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McNeely: Sales-for-property tax swap fizzles out in Texas

The Big Three in Texas government gathered at the governor’s mansion Jan. 9, the second day of this year’s regular legislative session, touting their proposal to cut property taxes.

Gov. Greg Abbott and the presiding officers of the Legislature — Lt. Gov. Dan Patrick for the Senate and Speaker of the House Dennis Bonnen — put forth their idea to pay for the property tax cut by increasing the state sales tax by a penny on the dollar.

When the tax swap idea wasn’t getting the salutes the three Republican leaders hoped for, on May 3 they had another news conference reiterating their support.

But within days, the swap was declared dead — without ever taking a vote.

What happened? A required analysis of the impact of the swap indicated it would reward people higher on the economic food chain and punish those on the lower end.

Those more well-off were more likely to own property, and therefore benefit from the property tax cut. Those less well-off were more likely to be renters, who probably couldn’t count on their landlords to pass along the tax cut.

But those on the lower end also would spend a greater percentage of their net income on the sales tax. A 1-cent increase in the tax would raise the state’s current 6.25 pennies per dollar tax rate to 7.25 cents — an increase of 16 percent.

The total tax rate in most parts of Texas, when city and transportation district taxes of 2 cents on the dollar are added on, would bring the total rate to 9.25 cents per dollar — a competitor for highest in the nation.

The “tax/fee equity note” showed that Texans with incomes above $99,619 — approximately 40 percent — would pay lower cumulative taxes, while the 60 percent who make less than that would pay more.

The Republicans hold a 19-12 edge over the Democrats in the Senate, and 83-67 in the House. Democrats nearly universally opposed the tax swap because it increased a regressive tax.

But for at least some tax-leery Republicans, the swap had little attraction either because it, after all, required voting for a tax increase.

The analysis was performed by the Legislature’s budget-writing joint committee, the Legislative Budget Board.

One longtime legislative observer who took particular delight in seeing the tax swap fizzle was former Austin state Rep. Glen Maxey.

He is an ardent Democrat who retired from the House in 2003 after a dozen years, and has spent much of his time before and since organizing Democrats.

“I want to take a bow,” Maxey said May 8 on Twitter — the day after dirt was kicked onto the tax swap’s coffin.

“Yesterday, Republicans in the Lege folded on their ill-fated attempt to raise sales taxes in Texas by 16 percent. It was a terrible, horrible very bad bill.

“And the data that made them all take a pass,” Maxey wrote, “was in a little document called a tax incidence report, required to be placed on every tax bill coming before the Lege.

“When that report came out, they gagged on its effect on everyday Texans and they knew it wasn’t going to be good at the ballot box,” Maxey continued. “Guess who, 22 years ago, in a sleepy little amendment, required those ‘tax incidence reports’? Yep. Yours truly, Glen Maxey.

“I’ll take a bow 22 years later on my role in slaying the Republicans attempt to (assault) Texas yet again,” Maxey wrote. “Thank you.”

LGBTQ caucus gets a win

Legislation in the Texas House sought to override the decision by the San Antonio City Council to block the Chick-fil-A franchise from operating a restaurant in the city’s airport.

Council member Robert Trevino proposed the block because of the company’s “legacy of anti-LGBTQ behavior,” including support for groups opposing to same-sex marriage.

Rep. Matt Krause, R-Fort Worth, sponsored House Bill 3172, which he said would protect religious people and organizations from government attacks, and allow the Texas attorney general to sue on their behalf.

But up against a midnight deadline last Thursday, state Rep. Julie Johnson, D-Carrollton, one of five members of the newly formed LGBTQ Caucus, blocked the bill on a point of order.

House Speaker Dennis Bonnen upheld her contention that the bill analysis did not adequately describe changes made to the bill.

“Hopefully,” Johnson said after Bonnen’s ruling, “today is the day discrimination against LGBT Texans dies in the Texas House. This was a distraction, and I am thrilled that we were able to end it this way.”

A Senate version of the bill now is being fast-tracked.

— Dave McNeely, an Austin-based columnist covering Texas politics, appears Thursday.

Today's Bible verse

“Because you are his sons, God sent the Spirit of his Son into our hearts, the Spirit who calls out, ‘Abba, Father.’ ”

Galatians 4:6

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