Text of Gov. Perry's Remarks Announcing School Finance Plan
(NOTE: Gov. Perry frequently deviates from prepared text.)
Good afternoon. Three days ago I announced that I was calling legislators into special session to address education reform and property tax relief.
Today, I am going one step further, not only calling legislators back to Austin to address this challenge but also providing them a plan to get the job done.
The plan I offer today represents the middle ground between the House and Senate, utilizes good ideas from members of both parties, and most importantly it sides with property taxpayers, teachers and schoolchildren.
My plan offers $7 billion in property tax relief, puts $5 billion in new money into our schools, provides a $1,500 teacher pay raise and includes significant education reforms.
My plan is both reasonable and significant and it addresses the issues that this legislature left unfinished.
And it is a net tax cut for the people of Texas.
It also invests in education technology and textbooks, so that books sitting in warehouses today end up in classrooms this fall.
It provides real education reform, such as strong provisions to shut down chronically failing schools while helping teachers and schools that succeed with economically disadvantaged students.
It provides stronger accountability measures, so more money will go directly to the classroom and more taxpayers will know exactly what gets spent in the classroom.
And it limits recapture with a 45 percent cap as long as funding is at least 92 percent equitable.
These education reforms are many of the reforms that were contained in House Bill 2 and reflect the vision of House Bill 4, which would incorporate technology in new ways to make learning more fun and lessons easier to grasp for our many technology-proficient students.
This plan is a sweeping vision for our state that will improve education by increasing the state share of education funding while alleviating the tax burden on local property taxpayers.
Let me discuss the financing side of the equation in greater detail.
The approach I offer legislators involves savings I carved out of the budget with my line-item veto authority and additional revenue generated from the closing of franchise tax loopholes.
It imposes no new business tax to replace our franchise tax avoiding the uncertainty and headache a wholly new tax could cause in the job sector.
It increases the sales tax rate by seven-tenths of a percent, expands that tax to elective cosmetic surgery as well as car maintenance and repairs, removes an exemption for computer repairs and programming and raises the tax on cigarettes by a dollar a pack.
It also addresses fraud in auto sales, doubles occupation fees and repeals the timely filer's discount.
In all, these measures generate enough revenue to finance a $7 billion property tax cut that will reduce school property taxes by 20 percent in 2006 and 23 percent in 2007 and it represents a $300 million net tax cut.
Taken as a whole, the consumer-to-business tax ratio would remain virtually unchanged in part because I propose to increase the homestead exemption by $7,500 starting in 2007.
This element of my plan helps homeowners on the lower end of the economic scale by providing greater relief than they would feel from a straight rate cut.
Other elements include authorizing local enrichment at two cents a year not to exceed twelve cents over time if voters approve.
And I firmly believe we must incorporate stronger taxpayer protections: specifically a lower threshold for rollback elections than envisioned in current law and triggered by fewer signatures so voters can have greater say when their local taxes rise too high too fast.
If lawmakers last session thought fewer signatures was good enough for wet-dry elections then I say it's good enough for Texans trying to stop skyrocketing property tax increases.
Lawmakers have heard the angry voice of everyday Texans for three weeks.
I believe now, more than ever, they are poised to act.
They want to resolve this great challenge, and the proposal I offer allows them to do that.
It provides record funding for schools and record property tax relief for homeowners and employers.
Teacher salaries will rise and classroom reforms will be better funded.
It is a common ground approach to this issue, utilizing elements of various other proposals and melding them into one, coherent plan that represents a tremendous victory for taxpayers and our children.
If someone wants to propose something else, I welcome their detailed plan.
But if folks wants to just study this issue and kick the tires some more, they can get out of the way while the rest of us act.
I haven't the inclination nor the patience to study this issue any longer
and neither do everyday Texans drowning in rising property tax bills.
In my humble opinion, this plan solves school finance in the state house rather than the court house.
And those who will argue it is not a permanent solution usually argue that only a tax hike is.
But rather than raising taxes, I propose we cut taxes while protecting working families' jobs.
Rather than allowing textbooks to sit on loading docks, I propose funding those books and shipping them to schools all across Texas in time for the fall.
Rather than doing things the same old way, I propose new incentives to reward teaching excellence and reduce administrative costs.
There's the way we did it before: no property tax relief, under-funded teacher pay raises, and no real reforms.
And then there's the way I offer: historic property tax relief, funded pay raises for teachers, funded reforms in the classroom and new technology as well as new textbooks.
Our mission is crystal clear: the people of Texas expect action.
They say pick a plan and pass it.
To my friends in the legislature I say, "Here's the plan. Pass it."
Today the clock starts ticking.
Teachers are watching carefully; so are taxpayers and parents of schoolchildren.
Half-measures won't cut it.
And unlike horseshoes, close doesn't count.
We have to get this right.
This special session, and the plan I offer today, give lawmakers the opportunity to succeed on behalf of the people of Texas.
I am optimistic they will, and I will do everything in my power to assure such an outcome. Thank you.