PRINT THIS PAGE | E-MAIL THIS PAGE

Thursday, March 27, 1997

Lawmaker would abolish property tax, create 11-cent sales tax

By JUAN B. ELIZONDO Jr.

Associated Press Writer

AUSTIN (AP) - A state lawmaker wants to abolish all property taxes.

Rep. Talmadge Hefflen, R-Houston, on Wednesday proposed a constitutional amendment to abolish property taxes and impose a 9-cent state sales tax to replace the lost money. That would be 2.75 percentage points higher than the current 6.25 percent sales tax.

The total sales tax in Texas would be 11 cents under Hefflen's plan. Local governments, school districts and other taxing entities would split the other 2 cents per $1.

State lawmakers are trying to find a way to lower local school property taxes by increasing the state's share of education funding.

A House committee is considering a plan to eliminate many exemptions to the current sales tax, expand the current business tax and raise some other taxes to pay for a cut to local school taxes.

But Hefflen said if local property taxes aren't abolished, lawmakers in the future will force them back up. His plan would subject nearly all goods and services - including food - to the higher sales tax. That would raise about $14 billion.

"I don't want to tamper with the sales tax without doing away with the property tax," Hefflen said.

He added that the House Select Committee on Revenue and Public Education Funding, which is weighing the school tax issue, will try to provide safeguards to keep local school taxes from rising again. But he said the committee will not be able to keep future lawmakers from using the local tax to raise more money when it becomes needed.

"If there's an easy way to do something, we'll do it," he said.

Gov. George W. Bush has proposed a half-cent increase to the sales tax, a new business tax and the use of $1 billion in additional state funds to pay for a cut to local school taxes.

Dick Lavine said Hefflen's plan, considered by the committee Wednesday, would be very harmful to poorer Texans.

"The sales tax is inherently regressive," Lavine said.

Hefflen countered that the property tax is more regressive. He said the sales tax has a "choice" component because consumers can choose what to buy.

Rep. Kim Brimer, R-Arlington, said that's not the case with food.

But Hefflen said people choose between prepared foods - which already are taxed - and unprepared foods. He also said savings from abolishing all property taxes would offset the higher sales tax for most people.

"That's an interesting idea," said Bush spokeswoman Karen Hughes. "People have said that they want to contribute through their local school taxes and this plan obviously wouldn't allow that. But the governor welcomes ideas as the process moves along."

Meanwhile, Ms. Hughes said neither the governor nor his top staff was aware of a memo from the Texas Film Commission to industry officials warning them of proposed tax changes.

The commission, an arm of the governor's office, earlier this month told industry officials to call and write lawmakers about their concerns.

Rep. Rob Junell, D-San Angelo, a member of the committee, called the memo a lobbying effort. It's illegal for state employees or agencies to fight for or against any legislation.

"The governor has indicated that this is inappropriate. He expects an apology to lawmakers," Ms. Hughes said. Send a Letter to the Editor about This Story | Start or Join A Discussion about This Story
Send the URL (Address) of This Story to A Friend: