NCPA - National Center for Policy Analysis

A BAD IDEA TIMES 5¢

December 21, 2007

Despite Texas House committee chairman Phil King's proposal to the contrary, a sales tax should not replace the property tax as the primary means to fund our public schools, says the Dallas Morning News.

King's tax swap misses the boat on several levels, says the News.  For example:

  • The sales tax would have to go up about five pennies to make up the $15 billion or so in property taxes that now fund schools.
  • Either that, or sales taxes would have to be expanded to cover many more goods (today, the state's share of the sales tax is about 6.25 cents per $1 spent on a limited range of goods and services).
  • In addition, Texas already has a bad reputation for caring for poor people; King's option wouldn't do anything to help.

If that's the case, Texas businesses might as well fold shop or call the moving company.  A high sales tax like that or a broader one would place Texas companies at a serious disadvantage to competitors in other states.  (And businesses already pay most of our state's sales taxes.)

Frankly, we have other and better ways to finance our campuses, says the News.  For one thing, we could increase the rate of the new school business tax if schools need new revenues (and can prove they have trimmed their budgets).  In fact, legislators must watch the revenues the business tax generates; it may be lower than needed next year.

Source: Editorial, "A Bad Idea Times 5¢: Sales tax spike is no answer to school funding," Dallas Morning News, December 16, 2007.

 

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