Abbott, Patrick, Bonnen endorse sales tax increase in effort to lower property taxes
AUSTIN, Texas (FOX 7 Austin) - A harmonic sound came out of the Capitol dome Wednesday afternoon as a mariachi band from Texas A&M University-Kingsville provided the music that filled the Rotunda.
About the same time the band was playing, a political attempt at harmony was made with a release of a press statement from the Governor, Lieutenant. Governor and House Speaker.
Gov. Greg Abbott, Lt. Gov. Dan Patrick and House Speaker Dennis Bonnen, at the beginning of the legislative session, created the symbolic Coalition to push through issues like education reform. Now they're endorsing a one-cent tax swap idea that’s described as a buy down.
The plan is to increase the state sales tax from 6.25% to 7.25%. Many local communities add on to the state rate, for example the combined sales tax rate in Austin is 8.25%. As part of the proposed tax hike, local communities would lower property tax rates in return for the extra revenue. Paying more at the store, for some, is worth the trade-off.
"If my property taxes go down, yes, because they keep going up, we protest every year,” said Austin resident Teresa Becerra
Others consider it a political shell game.
"It all depends, at the end, you are still paying the same thing, whether you pay at the store or you pay at the county it’s the same thing, I mean nobody gets anything for free,” said Bastrop resident Manuel Ortiz.
Several state lawmakers were brief about the plan on Tuesday. State Sen. Eddie Lucio, Jr. (D-Brownsville) says he was told it may even help those living in apartments by lowering rent.
"We are going to get together and kind of strip it down and take it feature by feature. take it apart and see how it impacts our communities,” said Lucio.
The tax swap idea is familiar for Lucio. He's pitched a soda tax in the past two sessions to raise more than a billion dollars. Each time Lucio's legislation fell flat, but he thinks a tax swap may have a chance.
"I think the sales tax is a wonderful vehicle if you used it the right way,” said Lucio.
A Buy Down/Tax Swap, according to state Rep. Matt Schaefer (R-Tyler), is part of the GOP platform.
"I like the concept,” said Schaefer.
If a plan ever gets to the house floor, Schaefer wants more than a promise.
"It has to be a dollar decrease in our property taxes, for every dollar increased in sales taxes, that’s the only way I'd support it,” said Schaefer. "And you have to have a firm lid on property taxes to keep them from growing and washing out that property tax relief."
According to the joint statement, Abbott, Patrick and Bonnen want state lawmakers to pass House Bill 2 or Senate Bill 2 first, both of which would require voter approval of property tax increases above 2.5 percent.
Both SB 2 and HB 2 currently sit in committee.