Leaders hold out hope for school bill in week; Dewhurst confers with Craddick; Perry meets N. Texas homeowners

By Terrence Stutz and Joshua Benton
Staff Writers

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Despite growing doubts that a compromise can be found, Lt. Gov. David Dewhurst said Wednesday he and other legislative leaders are still aiming for Senate approval of a school finance bill by week’s end.

Toward that end, Mr. Dewhurst polled senators Wednesday on whether they could support a scaled-back plan that would provide less property tax relief and be funded through increased sales taxes and a revamped business franchise tax. The plan also proposed increases in state taxes on cigarettes and beer.

The lieutenant governor also met for nearly an hour with House Speaker Tom Craddick, R-Midland, to discuss what mix of revenue-raising options might be acceptable to House members.

“I don’t know that we’ve reached any firm conclusions because I have to go back to the Senate and look at a lot of details, but it was a constructive conversation,” Mr. Dewhurst said of the meeting.

“We’re still looking at the revenue package. We’re also looking at how we fund new resources if in fact there aren’t the votes over in the House for a constitutional amendment.”

His reference was to the constitutional amendment that would be required to legalize video gambling casinos at seven dog and horse tracks and on three Indian lands to raise $1.2 billion to $1.5 billion a year for school funding and property tax relief.

House members dodged the video gambling proposal last week, and key lawmakers said there still are insufficient votes to pass it in the chamber. A constitutional amendment requires a two-thirds vote of the House and Senate.

Key senators have decided that it may be possible to secure passage of legislation in the House if the measure does not require any constitutional amendments.

That would mean lawmakers would have to turn to reform of the business franchise tax and a sales tax increase to generate the necessary revenue for the legislation. An increase in the state cigarette tax is also part of the mix.

“I still favor a broad-based business tax that is fair and uniform and has a low rate,” Mr. Dewhurst said. He and other Senate leaders have supported a reform of the current business franchise tax so that all businesses pay the tax.

Gov. Rick Perry is opposed to new business taxes, however.

The proposal under consideration in the Senate also would scale back the proposed property tax cut to 25 cents per $100 valuation rather than the 50 cents outlined on Tuesday. A 25-cent reduction would be a 17 percent decrease in the current maximum rate of $1.50.

Mr. Dewhurst said he remains hopeful of passing a bill in the Senate by Friday. The current special session ends Wednesday.

Meanwhile, Gov. Perry was in Arlington to push for his package of property tax relief. He held a miniature town-hall-style meeting at the home of Bruce Deramus, chairman of Concerned Taxpayers of Arlington.

Mr. Deramus said the property tax bill for his home on Rocky Point Court had gone up 74 percent in the last seven years.

The governor pitched his plan to a supportive small group of mostly older residents from Grand Prairie, Arlington and Fort Worth.

“Right now, Texas is a highly desirable place to live,” the governor said. “If our tax appraisals keep going up, it won’t be any more because no one will be able to own a home,” he said.

The governor has proposed limiting property tax increases by capping the increase of property appraisals at 3 percent per year and preventing local government spending from growing faster than inflation and population growth without a vote of the people.

Mr. Perry indicated he still has hope that the Legislature can put a bill on his desk before the end of the special session. “There’s no reason we can’t do this in 48 hours,” he said.

In other developments Wednesday, the trial in a lawsuit filed by 46 school districts against the state was moved back two weeks and will now start Aug. 9. The school districts, including Dallas, contend they are underfunded by the state and that the current $1.50 maximum tax rate is unconstitutional.