Session Eyes Taxes, Redistricting, Tuition Education has recommended a raise from $100 to $150 for the nine-month academic year and the Governor’s advistory finance committee has come out for a hike to $200. Daniel has said he favors an unspecified increase if a program of “hardship scholarships” is established. An Associated Press poll of legislators, however, found feeling about 3-1 against the proposed increase, although one-third refused to take a position. The pressing question of increased teachers’ salaries, which was postponed in ’59, has drawn endorsements of a $600 yearly salary increase from the Governor, $800 from the Texas State Teach Reporter ers Association and the state AFLCIO, and $400 from the finance advisory commission. The Texas Education Agency has recommended higher pay without mentioning a specific figure. The Payroll Tax The advisory finance committee’s widely-reported payroll tax, which its backers say would raise $107 million in fiscal 1961 and $110 million in fiscal 1962, was designed to seek a middle way between a sales tax and an income tax. It would levy one percent on payroll earnings, with the first $1,000 exempted. Self-employed businessmen, lawers, doctors, farmers, and others would pay a levy of one-half percent after deducting cost of operations and would also get the $1,000 exemption. Half of the tax would be paid ‘by employers, half by employees. The advisory commission has argued that the tax would cost the average citizen and business in general less than a general sales tax or a graduated income tax. A payroll tax, the group contended, would cost a wage earner making $5,000 annually $20 a year, while a one percent income tax would cost him $21 with three dependents and $40.95 if he were single. The commission estimated that a one percent general sales AUSTIN Here are some observations made just after the May elections on the composition of the new legislature: United Press International said it will be the most liberal legislature in modern state history. Assocated Press said it will be “a legislature of moderates with maybe a shade toward liberal in political philosophy.” San Antonio Express said conservatives “cautiously” assessed their gains in the House at four or five seats. Dallas News said the legislature will be “younger and more diverse,” but most observers, including some lobbyists, believe it more liberal “largely because some well-known conservatives were defeated.” Texas Manufacturing Assn. in a special report to its members said: “It should be kept in mind that a man who voted somewhat liberal in one session might, due to changing conditions and issues, reflect a middle-of-the-road or Page 8 Jan. 6, 1961 THE TEXAS OBSERVER possibly conservative attitude in a subsequent session.” With this in mind, T.M.A. reported that, in comparison with a ’59 legislature that was 46 percent conservative and 45.33 liberal, the 61 legislature will be 51.33 percent conservative, 40 percent liberalwith an 8.67 percent in the “middle” the same for both sessions. The Observer, after a review of the platforms, campaigns, and political allegiances of the 181 legislators who will compose the 57th, reported that the Senate will be slightly less conservative and the House considerably more liberal on tax. and economic questions. “Conservatives, who held 81 seats in the 56th . . . will occupy 73 seats in the new session, a net lass of eight. These seats have been absorbed by the moderate-liberal coalition.” Liberals picked up five, moderates three, of these seats. “In the Senate, four incumbent conservatives will not return. They will be replaced by two liberals and two conservatives . . . Other than losses in Houston, liberal leadership in the House came through intact.” without taxing profitable corporations and wealthy individuals in accordance with their ability to pay. The majority of the commission,” he said, “recommended both taxes while at the same time rejecting Gov. Daniel’s earlier proposal to increase franchise taxes on the big multi-state corporations.” Schmidt also criticized the commission’s appropriations recommendations for not meeting “the pressing needs . . . for a better minimum foundation school program, adequate teachers’ salaries, higher old age assistance, better hospitals, higher education” and other problems. Some segments of Texas business will be more active and organized in advocating a general sales tax than in the last legislature. A group of prominent businessmen have set up a committee and appointed Tom Sealy of Midland chairman. The Texas Manufacturers Association is again making the argument that future industrial growth in the state will be hampered by corporate taxes. Taxes for an expanding state government, a recent TMA report on state finances argues, “should be met through broader-based taxes that are more responsive to a prospering