Governor Rick Perry signed into law today legislation that applies money from new school finance tax bills to future property tax reductions.
House Bill Two signed by Perry today in Waxahachie devotes new
money generated by those taxes to property tax cuts. It's part of a package of school funding tax bills approved by the Legislature in its recent 29-day special session. Also part of the package is a revamped business tax, an increased cigarette tax and a new way of taxing used car sales.
Perry praised the legislation as taxpayer protection that he
says "protects Texans' tax cuts for years to come."
Perry already signed into law the restructured business tax,
which closes corporate loopholes and changes the way businesses
calculate their taxes. He's is touring the state signing pieces of
the school finance package in the wake of the special session that
ended May 15th. Perry will visit Sherman on Thursday at 10am, appearing at Foxworth-Gailbraith on Taylor.
The state's under a Texas Supreme Court order to change its
public school funding system by June First.
Here's a detailed look at the reform bills:
-- SCHOOL REFORM: Replaces some school property taxes with
two-point-four (B) billion dollars in budget surplus money and
allots additional money for schools and teachers. The measure
includes a two-thousand-dollar pay raise for teachers, counselors,
librarians and school nurses; a required school start date the
fourth Monday in August beginning with the 2007-2008 school year; a
merit pay program giving school districts money to pay bonuses to
teachers for improving student academic performance; and a new high
school allotment that gives districts an extra 275 dollars for
every high school student.
-- PROPERTY TAX RELIEF: Dedicates all the revenue raised by the
other school finance tax bills to property tax relief.
-- BUSINESS TAX: Changes the state's business tax so that more
companies will have to pay it. The three-point-four (B)
billion-dollar tax expansion will be used to offset a reduction in
property taxes. The business tax would be levied on 1 percent of a
company's gross receipts, with deductions for either the cost of
goods or employee benefits such as salary and health care.
Retailers would pay at a rate of one-half of one percent.
-- USED VEHICLE TAX: Taxes the sale of used cars on a standard
value rather than trusting sellers to report the true sales price.
The measure is expected to generate an extra $70 million in the
next two years.
-- CIGARETTE TAX: Raises the 41-cent-per-pack cigarette tax by
one dollar per pack. The tax is expected to raise almost 700 (M)
million dollars in the first year.