House Envisions a Historic Tax Cut

Ways and Means chair State Rep.Dennis Bonnen, R-Angleton, while debating State Rep. Sylvester Turner on HB11 border security bill March 18, 2015.
Ways and Means chair State Rep.Dennis Bonnen, R-Angleton, while debating State Rep. Sylvester Turner on HB11 border security bill March 18, 2015.

The proposal from House Ways and Means Chairman Dennis Bonnen, R-Angleton, to cut the state sales tax rate by 0.3 percent is nothing short of historic.

If he is successful, it would mark the first time that the rate has been cut in the tax's nearly 54-year history.

As the chart below shows, the state began with a 2 percent sales tax, a rate that held from the tax's inception in 1961 and lasted for most of the decade. In the intervening decades, it has steadily stairstepped up to the current 6.25 percent. Local jurisdictions have the option to add up to a maximum 2 percent to the rate.

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At a Glance: Sizing Up Tax Relief, Lege Productivity

Gov. Rick Perry delivers a farewell speech to a joint session of the Texas House and Senate on Jan. 15, 2015.
Gov. Rick Perry delivers a farewell speech to a joint session of the Texas House and Senate on Jan. 15, 2015.

Also getting our attention this week were a couple of size-ups on where lawmakers are on the competing tax relief packages and on comparing legislative productivity between this session and last session.

As has been widely reported, the House and Senate must bridge a philosophical divide on how to parse out tax relief this year. They must decide which is the better option: make the more complicated move to cut a widely reviled tax (i.e., the property tax), or make the simpler move to cut a tax (i.e., the sales tax) that doesn't rouse taxpayers' passions as highly.

The Senate would rather tackle a property tax cut, while the House would rather target the sales tax for a rate reduction.

Both would also make a big cut to the business franchise tax. The net on tax relief is higher on the House side, going strictly by the numbers. Here's how the proposals break down:

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And the folks over at the Professional Advocacy Association of Texas tallied numbers through Sunday on how this Legislature's productivity compares with the last one.

The big takeaway here is that, in both chambers, the number of bills and resolutions filed and referred to committee is up from two years ago by a healthy margin.

However, action on legislation in committee lags, especially on the Senate side.

The amount of legislation considered in Senate committees is down 35 percent, and legislation reported out is down 47 percent.

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Is the Tesla Bill Losing Momentum?

Tesla vehicle on display outside the Texas Capitol on Jan. 15, 2015.
Tesla vehicle on display outside the Texas Capitol on Jan. 15, 2015.

Tesla Motors made a big splash at the beginning of session, but what's become of its proposal to sell its high-end cars directly to Texans?

HB 1653 and its companion, SB 639, would allow manufacturers that have never sold their cars through independent dealerships in Texas to operate a limited number of stores. But the bills have yet to receive a hearing, and Tesla advocates aren't happy.

In a development this week, Sen. Troy Fraser, R-Horseshoe Bay, let it be known that he won't bring up the proposal in his Natural Resources and Economic Development Committee until the House weighs in.

"The senator has just finished polling his committee members, and the members prefer to wait on the House bill," Will McAdams, Fraser's chief of staff, told the Tribune on Wednesday.

The House bill remains in the Licensing and Administrative Procedures Committee, chaired by Rep. Wayne Smith, R-Baytown. It is scheduled to be heard there on Monday.

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Legislation pushed by Tea Party-aligned Republicans to take back in-state tuition rates currently offered to undocumented immigrants has gotten out of committee on the Senate side.

Supporters of the current law, though, haven’t given up yet and are mobilizing in advance of debate by the full Senate.

Former state Rep. Carl Isett, R-Lubbock, a co-author of the 2001 Dream Act, will join the Texas Association of Business' Bill Hammond and Juan Hernandez, a former aide to U.S. Sen. John McCain, R-Ariz., at a news conference where they will reiterate their support for the in-state policy.

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House Public Education Chairman Jimmie Don Aycock, R-Killeen, presented the details of his plan to reform the state's school finance system in a committee hearing Tuesday afternoon — calling the bill a "first, best attempt."

