nothing more than a finger in the dyke approach and would do very little in stemming the flow of illegal immigrants from the south. And I fear that someday, some world leader will look to us and paraphrase President Reagan's famous line, "Mr. Gorbachev, tear down this wall." How embarrassing would that be? The wall idea however, does provide fodder for talk shows and serves as a symbol for the angriest among us. It is interesting that those who appear to be the angriest and are so quick to complain and engage in name-calling are rarely willing to face up to what is a major reason we have so many illegal immigrants here in Texas and across the nation. In nearly every debate on this issue, their fallback argument is simply that these people are here illegally. They are breaking the law and should be dealt with according to the law. End of argument. True enough. But there are other illegals operating here that contribute mightily to the problem. Companies that employ illegal, undocumented workers are also breaking the law and should be dealt with according to the law. Their illegal practice of hiring these workers creates a demand for them, which in turn brings even more into Texas and the nation. If the demand were not there, would the problem be as severe as it currently is? No. Now, finally, someone with actual policy-making authority has stepped forward and presented a plan that could go a long way toward addressing the demand side of the problem. It is not the final solution, but definitely a start in the right direction that should promote open and honest dialogue on an issue that impacts all of us. State Rep. Rafael Anchia, D-Dallas, offered up an amendment to House Bill 3 in this current special session that does just that. HB 3 is the new business tax that closes existing loopholes and puts more businesses on the tax-paying rolls. The plan was crafted by Gov. Rick Perry's blue-ribbon committee on tax reform headed by John Sharp and will provide much needed property tax relief. Under the new tax, companies will pay a one percent tax on gross receipts after deducting either employee compensation or cost of goods sold. Anchia's amendment makes it illegal for any company to deduct compensation paid to any undocumented worker and allows for the state comptroller to enforce the provision. We should not lose sight of the irony that it took a Latino policy maker, the son of immigrant parents, to be the first to face this issue head-on. Anchia's amendment passed in the House on a 141-1 vote. HB 3, with Anchia's amendment attached, has now been sent to the full Senate for debate. In whatever final form it arrives on Perry's desk, Anchia's amendment must be included. Ken Zornes is a former Dallas ISD board member who now lives in Austin. You can reach him at kzornes13@hotmail.com.
Tax talk continues to dominate Texas' digital "airwaves" with bloggers analyzing specific votes and House members taking the time to explain why they voted for or against certain proposals. Gas boycotts, immigrant employee protests, and a whole lot of news in the congressional delegation fill the hours between floor debate.* * * * * Tax Bills Keep on Moving If you've ever spent hours going through the House or Senate Journal to make sense of who voted for what, relax and let Vince Leibowitz at Capitol Annex do the work for you. First, he analyzes the House votes, then he excerpts statements from the House Journal. Charles Kuffner at Off the Kuff takes it a step further by talking to Rep. Rick Noreiga, D-Houston, and Rep. Mike Villarreal, D-San Antonio, about the reasons behind their votes. He also posted comments from Rep. Donna Howard, D-Austin. The group "Texans For No New Taxes" continues to lobby Republicans to vote against Gov. Rick Perry's tax plan. Flyers urging opposition to the bills were placed under doors at the Capitol. Pink Dome has copies. You can get a fix on some Houston conservatives at the Lone Star Times. Their readers are opposed to the tax plan and are taking their fight to the Senate. They also can't wait for local radio show host Dan Patrick to be sworn into the Texas Senate next January (which means they have something in common with the state's political reporters —ed.). "John Cornyn's Box Turtle," who has one crazy name and posts on In the Pink Texas, thinks people in Houston must be crazy. Of course, people in Houston think people in Austin are certifiable. And people in San Antonio think they're both right. Rep. Aaron Peña, D-Edinburg, raises teachers' hopes by declaring on his site, A Capitol Blog, that teachers are definitely getting a pay raise. My favorite line of the week comes from "Don't Mess With Pink," a regular contributor to In The Pink Texas who scoffs at a $1 increase per pack that was originally proposed in HB 5. Her line: "Like this is going to get me to quit smoking. I haven't stopped buying gas either." * * * * * Talking About High Gas Prices… When Bee County officials passed a resolution calling for a boycott on gas from Exxon Mobil until the price is lowered to $1.30 per gallon, a Midland-based blog, Jessica's Well advocated the opposite: "Fill up on Monday at your local Exxon or Mobil station," she said. "Show your support for one of the many companies that assures us a steady, reasonably priced supply of fuel. And show your support for a company that's vilified for its success." Lobby Duck, who must drive a very small, economical car, also quacked a complaint about gas prices. * * * * * Bricks and Boycotts The May 1 boycott/walk out from jobs by Hispanic employees in protest of proposed immigration reform was widely discussed on the Internet. As angry as Hispanics are at the perceived discrimination, some folks are even angrier because the federal legislation doesn't go far enough. Right of Texas encourages its readers to mail bricks to U.S. Sen. John Cornyn to encourage him to support the building of a wall along the Texas-Mexico border. Rep. Peña, again writing on A Capitol Blog, says many people don't know that of 80,000 "Minutemen" guarding the border with Mexico, 800 are Hispanic. "Much like the multiple perspectives of Tejanos during the Texas Revolution, today's Tejanos, like other Americans, have multiple perspectives on