The House Ways and Means Committee voted 8-3 Thursday for House Bill 2187, which backers painted as necessary to keep yacht sales and the economic activity that goes with them from being lured by Florida's lower taxes.

"It's economic development," Rep. John Davis, R-Houston, author of the bill, said Friday. "I think it's the right thing to do to keep us on a level playing field with Florida."

Rep. Mike Villarreal, D-San Antonio, voted against the measure and lambasted it as wrongheaded at a time when cuts are threatened in areas including education and Medicaid reimbursement rates for health care providers

"With all due respect, sometimes I'm not sure what planet my Republican colleagues live on," Villarreal said in a statement. "How can they say tax breaks for yachts are a higher priority than supporting our children's classrooms or keeping nursing homes open?"

Joining Villarreal in voting against the measure in committee were Reps. Wayne Christian, R-Center, and Trey Martinez Fischer, D-San Antonio.

Davis' bill originally would have capped the sales tax on a boat at $15,625 — the amount normally due on a $250,000 vessel — regardless of sales price. He changed that to match Florida's $18,000 maximum, the amount normally due on a $288,000 yacht under Texas' existing rate.

The fiscal analysis on the original bill said it would cost Texas about $1.4 million annually in lost tax revenue, but yacht brokers and other supporters of the measure said that figure does not take into account the ripple effect of Texas losing yachts. An updated analysis of the impact of the $18,000 maximum was not immediately available.

The bill next goes to the full House, where Davis and Ways and Means Chairman Harvey Hilderbran, R-Kerrville, expressed optimism about its chances.

"The hearing was pretty convincing that we're losing business to Florida. It's one of those things you have to do," he said.

"Why don't you tell that do a kindergarten parent?" said Sen. Leticia Van de Putte, of San Antonio, who chairs the Senate Democratic Caucus.

'Absurd step'

The committee's OK of the special sales tax break comes as lawmakers in the House and Senate are searching for additional revenues to help close a two-year budget shortfall of $15 to $27 billion. Budgets proposals in both houses already would cut billions in state and federal funds from social services and give public schools billions less than they would get under current funding formulas.

"This is an absurd step in the wrong direction. Instead of digging Texas' budgetary hole even deeper, legislators should be looking for new revenue to pay for the public schools and other critical services. The cuts being contemplated for the public schools threaten educational quality in Texas to the point that, within a few years, fewer and fewer people will qualify for jobs that pay enough for anyone to even think about purchasing a yacht," said Texas State Teachers Association spokesman Clay Robison.

F. Scott McCown, of the Center for Public Policy Priorities, which advocates for low- and moderate-income Texans, said, "This isn't the time for tax breaks for rich folks with big yachts. A strong economy is built by investing in the education to prepare our children to be tomorrows inventors and entrepreneurs. Our goal should be for our children to get an education so that they can own yachts, not for our children to sacrifice their education to attract rich folks with yachts."

Davis said he did not yet have a Senate sponsor for the measure. Senate Finance Committee Chairman Steve Ogden, R-Bryan, declined comment on the bill.

"I don't own a yacht," he said.

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