Yes, the Texas Legislature gave teachers a pay raise, which may be worth a few thousand dollars a year on the high end to some teachers and less to others, depending on decisions by their individual school districts. We hope this will prove to be a down payment on more school funding and more pay raises in the future for teachers and other school employees.
But lawmakers gave another, much-smaller and much-wealthier group of people a better windfall. They gave the buyers of luxury yachts a new tax break that is potentially worth several times the average teacher’s total salary.
How much more exactly? Well, that will depend on how much someone spends to purchase a yacht. But the new law will cap the sales tax at $18,750 for any luxury boat as large as 115 feet. That tax savings, according to the Houston Chronicle, will be about $228,000 on the purchaser of a $3 million yacht. How many teachers do you know who make $228,000?
Supporters of the new law say it was necessary to revive the marine industry in Texas, which has been losing money to several other states, including Florida and Alabama, which already have similar tax breaks.
Those states, or so the argument goes, are recouping additional revenue from yacht sales that could have been made in Texas as well as from the marinas, fuel purchases and other products and services related to the industry.
Industry jobs also are at stake, they point out. And the total estimated cost to state government for the yacht tax break will be only $2.3 million over the next two years, compared to the $2 billion appropriated for teacher pay raises.
But the real issue is this. This is a tax break for the super-wealthy to be stacked on top of numerous other tax breaks that already exist for various corporations and special interests.
All those tax breaks undermine the ability of future Legislatures to continue meeting state needs, including an increased investment in public education and more pay raises.
The additional funding the Legislature appropriated for education, including teacher pay raises, and school property tax relief, will cost $11.6 billion over the next two years. The Legislature paid for it this time with a $9 billion revenue surplus and an assortment of other sources, which may not be available two years from now.
The yacht bill was bad enough that even Gov. Greg Abbott refused to sign it. Instead, he hedged and let it become law without his signature. Too bad he didn’t think it was bad enough to veto.
Instead, he let a relative handful of rich boat buyers sail away with part of the next state budget.