Houston Chronicle by Jeremy Wallace May 7, 2019
A plan to increase the state’ sales taxes to among the highest in the nation in order to cut property taxes is dead.
Just four days after Gov. Greg Abbott, Lt. Gov. Dan Patrick and House Speaker Dennis Bonnen expressed confidence they had the votes to do it, the Texas House gave up, postponing any debate on the measure until January 2021, the next time the Texas Legislature meets.
The House action comes a day after the Senate also rejected the tax swap, pulling the proposal from a school finance bill.
It was a dramatic reversal of fortune for the top three GOP leaders, who were aiming to make a big splash on property tax reforms after years of complaints of a lack of progress on the issue despite strong Republican majorities in the Texas Legislature. While Abbott and Patrick, particularly, have made property tax relief core parts of the campaigns for office, they have not been able to secure clear across-the-board victories to lower taxes. The tax swap was seen by some as the type of bold proposal that would result in truly lower bills, even if it meant the first sales tax increase since 1990.
Abbott and the other leaders had called for raising the state portion of the sales tax from 6.25 percent to 7.25 percent, which would have tied California for the highest sales tax.. Combined with local-option sales tax increases, the rate would be 9.25% in most of Texas. The revenue from that tax — approximately $5 billion a year — would have gone to reduce property taxes.
A state analysis of the plan may have been the key in killing it off. That analysis showed people making less than $100,000 faced tax increases under the proposed swap, while the wealthy and businesses would have reaped the most benefit.
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