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  •   Bush's Moment of Tax Truth

    George W. Bush, AP
    Texas Gov. George W. Bush after signing a bill requiring detention for any juvenile who commits a crime with a firearm Tuesday. (AP)
    By Paul Duggan
    Washington Post Staff Writer
    Friday, May 28, 1999; Page A3

    AUSTIN, May 27 Four months later, his words still echo: "I will propose a $2 billion property tax cut," Texas Gov. George W. Bush declared on Jan. 27. The proposal was the cornerstone of a broad tax-cutting agenda he laid out that day in his opening speech to the state Senate and House, and it drew sustained applause, especially from fellow Republicans.

    Now, in the frenetic final days of the 76th Texas Legislature, the moment of truth is approaching for Bush's most important goal of the session. The size and shape of those tax reductions--and how loudly the governor can trumpet them in his quest for the GOP presidential nomination--should soon become clear as lawmakers work day and night against a Monday deadline when the Texas constitution requires them to adjourn.

    How close Bush will get to a $2 billion property tax cut is largely up to a House-Senate conference committee, as it tries to reconcile education bills passed by the two chambers. As for the rest of Bush's tax-cutting plan--$600 million in reductions for consumers and businesses--a budget agreement has set the figure at $500 million. But as dealmaking intensifies, it remains to be seen who will benefit the most--big corporations, small companies or their customers--and whether the result will be one Bush can tout as an unqualified victory.

    "It seems to me that if he gets any sizable percentage of what he asked for, he'll be, if not bulletproof, then at least in a strong position politically," said Bruce Buchanan, a University of Texas specialist in presidential politics. "He can argue that given all the politics on the ground, and the realities of the legislature, he's done adequately, if not great."

    Nevertheless, Bush in recent days has raised the possibility of a special legislative session if he does not get what he wants on tax cuts.

    Although each chamber has passed hundreds of millions of dollars in tax relief for businesses and retail buyers, the House, unlike the Senate, has weighted its cuts heavily toward small companies and consumers. After the Democratic-led House on Tuesday killed a Bush-backed tax-cut proposal that would have helped large corporations, the governor's supporters were working today to revive the bill in the Senate, where Republicans hold a one-seat majority.

    In the conflicting education bills, the House and Senate both approved sizable property tax cuts, but neither was as large as what Bush proposed in his January state of the state address. And even the governor's staff, at least publicly, has stopped referring to a $2 billion reduction, saying only that Bush "believes we will have significant tax cuts."

    Besides proposing that the state disburse $2 billion to local school districts to allow them to reduce property taxes, Bush called for $1.6 billion in new education spending, including increased pay for public school teachers.

    In formulating the House bill, lawmakers used the state's most recent two-year budget surplus projection of $6.4 billion. The bill allocates $1.2 billion for a property tax cut--much less than Bush called for--and $2.6 billion in new education money, including $3,000 raises for Texas's 260,000 public school teachers. That is far more in new education spending than Bush proposed.

    Rep. Paul Sadler (D), House Public Education Committee chairman, called it a meaningless "game of semantics" to judge Bush's legislative success by the exact amount of money that winds up targeted at property tax relief. Even $1.2 billion, he said, would be "the largest tax cut in the history of our state." But Rep. Domingo Garcia (D), who offered a failed amendment to spend the $1.2 billion on education improvements, said, "The governor's office is more concerned about voters in Iowa and New Hampshire than it is about children in Texas."

    "For a $100,000 home, the owner gets a $20 tax cut," he said. "That's a night out at McDonald's for a family of four. Instead of that, we could have . . . transformed the Texas education system."

    Bush spokesman Scott McClellan, echoing a Bush refrain, replied that the governor "believes that in times of plenty, it's important to send money back to the taxpayers so that we don't over-commit the state to a level of spending that we can't maintain in the future."

    The Senate relied on an earlier budget surplus estimate of $5.6 billion in formulating an education bill that passed late last month. The measure includes about $1 billion in property tax relief and $1.7 billion in new education spending. It would give $4,000 raises to about 140,000 teachers who are at minimum salary levels for their years of experience.

    When the state's GOP comptroller, Carole Keeton Rylander, released a May 13 report boosting the surplus estimate to $6.4 billion, "everyone gave a sigh of relief," said Sen. Teel Bivins (R), Senate Education Committee chairman. He said the education bill that emerges from the conference almost certainly will be much larger than the Senate version.

    As for whether Bush will be pleased with the result, Bivins said, "The governor has always been good at setting a goal, and understanding that the legislative process is to chew that up, spit it out, chew it up more, digest it, and finally come out with legislation." He said he has spoken with Bush about the bill, and that the governor, "like the rest of us, is optimistic."

    "You have to be an optimist to be in this business," Bivins said.

    © Copyright 1999 The Washington Post Company

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