economy and a growing population.” The report asserts that “corporate franchise taxes on property and raw materials will impair the future industrial growth of the state.” Other Issues In the last leg:slature, 1,000 bills were introduced in the House, 306 of which became law. In the Senate, 208 out of 487 were passed. Among the more important proposals now in the offing, legislation to regulate loan sharks will be high on the list. A constitutional amendment approved last November lifted the interest ceiling and left it to the legislature’s dicretion. The Youth Council will seek additional funds for the six stateoperated juvenile training schools and establishment of a Daniel-endorsed juvenile parole system. Council chairman W. C. Windsor Jr., Dallas businessman, will press a proposal to build a home for neglected and dependent Negro children. Action will be recommended to abolish or amend the safe-driving insurance program. Sen. Grady Hazlewood of Amarillo has said he will introduce amending legislation, although the delegated authority of the state board of insurance might have to be changed if the program is revised., Subscribe to The Texas Observer Name Address City, State Send $5 to The Texas Observer, 504 W. 24, Austin, Texas. Supporters of state remedies to meet problems of the aging will recommend a number of measures which emerged from the Governor’s Conference on Aging in September. Foremost among these will be pro-posed passage of a constitutional amendment to increase the constitutional ceiling on welfare spending payments to the aged, the blind, the disabled, and dependent children from the present $47 million to $57 million. Also to be recommended will be enabling legislation to put into effect a ‘constitutional amendment passed in 1958 providing payment for medical and hospital bills of needy old people. Some $18 million a year in matching federal funds have been available under the program and can be drawn upon if the enabling laws are passed. Both the constitutional amendment and the federal-state medical plan have been endorsed by Daniel and Sen. Crawford Martin’s interim legislative committee. The interim legislative committee will also propose funds for additional field workers in the Public Welfare Department, additional inspectors for the state’s 600 nursing homes, and transfer of some 3,000 senile patients from state mental hospitals to license nursing homes. It will further suggest that the state might create an insurance pool with the state and federal money to pay medical expenses of the needy aged. Legalized horse-racing will have a colorful supporter in Rep. Red Berry of San Antonio, who will set up shop in lobbyist Youngs Crook’s former “lobby suite” on the eighth floor of the Driskill. The state AFL-CIO has outlined its goals for the legislature. They include: Support of legislation patterned after the federal law providing for state-supervised elections in deciding whether the employees of a firm want to be represented by a union; a state mediation and conciliation service; higher state minimum wage for workers not covered by federal minimum wage; repeal of the state right-towork law; corporate profits and personal income taxes; “reasonable taxation” of natural resources; Legislation to guarantee migrant workers a minimum wage, adequate housing, and transportation; broadened unemployment a n d w or kme n’s compensation programs; an industrial safety law; repeal of the poll tax; an $800 a year pay hike for teachers; and abolition of capital punishment. And Others Three controversial reforms in the penal code will be brought forward: abolition of capital punish A juvenile parole program was also recommended, along with increased funds for larger populations in Youth Council schools. Hospitals and’ Special Schools asked for $119.5 from general revenue and the governor recommended $107.8 \(in 1958 the figures were $117 million and $92.4 million and the Governor recommended $184.5 \($161 million and ments and Agencies asked $87.6 million and were recommended for $74.2 million. Among the departments and agencies, state parks were the hardest hit of all, asking for $2.34 ‘million and being recommended for $1.31. The Department of Health asked for $8.4 and was recommended for $6.9. Divisions dealing with labor ment, lowering of the present age of 17 separating juvenile from adult offenders, and transferring of the authority to fix sentences from juries to judges. Rep. Tom James of Dallas, who has been leading the vice investigation in Jefferson County, plans to introduce a bill assigning to district judges, in rotation, the duty of naming grand jury commissioners. The board of education will back legislation to invest part of the money from the permanent school fund into Wall Street stocks instead of government securities alone. The Farm Bureau has now given its backing