By J. Lyn Carl, GalleryWatch.com
Austin, TX –
The Conference Committee on HB 3, the property tax reduction bill, today broke into workgroups to try to iron out differences in each of the bill's 11 articles. The workgroups are meeting now and the full conference committee will reconvene at 4 p.m. today.
While property tax relief is the goal of the legislation, Rep. Jim Keffer (R-Eastland), co-chair of the conference committee, reminded that, "Creating jobs and investments in Texas to make sure the economy is healthy is the underpinning of everything we do."
While the bill attempts to close loopholes in the state's franchise tax, Keffer said House members "wish we were going farther," but described what is in the bill as an "incremental step."
"It's not like the problem of high property tax is like wine or cheese - it's not going to get better with age," said Keffer, pledging that House members on the conference committee would do everything they can to come up with a legitimate policy - but "not just a policy so we can go home."
"Both the Senate and House bills are inadequate and fail to meet our basic goal - to substantially cut property taxes and overhaul the state tax system in such a way that it reflects the 21st Century economy," said Co-Chair Sen. Steve Ogden (R-Bryan). "Neither bill does that." He said the goal now is to produce a bill that "takes us a step in that direction," adding that whatever the conference committee produces "are components of what a complete overhaul would look like." He said the bill should reflect "a movement in the right direction," but added, "It's not the finish line." He said the legislature also should avoid "moving in the wrong direction."
Ogden said he thought the components represent "pieces of the overall puzzle, but not every piece of the puzzle." While the Senate wants to sunset the franchise tax, what is currently being studied is a "transition plan" toward finding the right answer to the problem.
"It seems like every session and through Texas' history, the bulk of the state's budget is spent on education," said Sen. Ken Armbrister (D-Victoria). "Each time we go through this type of exercise, we say we wish we could do more, but this is all we can do. We've got to the point - if not now, when?" Armbrister said the legislature seems to continue to put off some of the work until future sessions.
"The big picture" is what Senate members are talking about, said Armbrister.
"This is not about getting anybody re-elected. This is not about the governors' race. It's about the school children of Texas and property taxpayers." He said the legislature is committed to a "sound system" that not only will generate the revenue that will answer any type of court challenge, but also provide property tax relief and put sufficient money into the public schools. "Is the money enough?" asked Armbrister. "It's never enough."
"I don't like either bill, but I know we're making a good faith effort," said Sen. Juan Hinojosa (D-McAllen). He said the bills shift taxes from one sector of the economy to another and that adjustments need to be made to equalize those tax burdens.
Keffer reminded members that they should keep two reports in mind - the Legislative Budget Board's tax equity statement and the comptroller's dynamic model and how they both balance. He said it is important to ensure that "whatever we do does not harm the economy" and provides for a tax balance between businesses and individuals. He reminded that too big a burden on businesses will cause them to leave the state. And if that happens, he said, "The economy tanks."
Saying the legislature is seeking the best policy it can produce, Keffer warned, "I know time is of the essence, but just to do something - to do something - would be wrong for the state of Texas."
He said the House bill provides for a property tax rate reduction to $1.23 in 2006 and to $1.12 in 2007, noting he would like to see the conference committee stay close to those numbers. "We feel that is substantial relief," said Keffer.
"My view," said Ogden, "is that once we know how many of these new taxes we can agree on, then we know how much property tax relief we can provide."
The committee then broke into workgroups and will reconvene this afternoon.