Page 21


board was recently disbanded and the six top administrators ousted. The school district will be run by a state-appointed master for the next five years. We could ask state universities to run low-achieving districts. In a low-income area of Boston, six schools were taken over by Boston University at the request of the local school board. The university initiated a $20 million fund raising drive for the schools and is restructuring all current education programs. The Edgewood vs. Kirby opinion focused on the state’s responsibility to provide an efficient system of public schools. I think we need to look at tearing down traditional walls in our system and see if we can provide quality education more efficiently. We need to start with vocational education. Texas has 66 public community college campuses and four public technical institutes statewide. And yet we replicate many of the vocational programs they offer in our secondary schools. That doesn’t seem efficient. We have students in our public high schools wasting a year or two sitting through unchallenging classes. Why not send them on to rigorous college classes and allow them to earn high school and college credit at the same time? That seems a more efficient use of time and money. Most of the problems of the current funding system are related to the fact that local property taxes form the primary basis of school funding. The state contributes about 41 percent of total public school funding, but the majority of that is spent trying to equalize the inherent imbalance caused by the property taxes. This leads me to believe that we need to look beyond the property tax in finding a solution. One idea that has been suggested is to take this disequalizing tax away from the school districts and assess it on a statewide complete personal and business insurance ALICE ANDERSON AGENCY 80S-A East 46th P.O. Box 4666. Austin 78765 ANDERSON & COMPANY COFFEE TEA SPICES WAM AUSTIN TE S XAS 78’731 512 453-1533 Send me your list. Name Street City Zip basis, so that the money could be redistributed on an equalized basis. That might solve the problem, since the tax burden; by constitutional mandate, would have to be equal, and the Legislature could then allocate the funds in a manner that might be acceptable to the court. However, does . that solution take full advantage of the opportunity that is presented by this crisis? Is the property tax such a worthy part of the tax system that it deserves perpetuation in a revised structure? If we look to the tax equity committee report, we find that the property tax is considered a large part of the problem in the tax system as well as the education system. The property tax is regressive, hitting poorer taxpayers more heavily than the wealthy. It has been an unreliable producer of revenue in the 80’s, as property values have fallen. The tax complicates economic development efforts, since it applies to a greater share of business property in Texas than in any other state, making business pay a larger portion of it in Texas than in other states. The administration of the tax is cumbersome and expensive, costing about $200 million per year statewide. And finally, the tax is unpopular, ranking at the bottom of all taxes in poll after poll. Ten years ago, our tax system stood on three legs: the property tax, the sales tax and the oil and gas severance taxes. Now, revenue from the severance taxes has diminished to the point that they are the seventh and eighth largest sources of revenue, falling behind fuels taxes, the franchise tax and alcoholic beverage taxes. The sales tax at 2 percent, as it was passed, was all right. At eight cents it is regressive and onerous. It weights too heavily on business. The franchise tax is a tax on investments, on equity. It is unfair, because it taxes only corporations and not partnerships and other business entities. It is counterproductive because it discourages investments. Is it time, then, to think the unthinkable? Dare we utter the dreaded “I” word? A personal income tax should only be considered when there is a crisis or a consensus on its adoption. I would call the funding of the public schools a crisis. The problem is that there will not be a consensus until someone takes the lead in creating it. The income tax in Texas has been the subject of the worst smear campaign since the days of Joe McCarthy. Willie Horton looks like a paragon of virtue compared to the income tax in Texas. Those beliefs, that public perception, are founded on more confusion than facts, and it is time to talk about the facts. When most people in Texas think of the adoption of a personal income tax, they think of the federal tax, with rates as high as 33 percent. No state taxes income at those levels. Nor would. Texas need to. They think of a tax increase rather than tax replacement, the burden of an income tax added to the current tax system. If an income tax were used to replace the school property taxes, even with additional funding for education, many people would pay lower taxes. A personal income tax of 4 percent on a broad measure of income, even with generous exemptions and deductions, would raise enough money to replace every dollar of school property taxes and add almost another billion dollars per year to fund education. This would resolve the objections of the court concerning the inequities of school finance. The overall equity of the tax system would also be improved. It would be more stable. It would be more adequate, since income taxes grow with the increase in personal income. It would, I submit, be a considerable improvement for both the education system and the tax system of this state. It is also true that no idea could be more unpopular in this political climate. The Legislature is committed against it. Most statewide candidates will be forced to oppose it. But if the idea of an income tax is not put fairly and accurately into the debate about this state’s future, we are letting our children and grandchildren down. If we refuse to even discuss the merits of an income tax, we doom ourself to a solution perhaps worse than the problem. Representative government shouldn’t be so handcuffed by political rhetoric that we cannot consider realistic solutions. We cannot debate the future of our state without considering the bedrock problem with a revenue structure that is unduly burdensome to business, the sector of our economy that provides jobs and income. Rest easy. The income tax probably won’t even be considered during these special sessions of the Legislature. It probably won’t be considered until business takes the lead again and demands it. It was business, after all, that took the lead in backing House Bill 72 and reform of our public school system in 1984. It was business that refused to financially starve our public universities in 1987. It was business that took the lead in passing the sales tax in 1961. It will be business that charts the way to a more equitable tax system. I have been in government for 16 years, and there has been progress during that time. We’ve had successes in developing a water plan, in advancing our system of higher education and improving our schools. But let’s be honest. In too many ways, Texas still ranks with the poorest states in the nation. The 72nd Legislature will address these problems without me, and I suspect, will do just fine. But if we’re going to debate the issues, there is one thing we should demand a fair, honest and complete debate. As businessmen, you expect that. As taxpayers you deserve that. As voters, you can require that. 6 NOVEMBER 10, 1989