- Associated Press - Wednesday, April 8, 2015

AUSTIN, Texas (AP) - Tax cuts and better pre-K in Texas - two major promises of new Republican Gov. Greg Abbott - pushed ahead Wednesday when the House rallied behind a $2 billion proposed sales tax cut before passing an early education bill that schools say underwhelms.

Both moves simultaneously disappointed Democrats, deepened tensions with Senate Republicans and raised the chances of a rocky final two months in Abbott’s first legislative session.

Across the aisle from the House, Republican Lt. Gov. Dan Patrick dug in his heels, calling the House tax plan “out of step” and saying he will insist on property tax relief for rising home appraisals.

The significance of the day was set early when Abbott - who has largely kept behind the scenes so far in the Legislature - privately huddled with House Republicans before they called for lowering Texas’ sales tax rate and then delved into a limited pre-K makeover.

“I’m very proud of the fact that the Texas House of Representatives has taken it this far,” Abbott said.

School administrators and education groups are more frustrated than proud. They see Abbott’s plan as a missed opportunity that only nudges the status quo, since Texas would not expand pre-K eligibility or extend to full-day classes. The state would instead give districts more money to improve its existing programs.

Abbott says Texas shouldn’t rush into pre-K expansion but wait a few years until the state can study the impact of his $130 million plan. Four years ago, Texas cut $300 million from pre-K to help close a massive budget shortfall, which hasn’t been restored.

Debate over the House bill began shortly after House Republicans unveiled a sweeping tax-cut package that includes what would be the first drop in Texas’ sales tax rate in history.

“We discuss a $4.8 billion tax relief package on the very same day we’re about to give crumbs to pre-K education,” Democratic state Rep. Trey Martinez Fischer said.

Since 1990, the state sales tax rate has been 6.25 percent, though most pay 8.25 percent at the checkout line in Texas after local taxes kick in. House Republicans want the state rate lowered to 5.95 percent, which they say would save the average family $170 a year.

Tax cuts are practically a slam-dunk for passage before the Republican-controlled Legislature adjourns in May but are also causing the most tension. Senate Republicans want property tax cuts, not a sales tax cut, and Abbott is also asking lawmakers to deliver property tax relief.

Republican state Rep. Dennis Bonnen, the House’s chief tax writer, said the governor should take a close look at the House plan.

“This delivers real, lasting tax relief that will stand the test of time,” Bonnen said. “These tax cuts cannot be eroded by local tax hikes or raising appraisals.”

The sales tax cut would cost the state an estimated $2.3 billion in revenue over the next two years. Republican lawmakers, flush with spending power after years of booming energy prices, have so far left billions of dollars unspent in an answer to conservative voters to craft a budget lean as possible.

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Follow Paul J. Weber on Twitter: www.twitter.com/pauljweber

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