“Competing views” indeed

Austin political pundit and TSCPA friend Harvey Kronberg examines what sound like conflicting statements made recently by the Governor and Lieutenant Governor on what issues the special legislative session will and won’t include. Thanks as always to Harvey for permission to reprint from his Quorum Report publication.

What role for school reform?

Call or no call, senators intend to address school reform in addition to helping fix the state’s unconstitutional school property tax, according to Lt. Gov. David Dewhurst.

In comments made to the press following his remarks to Tuesday’s inaugural luncheon of the Texas Association of Manufacturers, the presiding officer of the Senate said his body would send a school improvement package to the House. That could set the Legislature’s upper chamber on a collision course with Gov. Rick Perry.

Perry has consistently said he would initially limit the call for the April 17 special session to dealing with the November Supreme Court ruling. Justices concluded local school districts have lost meaningful funding discretion because of the current $1.50 per $100 valuation cap.

The governor, who addressed the TAM before Dewhurst, repeated his position on Tuesday. "But if the Speaker and Lieutenant Governor can bring me a school reform bill that both chambers agree on, I will gladly add it to the call once the tax issue is resolved," he said.

Dewhurst disagreed the two halves of school reform could be dealt with sequentially in a special session. "Once the lawsuit is solved, the wind goes out of the sail of a lot of the members of the Legislature. They want to go home."

He added that no matter how narrowly Perry tailors the call, each legislative chamber can send legislation to the other chamber.

Dewhurst said he is meeting with Perry this week and with Speaker Tom Craddick possibly as early as this week to persuade them of the need to address reform issues and the tax bill simultaneously. He also intends to travel the state to speak to various groups about his plans.

Both Perry and Dewhurst were critical of a temporary tax fix circulated by state Rep. Warren Chisum (R-Pampa) that would use $4.3 billion in surplus revenue to buy down school property taxes.

Passing comprehensive tax reform now would help the state in the long run, according to Perry. Restructuring the franchise tax would make the state’s tax structure fairer and more stable, he said.

"I say let’s not substitute speed for substance," Perry said. "And let’s not confuse doing the easy thing with doing the right thing. It may be more of a challenge to reach an agreement on comprehensive tax changes, but it is a challenge we should take head on because it is the right thing to do."

Dewhurst cautioned against relying too much on surplus spending because, he said, much of that money is already spoken for. Funding for onetime measures enacted in 2003 would eat up $1 billion and the state has about $2 billion in obligations for 2007, he said.

The Lieutenant Governor also argued that any tax swap that comes out of the House should be proportionately balanced between businesses and consumers. Businesses would see a roughly $3.4 billion benefit from a property tax rollback. With any new business tax, "in fairness, they should pay their fair share, too," he said.

Dewhurst’s remarks seemed to put him at odds with tax reform commission chairman John Sharp, who said in a recent interview that expanded consumption taxes shouldn’t be included in the upcoming tax bill.

Dewhurst promised that the Senate would consider the Sharp commission’s proposals, which are expected to include an alternative margins tax to replace the current franchise tax, an increased cigarette tax and the use of about $1 billion in surplus revenue.

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