Quick rundown on HB 3:
Of course you can go to
www.capitol.state.tx.us and type in hb3 or hb2 to read all versions of the Bills. To give you a rundown on what was in the tax bill, HB3.
The House passed a Bill that included:
(1) A one cent increase in Sales Tax and spread it to several more issues including mechanic work, bottled water, computer programming etc….
(2) Include more small businesses in the Franchise Tax.
(3) A cut in the property tax cap to $1.30.
(4) A $1 a pack tax on cigarettes and smaller tax increases on other tobacco products.
The Legislative Budget Board issued a financial summary stating that based on income there would be an incremental increased financial loss to those earning less than $100,000 with a small gain to them and a larger savings to those earning $140,000 or more. In other words the middle income and low wage earner would pay increased taxes while upper income earners would realize a tax savings.
The Senate Finance Committee offered CSHB3 containing:
(1) A ½ cent Sales Tax increase covering the same items.
(2) Included major partnerships in the Business Tax.
(3) A cut in the property tax to $1.25 the first year and $1.11 the second year if approved by the districts voters.
(4) A $.50 tax on cigarettes the first year increasing to $1.00 the second year plus a 20% increase in alcohol tax.
Both the Governor and the House Speaker said they would not accept making large partnerships pay the business tax.
When the Substitute Bill came to the Senate Floor Senators Janek and Brimer were chosen to be the hatchet men for the governor to remove #2 from the Bill. While arguing the Amendment to remove the section (2) Senator Brimer said in his opinion anyone who pays a business franchise tax is a fool. Senator Shapiro let him know that her business pays the franchise tax because she feels everyone should pay their fair share. Senator Ogden stated that removing that section would gut the entire Bill. Lt. Governor Dewhurst said big partnerships should pay a business tax.
When it came to a vote the vote was 14-14. Mr., Dewhurst broke the tie by voting yes to remove big partnerships from paying a share of the taxes throwing it back to legislators to find another way to make up the lost revenue.
Senator Barrientos offered an amendment to increase the Homestead exemption to $30,000 from $15,000 arguing this would give a better break to low income families. The amendment passed. The Bill was passed and sent back to the House. The senate said they would not accept more than a ½ cent sales tax increase.
The House refused to concur and the Bill was sent to conference Committee. It came out with a ¾ cent sales tax increase and decreased the homestead exemption to $22,500 to make up for the lost revenue from cutting the partnership business tax. It included the full $1 per pack tax on cigarettes and dropped the alcohol tax. The property tax cap for operation and maintenance would be $1.30. Now we had gone from aiming to cut the property tax cap to $0.75 to ending up at a $1.30 cap.
Senator Barrientos once again explained how adding 4 cents to the property tax cap and increasing the homestead exemption to $30,000 would mean a bigger savings to the average home owner and remain tax neutral. It was refused. WE will get this fact sheet up on the websites and you can see them for yourself.
Monday the leadership did not have enough votes to bring either HB 2 or HB 3 to the Floor. After twisting arms all day the senate adjourned until 11:00am Tuesday. Tuesday after a full day of standing at Ease and Recessing they finally adjourned until 10:00am today which is the final day of the Special Session. The 30 days and $1,700,000 was a total loss. Unless something unforeseen happens nothing will have been accomplished but spending money that could have been used elsewhere. We did this same thing last session.
There is a quick rundown on what is happening. Governor Perry has said he will call them back into another Special Session on Thursday and do it over again.
For now your chairman has to answer all the Emails and catch a very short nap before getting ready to head back to the capitol for the final day of this round.
Read the Bills and if you disagree with this summation let me know.
Later,
Sputnik