Among Aycock's proposals: doing away with the outdated formula weights known as the "Cost of Education Index," reducing the number of school districts subject to recapture or "Robin Hood," and funding more of the districts currently receiving money on "hold harmless" provisions through formulas.

"Before you take a shot at it, take a look at it," he said, noting that it was not meant to be a "permanent fix" for the system.

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The Legislature’s main policymakers on roads and transportation — Senate Transportation Chairman Robert Nichols and House Transportation Chairman Joe Pickett — sat down for an interview this week with the Tribune’s Evan Smith.

One big takeaway from the conversation was Pickett saying that the two chambers are closer on an agreement on a road funding proposal than it might appear on the surface.

The Senate funding plan relies on dedicating and diverting revenue from the motor vehicle sales tax, while the House plan would do the same to the overall state sales tax.

But, as Pickett explains, “I would like to see the House members … get down to discussing the two different plans. And then I think the senator and I are three-quarters of the way there when we get people talking about which one.”

Disclosure: The Texas Association of Business and Tesla Motors are corporate sponsors of The Texas Tribune.A complete list of Tribune donors and sponsors can be viewed here.

Inside Intelligence: About Those Dueling Tax Cuts...

We started off this week’s survey of politics and government insiders with a question about how lawmakers might resolve the dueling tax relief proposals proffered by the House and Senate.

The Senate would make a cut in residential homeowner property taxes via a higher homestead exemption a centerpiece of this session's tax cuts. The House, meanwhile, would opt for a historic 0.3 percent reduction in the state sales tax rate.

A plurality — 43 percent — saw lawmakers opting to combine both proposals, with 36 percent believing that the Senate option would win out. Just 14 percent thought the House's proposal to cut the sales tax rate would end up the winning option.

We moved on to ask our insiders to handicap a trio of hot-button bills currently in the legislative process.

Two bills — one designed to prevent "sanctuary cities" in Texas and another reversing a state law extending in-state tuition rates to certain undocumented students who graduate from Texas high schools — are out of Senate committee and on their way to the floor.

A bare majority — 51 percent — thought it likely a sanctuary cities bill would become law, while 48 percent thought it unlikely. Meanwhile, 57 percent thought it unlikely that lawmakers would take back in-state tuition for undocumented students, while 42 percent saw this as a likely development.

The insiders were more certain on the prospect of legislation that would reform marijuana possession penalties. Seven in 10 of the insiders thought such a bill is unlikely to pass this session, while less than three in 10 thought it likely.

And the insiders felt most strongly about their prognosis on marijuana laws. A strong plurality  — 44 percent — termed passage as "very unlikely."

On the other questions, our insiders were a little more squishy in their responses. On the question of sanctuary cities, the "somewhat likely" option led the "very likely" option, 37 percent to 14 percent. On repeal of in-state tuition, the "somewhat unlikely" option was favored by 35 percent, well ahead of the 22 percent who thought it was "very unlikely."

We collected comments along the way, and a full set of those is attached. Here’s a sampling:

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Senate and House plans for tax relief differ on where to look for cuts — property taxes or sales taxes. Where does the Legislature go on tax cuts?

• "They have already promised property tax relief, even before trying to understand it, but they will have to incorporate some alternative, such as sales tax, to appease business interests who correctly point out that they already pay over two-thirds of the tax burden."

• "The easiest, most practical political play is an increase in the residence homestead exemption. Sales tax rate cut will give the average household in Texas less than the homestead exemption."

• "The property tax cut won't do anything but add to state spending, whether it's subject to the spending cap or not. Plus, it shifts the burden more to business and gives nothing to renters. The sales tax cut is the most equitable way to cut taxes for all Texans, regardless of their financial means."

• "My best guess is a minimal reduction in property tax. The best for the state is to reduce sales tax. An added benefit is that a reduced sales tax will be felt by more voters on a more frequent basis."

• "One place they won't go, despite Big Business dreams, is an across-the-board property tax cut like in 2006. Members felt it wasn't appreciated."

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The Senate this week passed out of committee a bill that would penalize cities and other local governments for preventing police from asking for a person's immigration status during a detention or arrest. What are the odds of this bill, commonly referred to as a 'sanctuary cities bill,' becoming law?

