DALLAS — As lieutenant governor, Texas Sen. Dan Patrick wants to cap property taxes and increase state sales taxes, a move he describes as a "tax swap."
Patrick, who defeated current Lt. Gov. David Dewhurst in the Republican primary, would control the legislative agenda in the state Senate if he defeats his Democratic opponent, state Sen. Leticia Van De Putte, as expected Nov. 4.
"We need to transition from depending all on property taxes to sales taxes," Patrick told the Texas Tribune Festival recently. "It's not increasing - it's a swap."
The new tax formula could affect general obligation bonds from local governments backed by property-tax pledges. Texas has no state income tax.
Patrick, a right-wing radio talk show host and Tea Party leader, will preside, if elected, over the 2015 Senate, where structural budget issues over school finance could be resolved. State courts have ruled that the current school funding formula is unconstitutional.
Patrick's plan to increase sales taxes from the current 6.25% to as much as 8.25% is designed to bring relief to homeowners and businesses that carry the burden of financing schools, hospitals and local government.
The Houston Republican announced creation of a task force of "conservative grassroots leaders, business leaders and tax policy experts," to shape legislation to refund projected revenue surpluses to taxpayers.
According to early estimates from the Texas Comptroller's Office, when the Texas Legislature convenes in 2015, the state will have a surplus of tax revenue of at least $2.6 billion, Patrick said in a press release. Oil and gas activity, and the Texas economy in general, is expected to continue to flourish and provide ample revenue for the next budget cycle as well, he said. The Economic Stabilization Fund (or rainy day fund) is also projected to hold more than $8 billion by the fall of 2015.
"The Comptroller has put everyone on notice that Texans are paying more taxes than we need to pay for the current budget," Patrick said. "We need to begin planning now on how to return that surplus before the special interests start spending it."
The task force will begin work immediately after the members are selected.
"David Dewhurst has put politics before policy and has failed to handle the fiscal business of the state of Texas," Patrick said. "We must start addressing these issues today."
As a state senator, Patrick proposed legislation to limit the growth of state spending to a rate below population growth and inflation as well as cutting taxes. Those bills cut the appraisal cap on homesteads, lowered the revenue cap on local governments and reformed the rollback rate.
Van De Putte said the state needs to spend more on education, which includes all-day pre-kindergarten for low-income children, funding for thousands of more teachers and an allocation of $2 billion from the state's rainy day fund for community colleges.
Van de Putte, a pharmacist, supports the federal expansion of Medicaid in Texas, noting that the state's refusal to expand means Texans are paying federal taxes that instead of coming back to the state's health care system, are flowing to other states.
