Off the Kuff Rotating Header Image

Bidness

The power to pay more for electricity

Deregulation really does create jobs.

When Texas deregulated electricity markets 16 years ago, the Public Utility Commission created the website Power to Choose to help consumers through the power buying experience. But what was promoted as an easy, free way for Texans to pick electricity providers has turned into a such a complex and confounding experience that it is spawning a cottage industry to help consumers navigate the scores of companies and hundreds of plans available.

At least five companies in Texas are providing both free and paid services aimed at helping consumers in Houston and other deregulated markets decipher confusing electricity offers such as free nights and weekends, multi-tiered pricing plans, and credits for high electricity use.

The companies have built computer algorithms that try to ferret out the best deals based on factors such as past electricity consumption, home size, and the number of people living there. In some cases, it’s just a matter of plugging in your monthly electricity into a website calculator. Others provide more comprehensive services, charging a monthly fee to advise customers which plan will save them the most money and then monitor the market so if prices fall, consumers can switch.

This kind of hand-holding is akin to car buying services, which save customers the time, energy and aggravation researching models, doing comparison shopping and negotiating prices. But unlike cars, there’s no difference in the electricity provided by different retailers, making the emergence of these power buying services a sure sign of the complexity of the system.

“The third party guys demonstrate the consumer is getting ripped off by the Power to Choose artificial configuration that the Public Utility Commission has rammed down the throat of Texas consumers,” said Ed Hirs, energy economist at the University of Houston.

The Public Utility Commission recently recognized the shortcomings of Power to Choose, with chairman DeAnn Walker criticizing retail electric providers for misleading pricing plans. Those plans offer rock-bottom rates at 1,000 kilowatt hours, but if consumers use just one kilowatt hour more, the price per kilowatt hour can jump as much as 10 times.

[…]

Jesson Bradshaw, a power industry veteran, saw an opportunity when his friends and family asked him which company they should sign up with for electricity. He sent them to Power to Choose, but he quickly heard complaints.

“I saw how confusing it was,” said Bradshaw, who worked as a power trader and owned the retail power company Amigo Energy until he sold it to Just Energy in 2011.

Four years ago, he and a partner launched the buying service Energy Ogre. The company charges customers $10 each month to find the lowest price plan and monitor rates to see if it makes sense to switch mid-contract. It doesn’t take commissions from power providers.

Bradshaw said his business is not exactly popular among the retail providers, many of which bet that customers won’t shop for better rates when contracts expire.

“They don’t like us informing the customer,” he said. “ If there is a better rate, we move them. We don’t care which provider.”

Mark Axford of Sugar Land signed up with Energy Ogre about three years ago. Axford said the company switches electricity providers at least once a year and makes sure Axford and his wife do not get hit with penalties. The monthly fee is well worth it, he said.

If you want to save, you have to shop, said Axford. “But who has the time to keep shopping for electricity?”

The trade association for retail electricity providers in Texas said it recognizes that the buying services may help customers sort through offers. But it’s important to note, said Julia Rathgeber, president of the Association of Electric Companies of Texas, that these companies are not subject to oversight by the Public Utility Commission. It’s still up to consumers to decide whether plans are right for them, she said.

Got that? If you’re paying too much for electricity, it’s your own damn fault. Never mind how confusing or time consuming the shopping process is. There’s no reason I can think of why the state couldn’t provide, for free, the kind of easy, at-your-fingertips information that these entrepreneurs have done. Why wouldn’t we want to do that, if the goal of deregulation was to lower prices for consumers? The answer to that is left as an exercise for the reader. In the meantime, here’s the sidebar that tells you how to find the best deal for yourself:

MORE INFORMATION
Companies that help consumers find the best power deals:

Texas Power Guide

Website: TexasPowerGuide.com

Awesome Power Texas

Website: AwesomePowerTexas.com

Geek Your Rate

Website: GeekYourRate.com

Energy Ogre

Website: EnergyOgre.com

Real Simple Energy

Website: RealSimpleEnergy.com

You might also want to go back and look at some guest posts my friend Dan Wallach wrote about picking power plans. Good luck.

Buc-ee’s wins in court

That was quick.

After about six hours of deliberation, a jury in Houston found Tuesday that Choke Canyon company’s alligator logo violated state and federal trademark law, infringing on the pre-established Buc-ee’s beaver mark established by the popular Texas road stop chain.

“It’s absolutely not about a beaver versus an alligator,” said Jeff Nadalo, general counsel for Buc-ee’s Ltd. “There are more than 10 similarities between the two marks that we presented to the jury in this case.”

[…]

The judge asked the lawyers to meet and try to hammer out an injunction on how to deal of trademarked materials that violate the jury’s finding.

The damages phase of the trial remains pending.

See here for the background, and here for a later version of the story. Six hours of deliberation for a week-long trial is pretty darned quick. I may have been skeptical based on my view of the two logos, but I wasn’t there in court and neither were you. We’ll see what the damages look like.

Beaver v alligator

It’s a roadside rest stop animal logo legal smackdown, and it’s off to the jury.

Buc-ee’s, a popular chain of Texas pit stops, fought hard to build its reputation and wants a San Antonio-based competitor to stop “riding its coattails” by using a logo that confuses highway travelers into pulling off at a rival business, the company’s lawyer told jurors in his closing statement Monday in Houston.

“We don’t want to put Choke Canyon out of business,” said Buc-ee’s lawyer, Tracy Richardson, poised between poster boards displaying similarly colored T-shirts, beer koozies and plastic grocery bags with the animal logos from the two rival chains. Buc-ee’s just wants Choke Canyon’s owner to curtail what it views as an unfair ad campaign: “We just want him to stop using the logo.”

Richardson and the lead attorney for Choke Canyon offered closing pitches to jurors before they began deliberations Monday afternoon, following a week of testimony about the dueling roadside travel centers in a federal trademark case before U.S. District Judge Keith P. Ellison. The jury of three women and nine men will resume deliberations Tuesday.

The lawsuit brought by mega-chain Buc-ee’s claims that Choke Canyon’s alligator logo, posed against a circular yellow backdrop, is too similar to the buck-toothed beaver that is synonymous with its 33 gas stops. The Buc-ee’s chain, headquartered in Lake Jackson, also contends that Choke Canyon illegally mimicked its in store offerings, including friendly service, ample stock and plentiful, clean bathrooms.

[…]

[Defense attorney Charles] Hanor said the two trademarks are quite different, as are the offerings. The alligator is advertising a chain that specializes in barbecue, he told jurors, noting that Buc-ee’s only complained in court about its road stop competitor when Choke Canyon sought to open a chain in New Braunfels, where Buc-ee’s also had operations.

Trademark law doesn’t give either company a hold on any one attribute of their logo. Instead, the jury will consider the strength of Buc-ee’s logo, the similarity between the two logos and the stores’ product lines and whether Choke Canyon set out to or actually did confuse customers with the overlap.

It’s a balancing act, the judge explained in his directions to the jury. The goals of trademark law are to protect the public from being misled, to protect the rights of businesses to identify themselves in public and to protect the public interest in fair competition, Ellison said.

See here for some background. Earlier stories from the trial are here, here, and here. As I said when news of the lawsuit first appeared, I think Buc-ee’s is stretching it here. Maybe it’s because I’ve never seen a Choke Canyon, but I don’t see how a reasonable person could confuse the two. That’s up to twelve jurors here in Houston to decide. I wish them luck.

No Amazon HQ2 for Houston

Never really expected that we’d be a top contender, to be honest.

Amazon ruled out Houston as a candidate for its $5 billion second headquarters on Thursday, delivering a blow to local leaders who had hoped to lure the Seattle tech giant to a four-mile stretch between downtown and the Texas Medical Center.

The largest U.S. online retailer whittled down more than 200 proposals from North America cities to just 20, eliminating Houston but keeping the city’s longtime rivals Austin and Dallas on its short list.

Amazon’s decision marks a setback for local leaders including the Greater Houston Partnership, which led an effort last fall to pitch the city as an attractive market for the company to set down stakes.

“I believe this is a wake-up call for Houston,” GHP CEO Bob Harvey said in a statement. “While there has been growing momentum in the innovation space over the last couple of years, this is a clear indication that we have much more work to do as a region to grow our digital economy.”

Houston Mayor Sylvester Turner called Amazon’s decision ” disappointing and heartbreaking.:

But, he added, “It serves as a wake-up call that we must move at a much quicker pace. The city is well positioned, but it’s also is an indication that there is a lot of work that still needs to be done.”

[…]

In his statement Thursday, Harvey said Houston should focus on developing the Innovation Corridor and its technology sector further. He also said Houston should move forward with the proposed Houston Data Science Institute, a data center recently announced by the University of Houston.

“While we are the number one market in the country for STEM talent, we need to bolster our pipeline of digital tech talent that is relevant to tomorrow’s digital economy,” Harvey said. “This means working with our higher education partners across the region to develop and invest in programs that will produce the talent we need to succeed.”

But economists warned that Houston would rank low on Amazon’s wish list in the nationwide bidding war for a campus that could bring 50,000 jobs, saying the city lacked a robust public transportation system. Only 2 percent of the local population takes public transportation to work, according to Census data.

See here and here for some background. On the one hand, it’s always a bummer to miss out. On the other hand, I wasn’t excited at the thought of giving zillions of dollars in incentives and tax breaks to a behemoth like Amazon as deal-sweeteners. There’s too much of that going on already. Doing things like developing the Innovation Corridor and building a Data Science Institute, that’s fine and worthwhile as investments. And let’s be sure not to overlook the feedback about our public transportation infrastructure. Imagine where we could have been if we’d had a Congressional delegation that was unanimous in its support of of more robust transit system. We’ll have an opportunity to support that at the ballot box this November. If we’re serious about wanting to be more competitive with the cities we lost out to, we need to put our money where our mouths are. The Trib, Texas Monthly (which is very skeptical of the chase to lure in Amazon), Swamplot, and the Dallas Observer have more.

What Houston is showing to Amazon

Meet the Innovation Corridor.

Houston leaders hope to entice Amazon with a spot somewhere within the four-mile stretch of the Metro rail line that runs from downtown to the Texas Medical Center, an area they’re calling the Innovation Corridor – and the city’s best shot at winning the Seattle tech giant’s $5 billion second headquarters.

The rail line cuts through a part of Houston that includes some of the city’s largest companies and most prominent health care institutions, as well as Rice University, Hermann Park, the Museum District, Houston Community College, NRG Park and the collection of bars, restaurants and apartment complexes in trendy Midtown, according to a document outlining Houston’s confidential proposal.

City officials won’t say exactly where they want Amazon to plant a campus that could grow to more than 8 million square feet and house 50,000 high-paying jobs. But they have proposed multiple sites within the corridor, a slice of Houston that connects the city’s intellectual and cultural assets in the heart of its ethnically diverse population and bustling business hub.

“What’s remarkable is how concentrated all of this is in a four-mile-long area,” said Bob Harvey, president and CEO of the Greater Houston Partnership, the group behind Houston’s bid for Amazon. “Innovation Corridor seems to fit. It’s just like, wow, this is what Amazon is looking for.”

[…]

Local leaders have given Amazon its choice of undisclosed sites within the so-called Innovation Corridor, which, according to the document drafted by the Greater Houston Partnership, offers close access to two international airports, three interstates, 3 million workers, plus key game changers in business and an unparalleled array of amenities.

The document’s 32 bullet points highlighted the nearly 100,000 people who work in technology-related fields as well as the region’s low taxes, low cost of living, reasonable housing prices and eclectic neighborhoods and restaurants.

In particular, the document highlighted the city’s racial and ethnic diversity, which, Harvey argued, should appeal to a company that wants to attract millennial workers to a tech industry that has come under fire for its ethnic uniformity, particularly in Silicon Valley.