• "The Senate will pass it and the Governor would eagerly sign it, but will the House play along? Might it be a bone thrown to the Teas in exchange for increased school funding?"

• "Seems reasonable enough, except that it'll be used for harassment."

• "For being a bunch of Christian conservatives, they aren't remembering well Matthew 7:12 (The Golden Rule)."

• "Talk about dumb. Tell me again how many cities currently prevent cops from asking about immigration."

• "Speaker Straus is the roadblock. No true reforms can happen until he's replaced. The rule of law — 'detention or arrest' — should mean something."

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The same Senate panel also was looking at legislation this week that would reverse a 14-year-old state law granting in-state tuition to Texas high school graduates who aren't legal residents. What are the chances of success for this bill?

• "If common sense prevails, it will die. We talk about encouraging immigrants to become productive citizens. Who is more motivated to do that than someone who has graduated from a Texas school and is qualified to enter a Texas college (which is more than far too many 'legal' residents can say)?"

• "And the Senate is once again blocked by the House. Speaker Straus working a perfect game."

• "This should pass but it won't. Republicans will get scared. If illegal residents want to pay in-state tuition, they should apply for grants from their home countries for the difference between out of state and in-state tuition."

• "This one is silly. Everyone in Texas pays Texas taxes, since we're primarily funded by sales and property taxes, so the state support is being paid for by non-legal residents. Plus, if they're here, I'd rather those individuals be educated and have a chance at a good job instead of being government subsidized."

• "Abbott + Patrick will be enough to pass it."

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A House panel this week takes up a handful of proposals that would loosen penalties for possession of marijuana. How likely are lawmakers to reform current penalties for pot possession?

• "Legitimate legalization efforts are still a couple of sessions away but this step is a distinct possibility."

• "Alright, alright , alright."

• "Maybe a tiny camel's nose for limited medical purposes. Everyone else can just drive to Colorado."

• "Legislators who support 'reforms' will put a political target on their future elections."

• "Unlikely. No one in power cares enough about it to make it happen. Public support is wide but not deep."

Our thanks to this week's participants: Gene Acuna, Cathie Adams, Victor Alcorta, Brandon Alderete, Clyde Alexander, George Allen, Jay Arnold, Charles Bailey, Andrew Biar, Allen Blakemore, Tom Blanton, Chris Britton, Lydia Camarillo, Elna Christopher, Harold Cook, Kevin Cooper, Beth Cubriel, Randy Cubriel, Curtis Culwell, Denise Davis, Nora Del Bosque, Tom Duffy, Gay Erwin, John Esparza, Jon Fisher, Tom Forbes, Neftali Garcia, Dominic Giarratani, Bruce Gibson, Eric Glenn, Daniel Gonzalez, John Greytok, Wayne Hamilton, Bill Hammond, Susan Hays, Ken Hodges, Steve Holzheauser, Mark Jones, Robert Kepple, Richard Khouri, Tom Kleinworth, Sandy Kress, Dale Laine, Nick Lampson, Dick Lavine, James LeBas, Luke Legate, Leslie Lemon, Ruben Longoria, Matt Mackowiak, Mike McKinney, Kathy Miller, Steve Minick, Mike Moses, Steve Murdock, Nelson Nease, Pat Nugent, Nef Partida, Gardner Pate, Jerod Patterson, Robert Peeler, Jerry Philips, Wayne Pierce, Allen Place, Gary Polland, Jay Pritchard, Ted Melina Raab, Tim Reeves, Patrick Reinhart, David Reynolds, Carl Richie, Grant Ruckel, Tyler Ruud, Jim Sartwelle, Barbara Schlief, Stan Schlueter, Bruce Scott, Robert Scott, Steve Scurlock, Christopher Shields, Nancy Sims, Jason Skaggs, Ed Small, Martha Smiley, Mark Smith, Larry Soward, Leonard Spearman, Dennis Speight, Bill Stevens, Bob Strauser, Colin Strother, Charles Stuart, Sherry Sylvester, Sara Tays, Jay Thompson, Corbin Van Arsdale, Ware Wendell, David White, Darren Whitehurst, Angelo Zottarelli.

