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May 3, 2004     (512) 463-0300

The Senate Prepares for the Arrival of House Public School Finance Legislation

The House Select Committee on Public School Finance approved a finance reform bill Saturday by a vote of 21-7, sending a comprehensive plan for education funding to the floor of the House of Representatives. The bill as drafted will address Governor Perry's call to reduce reliance on property taxes for education finance by reducing state property taxes to $1.05 per $100 valuation, a forty-five cent decrease from current taxes. The bill would also implement a payroll tax, charging companies $500 per employee, or 1.25 percent of annual payroll, whichever is lower. The bill would raise the state sales tax from 6.25 to 6.75 percent, increase the cigarette tax to $1.41 per pack, and allow gambling terminals at seven dog and horse tracks in the state.

The House's Legislation also creates an incentive program that rewards schools for increasing test scores and reducing drop-out rates. Under the bill, high-school seniors would have to pass a new exit exam in order to receive a diploma. The House is likely to take up the legislation some time this week. If the bill is passed, it will be sent to the Senate for approval.

Lt. Governor David Dewhurst has made is clear that the Senate will act quickly on whatever school funding measure comes out of the House. At today's press conference, he said that he expected the bill to arrive late Thursday and that the Senate would meet as a Committee of the Whole on Friday. He expects a Senate version of the bill to be passed out that afternoon. A conference committee could then take up the measure as early as the weekend.

Responding to reports of a threatened gubernatorial veto of any new tax on business, he said it was essential that the property tax on business be reduced, saying " it is the one major item that CEO after CEO tells me is a stumbling block to creating more new jobs here in Texas...Anything we pass out of the Senate will create more jobs here in Texas , it's going to create more disposable income, it's going to create more investment by out Texas companies. "

The Senate met briefly today and adjourned until Thursday May 6th at 10 a.m.

Session video and all other webcast recordings can be accessed from the Senate website's audio and video archive pages.

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