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We’re going to vote on making an income tax double secret illegal

It’s definitely time for sine die.

Sen. Pat Fallon

Texas voters will decide in November if they want to bar the imposition of an income tax, following approval of the constitutional amendment by the state Senate on Monday.

The Texas House had approved House Joint Resolution 38, which prohibits the imposition of an individual income tax, earlier this month.

The seemingly anodyne proposal ran into pushback Monday from some Senate Democrats who suggested the bill could cut business taxes, a major source of state money.

There appears to be no threat of an income tax currently — no such bill appears to have been filed, let alone have reached the floor of either chamber, where it would be political kryptonite. And a 1993 constitutional amendment already holds that Texas can adopt a state income tax only if voters approve and that the money would go for the “support of education.”

But Senate Democrats on Monday sparred with Republicans over a seemingly arcane bit of language that could carry big budget implications.

The resolution says that the Legislature may not impose a net income tax on “individuals.”

Democrats, pointing to an analysis by the state’s nonpartisan Legislative Budget Board, said that could be interpreted by courts to apply to businesses, especially because the measure’s language uses that term rather than “natural persons,” which is often used in statutes.

The business levy, long a target of Republicans eager to shave taxes, brings in about $8 billion per biennium, helping to fund public schools.

“The term ‘individuals’ is not defined and could be interpreted to include entities that are currently subject to the state’s franchise tax,” the Legislative Budget Board analysis reads. “To the extent the joint resolution might exempt some entities from the franchise tax, there could be a loss to state revenue.”

[…]

Earlier during the debate, [author Sen. Pat] Fallon said the constitutional amendment would firm up the state’s opposition to income tax.

“I’m always in fear of an income tax,” he said. “Every day I wake up, the thought of Texas having an income tax makes me shudder. Physically shudder, not metaphorically.”

Seriously? Mere words cannot adequately express my reaction to Sen. Fallon’s delicate sensibilities, so mark me down as being somewhere between here and here. I do hope you sleep better tonight, Senator, and if not I recommend warm milk and a bedtime story, preferably one with a happy ending. As for my reaction, here it is:

“Why would pesky LBB fiscal facts be any help when discussing a major source of state revenue for schools?” Eva DeLuna Castro, a budget analyst with the left-leaning Center for Public Policy Priorities, wrote on Twitter. “I mean, it’s not as if major business conglomerates have highly paid tax lawyers waiting in the wings to explain why they are ‘individuals’ too.”

What could possibly go wrong? The Trib and the DMN have more.

Bullet train dodges more bullets

More good news for Texas Central.

The Dallas-Houston high-speed rail project dodged a bullet this week when lawmakers hashing out the state budget released their decision to strike a provision that could have delayed the project.

A committee of Texas House and Senate members ditched language that would have prevented the Texas Department of Transportation from coordinating with a high-speed rail company so its project could cross state highways until a court definitively affirms the company’s ability to use eminent domain with an unappealable ruling. That provision, called a budget “rider,” could have delayed the project for several years, according to Patrick McShan, an attorney for an opposition group and more than 100 landowners along the train’s planned route.

Project developer Texas Central Partners LLC lauded the legislative move. The company has been battling legislative efforts that it says could cripple the project and impose unfair requirements that other similar projects, like natural gas pipelines, don’t have.

“Today’s action ensures the project continues to be treated like any other major infrastructure project in Texas,” said Holly Reed, Texas Central’s managing director of external affairs.

[…]

The Senate added the rider in its proposed 2020-21 budget, but the House’s spending plan didn’t include the language. So that was one of several differences that a conference committee of members from both chambers are hashing out behind closed doors. Once that process is done, both chambers will vote on the revised budget.

Houston Democrat state Rep. Armando Walle, one of the members of the conference committee, said the rider was removed out of fear that a lawmaker could argue the language changes general law, something that House rules don’t allow the budget to do. If such an argument were successful, that could have threatened the entire spending plan.

“In order to not have the whole appropriations bill go down, I think that was the safest way to address the issue,” Walle said.

See here for some background. In the time it’s taken you to read this post, the odds of anything bad happening to Texas Central have decreased. I’ve said this twice before, and so far I’ve been wrong each time, but I’ll take my chances and say again that if Texas Central can make it through this session without anything bad happening to them, they ought to be in good shape going forward. I mean, at some point they’re going to have full-blown construction happening, right? Anyway, one more session mostly over, one less thing for Texas Central to worry about.

Prop B ruled unconstitutional

Oh, my.

A state district judge on Wednesday ruled Proposition B, the voter-approved measure that grants Houston firefighters the same pay as police of corresponding rank and seniority, unconstitutional and void.

The ruling came in a lawsuit brought in November by the Houston Police Officers’ Union, which contended that the city charter amendment conflicts with the Texas Constitution.

In her ruling, state District Judge Tanya Garrison found that Chapter 174 of the local government code preempts Prop B. The city, which was named in the police union’s suit, has alleged that the parity measure section conflicts with a provision of Chapter 174 tying compensation for firefighters and police officers to that of comparable private sector employees.

Mayor Sylvester Turner briefly stopped the weekly city council meeting to announce the ruling. The fire union quickly announced it would appeal.

After the council meeting, Turner said the 60-day layoff notices he proposed and council approved sending in recent weeks to 220 firefighters and more than 110 fire cadets and municipal workers to help close a budget deficit exacerbated by Prop. B would be rescinded, along with hundreds of proposed demotions within HFD.

Turner cast the ruling as a “tremendous positive” for the city as a whole, saying he hoped it could spur a “reset” to reduce widespread acrimony over the issue. He also stressed that firefighters deserve a pay raise and looked forward to negotiating one with union leaders.

“They’re deserving of a pay raise that the city can afford and I do look forward to sitting down and talking with them about what would be an acceptable pay raise within the confines of the city’s financial capability,” Turner said. “We’ll do everything we can to move it forward.”

A release with the Mayor’s comments following the ruling, which came down while Council was in session, is here. Judge Garrison had sent the parties to mediation originally, saying she didn’t want to get involved if they could work it out among themselves. They did not, and so here we are. You can see a copy of her ruling here, which is an order granting summary judgment to the plaintiffs, the HPOU. The city is listed as the defendant and their motion was also granted, while the HPFFA’s motion was denied; someone who understands the law way better than I do will hopefully step in to explain how all that worked. Be that as it may, the firefighters will appeal, but that almost certainly means the city is off the hook for this fiscal year, possibly for the foreseeable future.

Firefighters get Prop B back pay

Good for them.

The city of Houston on Friday issued lump-sum paychecks to more than 3,900 firefighters, a move Mayor Sylvester Turner said reflects the implementation, retroactive to Jan. 1, of Proposition B, the measure granting firefighters the same pay as police of corresponding rank and experience.

Marty Lancton, president of the Houston fire union, said that contrary to the mayor’s “Orwellian claims,” the paychecks did not fully equalize base and incentive pay between fire and police, as laid out in Proposition B. Lancton said the city “badly botched” implementation of the measure.

The back pay, worth $27.4 million, comes a week after Turner and the Houston Professional Fire Fighters Association ended court-ordered mediation without an agreement to phase in the raises over several years.

[…]

For now, the fire department’s biweekly payroll will increase from about $10.2 million to $12.3 million, Turner said. The city has dipped into its reserves to fund raises from Jan. 1 through June 30, which Turner said will cost $31 million. Lancton also has questioned the accuracy of that figure.

Both sides, meanwhile, are awaiting a state district judge’s ruling in a lawsuit brought by the Houston Police Officers’ Union, in which the police union and city have alleged Prop B violates the Texas constitution.

I don’t have anything to add to this, I’m just noting it for the record. I look forward to the day when I will be able to get all of this out of my brain, as I hope to do with Game 6 of Rockets-Warriors.

Cable franchise fees

Hey, remember how the city of Houston had to lay off a bunch of workers to to close a $179 million budget deficit? Well, there’s more where that came from.

The Texas House on Thursday approved legislation that would limit fees telecommunication and cable companies pay cities to use their rights of way, likely opening up a new spending gap of at least $12 million two days after Mayor Sylvester Turner laid out his proposed budget for the upcoming fiscal year.

Senate Bill 1152, authored by state Sen. Kelly Hancock, R-North Richland Hills, passed the House on a 92-50 vote on the third and final reading Thursday. The legislation, which had received Senate approval early last month, heads back to the upper chamber, where lawmakers will decide whether to approve the House version.

The measure would eliminate what cable companies and some lawmakers say is an outdated double tax levied on companies that transmit cable and phone services over the same lines. The bill would eliminate the lesser of the two charges, starting next January.

Opponents say the bill amounts to a gift for large telecom firms, which would not be required to pass the savings on to consumers because the state is barred from regulating cable rates. Turner had urged lawmakers to oppose the measure, saying it would deliver a financial hit to Houston.

Those who back the bill say companies still would pay millions for the remaining charge, arguing that cities would lose only a small portion of their revenue. The House companion bill’s author, state Rep. Dade Phelan, noted Wednesday that only one other state — Oregon — still charges both fees.

Turner blasted lawmakers in a statement Thursday, accusing them of attempting to “unconstitutionally take the value of Houston’s right-of-way” through the bill. He also lauded state Rep. Harold Dutton, D-Houston, for attempting to stop the legislation through a procedural maneuver.

[…]

A Legislative Budget Board analysis determined that Houston would take in $17.1 million to $27.5 million less revenue under the bill. Estimates for other cities include $9.2 million in Dallas, $7.9 million in San Antonio and $6.3 million in Austin.

An updated estimate provided by the city Thursday projected it would receive $12.6 million to $24.4 million less revenue during the 2020 fiscal year, which begins July 1.

It sure has been a great session for cities, hasn’t it? Here’s that earlier story, which I confess I never got around to blogging about. You know who else has had nothing to say about it? Bill King and Tony Buzbee. Way to be looking out for the city’s financial interests, y’all.

As for the fee itself, I can see the argument for getting rid of it, but let’s be clear about two things. One, if you believe this will result in a reduction in your cable or internet bill, I have some oceanfront property in Lubbock you might be interested in. And two, given the financial hit this will impose on cities, would it have killed anyone to phase this in after a year or two, so cities – all of which are required to have balanced budgets – could have had some time to adjust? What exactly was the rush here? Look at the roll call vote, and if you’re in one of those cities – especially Houston – and your Rep supported this, please call their office and ask them that question.

The tax swap is dead

For this session, at least. Most likely, barring anything strange.

State Rep. Dan Huberty, the top public education leader in the Texas House, postponed two items of legislation Tuesday that would pay for long-term, ongoing school district tax cuts by raising sales taxes — effectively killing any chance of passing the legislation this year.

Huberty tabled until 2021 — the next legislative session — House Joint Resolution 3 and the accompanying House Bill 4621, which would ask voters to increase the state sales tax by one penny to buy down school district property taxes. The Houston Republican’s move came the day after the Senate, headed by a lieutenant governor who had endorsed the proposal, stripped such a provision from its version of the school finance bill in what was perhaps a signal that the measure would be dead in the upper chamber anyway.

Despite Tuesday’s postponement, the idea could still be revived this session; lawmakers could use a different bill as a vehicle to fund school district tax cuts.

Huberty criticized members of the Senate on Tuesday who “have spent their whole careers calling for property tax relief” but did not vote for the school finance measure the day before. And he repeatedly affirmed questions by House colleagues that suggested state Sen. Paul Bettencourt, the Houston Republican who leads the upper chamber’s property tax committee, had failed to take responsibility for coming up with a viable mechanism for property tax cuts when he was part of a school finance commission last year and during the current legislative session.

Bettencourt has arguably been the most vocal GOP senator opposed to the tax swap proposal, a position that has caught some by surprise since he’s closely aligned — both personally and professionally — with Republican Lt. Gov. Dan Patrick, who has made clear he supports the measure. Bettencourt marked himself “present, not voting” on the school finance bill Monday, while the majority of the upper chamber approved the legislation. And on Tuesday morning, ahead of business in both chambers, Bettencourt took to Facebook to once again reiterate his opposition to the tax swap, saying there is “simply no need to raise taxes even higher.”

