By J. Lyn Carl, GalleryWatch.com
Austin, TX –
"Senate Bill 8 lowers property taxes but is also contingent on passage of a tax bill that currently does not exist," said Sen. Steve Ogden (R-Bryan) as he laid out his SJR 11 on the Senate floor tonight. After much debate, Ogden used a rules suspension to allow the Senate to bypass requirements that the resolution have three readings and it was adopted.
Because the Senate cannot act on a tax bill unless it originates in the House, he explained, the Senate cannot move on lowering property taxes through SB 8 "because there is no tax bill associated with it."
If the House will not send the Senate a tax bill to act on, explained the Senate Finance Committee chair, then the Senate must take the issue to the people of Texas. He said the SJR will ask the people of the state if they want the general property tax cap of $1.50 per $100 valuation lowered to a maximum of $1.25. He said it also will ask Texans in a November election if local school districts continue to levy a local school tax of no more than $1.25 per $100 valuation, would that be considered a statewide property tax. He said the answer would be, "No."
"At the present time without a tax bill, the only way the Senate can move to lower property taxes in Texas is to send this SJR to the people and ask what their opinion is." He said if they approve the SJR in a statewide referendum, that would provide a "mandate" to the legislature to overhaul the Tax Code during the next legislative session in 2007.
"We have no other choice," said Ogden.
"From a policy standpoint you're talking about placing a tax rate in the Constitution of the State of Texas," said Sen. Royce West (D-Dallas). He said that would put a burden on school districts. Ogden disagreed and said it would provide "relief," not a "burden."
"What are you afraid of?" asked Ogden, who said he is not as apprehensive about putting the rate in the Constitution as West is. "We are not putting this in the Constitution," he said, but instead would be asking Texans to make that decision. "It's their Constitution. And their schools."
"The issue consistently subject to criticism is the state's over-reliance on school taxes," said Ogden, noting that adoption of the SJR would serve as the voice of the state's citizens saying they want the state to pay for schools through a different method of funding.
West cited a number of other mechanisms and vehicles for raising money to fund the schools, most of which have been met with reluctance by the legislature as revenue sources - from closing franchise tax loopholes to expanding and increasing the sales tax.
Ogden said passage of the SJR would give legislators "a clear direction" from the people of Texas to reduce the reliance on property taxes to fund public schools. "I'm simply asking for the people of the state of Texas to help us out here."
It's the people's right to do so...it's their Constitution." He said if a tax is set by a local school board and approved by local voters and levied for maintenance of schools, "It's not a statewide property tax." He said it likely would clarify any legal challenges. "It's our Constitution. We ought to vote on it."
Ogden said the result would be a more equitable school finance system, a guarantee of more equity in schools and a "good chance" of solving the legal disputes over the state's school finance system. It also is the "only way without the House sending us a tax bill to lower school property taxes in Texas."
West called it "bad policy" to propose placing a tax rate in the Constitution when that can be done through statute.
"It is the only way I know of to prevent another failure of this special legislative session," said Ogden.
Sen. Gonzalo Barrientos (D-Austin) offered a visual aid that explained his amendment that he said would provide a "more equitable" form of tax relief for homeowners in Texas. He showed the impact that an increase in the state homestead exemption from the current $15,000 to $30,000 would have on property owners throughout the state. It will give a bigger tax break and spread it out so the middle and lower income property owners will "get a break," said Barrientos.
Sen. Jeff Wentworth's (R-San Antonio) amendment to the Barrientos amendment would increase the current $15,000 homestead exemption to only $22,500. "In my judgment, we just can't afford the billion dollars that his (Barrientos) would cost us," said Wentworth.
"This is an additional tax cut," said Ogden before the vote on Wentworth's amendment. He said the Wentworth amendment would cost $500 million per year and the Barrientos amendment would cost $1 billion per year.
The Barrientos amendment, as amended by Wentworth, was adopted.
Ogden then used a seldom-used parliamentary maneuver, seeking to suspend Senate Rule 10.01 that requires that joint resolutions have three readings. He said a constitutional amendment does not require three readings as a statute does; it only requires one. He thus suspended the Senate rule so the SJR could be voted out in one day.
The maneuver was used in the 79th Legislature when Sen. Todd Staples (R-Palestine) suspended the rule so that an SJR relating to the definition of marriage as between one man and one woman could be passed without three readings.
"And you think this is of the magnitude that it warrants the Senate suspending the rule?" asked West.
Ogden replied affirmatively and the Senate voted 20-9 to suspend the rule, with Ogden moving adoption.
"Voting for this is tantamount to voting for a huge sales tax in the future," said Barrientos in speaking against the bill. "There should be honor, bravery, heroism and courage. We have needed that. This is not the way to do that."
"We have the ability now to set the tax rate in Texas through statute," said West, warning against putting the rate in the Constitution. He said the state need only look to California after passage in that state of Proposition 13. "They had some of the best schools in the country," said West, adding that since then, their per-pupil spending is among the worst in the country, as is their schools' performance.
"This action today will force the House to step up to the plate and step up to the challenge and make sure we address a tax system in our state that is fair and equitable," said Sen. Eddie Lucio (D-Brownsville), speaking in support of the SJR. "We are trying to address a 21st Century need with a 19th and 20th Century tax system. It's going to force us to do the right thing for Texas."
SJR 11 was adopted by 21-8 vote.