04.23.06

A Primer For Monday’s House Debate

Posted in Uncategorized at 10:45 pm by wcnews

Rep. Aaron Pena has a good write up here.

Before you answer those questions let me go over the events of the last few days. First, you should know that the “tax bill” is not one bill, but actually a number of bills that were kept apart so that members could individually vote on different aspects of the plan.

Broadly speaking here are the bills and what they do: House Bill 1 would use $2.4 billion of the $8 billion state budget surplus for a 12 percent property tax cut. House Bill 2 would dedicate all revenue from a new business tax and higher tobacco taxes to further property tax cuts. House Bill 3 would enact a new broad-based business tax. House Bill 4 tightens and clarifies motor vehicle sales rules, where some dollars were slipping through the cracks because consistent language was missing from sales documentation. House Bill 5 might mean an extra $623 million to school funding accounts, as it sets aside an increase to $1 on tobacco taxes.

Vince Leibowitz has great analysis on all the bills and brings us news of a “slush fund” set up in HB 5.

Rep. Hochberg tells us in his latest newsletter that not only have Tax Reductions Push(ed) School Funding Off Agenda, but the cigarette tax has lost key support:

Meanwhile, a bill to increase taxes on tobacco products, long supported by the American Lung Association and American Cancer Society among others, lost the support of those groups when it was rewritten at the urging of the tobacco industry. Health advocates have argued that substantial increases in the cost of cigarettes are very effective in discouraging teenagers from smoking.

The new tobacco tax bill, also on the fast track, would phase in the tax increase so slowly that health advocates believe that any anti-smoking benefits would be lost. Industry lobbyists argued much the same, saying that by postponing the tax increases, their sales would not be hurt. To make up the revenue lost from phasing the tax in, the state would borrow money by selling bonds to be repaid by future tax revenues. So, in a time when there are billions in the treasury, we will be voting on a proposal to borrow additional money to provide tax reductions.

Only Republicans could screw up a cigarette tax so bad that the American Lung Association and the American Cancer Society would withdraw their support.

Rick and John’s plan is now being referred to as “Swiss cheese”.

And Common Sense Texas has a post on A Republican rally against taxes tomorrow and a link to an article about the horrible financial state of schools in Texas from the DMN, Rich districts do fundraisers, poor districts do without.

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