Ganging up on the Perry Plan

As we get ready for the start of the special session on Monday, here's a preview of how the arguments against the Texas Tax Reform Commission (TTRC) plan will shape up.

From the Democrats: The plan will inadequately fund schools.

At a Houston news conference Thursday, lawmakers said Gov. Rick Perry is trying to limit session proceedings to shuffling existing funding rather than directing more money toward educational improvements, like addressing high dropout rates and low standardized test scores.

"It's about the children, stupid," said state Rep. Rick Noriega. "We still can't get our focus back on what everybody knows is the future of our state, which is our children."

[...]

"The chairs on the deck will simply be reshuffled," Rep. Garnet Coleman said of Perry's proposal. "Not a single new penny will go to fund public schools."

State Rep. Jessica Farrar said Democratic legislators will be especially vigilant against any proposal that would increase taxes for those Texans less able to afford them.

"There is a fondness for expanding or increasing the sales tax and that is what we will be on guard against," she said.

[...]

At a town hall meeting at Houston City Hall Thursday night, legislators focused on where proposals posed the most danger.

Of those who spoke before the legislators, many were current or former teachers.

Questions dealt more with problems at the local level, such as school districts who spend money on unnecessary junkets or teachers having to buy school supplies out of their own pockets.

And from Comptroller Strayhorn: The plan doesn't add up.

Perry's plan, developed by a 24-member commission headed by Sharp, would lower property taxes for school operations by as much as one-third.

Strayhorn said it would deliver $6.2 billion in property tax cuts when it is fully implemented next year.

The new expanded business tax would replace the existing franchise tax for a net revenue gain of $3.5 billion in fiscal 2008. That is about $400 million less than the Sharp commission had estimated based on what Sharp said were earlier projections from the comptroller's office.

Strayhorn said a $1-per-pack cigarette tax hike and increased taxes on chewing tobacco would raise $680 million next year. An additional $40 million would come from a new mechanism to ensure that buyers of used cars and trucks pay sales tax on the vehicles' "blue book" value.

Strayhorn said the plan will be $1.4 billion short next year and similar shortfalls will continue for the next five years. Cumulatively, the plan will cost the state an extra $10.6 billion by 2011, she said.

"At the end of the day, the money must come from somewhere, and we will not have the luxury of $10 billion in surplus funds to fill the gaping hole the Perry tax plan would rip in state finances," she said.

Governor Perry and TTRC Chair John Sharp naturally dispute Strayhorn's analysis. Strayhorn also echoed the Dems' criticism about the plan being inadequate.

So. Now you know where we stand going into Monday. Despite all this, there's still a sense of cautious optimism, according to Rep. Aaron Pena. We'll see what happens.

Posted by Charles Kuffner on April 15, 2006 to Budget ballyhoo | TrackBack