In response to House members’ criticisms, Bettencourt said he’s long been clear about his concern that the tax swap proposal could amount to a tax increase. When Huberty proposed that the tax swap devote 80% of the new sales tax revenue to property tax cuts and the remainder to public school funding, for example, “I immediately red-flagged that,” Bettencourt said.

“Emotions run high when bills fail,” Bettencourt said. “If you have the votes, pass your bill — don’t blame somebody in the other chamber. That’s just kind of a rule that I’ve learned.”

[…]

On Tuesday morning, before the House gaveled in for the day, Bonnen told House Republicans during a caucus meeting that there would be no point in bringing up the proposal for a vote in the lower chamber if it was considered dead in the Senate, according to multiple people who were at the gathering. Caucus members at the meeting, according to those sources, largely agreed with Bonnen, who said the Senate stripping such a provision from its version of the school finance bill Monday suggested the upper chamber couldn’t muster enough support to approve a tax swap proposal.

After Huberty postponed the tax swap legislation, a Bonnen spokesperson said in a statement that the proposal had been “an opportunity for lawmakers to further reduce property taxes” and sustain tax relief found in the lower chamber’s school finance bill.

“Speaker Bonnen believes it is in the House’s best interest to devote the limited time left in session to our Day One priorities — passing legislation to provide meaningful school finance and property tax reform for all Texans,” the statement read.

See here for some background. To an extent, I agree with Bettencourt, in that a sales tax increase is a terrible idea. Of course, Bettencourt sees no need to pay for tax cuts. He just wants to cut them, and nothing else really matters as far as he’s concerned. The tax swap is a terrible idea that deserved to die, but at least Huberty was trying to pay for what he wanted to do. What happens next, with school finance and everything else, we’ll see.

Here’s the Mayor’s budget

A lot of people won’t like it, but this is what happens when you heap a big expense on top of an already tight fiscal situation.

Mayor Sylvester Turner

Mayor Sylvester Turner on Tuesday proposed to close Houston’s $179 million budget gap for the upcoming fiscal year by tapping into the city’s reserves, eliminating more than 60 vacant positions and laying off more than 300 city employees.

Turner’s proposal would reduce the overall budget of city departments by about $36 million, a figure that includes layoffs of firefighters, fire cadets and municipal workers, all of whom have received pink slips.

The mayor’s budget also would draw $116 million from the city’s reserves, which Turner said the city can afford because it will end the 2019 fiscal year with a higher-than expected general fund balance. The next fiscal year begins July 1.

Laying out the final budget proposal of his first term, Turner framed the financial plan as conservative and said his administration “scrubbed every department” in search of places to trim costs. The budget also uses a conservative projection for the amount of new property tax revenue Houston may take in, Turner said.

[…]

Turner said a large chunk of the 2.2 percent increase in general fund spending is driven by the cost of Proposition B, the voter-approved charter amendment that grants firefighters the same pay as police of corresponding rank and seniority. The raises will cost $79 million during the next budget year, Turner said.

District E Councilman Dave Martin agreed with Turner’s fiscal assessment of the budget, contending that the city has faced a challenging situation with small revenue growth projections — about 2 percent in property taxes and 1 percent across all sources — amid large added costs such as Prop B.

“We’ve been working on this for nine months, accumulating a healthy fund balance, not filling slots that were available for employment,” said Martin, who chairs the council’s Budget and Fiscal Affairs Committee.

Under Turner’s proposal, public safety — which includes the fire and police departments, the municipal courts and emergency operations — would make up about 58 percent of the general fund budget, at a cost of $1.5 billion. The fire department’s budget would increase to $558 million, a 4.5 percent boost over how much the city estimates it will spend on the department this year.

The fire department was allocated $503 million in the current budget. Total projected spending, however, has grown to about $534 million with the city covering Prop B raises retroactive to Jan. 1. Turner said the adjusted paychecks would go out Friday.

[…]

Controller Chris Brown, the city’s elected budget watchdog, said he does not feel confident that Turner has accurately projected Prop B’s cost because the mayor has yet to supply his office with financial data backing up the $79 million estimate. Brown also wants to generate his own independent figure, which he said he cannot do without certain incentive pay data.

Turner told reporters Tuesday that the city attorney, Ron Lewis, had determined the city’s interpretation of Prop B would withstand legal challenges.

Still, Brown said the city has little breathing room if a judge rules the firefighters are owed more. He noted that the budget would dip the city’s target fund balance within striking distance of the minimum level allowed by city policy. The city’s reserves must make up at least 7.5 percent of the city’s general fund budget, and the 2020 budget target would leave the balance at $171 million — 7.9 percent, $9 million above the threshold.

“What if a judge says, ‘You know what, we think that this is $100 million,’ and we need to pay immediately this additional money?” Brown said. “Where is that money coming from?”

I see on Twitter that some firefighters have highlighted the above quote from Controller Brown, while in this article Marty Lancton again complains that Mayor Turner isn’t implementing Prop B exactly the way he wants it to be implemented. Well, someone has to talk about the cost of Prop B. As for Brown, he’s just doing his job. And the possibility that the cost of Prop B could go up on a judge’s order is a good point and more than a little disturbing.

From here, the budget goes through Council, where they can propose amendments and do whatever they’re going to do with it. I’ll be very interested to see if any of the ones that voted against the layoffs have anything constructive to suggest for how to avoid, or at least reduce them. The budget vote is scheduled for June 5, so mark your calendar.

Where goes the tax swap plan from here?

We start with the double down.

Showing their usual united front, the state’s “Big Three” political leaders on Friday tried to remake their case for why the Texas Legislature should deliver on long-term, ongoing property tax relief before the session wraps up this month.

They also expressed confidence that they would get the work done — even as House Democrats said they appeared to have the votes to block the lower chamber’s current main vehicle to provide the biggest property tax cut.

“Our goal is really simple: We’re going beyond the point of hoping to reform property taxes to the point where we’re hoping to to deliver true property tax relief through property tax reductions,” Gov. Greg Abbott said at a Capitol press conference Friday afternoon, flanked by Lt. Gov. Dan Patrick and House Speaker Dennis Bonnen, the Republican leaders of the Senate and House, respectively.

The three reaffirmed their commitment to a proposal that would increase the state sales tax one percentage point, raising about $5 billion per year to lower school district tax rates — which many have seen as a long shot from the start, with lawmakers from both parties skeptical about a sales tax hike.

The proposal has been moving through the Capitol so far in the form of a joint resolution, which needs two-thirds of each chamber to pass — at least 100 votes to pass the House and 21 votes to pass the Senate. If it passed both chambers, the proposal would then land on the November ballot for voters to decide, which leaders in support of the resolution have framed as a more democratic process.

House Joint Resolution 3 — which would ask voters to approve the sales tax swap for property tax relief — and its enabling legislation, House Bill 4621, passed out of the House Ways and Means Committee on Wednesday. The tax swap is expected to head to the lower chamber for a debate Tuesday.

The original version of the bill would have used 20% of the increased sales tax revenue to fund schools and 80% for property tax relief. That changed earlier this week, when state Rep. Dan Huberty, a Houston Republican who authored the legislation, tweaked the proposal to instead funnel all new sales tax dollars into property tax relief.

The move seemed to be an effort to bring on some of the Legislature’s more conservative members who had signaled they could be on board with a proposal if the new revenue was entirely dedicated to property tax relief. But it also seemed to solidify Democrats’ opposition to it, especially since the sales tax is regressive, meaning it takes a higher percentage of income from poorer people than richer people. A sales tax swap would raise taxes overall for Texas households earning less than $100,000 and would bring tax relief for households above $100,000.

State Rep. Chris Turner, who chairs his House Democratic Caucus, told The Texas Tribune that there are more than 60 “hard no” votes from Democrats against the proposal. If that opposition sticks for Tuesday’s expected vote on House Joint Resolution 3, its chances of passing the lower chamber would seem unlikely.

Patrick said he hoped both chambers would be able to get the needed two-thirds approval for the joint resolution from each chamber, but indicated he was open to getting it passed in different ways, exclaiming, “If it doesn’t, we’ll make it happen anyway!”

Sure, Dan. If you want to know why some of us are so skeptical of this, while plutocrats like Dan Patrick love it, consider this.

The state-run Legislative Budget Board estimated that the top 40% of wealthiest Texas households would see enough property tax savings to offset their increased sales tax payments in fiscal 2021. The bottom 60% of Texas households would pay more in taxes overall.

Households that make less than $99,619 would pay a total of $171 million more in taxes under the tax swap. Households that make more than that would pay a total of $424 million less in taxes, according to the analysis.

The disparity is because poor Texans tend to spend a greater portion of their money on taxable items.

The bottom fifth of Texas household incomes — those with incomes less than $37,630 — spend about 7.3% of their income on state sales tax while households in the top fifth of incomes — those with incomes of $149,453 and more — spend 1.6% of their income on state sales tax, according to the Texas Comptroller of Public Accounts.

Of course, we’ve known this forever, but the same bad idea crops up every few years and gets beaten down by the club of the same evidence. So we go through the motions. You can catch up on reading about this at various locations – the DMN, the Chron, Better Texas Blog with a handy chart – but be sure to read the analyses of the politics of this by Ross Ramsey and Scott Braddock. The reason the Big Three are putting on such a show of bravado is because they’re holding an eight-high hand in a game of five card stud, and they know it. And as Braddock notes on Twitter, so do members of the Lege.

Which may be why in the end, we got this.

The Texas Senate on Monday approved a bill to massively overhaul public school finance, but did so while backing away from a proposal to use an increased sales tax to lower school district property taxes.

After an hours-long debate on dozens of proposed changes, the Senate voted 26-2 on House Bill 3, which under the version passed by the upper chamber would increase student funding, give teachers and librarians a $5,000 pay raise, fund full-day pre-K for low-income students, and lower tax bills.

The House and Senate will have to negotiate their significant differences over the bill — including how to offer teacher pay raises and property tax relief — in a conference committee before it can be signed into law.

“When you’re doing something as complex as this, there’s going to be something you don’t like,” said state Sen. Larry Taylor, R-Friendswood, the bill’s author, anticipating tension throughout the day’s debate.

[…]

Taylor stripped the [sales tax] increase from HB 3 and offloaded some of the more expensive property tax relief provisions in the bill. The bill no longer includes an expansion in the homestead exemption from school district taxes. It lowers property tax rates by 10 cents per $100 valuation, instead of 15 cents, saving the owner of a $250,000 home $250 instead of $375.

The legislation would still limit the growth in school districts’ revenue due to rising property values, a proposal pitched before session began by the governor. School districts that see their property values significantly increase would have their tax rates automatically reduced to keep tax revenue growth in line. That would now start next year, instead of in 2023.

“The bill before us today has no linkage to the sales tax and is not contingent upon a sales tax,” Taylor said.

Instead, the bill creates a separate “Tax Reduction and Excellence in Education Fund” to fund school district tax relief. State Sen. Kirk Watson, D-Austin, said a working group came up with a plan to get $3 billion from several sources, including the severance tax on oil and gas extraction and an online sales tax.

“This does not increase any taxes of any kind,” he said.

So does this mean that the tax swap is dead? Well…

In for a penny, in for a million pounds, I guess. Have fun taking that vote, Republicans.

Mediation fails to achieve Prop B agreement

I have three things to say about this.

Houston Mayor Sylvester Turner on Friday said a court-appointed mediator has declared negotiations between the city and firefighters union over the implementation of Proposition B at impasse, potentially leaving the future of the measure in the hands of a state district judge.

The announcement ends what had appeared to be some progress toward resolving the months-long dispute over how to phase in raises to firefighters required by the pay parity measure voters approved last November. The charter amendment requires the city to pay firefighters the same as police of corresponding rank and experience.

[…]

State district Judge Tanya Garrison had ordered the city, firefighters and the Houston Police Officers Union into non-binding mediation three weeks ago. Garrison’s order came as part of a legal battle between the three sides over the constitutionality of Prop B; she declined to rule on that issue until the three parties reached a settlement on implementation or an impasse was declared by the third-party mediator.

The three groups had met at least three times since.

At issue is how to implement the raises. The fire union has said it would ask its members to consider a three-and-a-half-year phase-in as long as no firefighters are demoted or laid off. Turner had said the city cannot avoid layoffs unless Prop B raises are phased in over five years.

