New taxes

The committee headed by John Sharp unveiled its tax proposal today after the LBB had a chance to review it.

AUSTIN — Texas lawmakers will start next month's special session with a school funding proposal that Gov. Rick Perry says finally has "broken the code" of modernizing the state's antiquated tax structure.

If adopted, the plan would slash school property taxes by a third — $6 billion worth — for all Texas homeowners. That money would be replaced in the state's $33 billion public school budget with a new business tax, a $1-a-pack increase in the cigarette tax and $1 billion from a state budget surplus.

Perry announced the plan Wednesday and urged lawmakers to approve it.

I have a few questions. For starters, this does absolutely nothing to improve public education in Texas. Not one single new penny for Texas' schoolchildren, so why is this being claimed as any kind of victory?

What are school boards supposed to do when the state isn't running a multi-billion dollar surplus? My guess is that they will raise property taxes to cover costs, thus negating the whole point. It's not an unreasonable question since just a few years ago, the state was running at a $10 billion deficit.

I have a problem with the cigarette tax, too. Sin taxes are very volatile taxes. If they do what they are supposed to, which is to get people to stop smoking, then that's less money for the state's schools. The money can vary wildly from year to year and isn't the sort of thing that should be used to fund a regular expenditure. That's why lottery money doesn't go to the schools.

Not to mention it is terribly regressive and will weigh on poor people the most.

There's nothing new here, just a bunch of old ideas that have been regurgitated as a shiny new bobble. As my friend Vince points out, this report is practically lifted from 2002's Joint Select Committee on Public School Finance and their report. That's pretty weak.

The thing that is probably going to piss most of us off is that only the very wealthy with lots of property are going to get any real savings out of this. Until the average Texan stops putting their fingers in their ear and won't listen to reason on a state income tax, that's probably the way it's going to stay.