Friday, April 15, 2005

Gas tax bill may die

The Austin American-Statesman reported yesterday that the option for a local 3 or 4 cent gas tax, supported by Rep. Mike Krusee (R-Round Rock) and Rep. Mark Strama (D-Austin), may not receive enough support to move through the Lege this session. The bill proposes relieving some of the burden brought on drivers by proposed Central Texas toll roads.

Hrm, though I don't support "double-taxing" citizens, I don't understand the notion of taxing every driver on the road by raising gas prices. The reason why these citizens say they are up in arms is because they don't want to pay to drive to work everyday - but a measure like this would tax everyone, not just a small portion of society that drives along certain roads. It's a move in the wrong direction. But I guess that's why it's not going anywhere.

Road signs soon to commemorate W

Now that the House has killed appraisal caps and sent revenue caps back to committee, members will debate HB 137 on Monday, which would require that:

A "Welcome to Texas" sign erected by the department must include the following elements:
(1) a depiction of the state flag;
(2) the phrase "Drive Friendly--The Texas Way"; and
(3) the phrase "Welcome to Texas--Proud to be the Home of President George W. Bush,"

which would change all 66 welcome signs in Texas.

I wish I could propose an amendment to say: "Proud to now be the Home of Connecticut-native [President] George W. Bush," or "Proud to be the Vacation Home of President George W. Bush."

Why do our lawmakers have such an infatuation with changing our road signs to honor partisan politicians?

Wednesday, April 13, 2005

House to debate HB 1006

Today, the House of Representatives is set to debate the revenue caps set out by HB 1006.

Earlier today, the Dallas Morning News reported on how some have labeled the revenue caps "a bit hypocritical" since local governments must meet certain unfunded state mandates without the ability to raise taxes. There have been warnings "that if the bill passes, fees will go up for libraries, parks and swimming pools, and taxing entities will issue more bonds to pay for expenses."

Also, cities and counties have praised the demise of appraisal cap bill.

On an unrelated note, Rep. Ray Allen (R-Grand Prairie) presented and passed House Resolution 948, recognizing Texas counties "for their countless contributions to the betterment of the Lone Star State" on County Government Day - today, April 13, 2005. The resolution also recognized members of the Texas Association of Counties, who had Dr. Ray Perryman actively lobby against [PDF] HJR 35 and its enabling legislation, HB 784 - which has been postponed in light of yesterday's result. It's too bad that Allen didn't move to place all Rep's names on the resolution.

Tuesday, April 12, 2005

HJR 35 killed

Rep. Villarreal's (D-San Antonio) Amendment 1 to kill HJR 35 (see below for more info.) was passed, which tabled the bill. Rep. Bohac (R-Houston) motioned to re-commit the bill. Then, Rep. Hill (R-Richardson) killed the bill on a point of order.

So, the constitutional amendment is dead. I take it that HB 784 will die tomorrow, but it leaves HB 1006's future in question. We'll see tomorrow.

Favorite quotes on HJR 35 debate

As Rep. McReynolds (Dem.--against the bill) spoke passionately against HJR 35, the appraisal caps constitutional amendement, I was still recovering from the laughing. Here are my favorite quotes that I just heard watching HJR 35:

(Rep. Villareal has proposed Amendment 1 to kill the entire bill; many got up to the front and back mic's to speak on the bill)

Rep. Hill (Rep.--against the bill): "You’ve gotta kill the snake when you have the hoe in your hand." (seconded by Casteel a few times)

Rep. Leibowitz (Dem.--for the bill): "Roar like a lion."
"Break yoke of slavery."
"We all have a different recipe for the sausage."

Monday, April 11, 2005

Local control over taxes would dwindle under appraisal and tax cap plans

Alternate title: "More regressive taxes on the way"

HJR 35 to be heard tomorrow on House floor;
HB 784, 1006 to be heard Wednesday

HJR 35 and HB 784, both filed by Dwayne Bohac (R-Houston), would implement new appraisal caps at 5 percent, which is lower than the current 10 percent cap set in 1997. The current cap, which applies only to residential homes, has already "cost local governments millions, and that the cap protects properties that tend to increase fastest in value," according to the San Antonio Express-News.