At a Friday morning press conference, however, Turner said the city had agreed to the fire union’s previous offer to phase in the raises over three and a half years, with no firefighters demoted or laid off.

Turner said the union then refused to accept that agreement, as well as another offer that would have given it hundreds of millions of dollars in a block grant-like arrangement that the union could use at its discretion.

He accused the union of repeatedly “moving the goal posts,” and said that agreeing to its full demands would devastate Houston’s finances and credit rating.

“The city cannot go beyond what we have proposed without bankrupting the city,” he said. “As long as I am mayor, we are not going to bankrupt this city. Everyone in the city would pay the price.”

Mediator David Matthiesen did not respond to a request for comment Friday.

In a statement, the fire union said it had agreed to take a four-year phase-in to its members if pay parity was implemented “effective immediately,” the city agreed to no layoffs and if the city disclosed “what each firefighter will earn in salary and incentive pay.”

HPFFA President Marty Lancton also said the city demanded in negotiations that Prop B be rescinded and declared unconstitutional, a request he adamantly opposed.

“Citizens’ rights to petition the local government must be protected,” he said.

1. You really have to admire Marty Lancton’s ability to keep the focus of this debate on one point, which is the pay raise that the voters agreed to give the firefighters. The fight here is not over whether or not to implement Prop B, it’s over how to do it. That’s what the mediation was about, that’s what the layoffs are about. The firefighters don’t like the way the city is implementing Prop B and have been complaining nonstop – and very successfully, at least from a short term political perspective – about it. Their grievance is that some firefighters will be laid off, and some others demoted, in order for the city to pay for Prop B. If the city had decided instead to lay off police officers, solid waste workers, and more municipal employees instead, there’s nothing in the firefighters’ rhetoric to suggest they’d have had a problem with that. Beyond the fact that it was clear from the beginning that the city could not afford Prop B, this right here is why I don’t have much sympathy for the firefighters.

2. That said, part of the litigation that was brought by the police officers’ union was a claim that Prop B is illegal and should be invalidated by the court. The argument here is that the pay parity law conflicts with state law about collective bargaining. I Am Not A Lawyer, and I have no insight into that question. I had thought originally that the litigation over Prop B would follow the template of previous lawsuits over city referenda and be about ballot language. I was wrong about that, which is why I like to emphasize my not-a-lawyer status in these matters. Be that as it may, it seems like a big stretch to get an election overturned. I will be surprised if Judge Garrison (who, full disclosure, is a friend of mine) rules for the plaintiffs. But again, I Am Not A Lawyer, so place your bets at your own risk.

3. The last couple of paragraphs in this story are about how the people other than Sylvester Turner who are running for Mayor are also critical of his handling of Prop B implementation, without a single word being quoted about what these alternative Mayors think should be done instead. They don’t like what the Mayor is doing, they oppose what the Mayor is doing, but what would they be doing if they were Mayor? You cannot tell from reading this story. Perhaps the reporter chose not to include what they said about that, perhaps the story editor excised it for space, or perhaps none of them had anything useful to say on the topic. You can probably guess which one I think it is.

Layoffs and demotions

I’m so ready for this to be resolved.

Houston firefighters have started to receive layoff notices amid the implementation of Proposition B, Houston Professional Fire Fighters Association President Marty Lancton said in a statement Wednesday.

Houston City Council voted last week to layoff 220 firefighters to help offset firefighter raises mandated by the voter-approved proposition. The union said the firefighters received the notices via email Tuesday in what Lancton called a “slash-and-burn plan” from Mayor Sylvester Turner.

Lancton also expressed disappointment with Houston Fire Chief Samuel Peña over the layoffs.

“We are deeply disappointed that Samuel Peña has become the first fire chief in Houston history to willingly execute mass layoffs and demotions of firefighters,” Lancton said in a statement. “From the city’s founding to the Great Depression, to two world wars and deep downturns of the energy industry, no fire chief had taken this course of action until today. Chief Peña now is alone among all Houston fire chiefs in that dubious distinction.”

Hundreds of HFD personnel also received demotion notices Wednesday, according to a letter provided to Chron.com. The firefighters union estimates upwards of 450 HFD personnel will be demoted.

This all follows a week in which CM Dwight Boykins made some loud claims about Council not being briefed about demotions, only to be smacked down by other Council members and HFD Chief Pena. Meanwhile, mediation is still underway, so the chance remains that all this can be reversed. (Or maybe not.) Pour yourself a drink and sit for awhile.

Also, too: This is the part where I point out that for all of the artillery being aimed at Mayor Turner, I’ve yet to see any suggestion for what alternatives exist to all this. Here are the constraints that must be satisfied:

– Prop B implemented, with the accompanying increase in expenditures by the city.
– No layoffs or demotions.
– The budget must be balanced, as mandated by city charter.
– The city cannot raise any new revenue beyond what is allowed by the revenue cap, which in the past five years has cost the city half a billion dollars via mandated tax cuts.

Feel free to leave your suggestions in the comments. If you say that’s not your job, that’s the Mayor’s job, I’ll say sure, but we have a couple of Mayoral wannabees who are busy lobbing spitballs about this without offering any of their own ways forward. (Though, in fairness, one of them is busy engaging in silly Twitter fights, so at least he has his priorities straight.)

More action on the school finance/property tax front

From Tuesday:

Rep. Dan Huberty

The Texas House gave preliminary approval to a priority property tax reform package Tuesday, teeing it up for negotiations with the Senate and impelling the upper chamber to act on an omnibus school finance measure.

Together, the education and tax overhaul bills have been the top policy issues of the 2019 legislative session, and they are ultimately expected to be ironed out behind the scenes — and perhaps simultaneously.

Tuesday’s vote marks a small milestone for House leadership, which has muscled its must-pass budget, public education and tax reform bills to passage, all before the last month of session begins. But the House and Senate will next need to reconcile notable differences among the three measures, and the upper chamber has yet to move the school finance bill out of committee.

“We have done our job in the House — and we have sent everything over to the Senate,” said state Rep. Dan Huberty, R-Houston, author of the school finance bill.

Senate Bill 2 was approved on a 107-40 margin after a half-dozen hours of debate. More than 20 Democratic lawmakers broke party ranks to support the measure, which has garnered adamant opposition from city and county officials since its introduction.

See here for the previous update. The House version of SB2 makes it contingent on the House version of school finance reform passing, namely HB3. The Senate started that process yesterday.

The Senate Education Committee held a hastily arranged hearing Wednesday morning to vote out comprehensive school finance reform legislation — accelerating the bill’s journey to the Senate floor and eventual negotiations with the lower chamber.

The fast-tracked revision and vote on House Bill 3 came the day after House lawmakers voted through a property tax reform bill, making it contingent on school finance reform passing this session. State Sen. Larry Taylor, the Senate Education Committee’s chair, had originally told The Texas Tribune on Tuesday he did not anticipate a committee vote on school finance until Thursday or next week.

The full Senate is now expected to vote Friday on the legislation, which aims to increase the base funding for each Texas student, increase teacher pay, provide money for full-day preK for low-income students, and allow for long-term property tax relief.

Many details of the bill still need to be ironed out, however, and committee members voted Wednesday without an official analysis of how their districts would fare financially. Still, the vote seemed to address concerns that the Senate was moving too slowly on school finance.

[…]

Senate Education Committee members voted out a version of the school finance legislation that differs in many ways from the version the House voted out in early April. It includes a $5,000 across-the-board raise for full-time classroom teachers and librarians, funding for districts that want to pay higher-rated teachers more, money for districts with better student academic outcomes, and a few different long-term property tax relief proposals.

The House’s version of the bill requires districts to use a portion of their additional base funding per student on raises for all school employees and designates extra money for raises to be given at districts’ discretion. It lowers school tax rates by 4 cents per $100 valuation — $100 off a tax bill for the owner of a $250,000 home — and lowers rates further for districts taxing higher. But it doesn’t include a proposal for long-term, ongoing tax relief.

As we know, the Republican plan to pay for property tax “relief” is raising the sales tax. That would require a constitutional amendment, and for the House version of the joint resolution to be voted out of committee by next Tuesday at 11:59 PM. As you know, I think that’s a terrible idea and am rooting for it to fail. The clock is ticking, but at least by next Tuesday we’ll know what parameters the conference committees will have to work with.

One more thing, from the first story:

Few attempts to make major changes to the bill were successful Tuesday.

One amendment, from state Rep. Charlie Geren, R-Fort Worth, seems to bar anyone but licensed attorneys from representing taxpayers in the property tax appeal process on a contingency fee basis. The change would likely affect the author of SB 2, state Sen. Paul Bettencourt, a Houston Republican and a property tax consultant.

“It affects a lot of people. We’ll talk about it in conference,” Geren said. He added, “I don’t believe in contingency fees, but if we have to have contingency fees to do this, then I want the lawyers to do that.”

Heh. Someone please give Charlie Geren a fist bump for me. The Chron has more.

School finance and property tax update

From last week.

Rep. Dustin Burrows

Blasting the Senate for taking a symbolic approach on school district taxes, a panel of House lawmakers heavily altered then approved the upper chamber’s version of priority property tax legislation late Thursday. And committee members pointedly included a provision meant to rebut claims that they were not committed to wholesale reform.

The chair of the tax-writing Ways and Means committee, state Rep. Dustin Burrows, said the House had kept a provision in Senate Bill 2 that attempts to constrain school district property taxes. While he and finance experts have said the language needs to be addressed in the Education Code, there “is an intent in the Senate to symbolically express that they are committed to lowering school property taxes,” Burrows said.

“Well, because of that, I want to make sure that the House also expresses its full commitment to lowering people’s property tax bills related to schools,” the Lubbock Republican said.

The Senate had tried to limit schools’ tax rate increases to 2.5%, without an election.

“We actually used a 2.0 number,” Burrows said, “to show that the House is equally as committed to doing significant things this session for the property taxpayers of the state of Texas.”

The insertion of the 2.0 figure may be a dig at hardline conservatives and Senate lawmakers, who have suggested the House gutted its own property tax reform package when they removed school district language from it in March. The lower chamber’s approach, however, has earned the backing of experts who say a separate public education bill is the most feasible way to make changes to the school finance system.

“To do property tax reform for schools, you really have to do it in the Education Code. I think that all of the experts agree,” Burrows said. “This bill has never touched the Education Code. It can’t touch the Education Code, that is House Bill 3,” he said, referencing the lower chamber’s omnibus school finance package.

As adopted in a 8-3 vote Thursday, SB 2 now closely resembles House Bill 2, a companion measure passed by the House committee last month — even taking on the same name: The Texas Taxpayer Transparency Act. The Democratic vice chair of the committee, state Rep. Ryan Guillen, joined Republicans in support of SB 2’s passage Thursday.

In the latest version of the bill:

  • Cities, counties and emergency service districts must hold an election if they wish to raise 3.5% more property tax revenue than the previous year
  • Those entities can increase their property tax levies by $500,000 a year, without triggering an election
  • Other taxing units — namely, hospital districts and community colleges — remain at an 8% election trigger, with Burrows’ citing the inflation of medical and education expenses
  • Homestead exemptions offered by local municipalities can be factored into the revenue growth calculation, preventing cities and counties from being penalized if they offer their residents tax reductions
  • A five-year carry-over provision lets taxing units bank unused revenue growth

[…]

A final change Thursday makes passage of SB 2 contingent on HB 3’s approval.

“These two are tied together,” Burrows said.

See here for more about HB3, and here for more on SB2. Ross Ramsey gets into the politics of the moment, which includes the Republican leadership’s continuing fealty to the property tax for sales tax swap that isn’t going anywhere. It’s hard to compare, because each session is its own story, but it sure feels to me like not a whole lot has happened so far, with less than five weeks to go. The big ticket items dragging along and seeming to go nowhere isn’t unusual, but what else has even made it to the floor of the other chamber? Not that I’m complaining, mind you, I’m just curious. Word is that SB2 will be up in the House today, so we’ll see how it goes. There’s still a wide range of possible outcomes.

Off to mediation we go

Hope for the best, y’all.

Mayor Sylvester Turner

Mediation soon will begin in a lawsuit between the Houston police and firefighters unions over Proposition B, the voter-approved measure that gives firefighters equal pay to police officers.

In a Monday morning filing, State District Judge Tanya Garrison ordered the Houston Police Department, Houston Professional Fire Fighters Association and the city to meet Monday or Tuesday.

The parties last week agreed to turn to mediator Dave Matthiesen over Prop B, though representatives from the HPFFA said they would need more time to brief members.

In her filing, Garrison pushed back against HPFFA’s claim, saying it had plenty of time to prepare for mediation. She also ordered the parties to continue meeting until “a settlement is achieved” or “in the sole determination of Mr. Matthieson, they have reached an impasse.”

[…]

At a press conference Monday, some members of City Council joined with municipal employees to reiterate their support for mediation and a five-year phase-in.

Among the first positions cut will be librarians, dental assistants, custodians, a park ranger and an electrician, District I Councilman Robert Gallegos said.

“It’s totally unfair to them,” he said. “I don’t believe this is what Prop B is about and I’m sure that’s not what the voters intended. Firefighters do deserve a pay raise, but not at the expense of innocent municipal employees.”

See here for the background. Matthiesen is an attorney and Democratic supporter who is well known to all parties involved, so at least that was easy enough. I don’t envy him the task, but maybe everyone’s ready for this to be over already. As the story notes, Council will still proceed with voting on layoffs tomorrow, as this is part of the budget work. My guess is that this can be unwound if a suitable agreement is reached, but it’s also a bit of pressure on the firefighters, as this is where it officially gets real. I do wish the story had listed all the Council members at that press conference, if only so we can have a clearer idea of what the whip count looks like right now, but we’ll find out soon enough.

What will Council do about Prop B layoffs?

We’re gonna find out.

Mayor Sylvester Turner told the Houston fire union Monday he would provide it with financial data leaders requested, a sign of progress at a critical point in negotiations between the mayor and union to phase in Proposition B raises for firefighters.

Officials from the Houston Professional Fire Fighters Association have asked Turner to open the city’s books, allowing firefighters to verify that the mayor’s offer to phase in the pay raises over multiple years honors the terms of the charter amendment, which requires the city to pay firefighters the same as police of corresponding rank and seniority.

Turner’s refusal to do so has been a key sticking point preventing a deal, union President Marty Lancton said.

The development comes two days before Houston city council is scheduled to consider a measure to lay off 220 Houston firefighters, which Turner has said is necessary to offset the cost of pay raises if Prop. B is not phased in over multiple years.

[…]

Fire Chief Sam Peña said he was “encouraged” by Monday’s talks, even if they did not produce immediate results.

“Anytime we’re sitting at the table and having a conversation is progress,” he said.

Peña said he was not sure whether Wednesday’s scheduled council vote would be delayed, but the department is moving ahead with implementation of Prop B anyway.

“The process needs to move forward, because the books do need to be balanced by the end of the fiscal year” in June, he said. Among the biggest changes Peña has sought is a switch from a four-shift work schedule for firefighters to three. Currently, firefighters work 20 24-hour shifts every 72 days, with occasional extra shifts for which Peña has said there is a high absentee rate.

The new, three-shift model would give firefighters regular days off. Peña said he was considering that switch even before Prop B’s passage as a way to save money that could be reinvested in fleet upgrades, among other things. Now, he said, it is about maintaining public safety while confronting HFD’s roughly $25 million share of Prop B’s annual costs.

The proposal headed to council on Wednesday shows that most of the staff reductions would come from firefighters, engineers and captains, though Pena said that absent any phase-in agreement, some employees could be demoted instead of having their positions absorbed through attrition.

See here for the background, and here for Mayor Turner’s letter. According to KUHF, the firefighters’ union tentatively agreed to the 3.5-year phase-in idea, though it sounds like there may still be sticking points as Mayor Turner is not saying that will eliminate layoffs – he’s been clear about needing a five-year plan for that – but merely reducing them. Like I said, we’ll see. In the meantime, 47 city employees who had nothing to do with foisting a large new budget item on us received their layoff notices late last week. I personally find that to be the most upsetting part of this whole saga. Just so we’re all clear, the stupid revenue cap prevents the city from raising taxes to pay for Prop B, and the city charter mandates a balanced budget. That’s why layoffs are inevitable barring a sufficiently slow phase-in. It was true (and communicated) before Prop B was ratified, and it remains true now.

No-nuke version of SB2 passes the Senate

Dan Patrick gets his bill, without having to do any nasty partisan maneuvering.

The Texas Senate broke a logjam Monday that had paralyzed a piece of priority legislation for weeks — blunting a controversial provision in its property tax reform package and then advancing the bill, without having to deploy a procedural “nuclear option” to move it.

A vote on Senate Bill 2, a top imperative for state leaders, had been expected last week. But an apparent lack of support stalled the vote in the upper chamber, where the backing of 19 senators is generally required to bring a bill up for debate. After Republican Lt. Gov. Dan Patrick threatened to blow past decades of tradition and bring the measure to a vote with a simple majority, state Sen. Kel Seliger, a vocal dissenter, relented Monday, allowing the bill onto the floor. He did not support its passage.

Seliger’s announcement came alongside a reworked bill with a handful of technical changes and one notable concession. As updated, SB 2 will force cities, counties and other taxing entities to receive voter approval before raising 3.5% more property tax revenue than the previous year — a change from the 2.5% trigger originally proposed. School districts would still face the 2.5% threshold under the version of the bill approved Monday.

Revenue generated on new construction does not count toward the threshold. And small taxing units, with sales and property tax levies under $15 million annually, will need to opt into some of SB 2’s provisions in an election.

[…]

After three hours of debate, SB 2 passed on an 18-13 vote, with Seliger joining the upper chamber’s Democrats in opposition. It was then given final approval on an 18-12 vote — with Sen. Eddie Lucio, Jr., D-Brownsville, voting present — and will be sent to the House for further debate.

The lower chamber, meanwhile, has postponed discussion of its property tax reform legislation until April 24. Unlike the Senate’s version, the House has exempted hospital districts, community colleges, emergency service districts and school districts from abiding by a 2.5% election trigger — a move that has enflamed far-right lawmakers and activists, who say homeowners will feel scant relief if those entities are exempted.

See here for the background. One way or another, this was going to pass. Sen. Seliger made a point about comity and tradition, for whatever those things are worth to Dan Patrick, and he voted according to his conscience, which is a good thing as long as one has a good conscience. Which Sen. Seliger has, and I appreciate his effort. Now it’s just a matter of what the conference committee bill looks like, since the House version will be different. Figure this one will more or less go down to the wire, but it will pass in some form similar to this. It’s a lousy bill and lousy policy, but (say it with me one more time), nothing will change until we change who we elect. Texas Monthly has more.

Is there a city/firefighters agreement in the works?

They’re talking, for whatever it’s worth.

Officials from the Houston Professional Fire Fighters Association said Friday they would seek union members’ approval of a 3.5-year phase-in of Proposition B if the city meets certain conditions.

After meeting with the union to discuss the terms, however, Mayor Sylvester Turner released a statement saying the provisions were “not consistent” with discussions held at the meeting.

Union president Marty Lancton said he had in fact laid out the union’s terms to the mayor, which include a guarantee that no firefighters will receive layoffs “before, during or after implementation of Proposition B.”

“We said it implicitly and explicitly,” Lancton said.

The mayor acknowledged the union delivered a copy of the letter, but accused Lancton of publicizing it before the meeting. Lancton also said this was untrue.

Aside from the no-layoff guarantee, union officials said any phase-in agreement would have to be ratified through a collective bargaining agreement.

Lancton also said Turner’s administration must provide the firefighters with “complete access to city financial and budget information” and implement “complete parity,” including base and incentive pay, with Houston police officers.

The two sides were scheduled to meet again next week before Houston City Council considers a measure at its Wednesday meeting that would authorize 220 firefighter layoffs.

See here for the latest update. I mean, maybe they’ll hammer something out and maybe they won’t. Deadlines have a way of focusing the mind, especially when layoffs are on the other side. I’ll reserve judgment about what may or may not be involved until there’s a resolution, but I will say this: Very early on in this process, Mayor Turner’s position was that Prop B had to be implemented all at once, there was no legal path to negotiating a phase-in. Everyone seems to have forgotten about that, which in and of itself doesn’t bother me too much since I like the idea of phasing it in regardless. But if this is true, then all it will take is someone filing a lawsuit to screw this all up. Let’s worry about that another day, as it’s not a thing until and unless a phase-in deal is ratified. There’s plenty of trouble here already without borrowing more.

Yes, they really are now pushing a sales tax for property tax swap

Some bad ideas never die.

Texas’ top three political leaders — Gov. Greg Abbott, Lt. Gov. Dan Patrick and House Speaker Dennis Bonnen — threw their support Wednesday behind a proposal to increase the sales tax by one percentage point in order to lower property taxes across the state.

But that’s only if lawmakers agree to limit future local property tax increases.

The proposal would raise the state’s sales tax from 6.25% to 7.25%, generating billions of additional dollars annually for property tax relief, if voters approve a constitutional amendment. But the idea will be a hard sell to Democrats, since the sales tax is considered regressive, meaning lower-income Texans end up paying a larger percentage of their paychecks than higher-income Texans.

“Today we are introducing a sales tax proposal to buy down property tax rates for all Texas homeowners and businesses, once Senate Bill 2 or House Bill 2 is agreed to and passed by both Chambers. If the one-cent increase in the sales tax passes, it will result in billions of dollars in revenue to help drive down property taxes in the short and long term,” said a joint statement from the three Republicans.

Neither chamber has passed HB 2 or SB 2, which would require voter approval of property tax increases over 2.5%.

The House Ways and Means Committee was scheduled to take public testimony on the House’s sales tax swap proposal this week but delayed hearing the bills. Rep. Dan Huberty, R-Houston, who authored House Joint Resolution 3 and House Bill 4621, is considering changing the legislation to use a fraction of the additional money generated by the sales tax for public schools — in order to get more Democrats on board.

The bills are intended to provide another revenue source to help significantly cut down local school property taxes, which make up more than half of the local property taxes levied in Texas.

If the Legislature approves the resolution, the constitutional amendment would go to voters to approve in November, and if voters sign on the tax rate change would apply in January 2020.

See here for the background and my opinion about this lousy idea. Given that a constitutional amendment is needed for this, it will be easy enough to prevent it from happening. The progressive case against swapping out property taxes, which will disproportionately benefit commercial real estate and wealthy homeowners, for regressive sales taxes, is clear cut, and likely to hold a lot of sway with the current Democratic caucus. There’s also polling evidence to suggest that the public doesn’t care for a sales tax increase. I’m a little skeptical of that, since the question was not asked in conjunction with a potential cut in property taxes, but that’s an argument for the Republicans to make, and given the baked in doubt about anything actually reducing property taxes (for good reason!), I’d take that bet. HB2 is up for debate today, so we’ll see how this goes. The Chron and Texas Monthly have more.

Time for another Texas Central legislative update

I keep thinking that Texas Central has reached a point where there’s not much that can be done in the Lege to stop them, and events continue to prove otherwise.

Dallas-Houston bullet train developer Texas Central Partners LLC said its project could be delayed by a provision added to the Texas Senate’s proposed 2020-21 budget Wednesday, even though the company is not planning on using state funds to build the high-speed rail line. The company said language added to the upper chamber’s spending plan would encourage lawsuits and “is not beneficial for good coordination and planning.” Meanwhile, project opponents cheered the provision.

The measure, authored by Sen. Brian Birdwell, R-Granbury, continues to bar state funds from subsidizing high-speed passenger rail projects but would go further than current law. It would prevent the Texas Department of Transportation from helping coordinate access to rights-of-way on state highways for the high-speed rail project until there is a final, unappealable court ruling on the project’s eminent domain authority. Debate over whether Texas Central has the right to condemn land and buy it from unwilling owners has fueled opposition to the project and led to court battles across the state. The new language was added in what’s called a rider to the proposed budget.

[…]

“Working with TXDOT is critical to the project,” the company said in a statement late Wednesday. “This rider would impose arbitrary and discriminatory restrictions for a single project and sets a bad precedent.”

