FRANCHISE TAX COMPROMISE BILL MOVES TO FULL SENATE

(AUSTIN) — The Senate Finance Committee passed a House bill Wednesday that would cut more than two-and-a-half billion dollars in franchise taxes over the next two years. HB 32, sponsored by Finance Chair Jane Nelson, is similar to Nelson's SB 7, which was a flat cut in the franchise tax rate. HB 32 would cut more than the Senate version, 25 percent compared to 15 percent. Like SB 7, the House bill would raise the threshold for the EZ tax rate, a lower rate that smaller businesses without deductions can file under, from $10 million to $20 million, and decreases that tax rate. "For our economy to continue to thrive, for businesses to grow, for jobs to be created we have to support our businesses," said Nelson. "This is a smart investment."

House and Senate negotiators have been wrangling over how to deliver nearly five billion dollars in tax relief next biennium. Though the chambers were divided on how to cut taxes for Texans, with the Senate preferring a property tax cut and the House pushing for a sales tax reduction, both chambers approved franchise tax cuts. Franchise tax cuts are a critical piece of state appropriations this session, as Governor Greg Abbott vowed to reject any budget that didn't include them. The tax has proven unpopular among lawmakers and the business community since its passage in 2005. Nelson said at Wednesday's hearing that she believes the ultimate aim is to repeal the tax entirely. "I think the majority of the Legislature shares that goal, we've just got to take it in increments," she told a witness testifying in favor of HB 32.

Also Wednesday, the Senate Education Committee took up a bill to reduce the burden of high-stakes accountability testing on public school students. HB 743, sponsored in the Senate by Amarillo Senator Kel Seliger, would place restrictions on the duration of state standardized assessment tests for third through eight graders. Tests would have to be designed so that 85 percent of students in the third through fifth grade can complete it within two hours. That limit would be increased to three hours for sixth through eighth graders. The bill would also require the Texas Education Agency to study standardized testing curriculum taught in schools and consider the scope and effectiveness of that curriculum.

Fifth grader Aurora Andress testified that teaching-to-the-test based curriculum has taken the fun out of learning. "Our class time went from a day full of fun active learning and experiments, to a day full of worksheet after worksheet after worksheet," she said. "Sometimes the teachers get so stressed out from the amount of pressure and work they have to cover, it makes us feel stressed and sad as well." Jaime Thibodeaux, who teachers third grade in Wimberley, said the math portion of the state tests that consist of 54 multi-step word problems, is too long, complicated and confusing for her young students. "It's not right. We're not teaching them to be good learners, we're not teaching them to be confident so they can be in the job market," she said. "What we're training them to do is to second guess every right answer that they have and they're learning to be defeated." She said she supports legislation to craft assessment exams that are of appropriate length and difficulty for her eight and nine-year-old students.

The Senate will reconvene Thursday, May 21 at 11 a.m.

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