“As Amazon seeks to diversify its ranks at the executive, manager and professional levels, there is no better place to locate than in Houston,” city leaders said.

I still don’t think Houston’s efforts are going to amount to anything, but hey, it’s worth a shot. Given what Amazon has talked about for their new location, this is probably the best part of town to meet the requirements. Maybe we’ll learn something from the experience for the future.

Amazon and Houston

Does our city have a shot at landing Amazon’s HQ2? Eh, maybe.

Bringing Amazon to Houston almost certainly will be a heavy lift. The pursuit of the company that revolutionized the retail industry has highlighted both the potential and shortcomings of the local technology sector, made up of scattered groups of engineers in the energy, medical and space industries, which account for many of the city’s major innovations, but have yet to break out of their silos to create the kind of culture and buzz that animate tech centers such as Silicon Valley, Austin or Amazon’s hometown of Seattle.

But economic development officials say that regardless of outcome, the bid may well become the catalyst for the kind of innovation ecosystem that pushes the region and its economy into new directions to underpin its long-term prosperity.

“Amazon is a foil for thinking about where you’re trying to take a city,” said Bob Harvey, president and CEO of the Greater Houston Partnership, which is leading a team of developers, academics, Texas Medical Center executives and real estate brokers juggling a high-stakes bidding war and Hurricane Harvey recovery efforts.

[…]

Houston likely has a tough sell ahead of it. The local startup scene has grown in recent years, but has so far failed to attract the sort of venture capital activity concentrated in Austin and other tech-focused cities. Skeptics point to the city’s consistent failure to develop projects that would substantially expand its technological base and attract major firms such as Microsoft, Google or Dell, all of which have operations in Austin.

Most recently, the University of Texas system’s ambitious plan to transform roughly 300 acres of land near the Medical Center into a cutting-edge data science center failed in the face of intense opposition from University of Houston leaders and state lawmakers. Proponents of the deal blamed political sparring for scuttling a deal that could elevated the city’s chance of developing a more robust technology sector.

“That type of nonsense has to stop,” said Houston developer David Wolff, chairman and president of Wolff Companies. “You have to have the institutions working together.”

But local leaders argue that the city’s growing number of software engineers and computer programmers could complement Amazon’s ambitions as it expands its data science capabilities outside of retail and entertainment. In addition, city officials in recent years have made a push to elevate local startups and draw venture capital investors. Station Houston, a downtown startup incubator and co-working space, has attracted more than 260 member companies since it opened this spring.

The city’s most prominent universities have bolstered their technology programs in recent years to include data science and analytics. The University of Houston-Downtown offers a master’s degree in data analytics, and Rice University has partnered with IBM to develop robotics.

“We are still evolving, and we can grow and design a city with the help of an Amazon to help customize our city to their particular needs, which many other cities cannot do,” Mayor Sylvester Turner said in an interview. “We are just now beginning to focus on startups, technology, innovation in a very integrated sense.”

Just between you and me, I don’t think Houston’s odds are very good here, and I won’t be terribly grieved if we are not the chosen city. I think we’d have to give them a pretty substantive bribe incentive package to come here, and I have a hard time with that. (Turns out I’m not the only one who isn’t bullish on our fair city’s chances.) If we’re going to have a broader discussion about making the city more amenable to startups, or to address the infrastructure and transit demands Amazon is making, I’m all in. But let’s leave it at that. Swamplot has more.

AirBnB tax collection deal

Seems reasonable.

[AirBnB] announced Wednesday it will begin collecting and remitting the 6 percent state hotel occupancy tax May 1. The decision followed more than a year of talks, said Laura Spanjian, Airbnb’s Texas public policy manager. Airbnb has similar tax-collection agreements with 25-plus states.

“These agreements are a meaningful revenue boost for communities, and we hope to reach similar agreements with cities around Texas soon,” Spanjian said by email.

Houston homeowners who rent out their properties are supposed to pay a total of 17 percent in occupancy taxes, 7 percent of which goes to Houston First, which oversees hotel tax collection for the city.

Yet of the 7,200 active hosts Airbnb says operate in the area, only 70 have registered with the city as taxpaying hosts, said Jonathan Newport, Houston First’s director of government affairs.

[…]

Under the new agreement, the state portion of the hotel-occupancy taxes will be guaranteed. Guests will be charged the correct amount on their bill for a stay of 29 nights or less, and Airbnb will then remit the collected taxes to the state.

“The sharing economy plays an important role in our state’s overall fiscal health,” Texas Comptroller Glenn Hegar said in a statement. “We applaud Airbnb for agreeing to collect state hotel occupancy taxes, as all lodging facilities in Texas are required to do.”

See here, here, and here for some background. This is a positive step, as it gets some revenue that otherwise would have been lost for the city while giving AirBnB some regulatory certainty. People want to use AirBnB, and as seems to be the case with everything these days there’s a bill in the Legislature to override local restrictions on it, so this is another level on which it makes sense for the city to reach a deal with them. Hope it works as intended for everyone.

“Texas lives on immigrant labor”

Ain’t that the truth.

In Texas, an estimated 400,000 construction workers reside illegally, according to one study. If they were forced to leave the country, contractors say, state construction companies would face a difficult fallout, including higher labor costs, construction delays, and some projects canceled altogether.

“Texas lives on immigrant labor,” said Jeff Nielsen, executive vice president of the Houston Contractors Association. “Our economy is the way it is partly because cost of living is cheap and the reason for that is labor is cheap.”

Throughout his presidential campaign, Donald Trump advocated a “deportation force” to track down and remove millions of immigrants here illegally. This week, he moved closer to that goal with a memo instructing federal authorities to broaden the scope of targeted deportations.

The president’s actions dovetail with a current push in the Texas Legislature to outlaw so-called sanctuary cities, requiring local law enforcement to cooperate with federal authorities on immigration enforcement.

On Friday, the U.S. Hispanic Contractors Association and its Austin-based Texas arm sent a letter to Gov. Greg Abbott, warning that immigrants in Austin have been wary of showing up to work after an escalation of Immigration and Customs Enforcement activity.

“Our fear is that because of the perception that the public has on what the elimination of sanctuary cities means,” the contractors wrote, “it will be difficult to find and retain experienced workers, which is especially damaging to small businesses.”

[…]

Efforts at comprehensive reform have stalled repeatedly, most recently under the Obama administration, and has been wiped from the agenda under Trump, whose stated goal is to remove immigrants living here illegally from the country. Proponents of hard-line immigration policy have argued that unauthorized workers should simply attain legal status, but experts contend that there is no such option for the class that builds Texas.

“The ability for these workers to come in legally for a temporary work program is about as close to zero as you can get,” said Charles Foster, a veteran Houston immigration lawyer who advised on immigration policy for the George H.W. Bush administration. “There is no line to get legal. It’s all a myth.”

The closest thing, he said, was the H-2B visa program for temporary non-agricultural workers, which allows in about 66,000 people across the 50 states each year – hardly enough to account for the hundreds of thousands of laborers in Texas.

It would of course be better if we lived in a country where undocumented workers were not exploited as cheap labor for the rest of us but instead got to live and work here legally at a fair market wage. I don’t hold out a lot of hope for getting to that place any time soon. In the meantime, this is the reality. You want to deport ’em all? Then get ready for construction work, among other things, to grind to a halt. And if you don’t want that to happen, the don’t vote for politicians who stand for it, whether or not we’re supposed to take them seriously when they say it.

Global investors against SB6

From the inbox:

Led by New York City Comptroller Scott M. Stringer and Trillium Asset Management, a group of some of the largest investors in the world, with a combined $11 trillion of assets under management, today spoke out against Texas Senate Bill 6 (or SB6), a “Bathroom Bill,” as well as similar discriminatory legislation. In the wake of hundreds of millions of dollars in lost economic activity in North Carolina after HB2 – a similar bill – was signed into law in that state, major investors are standing up against this discriminatory legislation.

The 40 signatories include some of the biggest investors in the world, such as BlackRock, State Street Global Advisors, T. Rowe Price, and AllianceBernstein, as well as New York City Comptroller Scott M. Stringer, California Controller Betty Yee, Connecticut Treasurer Denise L. Nappier, New York State Comptroller Thomas DiNapoli, Oregon Treasurer Tobias Read, Rhode Island Treasurer Seth Magaziner, and Vermont Treasurer Elizabeth Pearce.

The investors’ letter urges Texas Governor Greg Abbott, Lieutenant Governor Dan Patrick, and House Speaker Joe Straus to oppose the legislation, which would discriminate against transgender individuals in Texas. This not only makes it more difficult for companies to attract and retain the best talent, but could have real effects on the Texas economy by undermining businesses operating there and delivering extraordinary reputational harm to the Texas business environment. The state could lose hundreds of millions – if not billions – of dollars in economic activity. Tourism dollars, sporting and other entertainment events, and corporate expansions – all are vital to Texas’s economy and could be at risk. As just one indication of the potential impact, organizations including the National Football League and the NCAA have already warned that the siting of future events in Texas would be jeopardized.

The investors’ letter also highlight opposition to SB6 from more than 1,200 companies doing business in Texas, including major firms like American Airlines, Dow Chemical, Southwest Airlines, Texas Instruments, and Waste Management.

“This bill is the 2.0 version of North Carolina’s HB2, and we saw how that bill impacted North Carolina. Not only is SB6 wrong for Texas residents, it also undermines anyone who is invested in companies in that state. SB6 would take Texas in the wrong direction,” New York City Comptroller Scott M. Stringer said. “This group of investors represents a truly extraordinary level of assets, and the market is unquestionably speaking out about the economic consequences of such bills. We hope that message will be heard. I couldn’t be prouder to lead this massive effort to protect not just the interests of New York’s retired firefighters, police officers, and teachers, but also fundamental human rights.”

“The evidence is overwhelming that inclusive corporate and public policy that embraces diversity and equality are essential to strong businesses and financial success. Trillium Asset Management, and the trillions of dollars of assets that support this letter, unequivocally and emphatically urge Texas legislators to maintain a healthy and vibrant climate for business in the State of Texas,” said Trillium Asset Management, CEO Matthew Patsky, CFA. “Senate Bill 6 must be defeated and not allowed to negatively impact the economy of Texas, the second largest in the United States.”

SB6, introduced in early January 2017, is similar to North Carolina’s HB2’s bathroom restrictions, and requires individuals to use the public restroom that aligns with the gender on their birth certificate, discriminating against transgender individuals. The bill also eliminates municipal bathroom access non-discrimination laws, effectively legalizing discrimination against the LGBT community in both public and private accommodations. SB6 allows the Texas Attorney General to impose fines of up to $10,500 a day for violation of bathroom access regulations.

North Carolina has faced significant financial harm since enacting a similar bill, HB2, in March 2016. In the months since the bill was enacted, sporting events, concerts, TV shows, and conventions were canceled and business expansions were halted. By some estimates, the cost to the state reached over $600 million.

To read the investor letter, and see a full list of signatories, click here.

Here’s a Chron story about this letter.

[Trillium CEO Matthew] Patsky told the Chronicle, “We didn’t have this level of support for divestment from South Africa during apartheid.”

[…]

Stringer and others said the state lost more than $600 million in economic activity after passing HB2, with the NBA and NCAA pulling championship games. Given that Texas’ economy is the second largest in the country, Stringer said there is fear that negative economic impact in the state as a result of passing the bathroom bill here could be felt across the nation.

“I’m worried that pension fund investments could suffer,” he said.

Patsky said Trillium Asset Management, which has business ties to Texas, has previously coordinated efforts to get investors to speak out against the North Carolina law. He said it didn’t take much to convince them to speak out against the Texas proposal.

T. Rowe Price and others echoed the concern over an economic backlash.

“Our decision to participate was taken out of concern for the likely adverse economic impact of the proposed legislation and its inconsistency with our commitment to fostering diverse and inclusive communities,” a T. Rowe Price spokeswoman said in a statement.