the current question of immigration reform," he said. The "Day Without Immigrants" ended with people on both sides of the political spectrum vowing to either boycott or patronize businesses according to whether or not they allowed Hispanic employees to take the day off. While most of the blogosphere is focused on immigration into America, WILLisms posted some interesting information from the Census Bureau on American migration patterns. To the surprise of no one living in Plano, Round Rock or Flower Mound, it shows that Collin, Williamson, and Denton Counties — each of which overwhelmingly supported President Bush in 2004 — are among the country's fastest growing counties. * * * * * Delay Replacing DeLay Democratic political op Matt Angle of the Lone Star Project laments the lack of an immediate special election to replace resigning Congressman Tom DeLay, R-Sugar Land, saying it will create the longest period of time without representation for residents of a Texas congressional district "since John M. Pinckney was shot and killed at a meeting of the Waller County Prohibition league in 1905." A resident of Pearland who goes by the name of Greg in TX22 is completely focused on the intra-party struggle to name a Republican ballot replacement for Rep. DeLay. This is interesting reading if you thought that area's troubles ended with Delay's resignation. They've got a long summer ahead. * * * * * Congressional "Roundup" Congresswoman Sheila Jackson Lee (D-Houston) was arrested outside the Sudanese embassy in Washington D.C. as part of a protest against genocide in Darfur. Congressman John Carter (R-Round Rock) had his picture made in Iraq with the son of his opponent. Conservative sites Red State and Right of Texas use the power of blogging to raise $10,000 in a matter of days for Van Taylor, the Republican running against Congressman Chet Edwards, D-Waco, for CD 17. Finally, Congressman Silvestre Reyes, D-El Paso, gets into the blogging business. * * * * * Blogo-graphics If you're wondering what all the fuss is about, BlogAds, a company that helps bloggers put advertising on their sites conducted a survey of 56,000 blog readers. They found: "The median political blog reader is a 43-year-old man with an annual family income of $80,000. He reads 6 blogs a day for 10 hours a week. 39% have post-graduate degrees. 70% have contributed to a campaign. 69% have bought music, 87% have bought books. 58% say blogs are "extremely useful" sources of information. 52% leave comments on other people's blogs." What a great target market for purveyors of luxury items, books, and MP3 players. Oh, yeah, and campaigns. Did we mention sometime Austin resident Dan Rather is considering writing a blog? OUT THERE is something new for Texas Weekly: Robyn Hadley will cherry-pick the state's political blogs each week, looking for news, info, gossip, and new jokes. Robyn, a veteran of both journalism and the state Capitol, is the owner of Capitol Crowd, a networking site for people who work in and around state government. The opinions she quotes belong to the bloggers, and we're including their links each week so you can hunt them down if you wish. Please send comments, suggestions, gripes or retorts to Robyn at robyn@capitolcrowd.com, or to Texas Weekly editor Ross Ramsey, at ramsey@texasweekly.com.
Gov. Rick Perry's political office is apparently of two minds about the progress of the tax package through the Senate. They want people to give the Senate a smack. But it's not clear which sort of smack they want. Suggested Smack Number One was a hit. Smack Number two, about an hour later, was a big, wet kiss...Take a look at these emails from the governor's political office. The first, sent between 5:30 and 6pm Friday evening (the punctuation and emphasis is from the original): "It is becoming apparent that the Lt. Governor and the Texas Senate are NOT committed to lowering your property taxes by 33% to the $1 tax rate!! They are considering a tax cut that is LESS than the 50cent reduction called for in the Texas Tax Reform Commission Plan! "We must act NOW! The vote in the Senate is this weekend. "Please call, email, fax your state Senator NOW and tell them to get "Back on the Buck." "The House of Representatives is expecting the tax cut to be no less than 33%. We will lose support for the plan in the House if the Senate does not get "Back on the Buck" and lower the rate to $1. "Please call the Lt. Governor and your Senator NOW!!! Your property tax cut depends on it." * * * * * The second went out about an hour later: "Today the Senate took decisive action and passed school finance reform and taxpayer protection legislation. This legislation, almost identical to the bills earlier passed by the House of Representatives, are part of a plan that will provide historic property tax relief to homeowners and businesses and long-term protections to taxpayers. "The Lt. Governor and the Senate are to be commended for moving swiftly. "The Senate action will result in the largest property tax cut in Texas history, will make homeownership more affordable for millions of Texas families, and will allow employers to spend more resources on jobs and growth. "This plan reforms the franchise tax to make it broader and fairer and the tax rate lower. It closes loopholes so that more businesses pay their share of education costs and it also reflects the modern Texas economy. "This legislation is conservative, responsible and the right thing for Texas. "Please call the Lt. Governor and your Senator and tell them to keep up the good work! "Lt. Governor Dewhurst?(512) 463-0001 http://www.ltgov.state.tx.us/Contact/ Find your senator's contact information http://www.capitol.state.tx.us/fyi/fyi.htm"
At least one of the big tobacco companies bought full-page newspaper ads blasting the proposed $1 increase in the tax on a pack of cigarettes.The ads urged people to call in, and their calls were then routed to their senator or state representative. A spokesman for Philip Morris USA said the ads were running statewide, but didn't specify which papers had run them or when. The lawmakers said the pressure wasn't all that heavy, but the cigarette tax had stalled in the Senate Finance Committee by the end of the week.