Appraisal caps seek to place a limit on the taxes paid by homeowners. While the proponents of appraisal caps claim that these measures would provide a great relief to homeowners everywhere, critics point to who would benefit the most - as you may have guessed, the numbers suggest that the richest Texans would receive the greatest windfall: those with property whose value increases the most are those who would benefit the most. Conversely, this means that the lower the price of the home, the less of a tax break that homeowner would receive. According to a CPPP Policy Page [PDF], "More than half of the benefit of the current 10 percent cap goes to families with incomes over $97,000 a year ... This tendency is so strong that the one-tenth of Texas families with incomes over $136,000 reap more than one-third of the benefit of the current cap."

Perry's optimism

HB 784 proposes lowering the appraisal cap to 5 percent, a move that Governor Rick Perry proposed during his "State of the State" address. Both Perry and Bohac have called the rising value of homes an "appraisal creep."

Despite the attempts by certain GOP members to drum up support for appraisal caps, it is possible that Republicans can't get 100 votes for HB 784 and its required constitutional amendment, HJR 35. If those two bills fail to pass, then HB 1006 - by Rep. Carl Isett (R-Lubbock) - would step in as Plan B. Instead of appraisal caps (that require a constitutional amendement), Isett's bill would force an automatic rollback election if overall tax revenue that a municipality raises exceeds 3 percent (this does not require a constitutional amendment).

NOTE: HB 1006 was once an amendment attached to HB 3 but was later pulled.

Consequences for municipalities

By restricting the amount of money that local governments may collect, HB 784 and HB 1006 would therefore restrict the amount of money that the local government may spend - consequently boosting the role of state government by determining what are currently decisions by local governments.

Fort Worth Mayor Mike Moncrief decried both appraisal and tax revenue caps, stating that "local officials know best what is needed to provide for their communities." He added, "If the state wants to provide police and fire protection and infrastructure for our cities, then fine, I'll get out of the business and go lower my golf handicap. This jerks the rug out from under local government and takes away our ability to do our job."

Municipal services include not only police and fire protection but also street maintenance and trash services.

Consequences for real estate

Regarding only HB 784 and HJR 35, the CPPP Policy Page on appraisal caps includes one aspect of appraisal caps not widely discussed: the negative impacts on the real estate market. It uses an example that they dub "Welcome, Stranger:" under a scenario where two neighbors pay the same in property taxes, when one sells their home, the hidden costs of the appraisal cap would be transferred on to the home buyer. The newcomer ("the stranger") would pay the taxes determined by the full market value of the home, whereas the neighbor who did not move would pay only the fraction taxes, as determined by the appraisal cap.

The policy page continues to say that local governments could therefore opt to lure in businesses, whose sales taxes (expanded under HB 3) could bring in additional revenues. Sales taxes would not be negatively - or positively, for that matter - by appraisal caps outlined in HB 784 and HJR 35.

The Texas Association of Realtors testified against Bohac's two proposals.

Consequences for businesses

Dr. Ray Perryman contends the opposite of CPPP's predictions for businesses: that new businesses would be negatively impacted by appraisal caps. His report [PDF] states that:

Appraisal caps penalize business startups. In an appreciating market, valuation change limitations benefit existing property owners at the expense of new buyers. For example, a business owner who had owned a location for many years might be paying taxes far below a competitor who recently purchased. This reduces the capacity of new owners to compete effectively, with corresponding detrimental effects on consumers.

Not to mention that the Texas Association of Business opposes these plans, the pro-property tax relief Dr. Perryman has been actively lobbying for the Texas Municipal League, Texas Association of Counties, and Texas Conference of Urban Counties against these proposed caps.

Personally, I see these proposals as boons only to current businesses and the richest citizens, the latter of which comprises a small minority of Texans. In light of the other tax bills proposed this session, this is bad, unsustainable public policy that continues mislead Texans away from true progress.