Calling it a "victory for hardworking students and families", Lt. Governor David Dewhurst praised the Senate for passing a bill today that would review the state's de-regulation of college tuition and as it now stands, repeal it in 2008. In 2003, the Legislature passed a bill that allows boards of regents at public colleges to determine their own tuition rates. Since that time, the cost of public college education has risen dramatically, in some cases doubling in 24 months. Today's vote demonstrated that many legislators are not happy with those increases and re looking for some sort of change.
Senator Rodney Ellis of Houston proposed an amendment to Senate Bill 1228, by Senator Florence Shapiro. The amendment would call on the Legislative Oversight Committee to analyze the current system of tuition de-regulation, and make a report to the Legislature in the 80th Session. Then, unless the Legislature passes a measure to extend it, tuition would come back under state regulation as of September 1, 2008. The Senate approved the amendment and passed the bill. Shapiro said she is pleased with the change made to her bill. "There is a feeling among some senators, and I include myself, that we want some dialog on this, that we didn't really have debate on this last time," said Shapiro.
Senator Ellis opposed tuition de-regulation legislation in the 78th Session, and said he's been looking for a way to repeal that law this session. "With virtually everything we do with regard to higher education, we must ask ourselves: are we closing the gap or widening the gap," said Ellis. "I think it's an appropriate process to have comprehensive study, to have the debate. I think the timetable for the repeal is appropriate because it gives us enough time to decide if we want to keep de-reg in place."
Ellis added that before the 78th Session, Texas had one of the lowest college tuition costs in the nation, but with one of the lowest rates of high school graduates seeking higher education. The passage of de-regulation and subsequent increase in the cost of education only increased that disparity.
Also today, Lt. Governor David Dewhurst and Finance Committee Chair Steve Ogden expressed their frustration at some of the committee testimony surrounding the Senate's tax reform bill, the Committee Substitute to House Bill 3. "There are a lot of lobbyists around the capitol today, that are interested in special interests, in protecting loopholes," said Dewhurst. We're standing here because we're interested in protecting working class, hardworking families." He is referring to representatives of several companies testifying in the Finance Committee this morning against the expansion of the franchise tax proposed by CSHB 3.
The bill would expand the franchise tax to most businesses, excepting sole-proprietorships, while lowering the rate from 4.5 to 2.5 percent of yearly gross receipts. Dewhurst said that this change is necessary, not only to offset the loss of revenue from a potential property tax cut, but also to create a level playing field for all businesses. He added that the current franchise tax system increases the cost of business for about one in six companies, while excluding the rest.
Senator Ogden said that the new franchise tax system is broad-based, but modest, and would not put an unfair burden on businesses. He referred to a representative of one law firm that testified against CSHB 3, who admitted that the proposed changes would raise the firm's hourly rates from $400 to $406. "I submit to you that their customers would not even notice," said Ogden. Ogden added that the companies who are afraid that this tax will put an unfair burden on their companies are not being realistic. "It is frustrating to listen to what is being told in committee, because what they're saying is so far from what I perceive to be reality, its hard to keep my mouth shut."
The Finance Committee continued to hear public testimony this afternoon, with more testimony opposed to the franchise tax, as well as other proposed tax increases on alcohol, motor vehicles, and tobacco products. The new franchise tax is likely to stay in the bill, however, as it is the main funding source for the state's new public school finance system. Dewhurst believes that it is not much of a sacrifice to ask in order to help out Texas children. "What good Texan is going to have real heartburn about paying out of $650,000, six, or seven, or nine-thousand dollars, to improve the education of our youngsters, to improve our work force, to give every youngster the chance to go out and get a good job and have the ability to compete," said Dewhurst. "I don't think any good Texan would."