Democrats who generally support the increase came off when none of the money was dedicated to health care, and some Republicans were nervous about a big tax increase that is so apparent to end consumer/voters. At least the proposed state business tax won't be paid directly by or seen directly by most voters. Without the tax on smokes, lawmakers would be $700 million short of what they need for tax relief. In property tax terms, $700 million would buy a reduction of about six cents. Put another way, that's about 12 percent of what's needed for the whole tax cut.
It's been a bummer of a week for optimists. It looked for a minute there like the Texas Senate had everything lined up on school finance, but they reverted to form and fell into a series of old and new traps.More than a week remains in the special session — more than enough time to pull everything together. But as the third week came to an end, only one bill in the inventory had gone to the governor and two of the five bills in the package were mired in Senate Finance and the folks in charge in the upper chamber were fumbling for a strategy. That one bill on Rick Perry's desk is the biggest tax bill in state history. Taken alone, it might as well have a skull and crossbones on it; Perry isn't likely to sign it without companion legislation that directs the money raised by the tax bill to relief from local school property taxes. The rest of the package — two more tax bills, a bill forcing newly raised funds into property tax relief, another that uses part of the budget surplus to pay for the first year of cuts, and a last one that's supposed to catch any mistakes in the first five — is still winding its way through the Legislature. And as time has passed, the obstacle course has become more difficult. New traps: Tobacco industry lobbying on the amount of the cigarette tax increase and on an intra-industry dispute over taxes on snuff; an insurance-friendly provision to a sales tax bill that would have the effect of lowering, in some cases, what you're paid when you total your car; and whether there's really enough money to cut M&O property taxes to $1, and whether anything in this legislation forces local property taxes to that much-hyped mark. Old traps: Recapture and equity; election dates; school start dates; homestead exemptions; caps on annual increases in property taxes; teacher pay raises (and amounts); and the health stipend for teachers and other school employees that has yo-yoed between $0 and $1,000 since it was put in place in 1997.
Kids will teach you -- quickly -- that an easy to understand promise is one you'd better keep. It's a useful lesson when you're thinking about voters. Tell them you're gonna lower local school property taxes to $1, and anything else -- from $1.01 to $1.50 -- will make you look like a cheat.So Gov. Rick Perry, prompted by the business groups who traded their endorsements on the tax bill for a 50-cent cut in property taxes, is doubling up his wager. His marketing machine is pushing the $1 promise hard as the Senate gets ready to legislate. The state's eight biggest chambers of commerce held a press conference to push the point. Texans for Taxpayer Relief — the non-profit corporation that's raising money to promote Perry's tax plan — sent letters to lawmakers urging them to put the full cuts to $1 into law. And Perry himself held a session with Senate Republicans — they've apparently given up on the Democrats — to tell them nothing less than $1 would do. That puts him at odds, kinda, with Lt. Gov. David Dewhurst. Dewhurst says the House's legislation doesn't balance, and promising a tax cut of a particular size could push future legislatures into a jam. If the taxes passed during this session don't raise the money needed for the school tax break, lawmakers will have to scrape up the funds from other sources. A 50-cent cut in taxes costs somewhere in the $5.5 billion to $6 billion range. Former Comptroller John Sharp, who headed the Texas Tax Reform Commission appointed by Perry, has acknowledged the plan will need to use $1.4 billion of the state surplus as it gets off the ground. He says growth in the economy and in the new business tax will cover that in the years that follow. But the current comptroller, Carole Keeton Strayhorn, says the plan has built-in deficits that will have to be covered in future years by money that's not coming from this session's new taxes. Sharp and others on Perry's end of the see-saw disagree. So you have two competing assertions, and Dewhurst has weighed in with his own numbers. They don't exactly match Strayhorn's, but they're along the same lines. The proposal from the tax commission included a 17-cent cut in the first year of the tax break and a 33-cent cut in the second year. It also lowered the state cap on school property taxes to $1.30 from $1.50. All three numbers disappeared in the House; the first one was replaced with a provision that would take 11.3 percent off a district's current tax rate. And the House bills make no promise for year two, other than saying the money from the new taxes will go to cuts. If more is needed to get to the buck, they didn't make any provision for it. Dewhurst has been reluctant to put the promise in