A representative of BlackRock said the company has previously signed a letter to North Carolina lawmakers in opposition of their law as well as signed an amicus brief in defense of marriage equality when the Supreme Court was reviewing it.

Patsky said passage of the bill also could deter venture investors looking for startup activity in the state or companies that might look to expand here. He also projected municipal bonds could be hurt as investment falls.

He also questioned the rationale behind the bill and said he recalled seeing misleading campaign ads during an effort in Houston a year and a half ago to overturn the city’s equal rights ordinance that guaranteed protections for transgendered people seeking to use the bathroom where they feel most comfortable.

No comment on this from Abbott or Patrick. I guess telling these folks to “stay out of politics and stick to business and finance” would sound weird even to them. It’s certainly possible that as with that TAB study that Stringer and Patsky et al are overstating the possible effects of SB6, but even if they are there’s no question that the effect we will have will be negative. A lot of investing comes down to perception in how things are and belief about where they are going, and the passage of SB6 would negatively change both of those things about Texas, for no real purpose. That is what this debate has always been about.

The “border adjustment tax” is a sales tax increase by another name

That’s a feature, not a bug.

Retailers across Texas and the country are warning that a proposed border adjustment tax would increase the cost of imports and, by extension, the price of food, clothing and other consumer goods. Texas companies, including Stage Stores of Houston and Neiman Marcus of Dallas, have joined more than 150 other U.S. firms in a coalition fighting a possible border tax, part of a broader tax overhaul championed by Rep. Kevin Brady, The Woodlands Republican who chairs the tax-writing Ways and Means Committee, and House Speaker Paul Ryan, R-Wisconsin.

The plan essentially proposes a 20 percent tax on imports, which the National Retail Federation, a trade group, expects would raise the price of consumer products by 15 percent. Randi Sonenshein, senior vice president of strategy and finance for Stage Stores, which has more than 800 locations in 38 states, said her company worries that the higher prices related to the tax would particularly hurt customers who shop at stores located in small and mid-size towns, where it primarily operates.

“The plan will have a disproportionately negative impact on retailers,” she said. “It’s a tough thing to contemplate.”

Border adjustment is one component of a tax plan that aims to shift the U.S. tax code toward favoring production of goods over their consumption. Under the plan, companies would lose deductions for the costs of importing goods; at the same time, sales revenues from goods they export would be exempt from corporate income taxes.

[…]

Companies with significant sales in foreign countries, including aerospace manufacturer Boeing, the industrial conglomerate General Electric, chemical maker Dow Chemical and pharmaceutical maker Pfizer, support the plan. But critics of border taxes say U.S. consumers will ultimately pay more, with the costs borne disproportionately by low- and middle income households.

If a border tax was enacted, apparel, autos, furniture and electronics equipment – much of which is imported – would see some of the largest price increases, at least initially, according to a recent analysis by the Wall Street investment bank Goldman Sachs. The National Retail Federation expects the cost of clothing, for example, would rise at least $350 a year for an average consumer.

Walmart, the nation’s largest retailer, as well as trade groups such as the U.S. Fashion Industry Association and the Association of Global Automakers, have joined the coalition against the plan, called Americans for Affordable Products.

The Texas Retailers Association, which represents companies of all sizes in every retail sector except convenience stores, has followed suit. George Kelemen, the association’s president and CEO, said every retail business in the state would be affected by the proposal in some way. In addition to clothing and other manufactured goods, food grown outside the United States, including everyday groceries, such as avocados, bananas and coffee would become pricier, he said.

“We are opposed to this,” he said. “It’s a cost passed on to the consumer.”

The real point of this is that once this is implemented, you – and by “you” I mean “Republicans” – can cut taxes elsewhere, which is always the goal. In that sense, it’s like the Craddick-era proposals to hike the state sales tax in return for a property tax cut. Dan Patrick would do that today if he thought he had the votes for it. I’m sure you can guess who would pay more and who would pay less in such a scenario. The bottom line is those tax cuts for the rich aren’t going to pay for themselves, but this might.

Dan Patrick and the wall tax

Hey, you know who’s going to pay for Dear Leader’s wall? You and me and everyone else in the country.

The Trump administration sparked widespread surprise Thursday by announcing it intended to implement a 20 percent tax on Mexican imports to pay for a coming border wall — followed by extreme confusion when it appeared to walk back the statement later that afternoon.

White House Press Secretary Sean Spicer made the initial announcement Thursday afternoon aboard Air Force One, as President Trump returned from a meeting with House Republicans in Philadelphia.

“Right now, our country’s policy is to tax exports and let imports flow freely in, which is ridiculous,” he told reporters. “By [imposing the tax], we can do $10 billion a year and easily pay for the wall just through that mechanism alone. That’s really going to provide the funding.”

Spicer further indicated that the administration has “been in close contact with both houses” of Congress.

“It clearly provides the funding, and does so in a way that the American taxpayer is wholly respected,” he added.

Later on Thursday, however, White House officials sought to characterize the tariff as one of several options to fund the wall, according to multiple news reports.

If passed by Congress, such a move is all but certain to have a dramatic affect on the U.S. economy and particularly in Texas, which imports far more from Mexico than from any other country, according to U.S. Census data.

Hmm, so that would be bad for the Texas economy. What does Dan Patrick think about that?

Many business and political leaders in trade-dependent Texas already have expressed reservations about the proposed import tax proposal itself, even without linking it to the wall.

Gov. Greg Abbott, who has championed increased trade with Texas’ southern neighbor since he became governor a year ago, had no immediate comment on Spicer’s suggestion.

Lt. Gov. Dan Patrick, an outspoken supporter of the wall who served as Trump’s campaign chairman in Texas, told Fox News that he was “not too concerned” about any adverse impact of such a tax. He suggested the proposal could be “the first warning shot across the bow” fired by Trump, and that the tax could end up being something less.

It’s only a little tax. You won’t even notice it. Also, of course Greg Abbott had no comment. I don’t know why anyone bothers to ask any more.

Now here’s a statement I got from the Texas Association of Business about this idea:

The following statement may be attributed to Texas Association of Business President Chris Wallace.

“Texas’ number one trading partner by far is Mexico, and imposing a 20 percent tax on Mexican imports to fund a border wall would hurt the Texas economy. This proposal could mean a loss of jobs and a hit to state tax revenues. We look forward to working with our Texas congressional delegation and our TAB members to address this proposal and I would encourage our state leaders to make the economic ramifications of this proposal known.”

Dear Chris Wallace and TAB: Dan Patrick cares way more about his pet ideological obsessions than he does about your interests. What are you going to do about that? The Rivard Report and RG Ratcliffe have more.

(Patrick has since said in a Facebook comment about his TV appearance discussing the wall tax that he is not concerned about it because it won’t happen, and he doesn’t actually support it. Which isn’t what he said on TV, and doesn’t say that he would oppose it if it does become a thing that might happen. I think that’s pretty wishy-washy, but in the interests of accuracy, there you have it.)

Business owners tell Dan Patrick to back off on bathrooms

More like this, please.

Saying Texas Republican leaders are threatening jobs and the economy, more than 200 small-business owners issued an open letter Tuesday urging legislators to abandon plans for a state law targeting transgender bathrooms.

The letter described “a growing sense of dread” that Texas will follow the path set by North Carolina, where a backlash to a similar law enacted in March will cost its economy several hundred million dollars in canceled sporting events, conventions, concerts and corporate investments.

“That’s why we oppose any Texas legislation — broad or narrow — that would legalize discrimination against any group,” the letter said. “That kind of legislation doesn’t just go against our values to be welcoming to everyone, it jeopardizes the businesses we’ve worked so hard to create, and it threatens the jobs and livelihoods of everyday Texans.”

Unveiled in San Antonio, home to the Final Four of the 2018 NCAA men’s basketball tournament, the letter was a direct response to Lt. Gov. Dan Patrick’s calls for legislation that he has dubbed the Women’s Privacy Act.

[…]

Tuesday’s letter not only sets the stage for an animated battle when the 2017 legislative session convenes in January, it underscored deepening divisions between social conservatives and many in the business community — a typically reliable GOP ally — on issues that include gay marriage and allowing transgender Texans to use bathrooms that conform to their gender identity, not the gender on their birth certificate.

The legislative priorities for the Texas Association of Business, adopted last month by its board of directors, calls for opposition to religious freedom bills that are “discriminatory” and would hurt the economy. The powerful business lobbying group also opposed similar bills in the 2015 legislative session.

Many business owners who signed Tuesday’s open letter — which was sponsored by Equality Texas, a gay- and transgender-rights group — said they rely on tourism or the ability to serve expanding corporations.

“Texas has always been a place of fierce independence and a great big pioneering spirit,” said David Wyatt with Wyatt Brand, a business-support company in Austin that endorsed the letter. “Companies, voters and political donors won’t stand for legislators dictating government overreach into individual liberties.”

Other Austin businesses listed on the letter include GSD&M advertising, Home Slice Pizza, Alamo Drafthouse Cinema and Bunkhouse, which manages Hotel San José, Austin Motel and Hotel Saint Cecilia, as well as hotels in San Antonio and Marfa.

Just remember, Dan Patrick is Donald Trump’s biggest fanboy in Texas, so you know how much he respects the ladies. This all comes down to the same question I asked before, when the normally Republican-aligned Texas Association of Business came out against any anti-LGBT legislation that Patrick and his buddies might want to peddle: How much damage does Dan Patrick have to do to Texas’ business interests before they decide that he’s not worth it to them? Putting it another way, at what point do the Republican members of these groups quit trying to reason with the radicals and work instead to defeat them? The definition of political insanity is to continue voting for people who oppose your interests in the hope that maybe this time they’ll listen to you. What’s it gonna be, fellas? The Rivard Report, the Chron, and the Current have more.

Buc-ee’s files another logo lawsuit

That’s one litigious beaver.

Buc-ee’s has sued the San Antonio-based operator of Choke Canyon Travel Center for promoting its barbecue and other travel essentials with its grinning, lip-licking, hat-wearing, finger-pointing alligator. The alligator sits in a circle -much like Buc-ee’s beaver — and adorns a wide range of products, from sweet and salty snacks to bags of ice to tee shirts.

The alligator, however, doesn’t have a name.

[…]

The case, which was filed late last year, alleged that the Choke Canyon convenience store, along with Choke Canyon Bar-B-Q and Choke Canyon Exxon, infringed on Buc-ee’s trademark by copying the look and feel of the roadside retailer, which has grown to 27 locations across Texas. Choke Canyon has three locations in and around San Antonio. Neither the owner of Choke Canyon or his lawyer returned calls seeking comment.

Besides the logos, Buc-ee’s alleges that Choke Canyon copied several other features, including oversized bathrooms, numerous fuel pumps, ample parking and a similar looking soda station. Buc-ee’s first learned of its competitor in December when it began receiving inquiries from vendors and customers about the Choke Canyon Travel Center, according to the lawsuit.

U.S. District Judge Keith Ellison set the trial for early next year.

Buc-ee’s won its previous logo lawsuit, against a company that also used a beaver in its branding. I get the zeal to protect these images, but I gotta say, this one seems like a stretch to me. We’ll see what happens in court. Whatever does happen in that case, I’d prefer Buc-ee’s stick to suing competitors and suppliers, and not former employees who will be impoverished by the experience. Don’t make me feel dirty about using your clean bathrooms, Buc-ee’s.

Here come the cannabis growers

For medicinal purposes only.

About 60 miles north of Dallas, amid green fields in the town of Gunter, population 1,486, Texas Cannabis CEO Patrick Moran has optioned to buy a former cotton gin, where he plans to grow the Cannabis sativa plant, known more commonly as marijuana.

