Legislative Issues, Part I
Generally when the legislature meets at the beginning of session, there are several weeks of partying and pageantry that must be endured before our elected officials actually get down to work.
This session, of course, is off track already due to the protracted speaker’s race. We don’t even know the committees yet, so until that’s settled, pageantry is about all the House can accomplish. The Senate, on the other hand, is already hard at work. Or at least was for a day or two until it was decided that a party in Washington, D.C. was more important than actually serving the people you’re elected to represent.
So if you’re just tuning in, you haven’t missed a whole lot. A quick look at the legislative Top 8 Issues.
Last week, Susan Combs dropped the state’s revenue estimate and pulled the tablecloth off the legislative dinner table. Unlike Carole Keeton Strayhorn in 2003, Combs managed to do it without upsetting the dishes.
That Texas would have a loss of revenue was a surprise to no one, mostly because the nation’s economy is in a nosedive, but also because Combs, unlike her predecessor, gave us a bit of early warning.
Despite all this, Texas is in an enviable position relative to the other states. Going into Combs’ announcement, we had a nearly $10 billion budget surplus, at a time when California’s deficit was pushing $40 billion – more than the annual budget of every other state except New York.
So rather than plunging us into the depths of a revenue decline, Combs' numbers basically brings us back to ground level – about $2.1 billion surplus.
Much of this left over money is either dedicated to property tax buy-downs or part of the state’s Rainy Day Fund. And though there are ample budgetary chicks crying to mommy for some legislative worms, touching either source of funds would be problematic. The first would be going back on a legislative promise to the people of Texas. And the second would exhaust the Rainy Day Fund and leave the state ill-prepared for a future emergency.
One could argue – and indeed, how could one not – that Hurricane Ike is an event tailor-made for the Rainy Day Fund (no pun intended). But Medicaid caseload growth? Certainly it’s a high-dollar item, but it’s hardly a disaster, unless you consider the entire federal Medicaid program a disaster. While some legislators no doubt do, the point of the Rainy Day Fund is to cover non-recurring expenses. Medicaid failing to stay within its budgetary limits is no more unusual than a drunken sumo wrestler on a tightrope staying within his.
The alternative, then, is to pull out the meat cleaver to the budget. Spending increases, conservatives argue, would be the worst thing Texas could do.
“Texans are facing the realities of our struggling economy, and they must not be asked to make up this revenue shortfall to the state in the form of new or higher taxes,” said State Rep. Larry Taylor (R-Friendswood). “Instead, the state must tighten its belt and reconsider its spending priorities, just as families across this state must make difficult financial decisions every day.”
Not so fast, says the Center for Public Policy Priorities’ Dick Lavine. Spending cuts, he says, would “hurt the Texas economy and hurt vulnerable Texans.”
Lavine argues that the spigot on the Rainy Day Fund should be open wide to “protect the state from the full effects of the recession.” And of course, he says, “Texas should consider new revenue sources.” Unless there’s some cash-producing magic tree hidden in the Sam Houston National Forest that Lavine isn’t telling us about, that means new taxes.
But while Barack Obama can believe in the tooth fairy and that raising taxes in a recession will actually stimulate growth, not kill it, he has the luxury of deficit spending should history prove to be stubbornly consistent. Texas, which cannot spend more than it takes in, would be in a less advantageous position. Increasing taxes or lavish spending – conservatives like Taylor argue – would likely send our state into a time warp to 2001, where the legislature partied and the resulting hangover was strong enough to end 130 years of Democratic legislative dominance in the Lone Star State.
Denton, Texas may have to re-think their “I Like Ike” Festival these days, and it’s not just because it swept away a significant chunk of the budget surplus this year. Sure, the University of Texas Medical Branch and a lot of pricey state infrastructure was devastated. School districts which were property rich under Robin Hood are now property non-existent – but still have bills to pay.
But ultimately, the worst structural damage from Hurricane Ike was to the state of Texas’ windstorm insurance pool. And if you think you’re not bothered because you don’t live on the coast, think again.
That’s because windstorm insurance in Texas – the specialty policies that cover hurricane damage – was already troubled. Windstorm insurance ceased paying for itself years ago, and to keep the people of Texas covered, a statewide insurer of last resort – the Texas Windstorm Insurance Agency (TWIA) was established. Much of the cost was born by premiums paid by people across the entire state, in such hurricane-prone hotspots as Midland and El Paso.