law without some certainty that the money will be there. Perry and a fair number of Senate Republicans want to put the dollar in the bill and hope for the best. Without a constitutional change, this Legislature can't force future lawmakers to do anything; as a practical matter, this could all change the next time the Lege meets. But it would be politically difficult, and that's probably enough. Three timing issues ought to get mentioned somewhere in here. First, even if she thinks the tax package is out of balance, Strayhorn's official pronouncement will only cover whether the plan balances between the time it takes effect and the end of the current two-year budget in August 2007. Since it uses surplus money for its startup, it probably will. And it was designed to get around a comptroller who's also running for governor. Second: The second and last phase of the local school property tax cuts show up on tax bills due in January 2008, two months before a primary election. If voters like it, that'll be good for incumbents. If they don't get what they want, it'll be a good year for challengers. Third: The new business tax will come due for the first time in May 2008, and accountants and other number-crunchers will be looking hard at the numbers at the first of that year. Again, it could influence primaries, for better or for worse.
You know that two-thirds rule that requires a supermajority in the Senate to consider a bill out of the "regular order of business"? There's a loophole.You can find some loud voices on the Republican side of the plane — Houston radio host and (probable) senator-to-be Dan Patrick is one — who want to get rid of that thing because it empowers minority parties. But there's a loophole in the rule and if the Senate uses it, Patrick and others who don't want any new taxes will be on the losing side. That regular order of business flips in mid-week, so that House bills are at the top of the lineup instead of Senate bills. On the Senate list, there's a "blocker bill" that's in the way of the real business; it takes two-thirds to cut in line ahead of that one. On the House list, there's usually a blocker (especially during regular sessions), but there's not one this year. If they don't have two-thirds but want to take up one of the House's tax bills, all the Senate has to do is wait until Wednesday.
Talking, Sampling, Gassing, and SingingThe Texas AFL-CIO will hear from all three challengers to Gov. Rick Perry next week, but not from Perry himself. Democrat Chris Bell and independents Kinky Friedman and Carole Keeton Strayhorn will all talk at that group's annual convention in Irving on Monday. • Friedman and Strayhorn have to turn in the signatures they've collected to get on the ballot by the end of business May 11, but it's still not clear how those signatures will be checked, or how quickly. Strayhorn went to court to force Secretary of State Roger Williams — a Perry appointee and supporter — to sample the names to determine whether she's got enough to get on the ballot. He has said he wants to check each of the signatures on her petitions and Friedman's, and that it'll take up to two months. The federal judge who's got that case, Lee Yeakel, said this week he'll decide quickly. To refresh your memory: Independents running for governor need 45,540 signatures from registered voters who didn't vote in the primaries or the runoffs and who didn't sign petitions for any other gubernatorial candidates. Strayhorn says the two-month counting delay would make it hard to raise money. If that's so, it would probably be good news for Bell, the Democrat in the race. Perry, as an incumbent, can raise money. Anti-Perry money that's not sure independents are a good investment might jump into the Bell camp. • U.S. Rep. Chet Edwards, D-Waco, has taken to running an Exxon sign with high gas prices on it in his emails. It emphasizes a shot he took at the Republican in the race: Van Taylor's personal financial disclosures indicate he owns $5 million to $25 million in Exxon stock. Edwards has been pressing him to say how much he's made off of the surge in gasoline prices. • There's a third "kinky-toon" up on Friedman's website. He isn't the richest candidate, but he can attract endorsements: the Dixie Chicks, Pat Green, Willie Nelson, Bruce Robison, Billy Joe Shaver, and Kelly Willis. It's online: www.kinkyfriedman.com/multimedia/_video/kinkytoon_03/.
A group of senators, irked by the lieutenant governor's chronic tardiness, are circulating a letter asking David Dewhurst to let them know when he's not gonna make it to the start of each legislative session so they can put someone in the chair to get things going until he's present.Sen. Jeff Wentworth, R-San Antonio, wouldn't give us a copy of the letter and said the senators are not trying to embarrass anyone. He didn't say how many senators have signed, or which ones. But they'd like to get going when they're supposed to get going, and the letter is meant as a gentle prod in that direction. Other senators have talked about changing the rules in the upper chamber to automatically put the president pro tempore or the Dean of the Senate in the chair when the Lite Guv isn't on hand. That would be more than a gentle prod.