The businessman and attorney is positioning himself at the forefront of what he estimates will be a $900 million a year industry in Texas – the recently legalized market for treating intractable epilepsy with a strain of marijuana that eases seizures without getting patients high.

Texas, as it turns out, may be one of the best states in the nation to grow pot. While the state has one of the most stringent medical usage laws in the country, it is setting up some of the cheapest licensing fees and one of the least restrictive markets for pot growers in the U.S.

Gov. Greg Abbott signed legislation last year allowing the state to license businesses to grow, process or dispense nonintoxicating marijuana or cannabis for medical use beginning next year. Moran wants to do all three with Texas Cannabis, cultivating marijuana from seed to sale.

Moran is waiting on the state to set up its registry, slated to go live by June 2017, to put in his application. He plans to use that former cotton gin, which has sat dormant for 40 years, to cultivate, extract and dispense cannabidiol oil, or CBD oil, from low-THC cannabis plants – just around the corner from the city hall in Gunter. THC, or tetrahydrocannabinol, is the psychoactive component that gives users a high when they smoke traditional marijuana.

The new market is being called the green rush.

“There’s a whole other industry that is being birthed in this country, just like what happened with the dot-com boom,” Moran said. “I think it’s once in a lifetime.”

[…]

The Texas law established narrow parameters on the type of cannabis that can be dispensed, who can take the medication and which physicians can prescribe, said Frank Snyder, a Texas A&M law professor who teaches the state’s first course on marijuana law, policy and business. But it doesn’t limit the number of competitors who can grow, extract or dispense.

“The process for getting a license and beginning to cultivate is probably the most liberal law of any of the medical marijuana states that I’m familiar with right now, in terms of putting up the fewest barriers to entry,” Snyder said.

Applicants aren’t required to have vast cannabis industry experience. They simply have to show they have the technological ability to grow, extract or dispense the product by having experience in related fields, such as cultivation, analytical laboratory methods and handling confidential patient information.

They also must show they can obtain the locations, resources and personnel necessary for operations, maintain accountability of all materials and have the financial ability to keep going for two years.

Regulations issued by the Texas Department of Public Safety in January also set fairly low licensing fees.

A cannabis operation seeking to become licensed in Texas must pay a $6,000 application fee to the state. Businesses will have to renew those licenses and pay another $6,000 application fee every two years.

That compares favorably with fees charged by some other states. Massachusetts, for instance, requires a medical marijuana dispensary to pay a $50,000 registration fee every year. Hawaii charges only a $5,000 application fee but requires a dispensary applicant to have at least $1 million in reserves, plus an additional $100,000 on hand for each retail site. Florida requires an applicant seeking a cultivation license to secure a $5 million performance bond.

Colorado, widely regarded as having some of the nation’s most permissive marijuana laws, charges as much as $25,000 in upfront application and licensing fees, depending on the type and volume of pot sold, plus additional fees.

See here for the background. One can look at the inexpensive fees for the grow/extract/dispense licenses and see low barriers to entry for cannabis entrepreneurs, and one can see a missed opportunity for generating revenue, since many of the arguments for legalizing pot in Texas come down to revenue in one form or another. What the Lege actually legalized is pretty limited, and some advocates for medical marijuana opposed the bill that got passed on the grounds that it didn’t really do anything for a class of people who need it. As such, I’m not sure how big or lucrative this business is going to be just yet. That said, I’m sure this issue will continue to be discussed in the Legislature, so the possibility of expansion will be there as well. We’ll see what the financial figures for these businesses look like once they’re fully operational.

Tesla takes its auto dealership fight nationwide

There’s more than one way to get into a market.

Tesla Motors Inc. hopes to capture mainstream auto buyers with its Model 3, an electric car it [recently unveiled] at a price about the same as the average gasoline-powered vehicle, but it may need a federal court ruling to succeed.

The Palo Alto, Calif., auto maker’s direct-to-consumer sales are prohibited by law in six states that represent about 18% of the U.S. new-car market. Barring a change of heart by those states, Tesla is preparing to make a federal case out of the direct-sales bans.

The auto maker’s legal staff has been studying a 2013 federal appeals court ruling in New Orleans that determined St. Joseph Abbey could sell monk-made coffins to customers without having a funeral director’s license. The case emerged amid a casket shortage after Hurricane Katrina. The abbey had tried to sell coffins, only to find state laws restricted such sales to those licensed by the Louisiana Board of Funeral Directors.

For now, Tesla is banking on a combination of new legislation, pending dealer applications and other factors to open doors to selling directly in Arizona, Michigan, Texas, Connecticut, Utah and West Virginia. But the company said it is ready to argue in federal court using the coffin case if necessary.

“It is widely accepted that laws that have a protectionist motivation or effect are not proper,” Todd Maron, the auto maker’s chief counsel, said in an interview. “Tesla is committed to not being foreclosed from operating in the states it desires to operate in, and all options are on the table.”

The ruling in favor of the monks, upheld by the Fifth Circuit Court of Appeals, could give Tesla the precedent it needs to join an “economic liberty” issue currently in dispute between circuit courts in the U.S., Northwestern University law professor John McGinnis said. The Second Circuit Court of Appeals, for instance, has upheld laws that require licensing to sell certain products even if there isn’t a clear reason for it other than protecting existing businesses from new competition.

[…]

Auto dealers are battle-tested and have notched a series of victories along the way. Earlier this year, the Second Circuit Court of Appeals refused to hear a case brought by auto makers that wanted to change laws using a similar constitutional challenge and involving warranty reimbursement levels.

Tesla could find powerful allies. The Federal Trade Commission has repeatedly said franchise laws are anti-competitive. Other organizations agree.

As we know, Tesla has tried and tried again to get a bill passed in the Lege to allow them to operate in their dealerless model, with no luck. I’m sure they’ll be back again next year, but in the meantime it can’t hurt for them to have a Plan B, especially if it solves the same problem for them in other states as well. We’ll see how this goes.

Bu-ee’s to expand to Louisiana

The road to world domination leads east.

The first Buc-ee’s outside Texas promises lagniappe, a little bonus, worthy of its Louisiana locale.

“It’s going to look like what we build, and it’s going to feel like what we build,” co-owner Beaver Aplin said this week. But in addition to the Beaver Nuggets and other proprietary snack foods such as fudge or jerky, Aplin said, customers should expect “Louisiana flair” with items like alligator, boudin and cracklins.

A 15-acre tract along Interstate 12 in Baton Rouge will soon get one of the Buc-ee’s mega-convenience stores. The chain known for its buck-toothed mascot, a cartoon beaver, has grown to 31 locations since the first one opened in 1982.

The store could also be the first of others in Louisiana and elsewhere as the Lake Jackson-based chain explores markets beyond Texas’ borders.

Exact plans are not yet available, but Aplin said Buc-ee’s has the Baton Rouge property under contract, and the company is working with the owner and the city. The store will likely be a 50,000- to 60,000-square-foot travel center, similar to ones in Baytown, Texas City or Madisonville. It will feature sprawling bays of fuel islands and expanded food and other items for sale.

“We think Louisiana will be a great market, and I look forward to being there,” Aplin said.

[…]

Many Louisianians, through traveling or living in Texas, have been exposed to the Buc-ee’s brand, said Kelli Hollinger, director of the Center for Retailing Studies at Texas A&M University.

“Buc-ee’s has a cult following,” Hollinger said. “You’re not just excited to go to Buc-ee’s, they’re part of the travel experience itself.”

Hollinger said tapping into Louisiana’s food culture should further help the brand there.

Added marketing professor Betsy Gelb of the C.T. Bauer College of Business at the University of Houston: “You always want to be putting a toe in a state where there are people who know you.”

General counsel Jeff Nadalo said Buc-ee’s continues “looking at all opportunities in Texas and outside of Texas.”

Louisiana is the current focus, Aplin said, with other sites, including along the I-10 corridor, under consideration. None of those projects is far enough along to announce, he added.

Makes sense. Just on billboards alone, you have to figure Buc-ee’s is well known to anyone who’s ever driven on I-10. Now you can stock up on Beaver Balls on your way to New Orleans. What more could you want?

TOP releases report on inefficiency of development tax subsidies

From the inbox:

[Thursday], the Texas Organizing Project and the Workers Defense Project released a report on the ineffectiveness of tax subsidies in cities across Texas, and proposed ways to increase requirements for such deals in Houston to offer benefits in the form of good paying jobs with community investment for Houstonians.

The report, compiled by the Workers Defense Project, looked at corporate tax subsidies throughout the state, including Houston, and found that Texas’ cities are giving away huge subsidies without enforceable community benefits agreements.

“Today, we are asking the hard, critical questions,” said Lola Garcia, a community leader with the Texas Organizing Project, “Economic development for whom? For out-of-state multi-billion dollar companies and wealthy developers? Or for neighborhoods and Houstonians in need?”

After analyzing Houston’s tax subsidy deals, contracts and compliance records, researchers found that Houston’s tax subsidy programs have failed to deliver on their promises of equitable development, specifically, they:

  • Failed to create good jobs that pay well;

  • Failed to incentivize affordable housing, and instead contributed to the gentrification of our neighborhoods; and

  • Failed to create a level playing field for small and local businesses to access these programs.

“It’s time to address the city’s long history of picking winners and losers through tax give-aways that fast-track gentrification and fail to provide any direct benefits to neighborhoods most in need of a lift,” said Tarsha Jackson, Harris County director for TOP. “The good news is that we have the opportunity to change this narrative, to redesign the programs, raise and clarify the city’s expectations and criteria for developers seeking multi-million dollar tax deals.

“We know Mayor Turner is committed to creating good jobs for Houstonians, and this research can help us set new standards on economic development projects.”

Get the full report here: The Failed Promise of the Texas Miracle: Corporate subsidies in the Lone Star state.

And here’s the executive summary:

Over the last year, researchers from the Workers Defense Project and the University of Texas at Austin have undertaken a study of tax subsidies and other economic incentives utilized at the state and local level to spur economic development in Texas. Researchers sought to understand the role economic incentives play in the Texas economy by examining how these programs have fulfilled or failed to fulfill their promise of creating high-quality, high-paying jobs and increasing local tax revenue. While there are over a dozen kinds of giveaways to businesses in the form of tax breaks, loans and grants in Texas, our research team conducted a thorough case study of one of the least transparent local programs: Chapter 380 (city) and Chapter 381 (county) agreements, which provide grants, tax breaks, and low-cost loans to corporations. To understand the impact of these economic programs, our research team combed through thousands of pages of contracts and compliance records from three Texas cities and county governments: Austin & Travis County, Houston & Harris County, and Dallas & Dallas County.

Researchers also examined data from over a dozen local, state and federal agencies including city and county governments, the U.S. Census Bureau, the U.S. Department of Education, the Bureau of Economic Analysis, and the State Auditor’s Office, among others. Additionally, researchers reviewed existing studies from numerous academic sources on the impact of economic incentives, as well as existing data on state incentive programs, including the state-level equivalent of Chapter 380/381 agreements: The Texas Enterprise Fund.

To provide context for the use and impact of Texas’ economic incentive programs, we have structured this report around the three pillars necessary to build a strong economy: good job creation, investment in education and training, and fair market competition. Researchers found that while the Lone Star State has made substantial investments to attract Fortune 500 companies to the state, it has failed to invest in Texas businesses and workers, and left many homeowners footing the bill for billions that have been doled out to big business. This study seeks to provide in-depth analysis to how these tax subsidy programs work, how they have failed or fulfilled their promise to Texans, and to provide robust solutions to ensure that our state builds a strong economy that puts Texas business, workers, and taxpayers first.

I’m not opposed to the idea of economic incentives. There does need to be a good, measurable return on the investment, there needs to be a way to enforce the agreements, and the benefits need to be distributed equitably among the population. There’s plenty of room to do all of these things better. The full report is here, and the Austin Chronicle, the Press, and KUHF have more.

