Tax swap advancing in Texas

Surprisingly, the front page headlines in San Antonio last week included a $6 billion school tax-swap deal (“latest news collected by TexasISD.com”:http://www.texasisd.com/cat_index_11.shtml ) that’s rapidly moving through the state legislature with the governor’s backing. The plan would cut school property taxes by a promised one-third by raising business income and cigarette taxes and using part of the state’s $8 billion surplus. (I don’t know how much of that surplus is recurring revenue, or how the state is doing so well in the first place.) Texas, like Illinois, has traditionally paid for schools mostly with local property taxes rather than statewide taxes, but unlike Illinois has no state personal income tax whatsoever.

Of course, the activist judges at the Texas Supreme Court provided an impetus and deadline (1 June) for reform with _Neeley, et al. v. West Orange-Cove Consolidated Independent School District, et al._, just as judges have instigated most statewide school funding reform efforts that shift away from property taxes. Yet if Texas can do it…

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