Texas House Kills Governor Abbott’s Big Sales Tax Hike

Democrats flexed their newfound muscle in the Texas House on Tuesday, ending a push led by Gov. Greg Abbott to increase Texas' sales tax, which is already one of the highest in the nation. While there's a chance a sales tax increase could be shoehorned into another bill already making its way through the Legislature, consideration of HJR 3, which would add a penny to Texas' 6.75-cent sales tax, has been delayed until January 2021, the beginning of the state's next legislative session.

As recently as Friday afternoon, Abbott, Texas House Speaker Dennis Bonnen and Texas Lt. Gov. Dan Patrick touted the increase, which would've raised about $5 billion per year in order to cut school district property tax rates.

“Our goal is really simple: We’re going beyond the point of hoping to reform property taxes to the point where we’re hoping to deliver true property tax relief through property tax reductions,” Abbott told reporters Friday.

Despite Abbott's remarks, the proposed increase was clearly in trouble. State Rep. Chris Turner, chair of the House Democratic Caucus, told the Texas Tribune Friday that all 67 Democrats were united against HJR 3, which, as a joint resolution, needed 100 votes in the 150-member Texas House to pass and be placed on Texas' constitutional amendment election ballot in November.

Democrats argued that the sales tax swap amounted to a regressive tax on low-income Texans. The state's Legislative Budget Board agreed, determining that the swap would amount to a tax increase for Texans making less that $100,000 per year. A breakdown of House district data circulated by Progress Texas showed that, in areas throughout the state, as many as 80% of taxpayers would see their bill go up if the plan were enacted.  

The Senate approved a version of HB 3, the House property tax and school finance bill, that did not include the sales tax increase Monday, the day before the House decided not to even put the tax hike to a vote. The Senate decision was a signal to the House, Bonnen's office said in a statement to reporters Tuesday afternoon.

"It became clear that even in the event of the House’s passage, this legislation would be unlikely to pass in the Texas Senate, as evidenced by their vote on House Bill 3," the speaker's office said.

Turner gave House Democrats credit for sticking together against the plan. 

"I want to thank the entire House Democratic Caucus for standing together and stopping HJR 3, a dangerous proposal that would have raised taxes on 80% of Texas families," Turner said in a statement after the vote was delayed by Rep. Dan Huberty, the House's de facto public education leader. "Texans want real solutions to lower their property taxes and fund public education, not a trickle-down plan that benefits a privileged few.”