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Saturday, April 26, 1997

Property Taxes: House debates plan

By JUAN B. ELIZONDO Jr. Associated Press Writer

AUSTIN (AP) - An effort to save utility customers from a tax hit failed Friday as the Texas House attempted to wrap up its debate on a plan to overhaul the state tax system.

The House is debating a proposal to lower local school property taxes by about 50 percent by raising and expanding some state taxes. The overall effect would be a 2 percent tax cut for most Texans, though wealthier residents would save more and middle-class Texans would save less.

A handful of liberal and moderate Democrats on Friday tried to get fellow House members to reconsider an amendment to the plan that would shift a heavy tax burden from some Texas businesses to utility companies - a shift many believe would land squarely on utility consumers.

Part of the plan had been to tax dividend and interest income generated out of state by Texas companies. That would have brought in about $248 million.

But many lawmakers said the tax would raise much more money and would hurt many Texas companies. They forced a change eliminating that tax proposal and increasing a tax on utility companies that could be shifted to consumers with permission from the Texas Public Utility Commission.

Liberal and moderate Democrats wanted to reconsider that shift.

"I'm just asking if we can talk some more," said Rep. Steve Wolens, D-Dallas.

The effort failed.

Rep. Mark Stiles, D-Beaumont, said the tax on businesses would not have been fair, adding that the current system makes Texas more attractive to companies.

"It creates jobs," he said.

The House debate was expected to last until late Friday. Many amendments, including a deal to ensure all renters get a share of the property tax cuts, remained undecided.

The plan currently gives renters on property with four or more rental units a share of the tax cuts. It would force landlords of those properties to share their tax savings with their tenants.

Rep. Kevin Bailey, D-Houston, said that is not enough and would leave out millions of renters in single-family homes, duplexes and triplexes.

He and other lawmakers worked up a deal to give all renters a credit toward their rent for three years. The credit would equal the difference between taxing the rental property as business property and residential property. Bailey said it would be about $177 per year for the average renter.

The deal has been agreed on by some members of the committee that wrote the plan.

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The tax bill is HB4. An accompanying constitutional amendment is HJR4.Send a Letter to the Editor about This Story | Start or Join A Discussion about This Story
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