Burnt Orange Report

Perry Considering New School Finance Prospects

By Andrew Dobbs

While Karl-T. and Byron L. spend their days happily Democrating it up in Beantown, I'm here in Austin keeping my finger on the pulse of Texas politics and whatnot. So in between pictures of Senators and stories about rubbing shoulders with someone cool and famous I'll be providing breathers for the junkies out there who want all the hot gossip from the City of the Violet Crown. And so, without any further ado...

Looks like the long lost special session for school finance might be rearing its misshapen head once more as another scheme to increase school funding while cutting property taxes and not introducing an income tax has been put forward, this time by Senator Florence Shapiro (R-Plano). From Capitol Inside (subscription required):

There are increasing indications that Governor Rick Perry might be amenable to the new school finance plan that State Senator Florence Shapiro has crafted and that he might consider calling a special session later this year if an agreement hasn't been negotiated before the end of August. (...)

Perry said earlier this week that there's still time for a special session this summer but that the issue might have to wait until the regular session in 2005. After a two-hour meeting with Craddick on Tuesday, however, Perry appears to be more open-minded about the possibility of calling a special session at some point this fall. A statewide vote on proposed constitutional changes would have to be postponed until February if a plan clears the Legislature in a special session during the final four months of the year.

Key House members probably won't be willing to cast any more votes on tax measures until they have reasonable assurances from Perry and the Senate that they are voting on proposals that wont be rejected later in the process. The House passed a watered-down school tax bill in May after removing a proposed business payroll that Perry threatened to veto. Senators never took a vote on the House measure.

While Perry still opposes any new taxes that he says will hurt job growth in Texas, he has apparently left the door open on the "cafeteria-style" approach to business taxation that's contained in Shapiro's new plan. Dewhurst had reportedly made strides in his attempt to sell Perry on the merits of a business activity tax as a fair and stable source of public school funds. (...)

Shapiro, the co-chair of a working group that's been holding informal meetings on the subject for several weeks, unveiled her newest proposal last week. She presented it to Perry and said that he appeared to be generally receptive to it . The plan would rely on a series of tax changes to raise $5 billion including $3.5 billion for property tax relief and the remainder for educational initiatives. Sales taxes, cigarette taxes and taxes on car and truck sales would all go up to help fund a 20 percent reduction in local property taxes. Businesses would be able to choose from a list of tax options in determining which levy was best suited for each of them. Hoping to avoid controversy that could undermine her plan's potential survival, Shapiro is not proposing to raise money for schools from video lottery terminals at racetracks like the governor and legislative leaders favored during the initial special session on school finance.

The prevailing sentiment at the Capitol is that many House members don't want to vote again this year on higher taxes and other volatile issues before the November general election. About half of the House's 150 members have November opponents while only a few senators face token opposition this fall. Craddick appears to be taking the heat while providing members with cover until the elections are over and the Legislature convenes in regular session in January.

Y'know, I have no idea why anyone other than incredibly wealthy businessmen ever cast their votes for the GOP. A plan that raises taxes on the most needy Texas families (most families already pay more in sales taxes than property taxes and an increase in sales taxes and a cut in property taxes will raise taxes on renters while cutting them for their landlords) while letting corporations have the right to pick and choose their taxes is so ludicrously rigged for the wealthy and for the powerful it makes Shapiro and Perry into overdrawn charicatures of their own party. This plan is a disgrace.

But the good thing is that it almost certainly won't pass. VLTs are a poison pill to any finance plan offered to this legislature and almost certainly any offered to the next. The vast majority of Democrats will vote against any bill with a sales tax hike and a solid number- if not a majority- of Republicans will vote against VLTs. So for this bill to pass it would have to lose all of its major sources of funding- just like last time. At that point most members will realize the idiocy of passing a school finance bill that doesn't actually y'know, finance schools and the bill dies an ignominous death.

I can see only one reason we should pass this plan- to keep Kay Bailey Hutchison out of the race for governor. A conservative journalist who I am on friendly terms with told me that sources close to Hutch have told him that she will definitely run if no school finance plan is passed before the end of the 2005 session and will most likely do something else if one is passed. I am still not convinced KBH can beat Perry in a GOP primary, especially since Strayhorn would likely run for Lt. Gov. at that point. Still, she is well-liked and would very likely beat anyone we offer up.

Perry, on the other hand, will beat Strayhorn easily in the primary and then will be a sitting duck- one of the most unpopular governors in recent Texas history. We need to keep KBH out of the race or hope that Perry can play the pro-choice card against her well enough to survive a brusing primary. To that end, passing a plan will help us reach that goal, but I'm not one for letting people needlessly suffer for political gain. This plan will almost certainly die and that will be a good thing for Texas.