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April 24, 2006     (512) 463-0300

DEWHURST LOOKS AHEAD FOR SENATE ON TAX BILLS

The Texas House of Representatives today began the process of debating five measures that would lower local property taxes in Texas, broaden the business tax, and increase taxes on motor vehicle and cigarette sales. These measures closely resemble the plan proposed earlier in the year by the governor's Texas Tax Commission, headed by former comptroller John Sharp.

Lt. Governor David Dewhurst said today that he hopes all five bills come over as a package. "We are hoping that they send us over all five bills so that we can over time lower our local school property taxes by at least one third, down to a dollar, and create a level playing field with a broad-based, low-rate business tax, taking advantage of the surplus to reduce taxes somewhere in the neighborhood of one to two billion dollars."

Dewhurst said that for the Legislature to meet the set goals of lowering the property tax rate to $1.00 per $100 valuation, the Senate must receive all five bills as a package. House Bill 1 (HB 1) is aimed at using the surplus to buy down the current tax rate to $1.33. HB 3 creates a margin tax on gross receipts for businesses that make more than $300,000 annually. House Bills 4 and 5 would raise the cigarette tax by one-dollar per pack over the next three years and increase the sales tax on certain motor vehicle sales. HB 2 dedicates the revenue generated by these tax increases to pay for a potential property tax cut.

Dewhurst said today that while the five-bill package will provide a good platform to work from, the House must send the Senate all five bills if the Legislature is to make good on its promise to cut local property taxes. "Itís a good start," he said. "We're moving in the right direction assuming the House can send us all five bills as a package. Otherwise, I'm going to be concerned if we can achieve the goals that we want of lowering our school property taxes down to a dollar."

The Senate will reconvene Thursday, April 27, 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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