The Calendar

Friday, April 10

  • Transportation: The Next Five Years, part of the Tribune's statewide series of public events looking ahead five years; 1301 E. Brockett St., Sherman (12-1 p.m.)

Sunday, April 12

  • Colorado River Ramble and Family Water Festival, presented by the Colorado River Alliance and the Expedition School; 2101 Jesse E. Segovia St., Austin (9 a.m.-4 p.m.)

Wednesday, April 15

  • Statewide Tea Party Rally; 1100 Congress Avenue, Austin (12-1 p.m.)
 

The Week in the Rearview Mirror

Senate Finance gave its OK to a $211.4 billion two-year budget. The document now goes to the full Senate, where it is expected to be debated early next week.

A Senate committee this week passed out two bills — on sanctuary cities and ending in-state tuition for undocumented students — that are high on Republicans' immigration agenda. The legislation moves to the Senate floor for further consideration.

The Senate has acted to move the state's public integrity unit from the Travis County district attorney. Under the compromise plan, investigations of public officials would rest with the Texas Rangers.

The House this week approved legislation that would provide incentives for school districts to implement a free, "high quality" pre-kindergarten program. The early education initiative is a priority item in Gov. Greg Abbott's legislative agenda.

The University of Texas System Board of Regents will allow member Wallace Hall to see some data and documents compiled during an outside investigation into outside influence on UT-Austin admissions. The decision was made during a contentious regents' teleconference meeting on Wednesday. Hall didn't have the backing of a majority but only needed two votes to have his request granted.

Disclosure: The University of Texas at Austin is a corporate sponsor of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here. 

Political People and their Moves

Mickey Long and Debbie Montford have been elected chairman and vice chairwoman, respectively, of the Texas Tech University System Board of Regents. Long, appointed to the board in 2009 and recently reappointed, will serve a second consecutive term as board chairman. Montford was first appointed to the board in 2010 and was reappointed a year later.

University of Texas System Vice Chancellor for Academic Affairs Pedro Reyes announced that he is stepping down to work full-time as a teacher and researcher. Reyes held the system job since 2012.

Today is Speaker's Reunion Day in the Texas House. Six former speakers are expected to be on hand: Jimmy TurmanBen BarnesGib LewisPete LaneyTom Craddick and Rayford Price.

The runoff special election between Ina Minjarez and Delicia Herrera for the Bexar County-based House District 124 has been set for April 21. Early voting in the contest will happen April 13-17.

Bo French announced this week that he will seek the Tarrant County-based House District 99 seat currently held by House Administration Chairman Charlie Geren, R-Fort Worth. French is a former business partner and friend to Chris Kyle, the former Navy SEAL whose life was recently depicted on screen in American Sniper.

Disclosure: Ben and Melanie Barnes have been major donors to the Tribune. A complete list of Tribune donors and sponsors can be viewed here. 

Quotes of the Week

I wanted to quit while I can still do my job. I covered the Senate long enough to see people carried out on a gurney, and I didn’t want to be one of those people in my profession.

Veteran newsman and Texas native Bob Schieffer, explaining his decision to retire from the news business this summer

People who talk about re-election during the session should be shot.

State Sen. Kevin Eltife, R-Tyler, who is at least 52 days away from deciding whether he's running for re-election

The joke is that at the Thanksgiving dinner table they throw turkey legs at each other.

Former Ron Paul travel aide Eric Dondero on the extent of disagreements between Ron and his son, Rand Paul

A white man just walks up to me and starts grabbing me. What do you do?

State Rep. Borris Miles, D-Houston, relaying his version of an encounter with a plainclothes DPS trooper on security detail for Attorney General Ken Paxton

At the end of the day I think there are a finite number of slots in our universities and those should be reserved for Texas citizens.

State Sen. Donna Campbell, R-New Braunfels, arguing in favor of reversing the 2001 law offering in-state tuition for certain undocumented high school graduates

It’s in the act of becoming an American that higher education becomes very personal.

Higher Education Coordinating Board Commissioner Raymund Paredes, arguing that the offer of in-state tuition rates is not an immediate driver of illegal immigration