Top Texas GOP Leaders Back Adding Penny to Sales Tax to Lower Property Taxes

AUSTIN -- The three most powerful elected officeholders in Texas on Wednesday threw their collective support behind a plan to increase the state's sales tax by a penny in order to reduce property taxes. Next week, Rep. Dan Huberty, R-Humble, is expected to present his House Joint Resolution 3 to the Ways and Means committee -- a bill he said could generate $5 billion dollars a year in sales taxes by increasing sales taxes by 1 additional cent that could be applied to pushing down the tax rate for school districts.In a joint statement, Gov. Greg Abbott, Lt. Governor Dan Patrick and House Speaker Dennis Bonnen said: "Texans are fed up with skyrocketing property taxes. At the beginning of the legislative session, the Governor, Lt. Governor and Speaker laid out an agenda for property tax relief through the passage of Senate Bill 2 and House Bill 2 to limit property tax growth. In addition to that effort, today we are introducing a sales tax proposal to buy down property tax rates for all Texas homeowners and businesses, once Senate Bill 2 or House Bill 2 is agreed to and passed by both Chambers. If the one-cent increase in the sales tax passes, it will result in billions of dollars in revenue to help drive down property taxes in the short and long term."The state sales tax has been 6.25 percent since 1990, when the Legislature raised it from 6 percent. Local governments can levy up to 2 cents, so the average combined sales tax rate across Texas is about 8.25 percent. GOP leadership have vowed over the past year to deliver meaningful property tax relief for taxpayers. However, since the beginning of the Legislative session they have put their energy behind passing bills to limit local government property tax growth. The priority bills for GOP leadership have been House Bill 2 and Senate Bill 2, companion bills that cap local property tax revenue growth for local government at 2.5 percent a year. The caps could be exceeded if the jurisdictions held elections to get voter permission. The House is expected to vote on its version of the bill Thursday.  Continue reading...