AUSTIN (Nexstar) — Texas lawmakers are expected to vote on property tax relief this week. One key question is how to pay for those plans.
The debate comes days after Governor Greg Abbott, Lieutentant Governor Dan Patrick, and House Speaker Dennis Bonnen announced they’re backing a plan to raise sales taxes to help pay for property tax relief.
Their plan would raise the statewide sales tax rate from 6.25% to 7.25%. Lawmakers would first have to agree to limit future property tax hikes. Then Texas voters would need to approve changing the state constitution to raise the tax.
The plan would create billions of dollars in new revenue. But it’s making some Texans worry. For insight into the proposals before lawmakers,State of Texas host Josh Hinkle spoke with Dale Craymer, the president of the Texas Taxpayers and Research Association.
HINKLE: You’ve come out in support of the proposal to raise the sales tax and put the proceeds toward property tax relief. But why?
CRAYMER: Well, there’s no question that folks are struggling with their property tax bills. This provides consumers with a choice of am I willing to pay higher sales taxes in return for lower property taxes or not.
HINKLE: How do you respond to people who say this is a plan that helps the rich and hurts poor and middle-income people?
CRAYMER: Well, I think the individual impact is basically going to depend on your own family situation. Do you own property? Do you not own property? Do you buy a lot of things? Do you not buy a lot of things? I think what we want is to make sure that folks understand how the proposal will affect them individually, so that if this is a constitutional amendment and they do go to the polls to vote on it that they at least vote with as much information at hand as they can have.
HINKLE: You just mentioned the constitutional amendment. This will be up to voters in the end. Is this going to be a tough sell?
CRAYMER: You know, that’s a good question. I think clearly at this point the leadership is all out in support of this. We’ll find how strong legislative support is for this in the next couple of weeks. But right now, I would say this proposal probably has some momentum.
HINKLE: What makes you think this proposal will get past voters? What do you think it will take to convince them?
CRAYMER: I think a couple of things. Voters are going to have to believe that this is actually going to reduce their property taxes. In the past, they’ve been promised property tax relief that at best has been illusory to them. Back in 2006, we cut school property taxes by a third, but there was no constraint on cities and counties. So they raised their taxes and as a result, property taxes went up anyway. So, I think this time we’re looking at two parts of the puzzle. One is constraint, so that whatever relief is delivered is long-lasting. And then the second part of that is the relief, which is going to involve higher sales taxes.
HINKLE: Of course, the House and the Senate have to agree on property tax relief. The House delayed their vote. What are you hoping to see from lawmakers at this point?
CRAYMER: Well, I think as a friend of mine put it yesterday, this is basically a bump in the road, not a road block. We will see property tax legislation pass this session or we’ll be back this summer to work on it. Governor’s made that very clear. So I think we will see some type of major legislation passed that constrains future tax increases. The question’s going to come down to what is the number going to be? The Governor’s proposed two and a half percent. The House and Senate have previously passed four and six percent. As we looked at some of the pre-filed amendments for that bill, mostly the focus is on the question of what is that number going to be and how is it going to be calculated.