Government

The total Texas tax bill in 2005 was 65.2 billion dollars. Governor Perry will call a special session of the legislature beginning on Monday, April 17, at 2 p.m. to meet the Texas Supreme Court's June 1 deadline for tax reform. Chart credits - Texas Tax Reform Commission with data from the Texas Comptroller's Office - Nov. 2005.

Part 12a of Texas tax reform - Gov. Perry signs taxpayer protection bill

House Bill 2 ensures longevity of $15.7 billion property tax cut; additional legislation protects against local tax increases, appraisal creep

May 24, 2006

WAXAHACHIE–Gov. Rick Perry yesterday signed into law House Bill 2, legislation that dedicates future revenue increases to sustain the historic $15.7 billion property tax cut passed by the legislature and provide lasting relief for years to come.

“I am proud today to sign legislation that protects Texans tax cuts for years to come, House Bill 2,” Perry said. “For too long, Texans have paid some of the highest property taxes in America, in spite of significant tax cuts authorized by the legislature in recent years. But that’s about to change. This time Texans will get both tax rate relief and tax rate reform.”

Perry thanked state Rep. Jim Pitts of Waxahachie who authored the legislation and participated in the bill signing, for shepherding the bill through the Texas House. State Senator Tommy Williams of The Woodlands, who sponsored the bill in the Senate, also participated in the bill signing.

“For as long as state leaders have been working on this challenge, we have said that our goal was to give Texans greater tax fairness, not a greater tax burden, and with House Bill 2, that promise is kept,” Perry said. “Our school finance plan contains historic taxpayer protections, including measures that give voters greater authority to stop local tax increases and the most significant protection against appraisal creep ever adopted in Texas.”

New taxpayer protections included in school finance legislation:

• Every new dollar generated by the reformed business tax, the increase in the cigarette tax and new anti-fraud measures related to the sale of used vehicles will flow directly to sustained property tax relief. (HB 2)

• After the school property tax rate is lowered to one dollar, two-thirds of the dedicated revenue will go to lowering property tax rates even further, and one-third will go to schools. (HB 2)

• School districts can raise the tax rate only 4 cents one time. Beyond that, if local leaders want more money from taxpayers, they have to get voter approval. Under current law, local school boards can raise tax rates by 6 cents every year without giving voters any say at the ballot box. (HB 1)

• If appraisal creep yields more revenue than voters have authorized, school districts must automatically seek voter approval to keep it. This provision will not lower the cap on appraisal increases – something Perry strongly supports – but it caps the amount of money school districts can receive from higher appraisals without a vote of the people. (HB 1)

“This is a tremendous victory for taxpayers, who can use the ballot box to keep local taxes low. Taxpayers will be able to decide for themselves whether schools need additional dollars, because our plan also gives Texans greater transparency in school budgeting. Texans can verify whether their dollars are being spent wisely and for their intended purpose and they can demand change if they don’t like what they see.” Perry said.

In addition to strong taxpayer protections, school finance legislation passed by the legislature will:

• Provide the largest property tax cut in Texas history and lowers Texans’ overall tax burden by some $7 billion.

• Reward every Texas teacher with a $2,000 pay increase and provides the largest teacher merit pay program in the nation.

• Invest millions of new dollars into dropout prevention and college readiness efforts.

• Guarantee a historic level of funding equity, and significantly reduces the impact of Robin Hood.

• Reform the franchise tax to close loopholes, reward employers for creating jobs and investing in employee benefits, and mandating that businesses that hire illegal immigrants will pay the price with higher taxes.

“Because of these new taxpayer protections and the sustained tax relief provided by House Bill 2, Texans can look forward to a stronger economy, more dollars wisely spent on education, and an end to sky-high property taxes that threaten the dream of homeownership,” Perry said.

Perry - Part 10a of Texas tax reform - School finance reform passed article

Perry - Part 10b of Texas tax reform - More information about passage of comprehensive school finance reform article

Part 11 of Texas tax reform - Perry signs landmark business tax reform legislation article

Perry - Part 12b of Texas tax reform - Taxpayer Protections

Perry - Texas Tax Reform Commission report - March 2006 pdf - size - 635 kb