Texas law allows railroads to use eminent domain to take land for projects, and Texas Central says it is one. But opponents argue that the company doesn’t count as a railroad because it’s not operating any trains — and a Leon County Court upheld that viewpoint in February.

Texas Central disagreed with the ruling, citing a previous Harris County ruling in its favor, and said it plans to appeal the judge’s decision. But as the decision stands, the company can’t condemn land in the counties under the court’s jurisdiction, according to an attorney who represented the landowner in that case.

Patrick McShan, an attorney for the group Texans Against High-Speed Rail and more than 100 landowners along the train’s route, said there may be a lengthy court battle to settle the disagreement over whether the company can use eminent domain. And that, he said, could stall the project.

“At least two years, could be four years. Whatever it is, it’s several years,” he said. “It would be a significant obstacle to the project being constructed. … I do not envision a scenario where they can obtain these necessary approvals and these necessary court rulings to prove to the state that it is justifiable and necessary for the state to expend its resources on this project.”

See here for more on that court case, and here for where things stood at the end of the 2017 session. I fondly remember thinking that if Texas Central survived that session with nothing bad happening they were probably in good shape going forward. Those were the days, I tell you. The Senate budget still has to be approved by the full chamber and then reconciled with the House budget, so there will be opportunities for this rider to get ditched. And then I can make the same foolish prediction at the end of this session and get proven wrong again in 2021. It’s the circle of life, almost.

First city layoff notices sent

Here we go.

The city has sent pink slips to 67 Houston Fire Department cadets, the first documented layoffs resulting from Mayor Sylvester Turner’s plan to implement Proposition B.

The trainees will remain employed through June 7, according to a copy of the layoff notices sent to cadets.

“The City of Houston has experienced a sizable budget shortfall due to the implementation of Prop B,” the layoff notices read, referring to the charter amendment passed by voters last November.

The measure requires the city to pay firefighters the same as police of corresponding rank and experience. Voters approved Prop B by an 18-point margin.

“I want to assure you that the elimination of your position was a business decision and does not reflect your work performance or the value we place on your service to the City,” the layoff notices, addressed from Fire Chief Sam Peña, also read.

Next week, 47 municipal employees will receive layoff notices, Turner said in a statement, while city council will vote April 17 on whether to lay off classified firefighters under the mayor’s plan to pay for Prop B-mandated raises.

[…]

His plan for implementing the raises prompted by Prop B, unveiled last month in talks with city council members, calls for the fire department to decrease its head count by 378 for the upcoming fiscal year, including layoffs.

Turner’s plan also calls for all city departments to cut their spending by 3 percent, which is expected to lead to the layoff of about 100 municipal workers.

In recent weeks, the mayor has said no layoffs would be needed if the raises required by Prop B could be phased in over four or five years.

See here, here, and here for some background, and here for the city’s statement. It will be interesting to see how Council handles this when it comes time to vote. Other than Dwight Boykins, it’s not clear to me who’s with the firefighters on this. This will certainly provide some clarity. As far as a phase-in period goes, if the city says “give us five years and we can avoid layoffs”, while the firefighters say “no, but we can go for three years”, I confess I don’t quite understand why some kind of deal can’t be reached. Maybe that’s just me. For what it’s worth, nothing has to be set in stone till Council votes on the budget. There is still time for an agreement to be reached. How likely that is, I have no idea. But at least theoretically, it could happen.

The further effects of Prop B

I mean, what did you expect?

The Houston Fire Department would idle six to nine fire trucks and employ fewer firefighters per shift, risking a modest increase in response times, if City Council approves a $25 million reduction in HFD’s budget as part of Mayor Sylvester Turner’s plan to fund Proposition B, Fire Chief Sam Peña said.

The mayor and fire union officials disagree whether the proposed cuts would put the public at greater risk. Turner said Wednesday that the city can withstand fewer firefighters, while Houston Professional Fire Fighters Association President Marty Lancton said the cuts “will risk firefighters’ safety and the people we serve.”

Shrinking the department through a combination of attrition and layoffs would mark the first tangible citywide impact of the Prop. B pay parity referendum, creating a difficult choice for City Council members who must approve a balanced budget by June 30 but also risk being accused of undermining public safety during an election year.

[…]

To absorb its portion of the cut — $25 million — the fire department will need to reduce its head count by 378, Peña said, noting that the figure includes employees lost to retirement, resignation and other factors aside from layoffs.

HFD typically loses 150 to 160 firefighters annually through attrition, though Peña said he expects that number to rise this year amid the turmoil of Prop. B’s implementation, leaving perhaps 200 or fewer firefighters to receive pink slips. The city’s fiscal year 2019 budget accounts for 4,090 firefighters.

[…]

Service reductions could be avoided, Peña said, if the city and fire union agree on a way to phase in the pay raises over multiple years. Peña also said he could maintain current levels of service by cutting only 239 positions. A personnel reduction of that amount would save $15.8 million — about $9 million short of what Turner has directed Peña to cut.

Campos has been saying that we should not be in this mess. Here’s a crazy idea: What if – stay with me here – what if Prop B was a bad idea that never should have been put on the ballot, and never should have been approved once it was put on the ballot? What if the reason we’re in this mess is because the voters approved a costly annual expenditure for which no price tag was attached or means of funding was provided?

Let’s try a thought experiment. Suppose Prop B, instead of being what it is, mandated that every firefighter be paid a million dollars a year. What do you think the city’s response would be if that happened? I’m going to suggest they’d do what they’re doing now, which is trying to reduce the obligation so the budget can be balanced, as is mandated by charter. I’m sure people wouldn’t like that solution, but what other options are there? My example is ridiculous, but only in degree. The underlying problem remains the same: This is a large budget item that was imposed on the city. The city cannot raise revenues beyond the limits of the revenue cap. Cutting costs was and is the only option.

We can’t go back and redo Prop B. It passed, and the city has to implement it. Mayor Turner said it was a cost the city couldn’t afford, and that if Prop B passed it would lead to layoffs. He was quite clear about what would happen. Why is this a surprise?

House approves budget, and other news

Always a major milestone.

In Dennis Bonnen’s first major test as speaker of the Texas House, the chamber he oversees resoundingly passed a $251 billion budget Wednesday after a long but largely civil debate — a departure from the dramatics that have typically defined such an affair.

Though lawmakers proposed more than 300 amendments to the spending plan, Bonnen, an Angleton Republican, and his chief budget writer, state Rep. John Zerwas, R-Richmond, finished the night with their budget plan largely intact. After 11 hours of relatively cordial discussion, lawmakers agreed to withdraw the vast majority of their amendments or move them to a wish list portion of the budget, where they are highly unlikely to become law.

The budget passed unanimously on the final vote. The legislation, House Bill 1, now heads to the Senate, whose Finance Committee was set to discuss its budget plan Thursday.

“I’m proud of where we are in the bill that we are sending to the Senate,” Zerwas said at the end of the marathon debate. “Each and every one of you should be incredibly proud of the work that you’ve put in here.”

The two-year spending plan’s highlight — a $9 billion boost in state funding for the public education portion of the budget — remained unchanged. Of that, $6 billion would go to school districts, and the remaining $3 billion would pay for property tax relief, contingent on lawmakers passing a school finance reform package.

The budget plan would spend $2 billion from the state’s savings account, commonly known as the rainy day fund, which holds more than $11 billion.

“I’m not here to compare it to previous sessions,” Bonnen told reporters after the House budget vote. “But I’m here to tell you we had a great tone and tenor tonight, and I’m very proud of the business that we did.”

[…]

So while Bonnen’s first budget night as speaker was hardly free of controversy — an argument over the effectiveness of the state’s “Alternatives to Abortion” program, for example, derailed movement on amendments for nearly an hour — the occasional spats paled in comparison with those of years past. There were no discussions at the back microphone of lawmakers’ sexual histories, as happened in 2015, and no one had to physically restrain House members to prevent a fistfight over the fate of a feral hog abatement program, as happened in 2017.

Still, state Rep. Jonathan Stickland, R-Bedford, continued his long-running campaign against the feral hog program. And though the exchange ranked among the evening’s rowdiest, it was more than tame by last session’s standards.

State Rep. Drew Springer, R-Muenster, again opposed Stickland’s amendment to defund the program, which reimburses local initiatives to eradicate wild hogs. Stickland responded, “Members, although I respect the thoughtful words of Rep. Springer … let’s end this program right here, right now.”

Stickland’s amendment failed, with just four votes in favor.

See here for more on last session’s House budget debate. One should never miss an opportunity to illustrate Jonathan Stickland’s failures. The House also approved a supplementary budget for the previous biennium, to cover expenditures that were not previously appropriated, such as the traditional underestimating of Medicaid’s costs and all of the Harvey recovery funding.

Speaking of revenues:

House Republicans muscled a heavily altered version of their property tax reform bill through a committee early Thursday, notching a single Democratic vote and swiftly shooting down attempts to further modify the draft.

A top priority for state leaders, House Bill 2 would require cities, counties and other taxing units to receive voter approval before levying 2.5 percent more property tax revenue than the previous year. A vote was expected to come Wednesday morning on a new draft of the legislation, which contains changes likely to appease small and special taxing units but leave big municipal leaders staunchly opposed.

But the hearing on the new version was postponed until past midnight. The 16-hour delay gave an unusual cluster of critics time to trumpet their concerns with the measure — and then for top House leaders to respond in an informal late-night news conference.

“Sometimes when everyone’s a little bit upset with you, maybe you have a good balance — that’s probably a good sign,” said House Ways and Means Committee Chair Dustin Burrows, the author of the legislation and a Lubbock Republican. “We worked really hard; we talked to a lot of different constituencies” and a lot of members. “I think you’ll see in the committee substitute, the work product and a lot of collaboration.”

As amended, HB 2 now exempts community colleges, emergency service districts and hospital districts from abiding by the 2.5 percent election trigger. Another provision lets certain districts, including cities and counties, bank unused revenue growth, so long as they average below 2.5 percent over five years. And new “revenue enrichment” language could cushion some taxing units by letting them raise $250,000 in new property taxes a year, even if it exceeded the growth rate. The threshold, set at $250,000 for 2020, would be adjusted by the state comptroller annually, based on inflation.

[…]

Currently, voters can petition for an election if property tax revenue growth exceeds 8 percent, a rate set during a period of high inflation in the 1980s. State leaders have touted the lower chamber’s proposal and a Senate companion as an overdue correction and as a needed check on spiraling property tax bills. But critics say the reform efforts would not reduce tax bills, just slow the rate at which they grow — and, in the process, hamper local officials’ ability to provide public services for growing populations.

As you know, I oppose revenue caps, no matter how well intentioned. The reason the Lege ties itself into knots every two years in a vain attempt to limit property tax growth is that a taxing system that so heavily relies on property taxes fundamentally relies on a system that is divorced from people’s ability to afford their taxes. As I muse every two years, if only there were some system of taxation that was proportional to how much money people made in a given year, that would solve so many of these problems. Too bad no such system exists anywhere in the world.

Of course, another way to limit property tax growth for homeowners would be to ensure that everyone is paying their fair share of property taxes.

As state leaders promote their property tax reform package as needed relief for everyday Texans, some Democrats and county appraisers suggest a provision in the tax code has stacked the system in favor of corporations that can appeal their valuations with a combativeness most homeowners can’t muster.

At issue: a 1997 amendment, drafted by a prominent tax attorney, that critics say has allowed business and industry to lower their property tax burden at the expense of other taxpayers. The provision offers all Texans a way to fight their appraisals by arguing they were treated unfairly compared to other properties. But critics say large property owners have capitalized on it to drive down their costs, while residences and small businesses can’t afford to do the same.

“If you have a whole category of property that is nonresidential systematically paying less, well who do you think is paying more?” said Bexar County chief appraiser Michael Amezquita.

Amezquita is one of several officials who say their districts have been inundated by appeals and lawsuits from commercial owners trying to lower their appraisals, which determine what taxes are owed on a property. Supporters of the “equity” provision say it’s a critical tool for all property owners, and that commercial properties aren’t afforded the tax exemptions many home and agricultural land owners receive. Critics counter only well-funded property owners can afford to sue — and when they do, there’s often little an appraisal district can do to fight back.

