Burnt Orange Report

Republicans Jumping Ship on HB 2 and HB 3

By Andrew Dobbs

Many may not realize this, but no major piece of legislation has been passed by the House this session. Only some local bills that typically pass by unanimous consent and resolutions honoring this or that local good guy have been passed. All is hinging on school finance and tax reform- HB 2 and HB 3 respectively- and right now things aren't looking so good for the GOP plans on either bill.

To begin with, the king of GOP tax policy, Grover Norquist, has come out against the tax bill:

National anti-tax activist Grover Norquist, who is close to the White House and Republican Gov. Rick Perry, is sharply criticizing a tax overhaul crafted in the Texas House.

In a news release Wednesday titled "Texas House Poised to Declare Texas Closed for Business," Norquist singled out House Speaker Tom Craddick, R-Midland, for getting behind a new payroll tax and higher sales taxes, which House leaders are promoting as a way to pay for property-tax reductions.

"Speaker Craddick and the House seem to want to shut down Texas for
business," Norquist said in the release. "A payroll tax would raise the cost of everything produced in the state, and eliminate Texas' competitive advantage. And sales taxes would raise the cost of every consumer good, lowering the standard of living of Texas workers."

Geez... when Grover Norquist and I agree on something things are getting scary. He's completely right about the standard of living reduction, but I suspect that his tax plan would just eliminate everything and end a ton of government programs. Still, as the article notes, a bunch of Texas legislators have signed a Norquist-designed pledge not to raise taxes and it will be interesting to see how they'll sell this bit of hypocrisy to their constituents. They claim that because they are lowering property taxes, it all evens out, but as I pointed out last week HB 3 would raise taxes on a majority of Texans.

BTW- Chris Kenedy pointed out that I didn't take into account that not every taxing unit (only a majority) aren't at the $1.50 cap. Point taken, and it actually means that people who live in places lower than the $1.50 cap will see an even higher tax increase under HB 3.

But I digress. Not only is Norquist- the uber Republican and ally of Gov. Perry- speaking out against HB 3, but Perry's not-so-uber-Republican-nemesis Carole Keeton Strayhorn has revealed that the bill doesn't actually cut property taxes:

The bill meant to buy down local school property taxes with higher state taxes lost something on its way out of the House Ways and Means Committee, according to the comptroller's office.

It lost the property tax relief, the office said.

"That legislation only included tax increases. It did not include a reduction in property taxes," said Mark Sanders, spokesman for state Comptroller Carole Keeton Strayhorn.

According to the comptroller, who was asked to help with a fiscal analysis of the measure, state tax increases included in House Bill 3 total nearly $9.6 billion over the next two years.

That's a hefty amount, but $1.2 billion short of the $10.8 billion that GOP leaders say would be necessary over the next two years to cut the maximum maintenance-and-operations property tax rate from $1.50 to $1 per $100 valuation.

Republicans are backtracking quickly, claiming that they probably made just a "one word mistake" that would cost the state $1.2 billion, but it looks like the debate might be delayed even further with this revelation. It might be a waste of time, however, as it seems more and more likely that the bill will be amended to pass the Democratic alternative with a significant number of rural Republicans joining forces to get the necessary 76 votes. From the Associated Press:

A plan to overhaul education in Texas could founder this week if measures aren't taken to address the concerns of rural Republicans who say they can't vote for the proposal in its current form.

The GOP-drawn plan to fund public schools in Texas has been slow to garner support from the large number of legislators who represent rural parts of Texas, both Republican and Democrat.

Those who hail from small-town Texas, where communities often revolve around schools, say the plan does not give their schools enough money for transportation, cuts funding for gifted and talented programs and does not give teachers a pay raise that would encourage them to move to the country.

"I haven't heard a lot of folks supporting it, other than the ones that wrote it," said Republican Rep. Scott Campbell, who represents a four-county district surrounding San Angelo. "It just breaks your heart because people have put in so much time and we still don't have anything." (...)

"I think (the plan) is on life support," said Rep. Robby Cook, D-Eagle Lake, who chairs the House Rural Caucus.

Most House Democrats have thrown their support to an alternative plan that they will offer as an amendment during floor debate next week.

That plan, unveiled earlier this week, gives more property tax relief to many Texas homeowners through a tripled homestead exemption. It would funnel $2 billion more than Grusendorf's plan to public schools.

It also puts more money into areas of top concern for rural members:
transportation, teacher pay and funding for at-risk and gifted and talented students.

"Hopefully the alternative can help bring life back to it, so we can get a good plan passed," Cook said, noting that the Democratic alternative "tends to cover a lot more the bases that we've been concerned about."

Remember that Robby Cook came within a hair's breadth of switching parties in 2003 (they had the press conference all organized and everything before he changed his mind) and that Scott Campbell is still a Republican. Pat Haggerty, an El Paso Republican (unfortunately, they do exist), has liked the bill to the Jonestown Massacre. Tommy Merritt, another Republican who likes a lot of Democrats, has said he will not vote for the plan. Those probably make up for the handful of Dems who will vote with Craddick and Grusendorf and all the other rural GOP votes will be on top of that. Enough people are starting to jump ship that the Democrats might just get something they want this session.

But Craddick and his crew will fight to keep their party in line and there is an excellent chance that the regular session will end in deadlock without a school finance bill. Special sessions will be called, but politicians will start getting antsy about their elections and things will get really interesting. The GOP has shown a distinct inability to lead, and this offers Democrats a great opportunity why our message is better.

Either way, stay tuned to BOR for your information on the 79th Legislature.