GOP governor pushes Texas' first sales tax hike in 30 years

AUSTIN, Texas (AP) — Gov. Greg Abbott on Wednesday called for Texas' first sales tax increase in nearly 30 years as Republican leaders who promised to boost money for classrooms and cut property taxes struggle to achieve both with just weeks left to deliver.

The plan would push the sales tax rate to 7.25%, tying Texas with California for highest in the U.S., an irony for Texas Republicans who for years have mocked the nation's biggest liberal state as the wrong way to govern.

But Abbott is in a bind. He and other Republicans promised tax relief and an infusion of billions of new dollars into schools in the wake of the Texas GOP's worst election in a generation. Those efforts, however, are in danger of stalling and the May end date for the 140-day legislative session is quickly approaching. 

RELATED: Check out the U.S. states where taxpayers pay the most state income taxes :

42 PHOTOS
States where Americans pay the highest in state income taxes
See Gallery
States where Americans pay the highest in state income taxes

California

State income tax: 1% to 13.3% 

Maine

State income tax: 5.8% to 10.15%

Oregon

State income tax: 5% to 9.9%

Minnesota

State income tax: 5.35% to 9.85%

Iowa

State income tax: 0.36% to 8.98%

New Jersey

State income tax: 1.4% to 8.97%

Vermont

State income tax: 3.55% to 8.95%

Washington, DC

State income tax: 4% to 8.95%

New York

State income tax: 4% to 8.82%

Hawaii

State income tax: 1.4% to 8.25%

Wisconsin

State income tax: 4% to 7.65%

Idaho

State income tax: 1.6% to 7.4%

South Carolina

State income tax: 0% to 7%

Connecticut

State income tax: 3% to 6.99%

Arkansas

State income tax: 0.9% to 6.9%

Montana

State income tax: 1% to 6.9%

Nebraska

State income tax: 2.46% to 6.84%

Delaware

State income tax: 2.2% to 6.6%

West Virginia

State income tax: 3% to 6.5%

Georgia

State income tax: 1% to 6%

Kentucky

State income tax: 2% to 6%

Louisiana

State income tax: 2% to 6%

Missouri

State income tax: 1.5% to 6%

Rhode Island

State income tax: 3.75% to 5.99%

Maryland

State income tax: 2% to 5.75%

North Carolina

State income tax: 5.75%

Virginia

State income tax: 2% to 5.75%

Oklahoma

State income tax: 0.5% to 5.25%

Massachusetts

State income tax: 5.1%

Alabama

State income tax: 2% to 5%

Mississippi

State income tax: 3% to 5%

Utah

State income tax: 5%

Ohio

State income tax: 0.495% to 4.997%

New Mexico

State income tax: 1.7% to 4.9%

Colorado

State income tax: 4.63%

Kansas

State income tax: 2.7% to 4.6%

Arizona

State income tax: 2.59% to 4.54%

Michigan

State income tax: 4.25%

Illinois

State income tax: 3.75%

Indiana

State income tax: 3.3%

Pennsylvania

State income tax: 3.07%

North Dakota

State income tax: 1.1% to 2.9%

HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

"Texans are fed up with skyrocketing property taxes," Abbott said in a joint statement with the Republican House and Senate leaders. "If the one-cent increase in the sales tax passes, it will result in billions of dollars in revenue to help drive down property taxes in the short and long term."

Lawmakers would first have to agree to limit future property taxes. The current sales tax rate is 6.25%, and local government add-ons make the average sales tax rate across Texas about 8.25%.

The proposed penny sales tax increase could bring in an extra $5 billion in its first year, which could be used to reduce local property taxes. Property taxes have taken on a bigger share of public school funding as Texas Republicans sought to satisfy conservative voters in recent years with deep spending cuts and resistance to demands for new education funding.

Democrats criticized the sales tax increase trade for lower property taxes as a reward for businesses and the wealthy, but a hit to the wallet for most Texans.

"An unfair, punishing sales tax hike on poor and working families is not the way to deliver real property tax relief," said Rep. Ramon Romero of the House Democratic Caucus. "It's a dangerous idea."

Texas doesn't have a state income tax and hasn't increased is statewide sales tax rate since 1990.

The plan endorsed by Abbott, Lt. Gov. Dan Patrick and House Speaker Dennis Bonnen would require statewide voter approval to amend the state Constitution and calls for increasing sales taxes for public education spending have been historically unpopular.

A tax rate comparable to California is also likely to be uncomfortable for Abbott to sell to voters as he's routinely touted Texas as a mecca for low-tax, low-regulation conservatives.

House lawmakers recently approved a measure to revamp public education funding with $6.3 billion in new money and another $2.7 billion to school to tamp down ever-increasing property taxes.

Deducting Medical Expenses for a Major Illness or Injury

TurboTax helps you understand medical expense deductions, HSA and MSA distributions, flexible spending accounts, IRA and 401(k) payouts for medical expenses, and more.

Read More

Brought to you by TurboTax.com

Top 8 Year-End Tax Tips

Learn these top 8 year-end tax tips in order to maximize your tax refund or minimize the taxes you owe.

Read More

Brought to you by TurboTax.com

Can I Claim Medical Expenses on My Taxes?

Medical expenses can take a bite out of your budget, especially if you have unforeseen emergencies that are not fully covered by your insurance. The Internal Revenue Service allows taxpayers some relief, making some of these expenses partly tax-deductible. To take advantage of this tax deduction, you need to know what counts as a medical expense and how to claim the deduction.

Read More

Brought to you by TurboTax.com

Best Investments for Boosting Your Tax Refund

If you're like most taxpayers, you're expecting a tax refund this year. The average refund amount for tax year 2019 was $2,725. If you want to boost your tax refund, consider investing in your retirement or your home before filing your taxes.

Read More

Brought to you by TurboTax.com
Read Full Story
Your resource on tax filing
Tax season is here! Check out the Tax Center on AOL Finance for all the tips and tools you need to maximize your return.