Wednesday, March 26, 1997
Governor expects action on tax plan soon
By ANTHONY WILSON
Staff Writer
Within the week, Gov. George W. Bush expects action on a plan
to reduce school taxes to 50 cents with the state paying four-fifths
of education's tab and homeowners reaping "substantial"
tax relief.
Though Bush's initial property tax proposal is all but dead,
the Republican governor was buoyant Tuesday over state lawmakers'
progress in crafting reforms that spread more evenly the burden
homeowners now shoulder.
"I come optimistic that we're going to succeed,"
Bush said in Abilene Tuesday.
"I can't tell you what the ultimate plan will look like.
I wish I knew. But now's an opportunity to do what's right for
Texas before people start storming the Capitol. This is a golden
opportunity to make our great state greater."
During a town hall meeting, a press conference and a meeting
with the Reporter-News editorial board, Bush repeatedly stressed
the reforms must pass three tests.
First, property tax cuts must be "substantial." A
House committee is crafting a plan to reduce property taxes to
50 cents - an "awfully ambitious" move, Bush said.
"There's no need to go through this unless the people
of Texas can feel it," he said.
Districts could raise taxes higher, but wouldn't receive additional
state aid, he explained.
Second, the plan must produce an overall cut rather than a
tax swap, a move that should be possible with a $1 billion surplus
in state revenue.
Third, the state must assume the bulk of the responsibility
for funding schools. Currently, the state funds only 44 percent
of public schools' budgets statewide and 65 percent in Abilene.
Lawmakers are drafting a plan to increase that burden to 80 percent
with districts getting at least as much aid as they'll lose in
local tax revenues.
"The primary obligation of the state of Texas must be
to fund public education," the governor said.
Bush meant to push his own plan in Abilene last month, but
his plane was grounded by inclement weather - part of his "drought-relief
plan," he told voters. By the time he arrived, it was his
proposals that were grounded.
While the governor recommended raising the state sales tax
from 6-1/4 percent to 6-3/4 percent, lawmakers are instead considering
applying the levy to goods and services now exempt.
Bush also called for a new business activity tax. But legislators
prefer expanding the business franchise tax or expanding the state
occupation tax on state-licensed professionals.
A bill is expected to reach the House floor within a week,
the governor reported.
"Anybody with a better idea, I'll support it," he
assured. "What doesn't matter is who the author is. What
does matter is, do we achieve the objective."
The governor is insistent, however, that limited partnerships
and corporations with out-of-state headquarters no longer be exempt
from business and franchise taxes.
"Republicans like me get nervous talking about taxes,"
he said. "But I also believe in fairness. Everybody ought
to pay a little bit rather than a few paying a lot. I have no
sympathy for people who don't want to share in the cost of the
future of the state of Texas.
"I heard it at (Hendrick) hospital," he later said.
"Doctors came up to me and said, 'I don't want to pay.' They
don't put it quite that bluntly, but that's what they said. I
said, 'I don't blame you, but I think you should.' "
Though Bush said the current tax structure overtaxes business
capital, is ripe for more court challenges, and relies on the
"Robin Hood" method of funding, he noted the biggest
driver for reform is that property taxes discourage home ownership.
Texans, he said, are begging for relief.
"I can see it on people's faces," he said. "When
you start messing with someone's home you start messing with their
hearts and their emotions. There's a certain emotion - more than
with any other tax - because you're taxing someone's prized possession
- their home. There's no option. You either pay the tax or sell
your home. It's incredibly regressive, more so than any other
tax in the state."
Some disagree. Taylor County Chief Appraiser Richard Petree
voiced concern the sales tax is too regressive in asking why a
personal income tax isn't being considered.
When prodded, Bush refused to discuss the topic.
"It's bad public policy and people will overwhelmingly
reject," he said. "There won't be a personal income
tax as long as I'm governor. Don't ask me again. (Supporters)
need to drop it. It's not going to happen. It's wishful thinking."
Instead, the reforms will rely on a $1 billion surplus and
an expanded sales tax.
Bush quelled fears of using a surplus that may not be available
in the next biennium, noting it would have been spent on something
else, "forever etched in the budget."
The sales tax had at least one supporter at the public forum.
"It still seems to be the fairest tax," one man said
as the governor nodded in agreement. "If you don't spend
it, you don't pay it. And it's a lot easier to pay pennies than
large amounts at one time."
School funding will also get a slight boost when Bush signs
a bill to dedicate all lottery revenues to public education. Though
the money will fund only 6 percent of the education budget, Bush
backs the move because voters believed lottery proceeds would
fund schools.
"People ought to trust their government," he said.
Though the struggle to lead property tax reform has been more
trying than his prior successes in juvenile justice, education,
torts and welfare, Bush said this work is more gratifying.
"Why go to Austin if you're not going to take on the problems
no matter how tough they are?" he asked. "I'd rather
watch baseball games than duck problems. This is an opportunity
to get something done."
Related story: Son impressed
with father's jump
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Abilene Reporter-News / Texnews / E.W. Scripps Publications
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