Another look at AirBnB

Interesting.

The hotel industry is starting to object. On Wednesday, a report funded by a national trade group claimed some Airbnb hosts function illegally and operate essentially as full-time hotels without the same health and safety oversight. It also says they can reduce the number of affordable options for full-time renters.

The home-rental site has stirred tensions in cities such as New York City, San Francisco, Paris and Barcelona. Austin has created new short-term rental regulations as a result.

In Houston, which does not have similar regulations, the city’s primary tourism agency is working with Airbnb and similar operators about taxes.

A city of Houston spokesman said Wednesday that the state is responsible for health and safety regulations that affect short-term rentals. But a spokesman for the Texas Department of State Health Services, which regulates hotels and bed-and-breakfast operators, said it does not have a role in Airbnb or short-term rentals.

Houston is the state’s second-largest Airbnb market, behind Austin, and officials are preparing for an increase in tourism around the 2017 Super Bowl. It was one of a dozen large U.S. cities included in the American Hotel & Lodging Association study released Wednesday by Pennsylvania State University’s School of Hospitality Management. Researchers tracked Airbnb data from a 13-month period.

“This study shows an explosion in activity among multi-unit hosts and the rise of full-time operators in each of the 12 markets we analyzed. Further, operators renting out three or more units represent a disproportionate share of revenue with only 7 percent driving more than $325 million in the period studied,” said John O’Neill, the Penn State professor who directed the research and is director of the school’s Center for Hospitality Real Estate Strategy.

The study found that nearly 30 percent of the revenue generated from hosts comes from people operating as full-time landlords, or 360 days a year. Individuals or entities renting out two or more residential properties on Airbnb account for 17 percent of hosts and drive nearly 40 percent of the revenue in those markets, according to the study.

The report found that in Houston there are 30 full-time operators who rent out their space for at least 360 days a year, generating $3 million in revenue during the 13-month period studied. In all, 956 hosts generated a total of $11 million in revenue, the report said.

It found 83 hosts operating three or more properties and 82 others with two units.

A copy of that report is here. AirBnB has disputed its findings and released its own report about its potential tax revenue for cities. I have no judgment about who is right or wrong in their facts and figures, I’m more interested in how cities are going to react to AirBnB, which I presume they’re going to have to do sooner or later. So far it has not been on the radar in Houston, but it has been in Austin and may be in San Antonio and elsewhere. I’ll be a little surprised if we see AirBnB regulation on the Council agenda in the near future, but if there’s any indication that it’s negatively affecting hotel tax revenue that could change.

The Uberization of moving companies

For when you don’t have a friend with a pickup truck and you need to move on the cheap.

A new breed of online moving companies with names like Buddytruk and PICKUP has drawn interest from the Texas Department of Motor Vehicles, which wants to ensure the companies are following state laws requiring moving truck drivers to be licensed.

“Anyone moving household goods in a pick-up truck for hire is required to register with the Texas Department of Motor Vehicles and show proof of insurance in the amounts required by law,” reads a letter the department sent to Plano-based PICKUP in October. “Something bought at a garage sale for home use would qualify as household goods.”

Since May, the department has sent letters to four app-based moving companies, warning each that they may be violating state law, according to spokesman Adam Shaivitz. Along with PICKUP, they include Austin-based Burro, as well as HashMove and Buddytruk, both based in California but offering services in Austin.

“Providers that refuse compliance can be referred to law enforcement because moving household goods without a license is a crime,” Shaivitz said. So far, the agency has not referred any cases involving these four companies to law enforcement.

Department officials say the issue is more than just the state keeping track of moving companies. The agency has pursued unregistered movers in the past who demand more money before delivering goods or fail to show up for delivery at all. Often, such movers advertise their services on sites like Craigslist, according to officials in several states.

The past two years have seen the launch of more than a dozen Uber-style moving or delivery companies, most debuting in cities on the West Coast. Many advertise themselves as being more convenient than traditional moving companies. Like Uber, some encourage those with access to a large enough vehicle to sign up as drivers to make extra money.

“You need to have a smart phone, a full-size pickup truck legally registered to you and insured to State requirements,” says PICKUP on the driver sign-up page of its website. The company, which promotes its drivers as “Good Guys With Pickups On Demand,” launched in 2014, serving the Dallas area. Asked if the company requires its drivers be registered with the state as household goods movers, CEO Brenda Stoner said in an email that the company was addressing that issue.

“We are working closely with a very collaborative Texas DMV, other regulatory agencies, and our attorneys and consultants to ensure that customers can adopt this new style of delivery service in a trusted, safe, insured and compliant manner,” Stoner said.

Both Burro and HashMove only employ drivers that comply with state laws, according to company officials. Buddytruk declined to comment.

I don’t expect to move again any time soon, and if I were anticipating a move I’m not sure I’d go for a service like this. Too many questions about liability and insurance and how good the service is. That said, the last time we did move we used a no-name company that was basically a guy with a repurposed bread truck and his three or four helpers, so who am I to talk? I guess overall I feel the same way about this as I do about major software releases – I’d wait till the bugs have been worked out first. Your mileage may vary, and if you’re looking at a soon-to-expire apartment lease, this may be a good way for you to go.

Would you like to sit in armed or unarmed?

From Houstonia:

Imagine it’s a Saturday afternoon. You stop into Whataburger to pick up lunch with your kids in tow, the only thing on your mind remembering which kid doesn’t want ketchup on his burger, which kid only wants ketchup on his burger, and whether you want to add jalapenõs to your own. You place your order and are pulling out your wallet to pay when a man walks in with a Sig Sauer strapped to his belt. He’s not in any kind of uniform; he’s not wearing a badge. He’s just a guy with his gun, and you’re just a guy with his kids. Are you okay with this scenario? Maybe so. Or maybe you can’t understand why a guy would need to bring his gun into a fast-food restaurant, and you decide to leave without your burgers.

Whataburger has long bet that a good portion of its customers belong to the latter group, hence its company-wide policy against open carry, which has been legal for years in other states where the chain operates, from Arizona to Arkansas. In advance of the new statewide law that goes into effect in Texas this January 1—the much-discussed House Bill 910 that makes Texas the 45th state to allow residents to openly carry and display their handguns—the Corpus Christi–based company recently reiterated that policy.

[…]

The thing is, there’s still a great deal of confusion surrounding the impending changes, as business associations large and small, reluctant to enter the quagmire of gun control politics, have been slow to provide guidance to private entities that may want to ban open carry. (The Greater Houston Restaurant Association didn’t even return Houstonia’s requests for comment.) As a result, getting those signs up in the first place is proving tougher than expected.

And in fact, rules for the necessary signage are complicated. “Business owners that want to ban guns from their property must post a new sign that adheres to strict wording, colors and text size,” says Terry McBurney, president of the Greater Montgomery County Restaurant Association, one of the few restaurant associations to provide assistance in advance of the new gun laws. Those colors, the Texas Department of Public Safety mandates, must be contrasting. The lettering must be block, and at least one-inch high, for maximum legibility, with the notice in both English and Spanish, posted “conspicuously” at the entrance to the business itself. Any sign that isn’t absolutely perfect, down to the letter, will be null and void.

I would note that State Rep. Diego Bernal of San Antonio has taken it upon himself to help businesses who want to opt out on open carry by printing signs that conform to all of the mandated requirements, which he is providing free of charge. Perhaps one or more of our local legislators could follow that example – I’m sure plenty of businesses would appreciate it. Regardless, I wonder how long it will take before some establishments use open carry as a marketing tool, catering to whatever side they think represents a bigger opportunity for them. I feel reasonably confident saying that there will be more than a few establishments in my neighborhood that feature these signs, and that more than a few of them will not be shy about advertising themselves as such. Should be fascinating to watch.

On a tangential matter:

During a panel [recently] addressing Texas’s new open-carry law, Houston Police Chief Charles McClelland, Harris County District Attorney Devon Anderson, and City Attorney Donna Edmunson encouraged citizens to ask as many questions as possible.

Mostly, they asked McClelland and Anderson to consider a myriad of hypothetical situations.

For example, many asked, what if you’re just sitting on a bench at a park with your gun in your holster, and some concerned “mad mom” calls the police on you because she and her kids are alarmed by the very presence of your gun? Are the police really going to detain you and ask that you show your CHL even though you’re just sitting on the bench eating a ham sandwich? Isn’t that a bit invasive?

The resounding answer from McClelland and Anderson, to all of the above types of questions, was basically this: we understand your concerns, but you’re just going to have to deal with it.

Chances are, they explained, you’re going to come across a CHL holder openly carrying his or her gun inside of a Walmart, a Taco Bell, a JCPenny (not a Whataburger, which already said it’s not going to allow guns inside). And chances are, for CHL holders, a police officer is going to ask you to show your license once someone’s kids get scared and they call 911, and you’ll just have to comply, because that’s the law—even if you’re just sitting on a bench eating a sandwich.

This is going to be so much fun, isn’t it? There are already plenty of disagreements about what this law means and what if any restrictions can be legally enforced in various places. I suspect the courts are going to be very busy next year, and the Lege will be back to revisit this in 2017.

Some power companies like the Clean Power Plan

Not that you’d ever know it.

ERCOT

Thad Hill, in a split with many fellow power company executives, flatly opposes the lawsuits that Texas and 25 others states have filed to block the Obama administration’s Clean Power Plan.

The plan, which the Environmental Protection Agency unveiled in the summer, seeks to combat climate change by reducing carbon emissions at existing power plants. It would affect coal-fired plants most profoundly, because they emit the most carbon dioxide.

It’s no coincidence that the company Hill heads, Houston’s Calpine Corp., owns exactly zero coal plants.

While it’s intuitive that wind and solar power companies, which don’t emit greenhouse gas in generating power, support the Clean Power Plan, opinion within the traditional electricity generation sector is more nuanced.

Calpine, which operates the nation’s largest fleet of natural gas-fired generators, leads a relatively small group supporting the federal rule.

Most companies that generate power with coal oppose it, including Dallas-based Luminant, the state’s largest power generator. It also operates some gas plants and one of Texas’ two nuclear plants.

[…]

While the EPA has tightened other emissions regulations under President Barack Obama, the Clean Power Plan is the most sweeping overhaul, said Travis Miller, director of utilities research at Morningstar.

The plan is intended to reduce carbon pollution from existing power plants 32 percent from their 2005 levels by 2030.

“The Clean Power Plan is going to have ripple effects throughout the entire energy system in the U.S.,” Miller said. “Utilities need a long runway to adapt, but they’re willing to adapt.”

In the lawsuit challenging the rules put forth by the Democratic Obama administration, Republican Texas Attorney General Ken Paxton calls the plan a massive power grab by the EPA that would increase Texans’ electric bills significantly and threaten the reliability of the electric grid.

The Electric Reliability Council of Texas, which manages 90 percent of the state’s power grid, has estimated the rule could force the closures of some Texas coal plants and increase electricity prices 16 percent by 2030.

Miller agreed that the Clean Power initiative would affect Texas, though he said that Midwestern, Great Plains and Appalachian states most dependent on coal would feel the greatest effects.

Some of the changes in Texas’ power landscape are occurring anyway, because of cheap shale gas and Texas’ ranking as the largest wind power producer in the nation.

“There’s an impressive pipeline of new gas generation and new wind generation in Texas,” Miller said.

That presents market challenges to coal plants, and could move the state toward compliance with the Clean Power Plan. “Texas might not have to do all that much,” Miller said.

See here for the background. Miller’s statement is consistent with what ERCOT itself has said, and the Clean Power Plan would help conserve water, too. But this is Texas, and our leadership has to do things the hard way. Just remember, they don’t speak for everyone, not even in the power generation business.

