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Wednesday, April 30, 1997

Fiscal analysis troubling for House tax plan

By JUAN B. ELIZONDO Jr. Associated Press Writer

AUSTIN (AP) - A House plan overhauling the way Texas funds its schools would not be in the red as first reported by official fiscal analysts.

The Legislative Budget Board on Tuesday caused a stir in the Capitol after releasing a required report showing that if adopted, the House plan would cause a $2.6 billion deficit in 1999-2000.

The LBB late Tuesday amended its report showing that the plan would be short about $740 million in that two-year budget. That shortfall is expected. Lawmakers expect to use $1 billion in additional state funds to cover that deficit.

In the first two-year budget, starting Sept. 1, the plan would create a $107 million surplus if the additional $1 billion in state funds is counted.

"The bill was in balance when it left the House and still is," said Rep. Paul Sadler, D-Henderson, chairman of the committee that wrote the plan. "We were a little ahead."

The House plan, approved Saturday, would lower local school property taxes by $5 billion by reducing the amount of taxes collected for school operation and maintenance. It also would encourage cuts to the property tax used to pay off school debt.

To offset the cuts, the proposal would raise about $4 billion by expanding the state business tax, increasing the number of goods and services subject to the state sales tax and hiking some other taxes.

A separate proposal would dedicate $1.3 billion in additional state funds for education.

A Senate rewrite of the plan is expected to cut the proposal in in half. Senate hearings were expected to begin Wednesday but have been delayed.

"We want to do this, but we want to be fiscally responsible," Sen. Teel Bivins, R-Amarillo, head of the Senate Education Committee, said of the tax plan.

Bivins added that senators already are concerned that they face a tight deadline on the complicated plan. The legislative session ends on June 2.

"We've got virtually a month left, and we've got to do something right away," he said. "I want to try to work with members of the Senate ... and maybe try to get some votes or at least some indication of support before we launch into a public hearing and take something to the floor."

Gov. George W. Bush, who has backed the House plan, said he met with senators Tuesday.

"You can understand why there is some concern and some uncertainty. I reminded them of the goal of cutting property taxes so people feel it," he said. "All of us in this building have got to understand the time constraint they are under."

Differences between the Senate plan and the House plan would have to be worked out by negotiators and receive final approval from both chambers before heading to the governor.

The plan would go before voters in a special election on Aug. 9.

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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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