“The deck is stacked against us,” said Amezquita, who has been sued by a J.W. Marriott resort seeking to have its taxable value reduced. A spokeswoman for the hotel declined comment.

I’ve written about this before. This issue of equity appeals was a cornerstone of Mike Collier’s campaign for Lt. Governor. We’d be having a much broader conversation about fairness and equity in taxation if he had won that race, but he didn’t and so we aren’t. Better luck next time, I guess.

Anyway. The Senate still has to approve its budget, and school finance reform remains a work in progress. There’s a decent amount of harmony now, but plenty of opportunities for tension, drama, and good old fashioned nastiness remain. Which is as it should be.

Garbage fee trashed

Not surprised, though I’d have thought it would get more support that this.

CM Dwight Boykins

Houston City Council disposed of a proposed garbage collection fee in a pair of 16-1 votes Wednesday.

Councilman Dwight Boykins, who floated the monthly fee as a way to help offset the cost of mandated pay raises for city firefighters, was the only person who voted in favor of the idea.

Most of the council’s members, including Mayor Sylvester Turner, previously had said they would not support the idea, which they called “regressive” and framed as a new tax on Houston homeowners.

Members including Turner reiterated those stances Wednesday before scuttling Boykins’ proposal in two separate votes.

“Let me be clear: the administration is not supporting this,” he said.

Boykins had offered three versions of the measure, with fees of $19, $24 and $27 a month. Council combined the two higher-rate options in one measure before rejecting it in a 16-to-1 vote.

See here for the background. Like I said, I didn’t expect this to pass, but I did think there was a chance it could draw enough support to make things awkward. Clearly, that was not the case. At least now we know, there’s no option to raise revenues on the table, not that this was a good one. It’s either layoffs, as already proposed, or an agreement to phase in Prop B in a way that allows the city to absorb the costs over time. The city says that requires five years, while the firefighters have offered three. Maybe there’s a compromise, and maybe someone needs to blink, I don’t know. But this is where we are. The Chron editorial board, which opposed the Boykins plan, has more.

How would you implement Prop B?

Here, from last week, is Mayor Turner’s official announcement about layoffs, following a failure to come to an agreement with the firefighters’ union about a time frame to fully implement Prop B. Here’s the Chron story about the firefighters protesting the layoffs, which we knew were coming – indeed, we’d known since last year, as that was one of the main points Mayor Turner made during the Prop B campaign. The Chron editorial board agrees with Turner that given the limited options available, layoffs are the only reasonable choice.

Now, to be sure, there is the garbage fee proposal, which Council will vote on this week. It would, at least in theory, pay for the increased costs that Prop B imposes, though there are objections. I’ve laid some of them out – a trash fee should be used for solid waste collection, the potential for litigation is non-trivial – and I’ll add another one here: If a garbage fee is the mechanism for funding Prop B, that necessarily means that only some Houstonians are contributing to that. Anyone who doesn’t live in a house that has city of Houston solid waste service would not be subject to this fee. (At least, I assume so – it’s not clear to me how this fee will be assessed.) Maybe you think that’s a big deal and maybe you don’t, but I guarantee someone will complain about it.

So the question remains, how would you implement Prop B? We all agree Prop B will cost some money to implement. The firefighters have never put a dollar figure on it themselves – they have made claims that the fire department brings in revenues that could be spent on the fire department instead of other things, which doesn’t actually solve anything but just recapitulates the argument that the city should spend more on firefighters. Raising the property tax rate is out, as it would violate the stupid revenue cap. Indeed, as we know, the city has had to cut the tax rate multiple times in recent years, costing itself a lot of revenue in the process. The basic options are a flawed fee that will charge some households up to $300 a year and others nothing, and layoffs. And if you’re going to do layoffs, the ones that make the most sense are the firefighters themselves, as the vast majority of calls to HFD are for emergency medical services and not fires – EMTs are cheaper to hire, don’t require expensive fire trucks to get to where they’re going, and aren’t in scope of Prop B. And that, barring any late-breaking agreement to implement Prop B more slowly, is what we are going to get.

So then, what if anything would you do differently? I’m open to suggestion.

UPDATE: Here’s City Controller Chris Brown saying the cost of Prop B is unsustainable outside an agreement to phase it in over five years, which is what the city has been pushing for.

Garbage fee on the agenda

I don’t think this is going to pass, but it will get a vote.

CM Dwight Boykins

Houston Mayor Sylvester Turner on Wednesday said he would put a proposed garbage fee on next week’s city council agenda, but will not vote for it.

Turner agreed to put the idea promoted by Councilman Dwight Boykins as a way to to offset the cost of firefighter raises mandated by Proposition B to a council vote, even as he called it “regressive” and said it would hurt low-income Houstonians.

“I will put it on the council agenda next week to let council members have their say, but I will not vote to impose this fee on the people of Houston,” he said on Twitter.

[…]

Boykins’ original proposal largely fell flat among his council colleagues, some of whom said the fees were far too high. Boykins since has floated lower rates, and said Wednesday that he would call for fees between $19 and $27 a month when council votes.

In a statement Wednesday, Boykins said he was the “only member of City Council to put forth a proposal that creates a steady revenue stream while preventing massive and destructive layoffs.”

“My proposal is an alternative that secures public safety while saving the jobs of up to 500 firefighters, 200 police officers and up to 300 city employees,” Boykins said. “It’s an opportunity for city leaders to lead, and I hope my colleagues will join me in supporting this measure.

See here for the background. As you know, I support the concept of a garbage fee for the purpose of improving and expanding our existing solid waste services. I don’t support it for other purposes, such as using it to pay for firefighter raises. Fees are generally exempt from the revenue cap stricture – Mayor Parker raised a bunch of fees as part of her budget-balancing in 2010-2011, with some language at the time about what it cost to provide various services and how the fees for one service should not be subsidizing the cost of another. That said, I would wonder if something like this, which is both a big increase in what most people pay each year plus an obvious ploy to raise money to pay for something else, would run into a lawsuit challenging its validity under the revenue cap. Surely someone will seize on the opportunity to cause trouble. Be that as it may, the first question is who will vote for this. My gut says Boykins will have some support, but probably not a majority. But who knows? We’ll find out next week.

One more thing:

If the Mayor is opposed [to the garbage fee proposal], why put it on the agenda?

For one thing, so the firefighters will not be able to claim later on that Turner never even put a valid proposal to pay for Prop B up for a vote. The ads write themselves – “He never even gave it a fair chance!” They can still claim he opposed it, of course, but if Council votes it down by (say) a 12-5 margin, that takes some of the bite out of it. Also, too, by letting the vote go on there will necessarily be a discussion about how much the fee would be, which might make people think a bit differently about Prop B. It’s not like the firefighters ever put a price tag on it, after all. If people realize that paying for Prop B will cost them personally $200 to $300 a year – down from $300 to $500 as in the original proposal from Boykins – they might see the Mayor’s point more closely. Finally, if Turner is wrong and the proposal passes, he no longer has to lay anyone off and he can let individual Council members explain their vote. I think letting the garbage fee be voted on makes more sense from Turner’s perspective than refusing to put it on the agenda would have.

Inevitably, we come back to a sales tax/property tax swap

It’s an idea we just can’t seem to quit.

Texas lawmakers are considering an infusion of $9 billion to improve public schools and lower property taxes over the next two years. The additional $6.3 billion in the classroom is being billed as a transformational effort to better educate the state’s 5.4 million students, while another $2.7 billion would stem the tide of escalating property taxes for homeowners.

“If we’re going to make some strides on these really big items, it really has to happen this session,” said Rep. John Zerwas, R-Richmond, chairman of the influential Appropriations Committee.

While lawmakers are confident the state’s booming economy will provide big bucks to spend on public schools, they are also pitching a number of plans to increase the state sales tax in the future. The proposals include hiking taxes on items such as sweet snacks, gasoline, e-cigarette fluid and heavy machinery rentals. But the proposal with the most apparent momentum is a tax swap that would allow local governments to charge a higher sales tax in exchange for reducing property tax levies.

Even raising the sales tax by one percent “contributes a lot of money” that school districts, cities and counties could use to offset reductions in property tax revenue, Zerwas said. Some estimates predict such an increase would raise more than $5 billion a year. The statewide sales tax rate is now 6.25 percent a year. Local governments can add up to two percent.

Although Republicans are leading the charge with major tax swap proposals, it’s unclear how they will fare in the GOP-led House and Senate, particularly among lawmakers who narrowly won their reelections as Texas Democrats gain ground.

Financial implications of the bills are shaky. Several tax bills were filed a week ago, just under a deadline, and have yet to be analyzed by the Legislative Budget Board which predicts financial effects.

Increasing reliance on the sales tax troubles Eva DeLuna Castro, a budget and policy expert with the left-leaning Center for Public Policy Priorities. Not only is a sales tax considered regressive for taking more money from low-income people than the rich, but its collections are more susceptible to the ups and downs of the economy, she said.

“You need to find a revenue source that doesn’t all the sudden tank on you. Or if you know that it is going to do that, you need to put most of it away for a rainy day and use it when that rainy day comes,” she said.

[…]

Rep. Drew Springer, R-Muenster, is proposing Texas increase taxes on gasoline and close tax exemptions on items like ice cream, certain baked goods, e-cigarette vapor fluid and over-the-counter medicine.

“I don’t think people realize their ibuprofen is tax-free,” said Springer. In exchange, House Bill 2915 would allow the state to lower the maintenance and operations property tax that funds schools. His bill would also increase the homestead exemption to 50 percent of a home’s value. Texans in a home valued at $274,000 would average $1,400 a year in property tax relief, he said, amounting to $6.2 billion less in property tax collections statewide.

Another bill, House Joint Resolution 3, proposes inching up the sales tax and using money from that increase exclusively for public schools. The resolution is proposed by Rep. Dan Huberty, R-Houston, the architect of the House’s $9 billion school finance plan. The measure would require a vote in November to change the state Constitution and increase the statewide sales tax, which is now 6.25 percent. Huberty emphasized that raising the sales tax is just one measure under consideration, and that it’s still too early to pencil in numbers.

“We have to put more money into the system. It’s our responsibility,” Huberty said Thursday at an event hosted by the Texas Tribune.

Rep. Chris Turner, D-Grand Prairie is proposing the state systematically examine each tax exemption every six years to decide whether it is needed. House Bill 3968 will raise revenue by expiring out-of-date tax “loopholes” over time, he said, and is a good alternative to raising sales taxes.

“It is important to note that Texas already has a high sales tax — 8.25 percent in most areas,” said Turner, who chairs the House Democratic Caucus. “The lower someone’s income, the more it hurts, so an increase in the sales tax will hurt a lot of Texas families.”

This comes up every few years – in 2005, in 2007, in the 2012 and 2014 elections – and each time we confront the fact that swapping property taxes for sales taxes greatly benefits property owners while burdening lower income folks the most. That’s a feature and not a bug, as far as its Republican advocates are concerned. I appreciate that at least this time it’s being proposed in the context of putting more money into schools, which would then have the effect of easing the pressure on local property taxes, but the same problem remains. Rep. Turner’s proposal to evaluate tax breaks also comes up whenever sales-tax-increase bills are filed, and it usually gets quietly ignored as the higher-profile swap bills eventually die. It’s still a good idea, it just never gets any momentum behind it. Rep. Springer’s idea to expand the sales tax to more things also comes up in conjunction with swap bills, and there is merit to this approach as well, though the real money is in taxing services, which is pretty much as big a taboo as an income tax is.

To review: I support requiring a process to scrutinize and sunset every tax break we have on the books, and I support at least exploring the imposition of a sales tax on selected goods and services where it is not currently imposed. If the goal of that is to put more state money into public education, and one result is that it allows local governments to ease up on property tax collections because they are no longer trying to make up for the state’s inadequacies, I would consider that a good outcome. The Trib has more.

House passes its budget out of committee

On to the full House, then the real fight occurs.

A panel of House budget writers gave initial approval Monday to a budget that would spend $115 billion in state funds, including a $9 billion infusion of new funds for Texas public schools and property tax relief.

