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Sunday, April 27, 1997

House approves tax plan

By JUAN B. ELIZONDO Jr.

Associated Press Writer

AUSTIN (AP) - A plan to lower local school property taxes by raising and expanding a list of state taxes is headed to the Senate with just more than one month remaining in the legislative session.

The House early Saturday voted 94-49 in favor of the state tax system overhaul. It replaces billions in dollars in local school property taxes with new and higher state taxes and with additional state funding for schools. The plan lowers overall taxes for most Texans by about 2 percent.

"We are making real progress toward cutting Texans' taxes and making it easier for people to afford their homes," Gov. George W. Bush said after the House vote. "The process is working."

The final vote came after three days of marathon debate on numerous attempts to change the plan. In the end, the proposal would limit residential property taxes used to pay for school operation and maintenance to 75 cents per $100 in value. That would have been 70 cents per $100 except for changes made to the bill, including tax exemptions for some business income, water utilities and a break on auto repair services.

Business property would be taxed at $1.05 per $100 in value for school operation and maintenance and all property would continue to face up to 50 cents per $100 in value for school buildings and maintenance.

"It is a better way to go," said Rep. Paul Sadler, D-Henderson, chairman of the committee that wrote the plan. "It is an overall tax cut. It is a property tax cut."

The bill, along with a proposed constitutional amendment to allow many of the changes to take effect, now goes to the Senate, where more changes are expected.

Changes there would force negotiations between the Senate and the House to iron out differences. The debate and final votes on the plan would have to come before the session ends June 2. Voters then would have the final say on Aug. 9.

Bush started the debate more than a year ago, saying local school property taxes are rising at alarming rates. The governor earlier this year proposed a new business tax, a higher sales tax and more state funds for education as a way of lowering those property taxes.

The plan was rewritten by the House committee to expand the current business tax to all companies except sole proprietorships, add to the list of goods and services subject to the state sales tax and increase other taxes, like those on cigarettes.

The tax bill is HB4. The proposed 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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