Back to the business angle

I’m sure we’ll hear more of this in the next few weeks.

Business and tourism leaders worried Wednesday that voters’ rejection of a citywide anti-discrimination ordinance has hurt what had been one of their best recruiting tools: Houston’s emerging reputation as a diverse metropolis that supported an openly gay mayor and welcomes young talent looking to launch careers in a progressive environment.

Suddenly at risk, they say, are corporate relocations, nationally prominent sporting events and the lucrative convention business that generate millions of dollars and help the region thrive.

“In recent years, we have done a remarkable job of changing the perception and attracting people to Houston,” said Bob Harvey, president and CEO of the Greater Houston Partnership. ” … We have to quickly re-establish that this is a modern, open city.”

[…]

Mike Waterman, president of the Greater Houston Convention and Visitors Bureau, the group that recruits conventions that draw tens of thousands of people here annually, said many of those top organizers hope the new mayoral administration will pass an alternative measure quickly.

“We can’t go on as a city without a non-discrimination ordinance forever,” Waterman said. “It’s a differentiator, and one we do not have today.”

The Greater Houston Hotel & Lodging Association, which like the other booster group was vocal in its support of HERO, echoed that concern.

“I think the issue we face is we want people outside our city to know the true Houston, that we are very open and welcoming to all visitors,” association president Stephanie Haynes said.

[…]

There also was concern Wednesday that the defeat of HERO could make the city unattractive to diverse job candidates, including the increasingly sought-after millennial workers, said Keith Wolf, managing director of Murray Resources, a recruiting and staffing firm in Houston.

“I think the larger concern is that it feeds into the misperception by some that Houston and Texas, in general, is an intolerant, unwelcoming place,” Wolf said.

“If you’ve been on Facebook and Twitter in the last 24 hours, you’ve probably seen millennials expressing their embarrassment that the ordinance did not pass,” he added.

Harvey, of the Greater Houston Partnership, said it will be hard to know how many companies might avoid Houston because of the vote, but he said he agreed that major companies are eager for young professional workers. Those recruits, he said, care about social issues.

I’ve said this a few times before, and I’ll say it again: This is a political opportunity for Democrats to try and drive a wedge between business interests that tend to support Republicans and the Republicans like Dan Patrick and Greg Abbott who oppose them on matters of equality (among other things). All it would really take, at least in the beginning, would be for some Democratic elected officials to point out how Republicans are actively harming businesses in Texas by things like their opposition to LGBT equality. (There are plenty of other issues one could cite, from “sanctuary cities” to schools and pre-kindergarten and infrastructure, but with HERO in the news this is the place to start.) Acknowledge that business interests won’t always agree with Democrats, but they already strongly disagree with Republicans on many things, and they are not being well served by a political party that is taking them for granted. This is obviously a long-term project, but it’s basically free and has plenty of upside. Naturally, the first politician to take this path needs to be Sylvester Turner, since he’s the only candidate in the Mayoral runoff who has any interest in revisiting HERO if elected. I’m just saying.

Bring back postal banking

I still like this idea.

Postal unions and civil rights groups are among other advocacy organizations, along with the U.S. Postal Service inspector general, pushing USPS to expand into banking. Sen. Bernie Sanders (I-Vt.), a Democratic presidential hopeful, agrees. But USPS, which could use the business, has no interest.

Providing financial services in post offices “could benefit the 68 million underserved Americans who either do not have a bank account or rely on expensive services like payday lending and check cashing,” says an inspector general report issued in May. “The products also could help the Postal Service generate new revenue to continue providing universal service. Because it has a presence in every neighborhood, including many places where there are no longer any bank branches, the Postal Service is well suited to provide such services. In addition, its well-trained workforce is already experienced at handling complex transactions and watching out for related fraud and other risks.”

The push for postal banking received a boost this month with an article by Mehrsa Baradaran in The Atlantic. Baradaran, a University of Georgia School of Law associate professor, advocates a “central bank for the poor,” as an alternative to “the unscrupulous practices of payday lenders.”

Postal banking, she wrote, could provide short-term loans and “potentially drive out the usurious fringe-lending sector, which profits from Americans’ financial woes.” Her article was adapted from her book “How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy.”

USPS officials regularly trumpet what they are doing to improve the Postal Service’s financial situation, including such things as selling greeting cards. But the officials have rejected postal banking.

“While we currently provide our customers with certain financial services, including money orders, electronic funds transfers, and cashing of U.S. Treasury checks, our core function is not banking,” said David A. Partenheimer, a USPS spokesman. Former Postmaster General Patrick Donahoe was more emphatic during his farewell press conference in January. “The key thing for any successful business is to work within their core,” he said. “We don’t know anything about banking.”

They must have forgotten.

Postal banking, known as the Postal Savings System, began operation in 1911 and officially ended in 1967, though the Post Office stopped accepting deposits a year earlier. Initially, savings earned 2.5 percent interest with a half-percent designated for operation of the system, according to a postal service history. “Although bankers first viewed the Postal Savings System as competition,” the history says, “they later were convinced that the Postal Savings System brought a considerable amount of money out of hiding from mattresses and cookie jars.” Most of the money was redeposited in local banks. The Postal Savings System, however, did not include lending, according to Mehrsa.

I’ve covered this before, and continue to be convinced that it makes sense. That Inspector general report quote above is a big part of it, but just having convenient access to their money without having to pay exorbitant fees or be at the mercy of the failings of unregulated “entrepreneurs” would be a huge book for millions of working people. I truly don’t understand the USPS’s objections to this, given their own history. It would be good for their business as well as good for so many people. Keep up the pressure, y’all.

Revisiting the Texas-Amazon sales tax deal

The Statesman looks back and concludes it was a pretty good deal all around.

Amazon

In 2012, the state rolled the dice on a controversial deal with e-commerce giant Amazon.com.

To end a two-year battle, Texas said it would drop a $269 million sales tax bill due from the Seattle-based company in exchange for an incentive deal, among other agreements.

Amazon said it would begin collecting sales taxes within 60 days and create 2,500 jobs in Texas and invest $200 million in the state by 2014.

Now, as the company says it’s exceeded those benchmarks, state officials and economists say the agreement was the right call for Texas.

“I believe Texas benefited from the deal with Amazon. The agreement meant Amazon began collecting and remitting taxes to the state, which the comptroller’s office felt were legally due,” Texas Comptroller Glenn Hegar told the American-Statesman. “The agreement also allowed Amazon to start building warehouses and to greatly expand their physical presence in the state, which was largely beneficial to the economy.”

This summer, the Internet retailer told state officials it reached more than 3,500 employees in Texas and made more than $300 million in capital investment in Texas by the end of 2014, according to documents filed with the comptroller’s office.

Amazon also paid an undisclosed amount to settle the matter in 2012.

With the deal, Texas ended a two-year fight seeking the company’s uncollected sales taxes, and Amazon began collecting on July 1, 2012 — potentially adding millions of dollars in new revenue to state coffers in coming years. Now, current figures seem to prove that out.

An American-Statesman analysis of data from the comptroller’s office shows the state’s sales tax collections have risen by hundreds of millions of dollars since Amazon.com began issuing the levy on Texas residents.

Since July 2012, sales tax revenue in Amazon’s sector has gone up more than $325 million, comptroller data shows. While state law prohibits the comptroller’s office from releasing sales tax collections by individual companies, it’s clear a significant portion of that increase is a result of Amazon’s Texas sales.

Although Hegar wasn’t the comptroller at the time of the 2012 deal, he says the state has benefited from Amazon’s presence.

“We welcome and appreciate Amazon like we do all the retailers in our state,” Hegar said in weighing the company’s role in Texas today. “We encourage and benefit from the economic activity generated by both their physical activities in the state through capital investment and job creation, and also greatly appreciate their following the law by collecting and remitting taxes from our citizens when selling taxable items.”

See here, here, and here for some background. I supported this deal back then, and I’m glad to see it has basically worked as intended. The rationale from two decades ago for making online sales tax-free has long since been rendered irrelevant, and the effect of that policy has become increasingly expensive for state and local governments. It just made sense for Amazon and other online retailers to start charging sales taxes. A few years later, this isn’t even controversial any more. Like I said, a good outcome and I’m glad to see it.

Bridal Extravaganza happily adjusts to a same-sex marriage world

Love is love, and business is business.

RedEquality

Vendors in the industry, from florists to caterers, are seeing a bumper crop of same-sex Texas weddings.

“I think there’s going to be some pent-up demand, and that’s exciting,” said Laurette Veres, Bridal Extravaganza producer.

In Texas, same-sex weddings could generate at least $182 million in total spending in the first three years, according to projections by the Williams Institute on Sexual Orientation and Gender Identity Law and Public Policy.

“That could be a lot of business,” said Carol Wyatt, who plans to marry her partner of two years, Sallie Woodell, on Aug.  2. The weekend bridal show really came too late for Wyatt and Woodell – they’ve been planning their Aspen, Colo., wedding since December – but they see a lot of other weddings in the works. “With almost every couple we know,” Wyatt said, “they’re either getting married or have gotten married in another state” and want to renew their vows closer to home.

Some of the show’s vendors made special efforts to welcome same-sex couples. Dream Bouquet Floral and Event Decor displayed a bouquet of roses with rainbow-hued petals. Who Made the Cake!, a Houston cake design studio, brought in a multi-tiered cake called “Love Around the World” that featured same-sex couples traveling together – two men riding a gondola, two women in a hot air balloon.

“We’ve always done cakes for LGBT marriages, so this is nothing new for us,” said the cake shop’s owner, Nadine Moon. “My view has always been love is love, and you deserve a great cake to celebrate, I don’t care who you are.”

The show’s name isn’t going to change, Veres said, because it’s been known (and trademarked) as the Bridal Extravaganza for three decades. But organizers are tweaking other details to make the show more inclusive to same-sex couples. Instead of signing up as bride and groom, couples now register as “Partner 1” and “Partner 2.” And for years, Veres said, engaged attendees have been given stickers that identify them to vendors as a “Bride to Be.” “We’ll use up the ‘Bride to Be’ stickers, but we won’t reprint those,” she said. The new stickers simply say “Engaged.”

[…]

Mark Phariss and Vic Holmes, who will marry in November after 18 years together, came to the show on Saturday. The two live in Plano and already have booked and ordered most of the things they want for their North Texas wedding, but they wanted to see what else they might find.

“Everyone was very accepting when they learned we were a same-sex couple,” Phariss said. “We had no issues at all.” But then, he said, that’s been typical of their experience since he and Holmes started planning their wedding in March. “Everyone we’ve called, we’ve told them that we’re a same-sex couple and asked if that would be an issue,” he said. “Everyone has said it’s not, and, in fact, said they were sorry we had to ask.”

Wyatt, who’s marrying next month, has heard talk that a same-sex wedding expo might be in the works in Houston, something made by and for the gay community. But she prefers the idea of same-sex couples “mixing and mingling in the broader wedding market,” as they did at this weekend’s show.

“Any time we can present ourselves as ‘We’re just normal; we’re happy to be getting married just like you are,’ it removes stigma from us,” she said.

God bless the Supreme Court and capitalism, eh? You’d think that if someone told Greg Abbott and Dan Patrick that a $60 million a year business was coming to Texas, they’d shout about it – and claim credit for it – everywhere they could. I guess Texas isn’t open for business for everyone. Still, it’s always good to be reminded who the mainstream is, and who the mainstream isn’t. They may raise a big fuss and may never quite go away, but they’re a shrinking and increasingly irrelevant minority.

Who’s afraid of a little climate change?

We should be in Texas, but we’re not.

Texas probably will see a sharp increase in heat-related deaths and coastal storm-related losses in the coming decades if nothing is done to mitigate a changing climate, according to a new study commissioned by a bipartisan group of prominent policymakers and company executives aiming to spawn concern – and action – in the business community over the much-debated warming trend.

