Posted on 04/12/2004 8:24:34 AM PDT by Theodore R.
Response to Perry’s ed plan lukewarm
By APRIL CASTRO Associated Press Writer
AUSTIN After debuting his long-awaited school finance plan, Gov. Rick Perry received a lukewarm reception from a potential key ally: state business leaders.
While business leaders have applauded Perry for making the only formal proposal since the regular legislative session, they are slow to endorse an integral part of the proposal, a “constitutionally linked” property tax.
Final passage of the plan in the Republican-controlled Legislature remains uncertain.
“We’re studying it, we are looking at the constitutional linkage that Governor Perry is proposing,” said Jeff Clark, state director of the National Federation of Independent Business.
Bill Hammond, president of the state’s largest business group, has signed a letter opposing the idea of splitting business and residential property taxes, but on Thursday issued a statement endorsing other aspects of Perry’s plan.
“We are excited to work with the governor and the Texas Legislature to develop an equitable plan for all Texans,” said Hammond, president of Texas Association of Business. Hammond praised Perry’s proposal to raise additional money for public schools by legalizing state-taxed video lottery terminals at racetracks.
Perry said he intends to call lawmakers back for a special legislative session this month, but has yet to set a date.
Perry is proposing that businesses and homeowners be charged different rates, both lower than the current $1.50 cap per $100 in appraised land value. Under his plan, taxes on homeowners, capped at $1.25, would continue to be levied by school districts. Businesses, however, would be taxed $1.40 by the state.
Both would be linked to ensure that businesses are taxed in proportion to residential property owners.
“Our fear always has been with a split-tax roll, that one moves up more quickly than the other,” Clark said. “With constitutional linkage, we’re studying whether that will keep businesses from carrying an unfair share of the burden.” Perry has emphasized that his “constitutionally linked roll” is different from a split roll tax because of the built-in links between the residential and commercial rates.
Eventually, both rates would be lowered to 75 cents, using a percentage of future surpluses in the state budget to “buy down” property tax rates.
Rep. Talmadge Heflin, a Republican from Houston who is chair of the House Appropriations Committee, said Perry’s plan “ought to be in the mix” for consideration. Heflin, who leads the budget-writing process in the House, said he favors the property tax buy-back part of the plan because it “helps restrain growth in the budget.” But, the statewide business property tax, video lottery terminals and changing the caps would require constitutional amendments. That means two-thirds of both houses of the Legislature have to approve them a daunting hurdle on any issue.
They also have to survive a public vote before being instituted.
“It’s still going to take a lot of debate,” Clark said. “This is the first step in a long process.” The governor for months has been working with House Speaker Tom Craddick and Lt. Gov. David Dewhurst about how to replace the so-called Robin Hood system, but a consensus has been difficult to reach.
Dewhurst said the proposal merits consider consideration and he would “continue to work with Governor Perry and Speaker Craddick” to develop a plan.
Craddick said Perry’s plan will be addressed in the House when the Legislature convenes, but acknowledged that a solution has “eluded our state’s leadership since the days of the republic.” “And we will make every effort to find answers to this puzzle that are fair both to the children who attend Texas public schools and to the taxpayers who fund those schools,” he said.
04/12/04
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This is difficult to achieve in practice. The reason people own property to live in is different than the reason people own property for business. The oft mistaken notion that business has more money than residence property can be a false illusion, it is also a common socialist delusion. If business is going to be taxed at a higher rate than residential property, it has the right to receive consideration in other areas. Socialists rarely make concessions to business.
AKA "forced redistribution of wealth" or Communism
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