3-29-06 - Governor Rick Perry today recommended a school-funding plan that would give Texas homeowners a property tax break. That break would be paid for by taxes on smoking and business.
The plan aims to raise almost $6 billion for the state's public school budget. The new money would offset losses from giving homeowners a 1/3-school property tax cut. Most of the proposed new tax money comes from a restructured business tax. That would generate an estimated $4 billion dollars.
The cigarette tax would increase by a dollar from $0.40 to $1.40 per pack. That would bring in about $800 million. The plan crafted by the Texas Tax Reform Commission also uses $1 billion from a state budget surplus of more than $4 billion.
The recommendation is a starting point for the Legislature when it convenes April 17th for a 30-day special session to rework school finance.