Now that the House Appropriations Committee has approved the 2020-21 spending plan, House Bill 1, the legislation moves to the floor of the 150-member House.

[…]

Among the highlights of the House’s spending plan are:

$9 billion in new state funding for K-12 education and property tax relief, contingent on lawmakers passing reforms to the way the state funds public schools. The budget does not dictate the breakdown of those funds, but a bill backed by Speaker Dennis Bonnen would give about $6 billion to school districts and use the remaining $3 billion to pay for a reduction in local school district property taxes.

A $2.8 billion increase in state and federal funds for health and human services above what the House proposed in January. That includes a $25 million increase for early childhood intervention services, $6.7 million to reduce caseloads for Adult Protective Services workers, $31 million to expand capacity at local mental health clinics for low-income Texans and $87 million to raise the pay of personal attendants, who care for the elderly and disabled, by about 10 cents an hour.

A $168 million expenditure to give some Texas prison guards and parole officers a pay raise.

Rep. Matt Schaefer was the lone No vote in committee, so presume that this will get some pushback from the wingnuts. The story notes that the House budget draws $2 billion from the Rainy Day Fund, but it doesn’t specify what it’s used for. There’s more here on the House school finance proposal. The budget is the one thing the Lege absolutely has to do. With some cracks beneath the surface on other “priority” items, it’s nice to see this get a head start.

Senate files its school finance bill

Here it is.

Sen. Larry Taylor

On the night of the deadline to file bills this legislative session, Texas Senate leaders turned in their first crack at legislation designed to reform school finance — rounding out a series of proposals in the upper chamber aiming to address rising property taxes and fix the way the state pays for its schools.

The bill was clearly incomplete and included some placeholder language. But its Republican author, Senate Education Chairman Larry Taylor, said it includes proposals that would fund full-day pre-K, incentivize school districts to improve their third-grade reading performance, offer money for teacher merit pay and increase funding for low-income students. The bill does not appear to require school districts to use standardized tests to determine funding.

Taylor didn’t give an indication of how much the bill would cost, or how it would affect local school district property taxes.

“Our focus should be on improving the academic outcomes of our low-income students, who make up the largest and fastest growing demographic in our public school system,” he said in a statement.

Some of the proposals in the bill appear similar to recommendations from a state school finance commission, which Taylor helped create.

See here, here, and here for some background. We don’t know enough about this bill yet – if there’s ever an application for the old saying about the devil being in the details, it’s with school finance bills – but so far I don’t see anything that makes me want to put my shields up. We’re starting out in a better place now than we’ve done in previous sessions. We still need to finish there.

Firefighter layoffs

Hoo boy.

Mayor Sylvester Turner plans to lay off up to 400 firefighters as he prepares to award pay raises required by Proposition B, the voter-approved charter amendment that grants firefighters the same pay as police of corresponding rank, according to five Houston City Council members who were briefed on the plan Thursday.

The apparent move to fully implement the pay parity measure comes after talks between the city and fire union about phasing in the raises over five or more years became strained last week. Meanwhile, city officials are preparing council members for the difficult task of closing a $197 million deficit in the annual budget that must be adopted for the upcoming July 1 fiscal year. About $80 million of that budget gap comes from the firefighters’ raises, council members were told.

In addition to the firefighter layoffs, Turner will seek to close the deficit by asking all city departments to cut their budgets by at least 3 percent, a move that is likely to require layoffs of, perhaps, 100 municipal workers, the council members said. Councilwoman Brenda Stardig said she was told no police officers will be laid off.

On May 9, Turner’s administration plans to issue back pay to firefighters retroactive to Jan. 1, which will total about $30 million, multiple council members said.

“So, basically, on May 9 you want to be hanging out near a firefighter because he’s going to be buying,” said Councilman Greg Travis. “He’s going to have a lot of money on that day.”

The city plans to mail layoff notices to firefighters within weeks, Travis said. Among the layoffs are 68 fire cadets who Turner has declined to promote amid a citywide hiring freeze than has spanned more than five months. The mayor nonetheless promoted more than 60 police cadets Monday.

The fire cadets filed grievances against Turner Thursday alleging that the mayor was discriminating and retaliating against them.

[…]

Turner, who repeatedly has warned of potential layoffs, told reporters his hands were tied because the charter amendment did not come with a funding mechanism. He also said the fire union rejected a city proposal to phase in pay raises. That offer did not appear to fully implement the charter amendment over the city’s proposed five-year window, falling short of increases in incentive pay that the finance department projects would be necessary to reach full parity.

“People want to put the administration in a box,” Turner said. “If you don’t implement Prop. B, people criticize you for not implementing Proposition B. When we move to implement Prop. B, people say, ‘We don’t want the layoffs.’ Well, you can’t have it both ways.”

During negotiations, the firefighters proposed to phase in Prop. B raises over three years, retroactive to July 1, 2018. The raises then would be distributed based on firefighters’ length of service, with all members reaching full parity by July 1, 2020.

No one can say they didn’t see this coming. One of the main arguments against Prop B was the cost, which would inevitably lead to layoffs because the vast majority of the city’s expenditures are personnel costs. It seems a little crazy that there wasn’t a way to agree to a phase in to avoid any drastic actions, but here we are. Note that the city has very limited capacity to raise revenues thanks to the stupid and harmful revenue cap, and the city is not allowed to run a deficit. That severely restricts options, and that’s the place we are in now. We’ve been through this before, back in 2010 when then-Mayor Parker faced a huge deficit caused by the downturn in the economy. She wound up laying off hundred of municipal employees. Police and firefighters were exempted from that, but this time it’s the firefighter pay parity referendum that is driving a big part of the deficit. Where should the cuts come from this time? You tell me.

One uncertainty appeared to stem from differences in educational requirements between the departments. For example, police officers must have a master’s degree to be promoted to assistant police chief, a stipulation that does not exist for assistant fire chiefs and fire marshals. Some firefighters may receive reduced raises due to the differing requirements, multiple council members said, explaining why the latest cost estimate of $80 million falls more than $30 million below Turner’s previous estimate.

There is speculation this will lead to a lawsuit. I’ve expected that from the beginning. And I fully expect it will still be litigated the next time the Mayor is on the ballot in 2023.

Here comes the House school finance plan

Not surprisingly, they go bigger than the Senate.

Rep. Dan Huberty

With Texas House lawmakers unveiling their long-awaited school finance proposal Tuesday and the Senate’s version likely close behind, teacher pay appears to be emerging as one of the biggest sticking points between the two chambers.

House Public Education Committee Chairman Dan Huberty, R-Houston, and House Speaker Dennis Bonnen, R-Angleton, laid out their reform proposal at a press conference Tuesday, calling for raising minimum salaries for a broad group of educators, increasing health and pension benefits, and offering opportunities for merit pay programs. That approach differs substantially from the $4 billion proposal that sailed through the Senate on Monday that would provide mandatory across-the-board $5,000 raises for classroom teachers and librarians.

When asked about the Senate’s proposal, which Lt. Gov. Dan Patrick has championed, Bonnen said, “I don’t know how you call a $5,000 across-the-board teacher pay raise … with no discussion of reducing recapture, no discussion of reducing property taxes, no discussion of early childhood education, no discussion of incentivizing the teachers going to a tougher school to teach” a school finance plan.

“What we have is a plan,” he added. “I think teachers are some of the smartest people in Texas, and they are going to figure out that the Texas House has a winning plan for the teachers and students in Texas.”

[…]

The House proposal, House Bill 3, would increase the base funding per student while requiring school districts to meet a higher minimum base pay for classroom teachers, full-time counselors, full-time librarians and full-time registered nurses. Many districts already exceed the current minimum salaries for educators at different experience levels.

It would work hand-in-hand with House Bill 9, filed Monday by the speaker’s brother, Rep. Greg Bonnen, R-Friendswood, which would increase the state’s contribution to Teacher Retirement System pensions over time while keeping active member and district contributions the same.

HB 3 would also provide funding for districts that offer a merit pay program, rating their teachers and providing the top-rated ones with more money — modeled on a Dallas ISD program touted among lawmakers. The Senate is expected to include a similar proposal in its school finance bill later this week.

The politics surrounding the Senate’s teacher pay raise bill this session are unusual, with Patrick, who has previously clashed with educators, advocating for a proposal many teachers like. Meanwhile, conservative group Empower Texans, a key contributor to Patrick’s campaign, has come out against the bill, with one employeecriticizing conservatives like Patrick for “kowtowing” to liberals.

That bill has divided the education community, with superintendents and school boards arguing they need more flexibility with additional funds and many teachers supporting the directed raises.

Huberty said Tuesday that the House would “certainly have a hearing on that [Senate] bill” but that the school finance panel that worked to develop recommendations for lawmakers did not include across-the-board raises.

He said HB 3 provides more opportunity for local school boards and superintendents to decide how to use increased funding. More than 85 House members have signed on as co-authors of HB 3, and in a public show of support, many of them were present at Tuesday’s press conference.

See here and here for some background. A preview story about the House bill is here, and a story about that Senate bill is here. The Senate bill covers raises for teachers and librarians, but not other support personnel like nurses or bus drivers, which is one reason why the more-flexible approach is favored by school districts; that said, the president of the Texas State Teachers Association released a statement emphasizing the need for a Senate-style guaranteed teacher pay raise. The House is also taking a different approach on property taxes, as noted in that preview story:

According to the summary, the bill would increase the base funding per student by $890 to $6,030 — the first time that allotment has been raised in four years. It would also lower school district property tax rates statewide by 4 cents per $100 of taxable property value, helping to reduce so-called Robin Hood payments that redistribute money from wealthier districts to poorer ones. The compression could save the owner of a home with $250,000 in taxable value about $100 annually in school district taxes.

That method of property tax relief is different than one proposed by Gov. Greg Abbott last year, which would cap annual increases in school districts’ tax revenues at 2.5 percent.

There’s also the Democratic proposal, some of which is in HB3. All of this is a starting point, so I don’t want to get too far into the weeds. None of these bills will be adopted as is, and some of them may not get adopted at all. This and the budget will be the last pieces of business the Lege deals with, and the main reason why there could be a special session. We’ll keep an eye on it all. The Chron has more.

Dems propose their school finance bills

It’s good to have a broad array of options.

The Texas House Democratic Caucus laid out a $14.5 billion plan for school finance reform and property tax relief Thursday, releasing a list of priorities in advance of a key school finance bill Republican education leaders are expected to file and support.

The Democrats’ plan is composed of dozens of bills members have filed — or will file — to increase teacher pay and benefits, pay schools more for educating low-income students, and provide more counselors for school districts. It does not include two policy items that may be included in Republican-filed legislation: merit pay for teachers or paying schools more for higher student test scores.

“We hope to work with our colleagues to incorporate some of these ideas into their bills,” said state Rep. Chris Turner, D-Grand Prairie, who chairs the caucus.

[…]

Some of the House Democrats’ proposals dovetail with recommendations in the school finance panel’s report. [Rep. Mary] González filed House Bill 89, which would increase the base funding districts get per student and ensure they receive more funding for low-income students and those learning English.

A few House Democrats have filed bills that would fund full-day pre-K for all school districts, an estimated cost of $1.6 billion.

The proposal also includes $3.78 billion for teacher pay and benefits — around the same amount Senate Republican leaders have proposed in across-the-board $5,000 raises for full-time classroom teachers. House Democrats are championing proposals that would increase salaries for not just teachers, but also support staff, while also boosting financial support for teacher health care premiums. The exact amount of the proposed raises for each person has not yet been determined.

See here for more on the school finance panel report. Some of these ideas will be included, in whole or in part, in the omnibus school finance bill that Rep. Dan Huberty will file. Others are there more as a statement of values, since none of these bills will pass without sufficient Republican support. If I could pick just one thing to make it to Abbott’s desk, it would be the full day pre-K, which will have a big return on investment if we do it right. When all is said and done, I’d love to know how much of what was on offer today makes it through into the final bill.

City proposes partial pay raise to firefighters

Progress, of a sort.

Houston officials have offered to raise firefighters’ base salaries, but not sufficiently to establish pay parity with police officers as approved by voters, city and firefighter union officials said Wednesday.

