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May 13, 2005     (512) 463-0300
EDUCATION FINANCE REFORM HEADS TO CONFERENCE COMMITTEE

Following hours of debate this week, the Senate approved both its plan to reform the state's public school finance system and its plan to lower local property taxes. These issue has been the main focus of the Legislature this session, and passage of these bills will put the issue in the hands of a conference committee composed of members of both houses. While there are still significant differences between the House and Senate versions of the bills, amendments added to the tax portion of the plan moves the Senate closer to the House's position.

Early Wednesday morning, the Senate passed the Committee Substitute to House Bill 3, which would lower property taxes and expand the business franchise tax. The first amendment added to the bill by author Senator Steve Ogden stripped the provision creating a state property tax and replaced it with one that maintains local districts' authority over property tax collection. Lt. Governor David Dewhurst said the decision to eliminate the state property taxes alleviates concerns from some Senators, while leaving the Senate in a good position to negotiate as the bill goes to conference committee. "A majority of the Senate still supports a statewide property tax, but we see, at the end of the day, we want to move the ball forward, ...work with the Senators and come to a consensus that permits us to negotiate and get us closer, we think, to where the House wants to end up, yet protects all of our basic principles," said Dewhurst.

The second amendment added by Senator Kim Brimer of Fort Worth made major changes to the franchise tax that was part of the bill passed out of committee. Under the version passed, a business would have to pay either an adjusted payroll tax, set at 1.75 percent of yearly payroll capped at $1,500 per employee, or an earned surplus tax at 2.5 percent of yearly net receipts. The business would pay whichever of the two taxes is lower, provided that both taxes are more than 0.25 percent of yearly gross receipts. If both the earned surplus and the payroll tax fall below this level, a business would pay 0.25 percent of gross receipts.

The bill would also increase the sales tax on alcohol and non-cigarette tobacco by 25 percent, and increases the tax on cigarettes by 75 cents a pack. The bill as amended would create a new sales tax holiday for one weekend in December, during which sales taxes would be waived on purchases of clothes or shoes.

As this bill moves to conference with the House, where the two chambers will try to resolve any outstanding differences between the two versions of education finance reform, Ogden says the conferees are dealing with a plan that is already adequate for the needs of Texas. "The way I see it now, going into conference with the House, is that we're going to fine tune a credible, competent plan, and that plan...balances and it will sustain us for a long time," said Ogden. He added that the Senate plan is revenue neutral over five years, meaning that the overall tax burden on Texans will not increase. a

The Senate approved the education reform component of its plan, CSHB 2, by Plano Senator Florence Shapiro, late Wednesday night. This bill would cap local property taxes at $1.15 per $100 valuation if the bill becomes law on September 1, 2005, and would lower the cap by another nickel in 2006. It would also increase funding to bilingual education, technology, and textbooks, as well as give teachers a pay raise of about $3,500 over two years, with the potential for more money through performance-based incentives. CSHB 2 makes post-secondary education the goal for every student in the state, and aligns curriculum with that aim. The school calendar would also be changed if CSHB 2 is signed into law, permitting public schools to start the year no earlier than the first Tuesday after Labor Day, nor end after June 7th.

Shapiro said the Senate is ready to begin negotiations with the House and come up with a school finance reform plan that the Legislature can send to the Governor's desk. "I think we've got a lot of philosophical ideas that are exactly the same, but we may be going at them from a little different direction," she said. "We're very anxious to get things moving forward, and I feel very confident that we'll be able to work things through."

The Senate passed other important bills this week, among them two measures that attempt to combat the production and sale of methamphetamines in Texas. Senate Bill 107, by Senator Craig Estes of Wichita Falls, places restrictions on the purchase of psuedoephedrine, the main ingredient in many over-the-counter cough and allergy medications, as well as the chief component in the manufacture of methamphetamines. The manufacturing process uses several volatile chemicals which have been known to explode, causing danger not only to the manufacturer but also those who live in and around the area. Citing this danger, as well as the social and political costs of methamphetamine abuse, Estes says Texas must do something immediately.

SB 107 would require that pills containing pseudoephedrine be kept behind a pharmacy counter, or locked in a case within 30 feet of a pharmacist. It would limit purchases of medications containing pseudoephedrine to two packages or six grams of the drug. Pharmacies would also have to keep a record of who purchased these kinds of drugs, and how much, and retain those records for two years.

The second bill, SB 112, by San Antonio Senator Leticia Van de Putte, gives Child Protective Services the power to remove a child from a home where methamphetamines are being manufactured, and makes paraphernalia used to produce the drugs illegal. It also doubles the current fines for methamphetamine production.

Thursday, the Senate State Affairs Committee passed a measure that would require minors to have parental approval before they can get an abortion. SB 1150, by Arlington Senator Chris Harris, would require any minor 17 years old or younger to notify their parents before they can terminate a pregnancy, unless there are certain extenuating circumstances. A judge may grant that a minor can get an abortion without parental notification if it is determined that notification could lead to abuse, is not in the best interest of the minor, or if the minor is deemed to be mature enough to make the decision on her own. All of these proceedings are confidential and not subject to open records acts.

The Senate will reconvene Monday, May 16, at 11 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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