to all but one of the migrant labor bills which it opposed in 1959. It will still fight the proposal to license crew chiefs. Re-organization of the State Board of Water Engineers will be pushed by the Texas Co-ordinating Water Committee, which proposes that the full-time, three-member board be changed into a six-member, part-time commission representing geographical regions, with an executive director in charge of administration. A legislative fight can be expected over the Game and Fish Commission’s 750,0000 received annually from sales of sand and gravel. Attempts may be made to transfer part of the money into state parks and water development. Reps. Ronald Roberts of Hillsboro and Lloyd Guffey of El Campo will introduce a bill to re-organize the state library commission. Rep. Ronald Bridges of Corpus Christi will again introduce a capital punishment bill and a youth reform bill similar to the CCC. Rep. Raymond Rapp, Raymondville editor, will introduce legislation -protecting newsmen from providing sources of information and opening all public bodies and meetings to the press. Reps. W. H. Miller and Don Garrison of Houston will propose an “internal security investigating committee” to investigate alleged subversive activities. Continued controversy over the rural roads program and the $15 million of general revenue tax turned over each year to the highway department can also be expected. Under the new constitutional amendment, the legislators will receive a $12 per diem for the first 120 days of the session, in addition to their new annual salary of $4,800. Previously they have received $25 a day for 120 days of the regular session, after which they could continue in session without pay. Also under the new amendment, the maximum length of the regular session will be 140 days. W.M. matters were also hard hit. The Industrial Accident Board requested $1.2 million and got $737,000, the occupational health division of the Department of Health asked for $205,000 and got $115,000, and the vocational rehabilitation division of the Education Commission got $1.65 out of $2.3 million. In higher education, requests from junior colleges were more severely pruned than any other branch. They requested $18 million and got a $12.2 recommendation. Among the divisions that fared comparatively well, although in the current revenue crisis budget requests are always urged to be low: geriatric homes, TB hospitals, pardons and paroles, water development board, and highway department. The governor approved a $13 million building program for mental hospitals. tax would cost a Texas family with $4,000-$5,000 income about $30 annually. The tax was originally suggested by industrialist E. B. Germany and is modeled after an Indiana tax, called a “gross income tax” there. In its appropriations recommendations, the commission reported that $107 million in new taxes are needed and estimated that growth needs on present state programs are $42 million. It proposed medical aid for those on old-age assistance role at a cost of $7.9 million a year; a $400 teacher salary hike, which, with other education spending would consume more than two-thirds of the proposed increase in spending; an increase of $12.5 million annually for higher education; legislative salaries at $875,000 a year; $7.5 million more a year for hospitals; $1.1 million more for junior colleges; $2.3 million more for Corrections; and $3.75 million more for all other state agencies, including parks, juvenile parole, the board of water engineers, and others. The commission reported its opinion that the payroll plan would finance this program. The commission offered an alternative sales tax plan which included one-cent sales taxes on gasoline, beer, and soda pop; an increase in the car sales tax; two percent on boats, motors, household appliances, jewelry, watches, business machines, and home and office furniture; three percent on restaurant meals; and seven percent on a pint of liquor. The payroll tax is ‘subject to criticism from small businessmen on the same grounds as the franchise tax. A business would be required to pay one-half percent on its payroll regardless of whether it is making a large profit, a small profit, or no profit at all. It is being opposed in some conservative quarters for its income-tax features, although no graduated plan similar to the federal income tax has been devised. But the tax has drawn strongest fire from labor and teachers. Fred Schmidt, secretary-treasurer of the state AFL-CIO and a member of the finance advisory commission, said, “It is better than a sales tax, but worse than a tax on income with higher rates for the higher incomes.” !Criticizing the proposal for not allowing federaltype deductions for “the little man,” Schmidt said supporters of the payroll tax and sales taxes
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