Lt. Governor David Dewhurst updated the status of two of the most important bills before the Legislature this session, House Bills 2 and 3, which address education and property tax reform. HB 3, which is the House plan to lower property taxes, will be replaced by the Committee Substitute to HB 3 when it comes before the Senate Finance Committee later this week or early next week. CSHB 3, the Senate's property tax reform plan, will still reduce property taxes in the state by one-third, said Dewhurst. Different from the House plan, however, is how the Senate would raise money to pay for the loss of revenue caused by this tax cut. The House relied on an increase in sales tax to make up the difference, but the Senate plan will rely more on franchise tax reform.
Dewhurst said that he believes there is a good deal of support from the state's business community to broaden the franchise tax while at the same time lowering the rate. "The hundreds and hundreds of business people that I've talked to have said, at the end of the day, if the business part of the tax revenue neutrality measure has everybody in the same boat, that it's a level playing field with a low rate, and there are no loopholes, and the money is dedicated to education and improving the workforce in the state of Texas, then they're on board," said Dewhurst. The Senate plan would level the playing field by extending the franchise tax to service-based industries, which do not currently pay the tax. By broadening the tax base, said Dewhurst, the state will be able to significantly reduce the tax rate by at least half and perhaps even two-thirds.
House Bills 2 and 3 will be coming to the floor for a vote within the next few weeks, said Dewhurst. HB 2 will likely come to the floor late next week, with HB 3 hitting the floor about a week after that.
Also today, the Senate passed a measure today that would add some flexibility to many school districts' "zero-tolerance policies." These policies attempt to improve discipline at schools by imposing automatic suspension, expulsion, or placement at an alternative school for certain offenses, such as fighting and drug or alcohol violations. Sometimes there are extenuating circumstances that surround these offenses, but a compulsory zero-tolerance policy gives school administrators no leeway in determining punishment. SB 126 would provide that districts do not have to determine a minimum term of punishment, such as expulsion, except for certain offenses. This will allow an administrator to impose less severe disciplinary action if it is determined that there are mitigating circumstances.
The Senate will reconvene Tuesday, April 19, at 11 a.m.