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nating the interest exemption on municipal bonds issued to finance private activities; repealing tax credits for rehabilitation of old allowable mortgage interest deduction at $12,000 for single returns and $20,000 for on life insurance and health insurance premiums \($30.2 billion; dropping the deduction for entertainment and meals to 50 accrued capital gains at a person’s death \($6 Finally there are the excise taxes. Joseph Minarik and Rudolph Penner in “Challenge to Leadership” provide a detailed account of the general erosion of these taxes since the early 1950s. In 1951 the excise tax on a gallon of hard liquor was $10.50, or 43 percent of the typical purchase price. Had the tax increased commensurately with the price for hard liquor, today it would amount to $44.32 per gallon. The tax was increased in 1985 to just $12.50 per gallon, but it is still far below the 1951 level. The tax on a six-pack of beer is 16 cents, and it has not been increased since 1951. The excise tax on wine then and now amounts to three cents per fifth of a gallon. The excise tax on a pack of cigarettes in 1951 was eight cents, or 42 percent of the price \(it would be 34 cents in today’s terms had 1983 it was increased to 16 cents, which is only 15 percent of the price and well below the 1951 level. Doubling the tax on cigarettes and hard liquor and raising the taxes on wine and beer to the hard liquor rate would raise $8.5 billion in 1992. The excise tax on gasoline has eroded in relative terms since the 1950s, and is far less here than it is in most Western countries. In the past, proceeds from the excise tax on gasoline sales have gone for highways and mass transit. Employing this tax to increase general revenues sets off an intense political argument. Representatives of consumer states in the Northeast and on the West Coast generally look favorably on an increase in the gasoline excise tax, while an increase is opposed by members from oil-producing states in the South and Southwest, as well as those from states with big auto plants. such as Michigan. Members of Congress from oil-producing states would rather see an oil import fee as a supposed incentive to domestic oil and gas development. Raising the motor fuels tax by 12 cents a gallon would raise $11 billion a year by 1992. An Agenda for Progress BY DAVE DENISON p OWER COMES IN TWO forms, the radical organizer Saul Alinsky used to say money and people. “You haven’t got any money,” he would tell folks in communities he wanted to organize, “but you do have people, and here’s what you can do with them.” For more than 15 years now, a group of activists in Texas has been using Alinsky’s methods to organize communities. About ten years ago they decided to apply the “people power” method to a place where money had always ruled the Texas legislature. In 1977, a citizens’ group from San Antonio calling itself Citizens Organized for Public Service brought busloads of its members to the state capital. Their mission was to urge Governor Dolph Briscoe and the legislature to increase public school funding. In 1983 they came again, in greater numbers. Democrat Mark White had just been elected governor and their hopes soared that public schools would be funded more generously. And in 1984, when a special session of the legislature was overhauling the educational system they were there again. It was in that year that the legislature redirected a portion of the state aid to the state’s poorer districts. It was a small but significant reform not because it solved the inequality in the funding of the state’s schools, but because it took a step in that direction. And like other social reforms that were allowed to blossom in the legislature under the Democratic governor’s tenure, it might not have even made it to the governor’s desk without the kind of organized citizen pressure that began with COPS in 1977. Over the last three sessions COPS has been joined by similar community groups from El Paso, Houston, Fort Worth, and the Rio Grande Valley that are organized under the network of the Industrial Areas Foundation and directed by organizer Ernesto Cortes, presence of the IAF “people’s lobby” has changed the equations of power at the Capitol. Few observers who remember the 1985 session, for example, would doubt that the difference between success and failure of a bill to increase funding for health care for the state’s indigent population was the presence of hundreds of IAF families from all over the state in the very halls of the Capitol at the moment when the bill’s fate was being decided. Suddenly, legislators were faced with a vocal constituency and the issue was more than an abstract funding proposal. It passed the House of Representatives by a one-vote margin. Such victories have not come easily. The new community lobby has been trying to bring the social spending of state government up at just the time when the state government’s revenue, which was based on taxing the energy industry, dropped dramatically. And now, this session, social spending advocates face a political situation in which a Republican governor threatens to hold the line on spending and to veto new taxes. Ernesto Cortes and his legions will be back this year to urge the 71st legislature to fund education and social welfare. They will be making the case that the school finance system remains inequitable and unjust. They will push for a state bond issue to fund water and sewer development for colonias along the border. And they will advocate expansion of the Medicare program to cover more low-income people who do not have health care. In addition, the IAF agenda will be broadened this year. The group’s organizers hope to be a part of the anti-crime debate, lending their weight to proposals coming out of the lieutenant governor’s office that seek to address the root causes of crime by directing spending to education and child abuse prevention. Other issues, such as new requirements for testing by college students, will draw the attention of IAF, according to Cortes. Cortes worries that, without money in the budget for remedial programs, such new testing will only serve to weed out minority students. One of the session’s major issues, reforming the workers’ compensation system, is also under study by IAF, Cortes said. In a recent interview with the Observer, Cortes discussed the major issues of the IAF agenda. School finance. Despite the 1984 education bill that added some measure of “equalization” to the state’s method of funding public schools, a state district court ruled in 1987 that the system was still so inequitable as to be unconstitutional. Because a major part of school funding comes from local property taxes, wealthy areas tend to have wealthy schools and poor areas have poor schools. But last fall an appeals court overturned the ruling; it is now set to be heard by the Texas Supreme Court. IAF has been meeting with the Mexican American Legal Defense and Education the legislature to solve the issue. But, Cortes admitted, “It’s going to be very difficult. Very, very, difficult. Because of the court case being overturned, there’s not now the pressure on the legislature to do anything.” 6 FEBRUARY 10, 1989