While the Texas Supreme Court hears testimony on the state’s school finance system, Texas lawmakers are debating the latest bill designed to reform that system.
The Texas Legislature is scrambling to put together a school finance plan that meets court muster in time for the start of the school year. The State House of Representatives has already passed one bill that defines the new plan and has a companion bill that lowers property taxes. Speaker of the House Tom Craddick says House Bill 3 is a $7 billion property tax cut bill that would lower the property tax cap of $1.50 per hundred dollars valuation down to $1.12.
HB 3 also raised the state sales tax from the current rate of 6.25 up to 7.25, making it the highest state sales tax in the nation along with California. The sales tax will also be expanded to apply to car repairs and bottled water. There’s also a raise in the cigarette tax by a dollar per pack and taxes on motor vehicle and boat sales go up more than a penny.
But Democratic opponents to the tax bill say HB 3 does nothing to help fund schools and merely puts a heavier tax burden on low-income families who don’t own property, but do pay sales tax. Houston Representative Garnet Coleman says HB 3 results in a tax shift leaving the middle-class to pay more out of pocket to off-set the property tax cuts that will mostly benefit upper-class homeowners.
Coleman says HB 3 has nothing to do with improving schools and will leave 80 percent of Texans paying more taxes each year. But Speaker Craddick says he believes HB 2 and HB 3 will establish a fair and constitutionally sound school finance system.