ustxtxb_obs_1993_10_29_50_00004-00000_000.pdf

Step Up for the Constitution o NCE AGAIN Texas voters are called-upon to demonstrate their basic contrary nature as 16 amendments to the state constitution have been proposed by the Legislature for the November 2 general election ballot. The constitution has been amended 339 times since 1876. To the cynic that proves how hopelessly flawed it is. The optimist says with just a few more amendments it will be perfect. The progressive realist, which is how we see ourselves, says that the heirs to the conservative backlash against the radical Republican administration of Governor E.J. Davis after the Civil War will continue to demand a supermajority of the Legislature and a popular vote to approve any increase in the state’s bonded indebtedness or allow any other meaningful change in state or local crovernment. This year we get a chance to vote for bonds to help finance minority-owned businesses and agricultural producers that the interstate bankers too often overlook, as well as housing for veterans. We can also vote for better-qualified sheriffs, to keep local governments from raiding their pension funds and to give individual counties a way to abolish their outmoded county surveyors’ offices. But we draw the line at tax breaks for polluters and a move by the Legislature to dodge their responsibility to enact an income tax, among several propositions we feel are, at best, premature. Proposition 1 would authorize $50 million in bonds for historically underutilized businesses owned by minorities and women. We vote yes. The amendment would allow the state to provide start-up capital to help eliminate the historic disparity between minorityand women-owned businesses and other Texas businesses. While women and minorities have had trouble getting loans to start up businesses in the past, some banks have stopped making small-business loans altogether. The ratio of loans to deposits in Texas banks is at an all-time low of 40 percent, compared with a traditional figure of 65 percent, the House Research Organization reported. The relatively small amount of money authorized by Proposition 1 would provide a source of capital that is a low pri ority on the national banking scheme of things. We find it interesting that some of the supporters of tax breaks for polluters \(see Proposition 2 would permit the Legislature to exempt from local ad valorem taxes equipment used for pollution control. The proposed constitutional amendment would exempt new property added after January 1994. Supporters say the amendment would help many businesses comply with what can be onerous costs of regulations to protect the environment and it would bring Texas in line with 33 other states that offer similar tax breaks. Still, we vote no. While the proposition may have some merit, the exemption it dangles is hardly an innocent one. Proposition 2 would write off a large chunk of property tax revenue that local governments may not be able to afford to give away. According to the House Research Organization, the Harris County Appraisal District has estimated that Proposition 2 could exempt $2.8 billion in property value that otherwise would be added to the county tax rolls in the next five years. At current rates, that would generate $84 million in tax revenue to Harris County’s school districts, cities and special districts. The Jefferson County Appraisal District has calculated that the proposition could exempt $950 million in property value in the next five to 10 years, which could generate $24 million in tax revenue for local taxing entities at current rates. Assurance that current property will remain on the tax rolls is hollow since obsolete equipment will be replaced and almost all pollution control devices in time would be exempt from property taxes. The Legislative Budget Office projects that Proposition 2 could force local taxpayers to absorb 26 percent of the cost of new pollution control equipment. Arguments also should be made that polluters have no right to expect special favors for reducing their toxic spew. As the owner of an Austin car repair shop told Bruce Hight of the Austin American-Statesman, businesses “that want to do the job right and care about the environment have already done these things.” Ironically, those businesses would not qualify for the exemptions. Instead, those whose owners have dragged their feet and fought the pollution controls will get the tax breaks. There are arguments to be made against Proposition 2, but you won’t see them on the editorial pages of many of the daily newspapers of this state. With the notable exception of the Houston Post, which called it “a ripoff of residential and other property taxpayers,” the state’s newspapers generally adopted the Chamber of Commerce line that the exemption was needed to help businesses cope with environmental regulation. At least the Dallas Morning News, in an editorial supporting the passage of Proposition 2, mentioned that newspaper publishers would be among the businesses that would benefit from the pollution tax breaks. In summary, this proposition is seriously flawed. If local property tax exemptions are to be granted, local city councils and school boards should weigh them and make those decisions, not the executive director of the Texas Natural Resource Conservation Commission in Austin. Pollution controls should be a cost of doing business and their costs should be passed onto consumers and not taxpayers, who are being asked to subsidize dry cleaners, gas stations, hospitals, newspapers and other polluting businesses and industries as well as the obvious petrochemical manufacturing companies. Some good people are promoting Proposition 2 and so are some scoundrels. Even with a relatively solid line of support from the state’s business and labor establishment, industrial interests are so sensitive about criticism of the proposition that Harry Whitworth, president of the Texas Chemical Council, wrote a letter to House members protesting that the nonpartisan House Research Organization had included in its even-handed special report on the proposed constitutional amendments the synopsis of arguments raised by opponents of the proposition. His objection only serves to reinforce our skepticism. Proposition 3 would relinquish the state’s claim to a one-third interest in land in Fort Bend and Austin counties whose title has been clouded since the 1820s. Most of the 146 current landowners are family farmers who have owned the land for generations and paid taxes on its entirety but were unable to gain a clear title to sell the land or secure a loan with it. We vote yes. Proposition 4 would require approval by statewide referendum of any statute to impose a state personal income tax. We vote no. This proposition was engineered by Lieut. Gov . Bob Bullock, who bravely suggested in 1991 that the Legislature should consider an income tax as the logical solution to the state’s inequitable taxation system that relies heavily on a sales tax and pushes other major responsibilities onto local property taxes. His modest proposal was met with fury by the monied classes most likely to pay such a tax and in atonement he promoted this proposition, which would not close the possibility of an income tax. Instead it would set up the scenario of a simple majority of the Legislature adopting the income tax and selling it to the voters as tax relief by dedicating income tax revenue to the public schools and promising a corresponding reduction in school property taxes. Still, many progressives were disappointed that the Democratic leadership embraced this initiative .to dodge the “tax and spend” label that the Republicans would like to hang on 4 OCTOBER 29, 1993