The legislature tried to fix TWIA in 2007, and the House even passed HB 2960, which would have done so. But a key Senator balked when coastal communities complained about having to bear a greater share of the burden for their own defense. When the bill died, it didn’t take a rocket scientist to realize that an ill-funded insurance provider, just wracked with the costs of Hurricane Rita, was entirely unprepared for a summer breeze, much less a large storm the size of Ike.
If that weren’t enough, the Texas Department of Insurance gets to go through the Sunset process (kind of like Russian Roulette, but with no bullets) this session. In theory, all legislative agencies must justify their existence or face abolition. The latter extreme just doesn’t happen, but ostensibly, any and every type of reform imaginable is open to legislators.
Of course, that means all types of insurance regulated by the agency, from homeowner’s insurance to health insurance. Originally, the Sunset Commission suggested a number of reforms that would have brought more of the free market into the insurance industry. The commission would have also eliminated the independent Office of Public Insurance Counsel (OPIC) and rolled it back into TDI. Both of these issues were squelched in the early debate, but they and similar issues may return once a sunset bill begins moving.
“The rumors of my death have been greatly exaggerated,” Mark Twain once wrote when a bogus eulogy appeared in a newspaper. Such could probably be said for the Trans Texas Corridor – the ambitious, but divisive plan by Gov. Rick Perry to bisect the state with a series of mega-freeways. Perry and TxDOT have said it’s dead, but naysayers suspect a ruse that would keep various smaller aspects of the idea alive. To that end, don’t expect legislators to call off the dogs. Opponents of the plan will seek to kill off any vestigial Sons of Trans Texas.
But we need transportation infrastructure in Texas and unless there is a hidden agenda behind gambling proponents’ bid to “save the Texas horse-raising industry” that means cars. And roads.
That being said, big projects are probably going to be off the table in a session short on cash.
Just like with insurance, TxDOT will go through Sunset. The commission’s report on the least-favorite state agency of many Texans right now outlines reforms designed to restore public trust in it. The reforms include more accountability and transparency, but also more legislative oversight. TxDOT was given the leverage in 2003 to include tolling as part of its solution to Texas’ road needs, but TxDOT announced that all new roads would be tolled.
One oft-cited potential reform would be a single TxDOT commissioner, elected by the people of Texas. Proponents say it would bring more accountability. Opponents doubt it would change much.
Everybody wants accountability in schools, but virtually no one is happy with the current system. The new culture of accountability that has taken hold in Texas public schools in the last decade has led to real improvements, but great angst as well, particularly of schools “teaching to the test.”
To that end, the legislature will likely look at changes to the accountability system that meets the goals of accountability with a more flexible approach to the means used to achieve it.
During the Interim, Lt. Governor David Dewhurst and Speaker Tom Craddick appointed a Committee on Public School accountability, made up by legislators and citizens, and charged it with drafting proposals for re-designing the current accountability model.
The group came back with results in October, which will play a key part in any reform legislation proposed this session. They key point is that multiple factors – not just testing – should be considered when assessing Texas schools.
One suggestion is grading schools based on rolling averages, not just one year. Proposals also include judging schools by more than just who fails the test, but also by who passes, and by how much they are improving from year-to-year. Lastly, the proposal would also focus on workforce needs and how to best prepare Texas students to meet them. Most importantly for government reform advocates, the plan recommends including recognition of how efficiently districts spend taxpayer dollars.
Immigration issues will reassert themselves this session, and don’t expect conservative members to be dissuaded by the argument that this is a federal issue and not an area of state concern.
It clearly is, as the results of this author’s 2006 study, “The Cost of Illegal Immigration to Texas” (found here) shows. That study found $3.5 billion in net loss to Texas from services to illegal immigrants. But it also noted that most of the numbers used to draw that conclusion are extrapolations. That’s because many state agencies conceal the real figures, either out of concern for protecting budgetary turf or from simple pro-illegal bias.
That was the basis behind Dianne White Delisi’s HB 127 in 2007, which would have done nothing more than require state agencies to keep the data. This session, Rep. John Zerwas has filed a similar bill, HB 276.
Legislators will also take on this issues of border security and sanctuary cities. Sen. Dan Patrick (R-Houston) and Rep. Patricia Harless (R-Houston) are taking the lead on this issue. Rep. Leo Berman (R-Tyler) has made fighting illegal immigration such a crusade that he’s promising to run for governor if legislation doesn’t pass. | 
