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    Rio Grande Guardian > Guest Column > Story
checkShapleigh: The Great Texas Tax Shift
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Last Updated: 26 January 2014
By Eliot Shapleigh
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EL PASO, January 26 - Over in North Carolina, radical Republican supermajorities just cut taxes on millionaires by $10,000 a year. To pay for tax cuts for the top five percent, Republicans hiked taxes for the bottom 95 percent. Whoa! Where did this idea come from?

Let’s go back to 2003 in Texas. That’s when Rick Perry launched the first Great Texas Tax Shift. Back then, millionaires paid inheritance taxes. If a person died with more than a million dollars, the state would get a percentage of what had to be paid to the federal government.

Quietly, Rick Perry killed the Texas inheritance tax. Ten years ago the inheritance tax, which only taxed millionaires, delivered over $300 million to the Texas treasury each year. Instead, Perry proposed tuition deregulation. Under this new idea, tuition would be deregulated and ‘float’ to the level that the market might bear. What really happened was that taxes once paid by dead millionaires shifted dollar for dollar to tuition hikes paid by live students.

Under tuition deregulation, unelected regents, many of whom are millionaires, now set the tuition rate for students. As a result of regents hiking tuition without fear of facing the voters, tuition and fees rose from 2003 to 2006 by 47 percent at UT-Austin, 49 percent at TAMU and 47 percent at UTEP. In 2006 alone, inheritance taxes on millionaires were down $272 million when compared to 2002, while statewide tuition on students has increased by $266 million.

Now, let’s fast forward to the Great Texas Tax Shift of 2005. That’s when Rick Perry shifted taxes again. Prior to session, Carole Strayhorn, the State Comptroller wrote Perry to tell him his tax plan was upside down by $23b. She called it the “largest hot check in Texas history”.

Perry had toured Texas to tout a school property tax cut. Perry proposed a new business tax, cigarette taxes and used car tax to pay for a 1/3 reduction in school property taxes. Exactly as the Comptroller had predicted, Perry’s plan did not add up. As a result, session after session, lawmakers start up to $10 billion short of money to pay for schools.

In the end, the Great Texas Tax Shift of 2005 cut taxes by $920 million for everyone making over $104,000 and hiked taxes by $10.8 million on everyone making less than $33,000. View the table at the top of the page to see how that looked.

What happens to your tax bill back home? What happens is that tax burdens once paid by state government are shifted to the local level. In El Paso at Ysleta ISD, after Perry cut the school tax and state budget cuts threatened to balloon class size, trustees passed a 14 cent increase in property taxes. Over the next few years 240 other districts around Texas did the same.

Over at the Texas Department of Transportation more and more projects are now paid out of TIRZ funds that take future City tax base money to retire present highway bonds. That money used to come from state gas tax revenue. At the end of January, take a look at your tax bill. Huge increases that you see on your bill at home come directly from the Great Texas Tax Shifts that Rick Perry engineered in Austin.

Perry's cuts in Austin mean more taxes or tuition in El Paso. Recently, the El Paso Times called tax hikes in El Paso ‘unsustainable.’ So draconian were Perry’s cuts to many colleges that Herb Taylor, the editor of the Galveston County Daily News said, “it’s a bit like ordering a big meal in a restaurant for a large group—and then leaving the table before the bill arrives.”

Senator Eliot Shapleigh, D-El Paso, served in the Texas Senate from 1997-2011. During his term, he was named U.S. Public Elected Official of the Year by the National Association of Social Workers, National Top 25 Doers, Dreamers and Drivers of Information Technology, National Legislator of the US by the American School Health Association and won the MALDEF Matt Garcia Public Service Award.

In Texas, Shapleigh was named the Texas Classroom Advocate of the Year by the Texas Classroom Teachers Association. Additionally, the Child Crisis Centers of Texas presented Senator Shapleigh with the Texas Advocate for Children Award, and the Texas Equity Center named Senator Shapleigh a "Champion For School Children." Shapleigh was also awarded the Education Leadership Award through the Texas Association of Mexican American Chambers of Commerce (TAMACC).

Write Eliot Shapleigh


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