While Perry Touts School Finance Plan, Dems Say No

Governor Rick Perry says his plan to solve the state's school funding crisis reduces property taxes and at the same time pours more money into public schools. But the governor's proposal is setting off alarms with state Democrats, who say the plan shifts the tax burden to lower income Texans.

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At a stop in Houston, the governor outlined his plan to fix the state's school finance system, a problem lawmakers have been working on since a special session on the issue started earlier this week. Perry's solution is to raise taxes on such things as tobacco products and auto repairs, close franchise tax loopholes and at the same time drop property taxes and raise homestead exemptions. "I think the legislators have heard loud and clear and I think they will have a very hard time explaining to their constituents why they didn't pass a plan that reduces property taxes by $7 billion, why they didn't pass a plan that put $5 billion new dollars into our public schools, why they didn't provide a $1,500 a year pay raise for the teachers of the state of Texas. That's a question that those legislators are going to be asked if they don't act," says Perry.

This is the fourth session lawmakers have tackled the school finance issue. They've coming up short the first three times since a judge in Austin ruled that the current funding system is unconstitional. Democratic state representative Garnet Coleman of Houston says the governor's plan taxes lower income Texans and benefits wealthier homeowners. "It literally shifts more taxes on people who can afford it the least to fund a tax cut for those who can most afford it. And, it puts no dollars into public schools, because no portion of the tax increases to do the tax decreases are used to fund the public school system," says Coleman.

Republican state representative Joe Nixon says the argument that lower property taxes only benefit higher income Texans doesn't hold water. He says voters aren't saying that and voters are the ones he and others answer to.

A Democratic plan would triple the current homestead exemption and put more money back into public schools. Both sides have the next four weeks to come up with a compromise.

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