The study is the third region-specific analysis by the so-called Risky Business Project, an eclectic coalition led by former banker and U.S. Treasury Secretary Henry Paulson Jr., former New York City Mayor Michael Bloomberg and billionaire hedge fund manager-turned-environmentalist Tom Steyer. The men co-chair a bipartisan 20-member governing committee made up mostly of former presidential Cabinet members – including President Ronald Reagan’s secretary of state – who agree that climate change is occurring and that it will have negative economic consequences, but have consciously avoided the debate over whether human activity is causing it — or how to respond.

The first step in their mission? Highlighting the potentially devastating economic impact of climate change in the not-too-distant future. And, of course, not everyone is buying it.

Published Tuesday, “Come Heat and High Water: Climate Risk in the Southeastern U.S.” found that Texas will be one of the states most negatively impacted by climate change by mid-century absent any changes.

Among the findings of the study, Texas will probably see by the 2050s:

  • The number of extremely hot days per year – with temperatures exceeding 95 degrees – more than double, from an average of 43 to 106.
  • About 4,500 additional heat-related deaths per year with nearly half that increase coming in the next five to 15 years. (For comparison’s sake, the study points out there were about 3,400 total automotive fatalities in Texas in 2013.)
  • A sea level rise of up to 2 feet in Galveston.
  • A $650-million-per-year increase in storm-related losses along the coast, bringing the state’s total annual damages to more than $3.9 billion.
  • A marked decrease in both worker productivity and crop yields.

The idea is that if the group can convince business leaders that climate change is a true risk, they will in turn pressure policymakers to do something to address it, said committee member Henry Cisneros, a former mayor of San Antonio and secretary of the U.S. Department of Housing and Urban Development.

“We’ve seen that happen time and time again” with other divisive topics, Cisneros said, adding, “The implications for the productivity of the workforce are immense.”

[…]

That does not mean the business community will accept the findings of the study, however. And that reluctance appears largely rooted in the parts of the climate change debate the Risky Business Project has avoided amid a lack of clear-cut consensus among its leadership.

Claiming you can accurately model climate change over the short or long term is “arrogant” and “unrealistic,” said Stephen Minick, the head lobbyist for the Texas Association of Business.

While the powerful group believes climate change is occurring and businesses should account for it, Minick said that whether it is being caused by human activity — namely greenhouse gas emissions — is far from proven, along with the extremity and accuracy of the study’s predictions.

“We absolutely acknowledge the fact that the climate is changing and that sea levels are changing, partly because of climate, partly because of other reasons, and they always have and they always will,” he said.

“We have a long, long way to go in terms of our scientific knowledge … before we can make valid assumptions along those lines,” Minick added, asserting that accurate predictions are difficult in large part because big changes take place “over millenia.”

I believe that response can be summed up as follows:

shrug_emoji

You can see why this is unlikely to be taken seriously here. Hey, most of the people who don’t want to do anything about this will be dead long before 2050 anyway, so let the kids worry about it, amirite? The Observer and Hair Balls have more.

Abbott sides with auto dealers

Sorry, Tesla.

Giving a nod to long-established franchised auto dealerships, Gov. Greg Abbott says Texas doesn’t need to carve out a loophole in its laws that would allow Tesla to sell its high-end electric cars directly to consumers.

“Texas has a very robust, very open, very effective automobile sector that seems like it’s working quite well the way that it is,” the Republican told Bloomberg Radio on Tuesday. “If you’re going to have a breakdown in a car, you need to have a car dealership there to make sure that the vehicle is going to be taken care of. We haven’t seen that from Tesla.”

Tesla’s business model is to sell directly to consumers, bypassing the middleman dealers as it does in many states. But a longstanding law bars that practice in Texas.

[…]

Tesla has refused to call last session a failure. The company says it educated more consumers and lawmakers and will continue its fight to enter the country’s second-largest automobile market. And on Tuesday, it said it wasn’t discouraged by Abbott’s comments.

“As a growing company, we are optimistic about the governor’s pro-business position and hope to be selling direct soon,” Ricardo Reyes, a spokesman, said in a statement.

Abbott’s comments contrast with those of his predecessor. Last year, Gov. Rick Perry suggested in an interview with the Fox Business channel that the state’s dealership laws were “antiquated protections” that should be revisited. Those comments came as Texas was trying to entice Tesla to build its $5 billion lithium-ion battery plant here. The company ultimately chose Nevada.

See here for previous Tesla bloggage. They’ve struck out in the last two legislative sessions trying to get a bill passed to change the franchise model, with no one even sponsoring a bill last time. Abbott may be “pro-business” in some sense, but he surely knows where his bread is buttered. It will be interesting to see what if anything Tesla does in the next session.

The wedding industry is rubbing its hands with glee

Nothing like having your market dramatically expanded overnight.

RedEquality

Within hours after the Supreme Court legalized gay marriage in Texas and across the country, local wedding businesses and venues already began getting orders and bookings from same-sex couples. Those in the wedding industry said they expect a surge of gay couples who were hoping to marry in Texas.

“The gay wedding business will grow instantly,” said Mariana Lemesoff, owner of AvantGarden, which received three new wedding requests from gay couples on Friday.

One study estimated an economic boost of $181.6 million in Texas during the first three years of legalization through direct wedding spending and spending by out-of-state wedding guests.

Until the high court’s 5-4 ruling, Houston had been missing out on the gay wedding business, said Betsy Gelb, a marketing professor at the University of Houston’s C.T. Bauer College of Business.

Competing primarily with Austin, Houston will have an opportunity to attract same-sex wedding business from other Texas towns where people aren’t as comfortable with their union, Gelb said.

“We are, in a sense, behind the curve in cities realizing there is money to be made in LGBT weddings,” she said.

[…]

In some weddings both women wear dresses. Other couples want pantsuits. Either way, [Christine Nokta, public relations director for Impression Bridal] said, the bridal store is expecting an increase in business.

“Two dresses, that’s better than one as far as we’re concerned,” she said.

Indeed. And don’t forget the boon that county coffers will receive by issuing all those marriage licenses, as places like New York City have been doing for years. You may recall that the original anti-gay marriage bill that was taken up in the Lege this year, from Sen. Charles Perry and Rep. Cecil Bell, would have transferred the marriage license business to the Secretary of State’s office. County Clerks raised a huge fuss about that, since that would have been a real financial loss to them. That’s a small amount compared to what this boost in the wedding business will be, however. Just remember, the next time Greg Abbott claims credit for Texas’ economy, SCOTUS and marriage equality will be a part of that. The Huffington Post has more.

Nothing but not-so-good-times ahead

Maybe if everyone chants “This time is different than the 80s!” loudly enough it will have the talismanic effect we all hope it will.

For five years, a domestic oil boom has created a bounty of high-paying jobs and a general climate of prosperity here. But as the rest country starts to see signs of economic revitalization, many of Houston’s biggest companies are slowing down. Both phenomena are due at least in part to the precipitous slide in the price of crude.

Halliburton, Schlumberger, Weatherford and Baker Hughes have dominated headlines with news of their layoffs, but the vast array of nonenergy businesses that feasted on their good fortune also are coming to the realization that the boom may finally have run its course.

That was clear in a series of interviews last week, in which even the most sanguine business owners agreed things could change dramatically over the next several months.

A financial planner whose customers include oil and gas executives said he’s advising clients to start “hunkering down.” A prominent hotelier is warning managers to get ready for “some belt-tightening.” A high-end real estate broker predicted builders could soon be offering incentives – “closing costs, appliances, upgrades” – in a market that only recently had homebuyers writing plaintive letters to sellers and paying well over asking price to get their second- or third-choice house.

“Nobody should be afraid, but people should be concerned,” added Patrick Jankowski, senior vice president of research at the Greater Houston Partnership. “We will feel the impact, even outside of energy. We just haven’t felt it yet.”

By almost every metric, Houston’s economy flourished during the domestic energy renaissance. The biggest impact has been jobs: nearly 485,000 added to the region in the last five years, according to Jankowski. The impact of those workers, whose wages are about double the local average, extends far beyond the energy sector itself, as they buy homes, purchase cars and spend money around town.

Optimists look to the medical, shipping and logistics industries to offer a cushion. But it’s naive to believe that if Houston thrived during the energy boom, it won’t suffer as the sector struggles.

Bill Gilmer, director of the Institute for Regional Forecasting at University of Houston, noted that although Houston’s economy has diversified since the oil bust that rocked the region in the 1980s, about half the region’s economic activity is still affected by the oil industry.

“I don’t think we have seen any significant diversification,” he said.

If the price of crude oil settles at $50 a barrel, the city would narrowly avoid a recession. But at $40 it won’t, said Mark Zandi, chief economist at Moody’s Analytics, in an interview earlier this month.

Doesn’t that make you feel better? I don’t really have anything to add to this. For what it’s worth, I agree that this time around, it likely won’t be as bad as it was before. That’s not going to be much comfort to anyone who’s been or going to be laid off, or whose business will suffer, but it’s something. And if you’re one of those people who once sported a bumper sticker that said “Lord, please send us one more oil boom, we promise not to piss it away next time”, well, I hope you feel like you’ve lived up to that.

Use less, pay more

Ain’t utility deregulation grand?

More than 70 percent of electric plans offered in the Houston area contain terms that may penalize customers who don’t use a certain amount of power, according to a Houston Chronicle analysis of more than 300 plans available in early January.

NRG and other companies with plans that include the fees say they offer a variety of products designed to meet the needs of different kinds of customers. They also point out that fixed fees covering some of their overhead allow them to reduce the rates they charge per kilowatt hour of consumption.

Some plans charge minimum-use fees to customers whose monthly power consumption falls below a particular threshold – usually 1,000 kilowatt hours. Other plans offer credits to customers who exceed a specified threshold of power use.

“The market probably still has a way to go toward rewarding people for using less,” said Troy Donovan, market development manager at CenterPoint Energy Services, which runs a website called TrueCost that factors the fees into its analysis of electric plans. It is a division of CenterPoint Energy, the transmission company that distributes electricity in the Houston area regardless of what retailer sells customers their power.

Consumer advocates say minimum-use penalties discourage energy conservation at a time when environmental groups, all levels of government and even electric companies themselves are encouraging customers to scale back on energy consumption.

“These fees often go unnoticed until you really cut back and you realize you still have a larger bill than you expected,” said Jake Dyer, a policy analyst at the nonprofit Texas Coalition for Affordable Power. “It’s bad news for a lot of folks doing their best to save power and save on their electric bill.”

Even customers penalized for using less energy pay for energy efficiency initiatives: A $3.05 fee on monthly bills in the Houston area covers installation of technically advanced smart meters partly touted as energy-saving measures; the city of Houston last year raised residential energy-efficiency requirements.

[…]

About a third of the Houston-area retail providers the Chronicle examined listed no plans containing penalties or credits based on power use.

TriEagle Energy, based in The Woodlands, charges customers flat monthly fees – in addition to their electricity rate per kilowatt hour – but the fees aren’t tied to power consumption. Consumers are more likely to stay with the company if they don’t get surprises like minimum-use fees on their bills, said Kasey Cline, TriEagle’s director of sales and marketing.

Other retailers, how­ever, say the fees make sense.

Champion Energy Services uses them to cover fixed costs that it otherwise would roll into energy rates, said Brenda Crockett, vice president for market development and regulatory affairs. The company has to pay costs of billing and other services for all customers, she added, regardless of their electricity use.

Other companies echoed that response.

“There’s a cost to cover, whether they’re using 1 kilowatt hour or 1 million kilowatt hours,” said Robbie Wright, a founder of Bounce Energy, which also charges minimum use fees.

