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Thursday, May 29, 1997

House-Senate committee reaches property tax compromise

By JUAN B. ELIZONDO Jr. / Associated Press Writer

AUSTIN (AP) - Lawmakers who pined for hefty reductions to Texans' local school property taxes tentatively agreed to a meager $140 homestead property tax cut Wednesday.

A House-Senate committee informally approved the deal, a concession to larger plans scrapped last week when the panel could not reach a compromise.

The deal, scheduled for a final overnight touch-up, was expected to be signed by at least the required three House members and three Senate members on Thursday, eliminating the need for a final vote.

The plan also was expected to easily pass the full House and Senate before the legislative session's last day, Monday.

The conference committee earlier this month wrangled over differences between tax-cut plans passed by the House and Senate. Both offered far more than the total $1.04 billion cut expected from the $140 homestead compromise.

Gov. George W. Bush and key lawmakers announced last Saturday that the committee could not find a middle ground between the House and Senate plans and would settle on the $1 billion proposal.

The change increases homestead property tax exemptions from the state minimum of $5,000 to $15,000. That means a $100,000 home, which has been taxed on as much as $95,000 of its value, would be taxed on no more than $85,000 of its value.

Local school districts are allowed to offer higher tax exemptions. Even so, the total savings of $140 was estimated for all homeowners.

"Is it what both sides wanted," Sen. Ken Armbrister, D-Victoria, asked. "Absolutely not."

"We are at least granting (tax) relief of $1 billion without tax increases," he added. Armbrister was the lead senator on the conference committee.

The House plan would have cut local school property taxes by about $2.5 billion a year, raising close to $2 billion in state taxes to replace the money.

The Senate approved a plan lowering the school taxes by $1.25 billion a year, raising about $500,000 in state taxes to pay for it.

Both plans would have used the $1 billion in the final proposal - money left from the last two-year state budget - to make up the difference.

Senate members rejected the House plan, saying it raised too much in new and expanded state taxes. House members said the Senate plan did not offer Texans enough cuts.

Rep. Paul Sadler, D-Henderson, was chairman of the House-Senate committee. He said the compromise was the best the committee and lawmakers could come up with.

"It's not disappointing," he said of the compromise. "It's just part of what we do."

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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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