That argument rings hollow with Dyer, of the Texas Coalition for Affordable Power. “You don’t pay a minimum-use fee when you step into a grocery store,” Dyer said. “You don’t pay a minimum-use fee when you shop for any other product. Most businesses price their product in such a way that the people who actually buy it will pay for their fixed-cost infrastructure.”

Dan Wallach noted this feature back in 2013, in his annual report of choosing an electric plan for his house that year. There’s no logical reason for this – the companies do it because they can, because most people don’t read the fine print closely enough. Jake Dyer is exactly right, but in the absence of some kind of market regulation, or better educated consumers, they’ll get away with it. It’s easy to say that other companies could undercut the ones that do this on price and steal their business, but that isn’t what has happened. Maybe this Chron story will help, but I doubt any one story could. It will take a lot more outreach than that to penetrate the public consciousness.

The LGBT Wedding Expo

I love stories like this.

RedEquality

The Houston LGBT Wedding Expo at the Galleria-area JW Marriott, which was hosted by the North Carolina-based Rainbow Wedding Network, showcased venues and companies marketing to the growing number of same-sex couples.

With the LGBT community gaining visibility and gay-marriage bans toppling in several states, wedding events and services for same-sex couples are becoming increasingly popular. Since launching the Rainbow Wedding Network in 2000, co-founder Cindy Sproul and her life partner have seen attendance at their events and demand for them grow quickly.

Sunday’s event proved to be the organization’s second-largest event of the year with more than 750 reserved tickets.

While gay marriage is not legal in Texas, many couples still exchange vows here or travel out of state for a ceremony and return home for the reception.

“Our shows in areas where there is no marriage recognition for LGBT couples tend to have a higher turnout. If you think about it, we kind of take that awkwardness out for couples,” said Sproul. “When they walk in here, they’re planning a wedding, all those businesses that are there are very excited for them. They don’t get that if they go to a traditional bridal fair.”

I’ve noted before that the legalization of same sex marriage is a boost to the economy, and with stories like this you can see why. The longer the current fight over the constitutionality of Texas’ ban on same sex marriage is drawn out, the less Texas will ultimately capitalize on this effect, since more and more people will decide not to wait but will take advantage of what is legally available to them in other states, but it will still be a boon when it happens.

The first same sex wedding I ever attended was in 1996, between my friends Martha and Elisabeth. Obviously, it wasn’t a wedding in a legal sense, but it was a lovely and very traditional ceremony at one of the progressive Episcopal churches in Montrose. The brides found a clever hack for dealing with wedding registries, which of course required a groom’s name as part of the couple. Each registered as the bride at one of the locations where they wanted to register, and for the groom’s name they simply entered the first and middle initials and last name of their betrothed as the groom. Neither Dillard’s nor Bed, Bath & Beyond were any the wiser, and they reaped the benefit of their business while the guests enjoyed the convenience of the service they normally expected. Oh, and the world didn’t end and eighteen years later they’re still married, now in the official legal sense, in California. And I hope that someday soon people like them will be able to register together without going through any subterfuge just as straight couples do.

No gigafactory for Texas

They’re going to Nevada.

Nevada Gov. Brian Sandoval announced Thursday that Tesla Motors will build a massive battery factory in the state as long as legislators approve tax breaks and other incentives worth up to $1.3 billion over 20 years.

Sandoval revealed terms of the deal he negotiated with the electric car maker at a Capitol news conference attended by Elon Musk, CEO of California-based Tesla. The governor called it a “monumental announcement that will change Nevada forever.”

Sandoval didn’t mention the total value of the package and his remarks seemed intended to pre-empt critics who will see it as too generous.

“Is this agreement good for us?” the governor asked. “This agreement meets the test, by far.”

Later, he said that for every $1 Nevada gives up, the project will produce $80 in economic impact.

“Even the most skeptical economist would conclude that this is a strong return (on investment) for us,” Sandoval said.

Musk told the audience that Nevada didn’t offer the biggest incentive package among the five states that tried to lure the factory, though he didn’t specify which did among California, Texas, Arizona, New Mexico and Nevada.

The most important considerations were not incentives, he said, but rather a high confidence that the factory will be ready by 2017, followed by assurances that batteries can be produced cost efficiently.

Later, Musk told reporters that Tesla would stop looking for another state as a backup, in case Nevada did not come through. “Nevada is it,” he said.

Well, I’m a bit skeptical of that 80-to-1 return claim, but I’m not an economist, so there you go. Texas was in the running for this, but there was a big obstacle in the way.

Despite the state’s advantages, the company had indicated that Texas’ long-standing state laws protecting auto dealerships – a challenge to Tesla’s business model – did not help the state’s case. Texas laws prevent car manufacturers from selling directly to Texas consumers, as Tesla does. Texas requires manufacturers to sell their cars through tightly regulated franchised dealers. A few other states restrict Tesla sales through franchise laws, but Nevada is not one of them.

I’ve blogged about that before. I wonder if this will have an effect on the effort to change that law in 2015. Because of this, Texas was thought to not be a serious contender for the gigafactory. I won’t claim to be a big fan of the money that was being thrown at Tesla by the competing states, but there’s no reason to keep that archaic setup for auto sales. The Rivard Report, the LA Times, and Think Progress have more.

It’s a great time to be a construction worker

For most people, anyway.

On a conference call earlier this month, the president of Houston-based developer Camden Property Trust described what it’s like building apartments in markets where construction is booming and skilled workers are in short supply.

“It’s a catfight to get subcontractors to fully staff at your jobs,” said D. Keith Oden. He added, “It’s hand-to-hand combat.”

The labor shortage has become so severe that the company recently started putting guards on job sites to keep its workers from being poached by competitors willing to pay more.

“We’ve had specific instances where people would come on site and try to round up workers,” Camden’s chief executive Ric Campo said in an interview. “During the World Cup, we actually put big screens on our sites to get people to stay.”

[…]

[Pat] Kiley, principal of Kiley Advisors said licensed trades are in high demand: “electrical, mechanical, plumbers, sheet metal workers, iron workers, operating engineers, certified crane operators. These are all crafts in short supply,” he said.

Labor unions are recruiting workers.

“You’re getting people moving here from out of state like they did in the ’60s, ’70s and ’80s,” Kiley said. “The unions have brought in people.”

Ed Vargocko, business manager of the Iron Workers Local 84, said the amount of construction taking place in the Houston area is attracting workers from other parts of the country where development remains slow.

“A lot of them come from California and quite a few from Detroit,” he said.

In some cases, the shortage is evident in higher wages.

Between the first quarter of 2010 and the first quarter of 2014, the average weekly wage in the local construction industry rose 24.5 percent, Jankowski said, citing the Quarterly Census of Employment and Wages. That’s higher than the 19.9 percent boost in the overall average weekly wage here over the same period.

The wage and benefit package for millwrights will increase by 4 percent for each of the next few years, Donahou said.

“It’s a strong market out there,” he said. “Everybody’s going after the same people.”

Still, a segment of the construction worker population, mostly immigrants, is underpaid and facing other problems.

A report on the challenges facing the construction industry in Texas, released last year by the Workers Defense Project and the University of Texas, found that the state’s construction industry is characterized “by dangerous working conditions, low wages, and legal violations that hurt working families and undercut honest businesses.”

The report cited a widespread practice of payroll fraud, where more than 40 percent of construction employees were misclassified as independent subcontractors.

In such cases, employers avoid paying payroll and unemployment taxes and workers are deprived of overtime and other employment benefits.

That gives an unfair cost advantage to companies that don’t abide by employment rules, said construction veteran Stan Marek, CEO of the Marek Family of Companies.

The report cited is here. It’s yet another reason why comprehensive immigration reform is so desperately needed, and another reason why I cannot fathom how business interests can say with a straight face that they support CIR while continuing to support the politicians that oppose it. But in a state where employers can legally lie to their employees, I suppose such duplicity isn’t that surprising. Anyway, it sure would be nice if this kind of leverage for workers made its way to other industries as well. After decades of stagnant wages, we could all use it.

AirBnB in Houston

When people talk about “the sharing economy” for good or ill, the main players that get named tend to be Uber, Lyft, and AirBnB. We’ve heard a lot about the first two in Houston lately, but prior to this Chron story I can’t say I’d heard anything about the latter.

Airbnb launched in 2009 as a way for those with extra space to connect with travelers looking for an alternative to traditional hotels, in the same way that Uber and Lyft help people turn their cars into temporary taxis. In November 2013 Airbnb chief technology officer Nate Blecharczyk reported that more than 9 million users, or “guests,” have now stayed in AirBnb rentals, up exponentially from the 4 million bookings that the start-up recorded in its first four years of business.

“I had a roommate, and when she moved out instead of going through the whole process of finding a new roommate, I had extra furniture so I thought I would give it a shot,” said Crystal Lee, who has been renting a room in her Montrose house on Airbnb since 2012.

“Everything is yours, so I think people are a lot more respectful of that,” she said. “With roommates, people get used to leaving their stuff everywhere and not caring. When you have a house guest, people tend to be polite. It’s kind of fun to play tour guide and tell people where to go and what to do.”

[…]

Airbnb is most popular in cities that attract a lot of tourism and where hotel prices and rents are high. Austin, with less than half of the population of Houston, boasts nine times the number of Airbnb properties that Houston lists. That’s partly because downtown Austin has only 6,000 hotel rooms, not nearly enough for major events like Austin City Limits and South by Southwest. The fact that Airbnb has made a major push for publicity at recent SXSW festivals – including a promotional park featuring live music and display rooms designed by musicians like Snoop Dogg – could also be a factor.

Houston, on the other hand, has nearly 75,000 hotel rooms in the metropolitan area. According to tourism data compiled by the Greater Houston Convention and Visitors Bureau, a higher than average percentage of visitors are here visiting family or on a business trip, implying that they already have a place to stay or that hotel price is not of primary concern.

Houston is also one of only two cities in the U.S. where the average hotel rate per night is lower than renting out an entire house or apartment on Airbnb, according to the website Priceonomics. (The other city is Las Vegas.)

Cheap, plentiful hotel rooms haven’t made a dent in the demand for Airbnb hosts though. Anderson says her property is booked about 75 percent of the time, and Wright, who only makes her house available on weekends when she is heading to family homes in Tiki Island or La Grange, says she turns down more offers than she accepts. The process has been so successful for Lee that when her job relocated her to New York earlier this year, she kept her Houston house and still rents out the extra room.

While Houston might be lacking in traditional tourists, many Airbnb guests are people who are planning to move to the city and want to get a feel for the different neighborhoods. Others, particularly international travelers, stop in Houston while on cross-country trips as a break between the frenetic nightlife of New Orleans and Austin. Internships, job interviews, weddings and family visits are also commonly cited reasons for a Houston Airbnb stay.

It’s an interesting contrast with Austin. I know several people who have made an envy-inducing amount of money renting their homes via AirBnB for South by Southwest. I suppose the difference between “normal” level of demand for hotel space in Austin and the peak level that happens when SxSW is happening is such that AirBnB makes a lot of sense to fill the gap. I seem to recall there being a few stories about people leasing their homes for outrageous amounts in Houston during the last Super Bowl for similar reasons. I get why people have concerns about the effect of companies like Uber and Lyft on employment opportunities in the industry they’re entering. I think those concerns are valid even as I support allowing Uber and Lyft into currently regulated vehicle for hire markets. I don’t see the same concerns about AirBnB, however. There’s no barrier to entry in the hotel market like there has been in many cities in the taxi market, and there’s no general complaint about the way the hotel business is run like there is for taxis. A ride is a ride, but there’s a vast difference between a Motel Six room and one at the Ritz Carlton, or a traditional bed and breakfast and a resort hotel like the Hyatt Lost Pines. Uber and Lyft could conceivably upend the existing taxi industry, but I don’t see AirBnB as being anything more than a niche. What do you think?