“In my mind, the proposal makes no effort to implement Prop B,” union attorney Troy Blakeney said, referring to the ballot item reflecting a city charter amendment approved in a Nov. 6 referendum. “It makes an effort to pay firefighters additional salaries that do not include all the components of Prop B.”

The proposal nonetheless marks the first evident progress made since Mayor Sylvester Turner met last month with Blakeney and Houston Professional Fire Fighters Association President Marty Lancton to discuss Proposition B, which compels the city to pay firefighters the same as police of equal rank and seniority.

City Attorney Ron Lewis confirmed the city had made an offer, but neither he nor Blakeney disclosed the amount.

Still, it was clear Wednesday that Turner and Lancton remain far from an agreement to phase in the raises over time. Both say they support that idea, with Turner arguing the city cannot afford to instantly implement Proposition B.

Lancton told reporters Wednesday that the city’s legal efforts to invalidate the proposition, based on the argument that it is unconstitutional, are hampering negotiations.

“He appears to be a victim of his own ego,” Lancton said of the mayor. “His relentless political and legal war on Houston firefighters and their families must end.”

Turner has said the firefighters’ decision Jan. 15 to seek a court order compelling the city to implement the proposition has similarly soured negotiations. Lancton has said the city should already be paying firefighters because the proposition became law nearly three months ago, which is why the union sought the court order.

See here for some background. At this point, I don’t have anything new to say. I don’t know how this ends and I don’t know how long it will take to get there. If we’re still fighting about this in the next city elections in 2023, I won’t be surprised.

Things the Rainy Day Fund was not intended for

This, for one.

A pair of conservative lawmakers want Texans to help pay for President Donald Trump’s border wall and plan to ask lawmakers to take $2.5 billion out of its rainy day fund to cover the costs.

Reps. Briscoe Cain, R-Deer Park, and Kyle Biedermann, R-Fredericksburg, told Breitbart, a conservative news publication, they plan to file legislation that would cover costs to “design, test, construct, and install physical barriers, roads, and technology along the international land border between the State of Texas and Mexico to prevent illegal crossings in all areas.”

Texans and Texas-owned companies would be given preference on all bids and contracts, the publication reported.

“If Congress refuses to keep Americans safe, then Texas will answer the call,” Cain said in a statement. “Our office is receiving many calls in support of this effort. We’ve even received calls from citizens of other states offering to help fund the wall.”

[…]

Texas now spends about $400 million a year on border security. Texas Gov. Greg Abbott suggested that lawmakers will renew that commitment over the next two years. The proposal from Cain and Biedermann would spend $2.5 billion by Aug. 31, according to Breitbart.

You know, I’m old enough to remember when this was known as the Economic Stabilization Fund. I’m also old enough to remember what its original intent was:

Texans approved a constitutional amendment creating the ESF in 1988, following an oil price plunge and economic recession that forced lawmakers to raise taxes to keep state government in the black. The Legislature structured the fund to automatically set aside some tax revenues in boom years to help the state during downturns.

It actually worked that way for awhile, too. Then Rick Perry came along and used the cover of the 2011 budget deficit to declare that the ESF was actually a fund for helping the state cope with natural disasters, and not to be used to avoid the deep and damaging cuts to things like public education and Medicaid that happened during that session. That change by executive fiat, along with the popular moniker of “The Rainy Day Fund” led to many people demanding its use in the aftermath of Hurricane Harvey, which Greg Abbott refused. It’s still not clear what the state will do to help further the recovery from Harvey, but tapping into the ESF in a time of need for one-time expenditures is at least within hailing distance of its original purpose. The Cain/Biederman exercise in pants-wetting and xenophobia, on the other hand, is not. I’m glad we had the chance to have this little conversation. The Observer has more.

Commissioners Court rejects Ogg’s request for more prosecutors

I fully expected that Commissioners Court going from 4-1 Republican to 3-2 Democratic after the last election would signal big changes in how business was done in Harris County, but I didn’t expect this to be the first milestone on the new path.

Kim Ogg

Harris County Commissioners Court on Tuesday rejected Kim Ogg’s request for 102 new prosecutors, a stinging public defeat for the first-term Democratic district attorney by members of her own party.

The rejection came less than 24 hours after a former assistant district attorney filed paperwork to challenge Ogg in next year’s primary, a sign criminal justice reformers may have lost patience with the self-described progressive after helping elect her in 2016.

The three Democratic members of Commissioners Court — commissioners Rodney Ellis and Adrian Garcia and County Judge Lina Hidalgo —supported increasing the district attorney’s budget by 7 percent, in line with increases for other county departments. Ogg had asked for a 31 percent increase, which would grow her prosecutor corps by a third and include 42 additional support staff.

“This is not the only way, and certainly not the most cost-effective way to decrease prosecutor caseloads,” Hidalgo said.

[…]

Ogg, who did not attend the court meeting, issued a statement after the vote.

“We will continue to fight every day to ensure that justice is done in every case for every crime victim, every defendant and the community,” she said. “Harris County must have a district attorney’s office with sufficient resources to ensure that all cases are resolved fairly and in a timely manner.”

See here for the background and here for an earlier Chron story that previewed the Tuesday Commissioners Court meeting. Ogg had addressed the criticism of her proposal, and also answered the question about maybe hiring prosecutors on a shorter-term basis, but it wasn’t enough to get any of her fellow Dems in line. I would say her best bet right now is to take what the ACLU of Texas said in a press release following the Commissioners’ vote to heart:

“Adding more prosecutors in Harris County is not the ultimate solution for reducing mass incarceration and fighting racism in the criminal system. While the Harris County Commissioners Court has taken a more measured approach than the initial proposal, the addition of new prosecutors must come with clearly defined standards for reducing incarceration — such as expanding pretrial diversion, reducing case disposition time, and reducing existing caseloads — instead of prosecuting more cases. The commissioners were right to call for studies into how best to improve the district attorney’s office, and District Attorney Ogg should commit to specific plans for how any newly hired prosecutors will be used. That’s accountability.”

“There is no question that Harris County prosecutors have high caseloads, but the solution is not to add more prosecutors in a cycle that endlessly ratchets up the size of the criminal system. The smartest way to reduce caseloads is to dismiss more cases, identify more cases for diversion, and invest significantly in substance use disorder and mental health treatment that help people who need it and prevent them from ending up awaiting prosecution in the first place.”

Seems to me this conversation will need to include HPD, the Sheriff’s office, and all of the other law enforcement organizations in Harris County as well. If the DA needs to prioritize what cases get prosecuted, they will need to prioritize what arrests they make. Commissioners Court needs to do its part, too, by working to expand mental health offerings. The Lege could also pitch in here, though for obvious reasons I’ll keep my expectations low. Everyone has a part to play – Kim Ogg’s part is bigger than the rest, but it’s not just her. Maybe by the time next year’s budget is being discussed, we’ll have less to argue about.

And speaking of next year:

Audia Jones, the former prosecutor who on Monday filed paperwork to challenge Ogg, spoke against the proposal. Jones said she left the district attorney’s office in December in part because she said Ogg’s administration has been too reluctant to offer jail diversion to defendants of color, in contrast with their white counterparts.

She said temporary court closures caused by Hurricane Harvey are not a driver of increasing caseloads, as Ogg contends, but rather are a result of her administration’s policies.

Murray Newman, who had some earlier thoughts about the Ogg proposal, notes that Audia Jones is married to Criminal Court Judge DaSean Jones. I’m not sure how that conflict gets sorted out if she wins (one obvious remedy would be for Judge Jones to step down), but that’s a concern for another day. I would have picked County Attorney Vince Ryan as the first member of the class of 2020 to get a potential primary opponent – designating a treasurer is a necessary step to running for office, but it doesn’t commit one to running – but here we are.

How many prosecutors do we need?

Opinions differ, but it’s a big question in Harris County right now.

Kim Ogg

Hanover is one of many prosecutors Harris County District Attorney Kim Ogg said are overburdened — the reason she has asked Commissioners Court for a budget that would fund 102 additional assistant district attorneys and more than 40 support staff. Ogg said the surge is needed to clear a backlog in cases exacerbated by Harvey, a driver of overcrowding at the Harris County Jail.

Her proposal to expand the prosecutor corps by a third, however, has evolved into a proxy battle over the future of criminal justice reform in Harris County. Ogg finds herself so far unable to persuade Democrats on Commissioners Court as well as reform groups, who have questioned her self-identification as a progressive and said her proposal would lead to more residents in jail.

“Simply adding prosecutors is the strategy that got us here in the first place, with this mentality that the only thing we can spend money on is police and prosecutors,” said Jay Jenkins, project attorney with the Texas Criminal Justice Coalition.

Ogg, a first-term district attorney who unseated a Republican in 2016 with the support of many progressive groups, said these critics fail to grasp the on-the-ground realities of her prosecutors, whose heavy workloads mean they sometimes are the reason cases are delayed and defendants languish in jail.

Ogg pledged to send the first 25 new hires to the felony trial bureau, where she said they can help achieve the reforms progressives seek, such as identifying low-risk defendants who can be sent out of the criminal justice system without a conviction.

“Who else is going to divert offenders who should re-enter society, and prosecute the people who should be incarcerated to protect the public?” she said. “This is a question of how fast do our funders really want to reform our justice system?”

Ogg laid out her argument in an interview Wednesday at the district attorney’s temporary quarters at 500 Jefferson, where a regular shuttle takes prosecutors to the criminal justice complex more than a mile away.

Ogg said since taking office, she is proud to have diverted 38,000 defendants for a variety of low-level offenses, including marijuana possession, misdemeanor theft, first time DUI and mental health-related charges such as trespassing. With an active caseload that jumped from about 15,000 when Harvey hit to 26,523 this week, she said prosecutors are not always able to give victims and defendants the attention they deserve.

Her staff noted Harris County’s 329 prosecutors are less than half the number in Illinois’ Cook County, which is only slightly more populous.

“With adequate staff, we’ll be able to offer pleas that are reasonable earlier,” Ogg said. “We’ll be able to focus on public safety to make sure we don’t let someone go who is really a risk and threat to either his family or his community.”

She sought to mollify the concerns of progressives who fear it could lead to more people in jail, saying, “There’s no data showing that more prosecutors equals more prosecutions.”

Here are the original statements put out by TOP and the TCJC. This subsequent Chron story gives some more detail.

“We would like to stop the clock and take time to consider other options, primarily looking at funding for mental health issues,” organizer Terrance Koontz said.

Koontz said TOP is looking at housing options for nonviolent offenders who may need to reset their lives.

“We’re talking about individuals who are being arrested for minor drug charges or being homeless on the street or having a mental problem, and they definitely shouldn’t be sitting in jail,” Koontz said. “We are not here to attack D.A. Ogg, we just want more time to consider our options.”

[…]

Doug Murphy, president of the Harris County Criminal Lawyers Association, agrees with Ogg’s proposal.

“Having witnessed the daily reality of their lack of manpower what we’re seeing is Harris County was the fastest moving docket in the country, we called it the rocket docket, and it slowed it down to a snail’s pace,” said Murphy. “What we got is bloated dockets because they don’t have the manpower to work these cases up and marshal the evidence.”

Murphy believes more prosecutors would help pick up the pace of getting cases to trial, resolved and even dismissed. “If I weren’t witnessing daily the backlog and the frustration, I would be in total agreement with the other organization,” Murphy said.

Koontz still worries that more prosecutors would ultimately mean more arrests and more people wrongly incarcerated.

“We just want to consider other viable options outside of just hiring the prosecutors,” Koontz said. “Because although it does not seem like putting more people in jail, at the end of the day we feel like more people will end up in jail than not and at the end of the day its black and brown people who are overwhelmingly being incarcerated.”

Honestly, I think everyone is raising valid concerns. The chaos of Harvey has caused a big backlog for the DA’s office, and it doesn’t serve anyone’s interests for cases to drag out because there just isn’t the time or the bandwidth among overworked assistant DAs to get to them. On the other hand, Kim Ogg made promises about how she was going to reform the system, and a big part of that was not prosecuting a lot of low-level crimes or crimes involving people who need mental health treatment. They also worry that while Ogg might not backtrack on her stated priorities, the next DA who inherits her bigger office may not share those priorities. It’s not at all unreasonable to worry that an increase in prosecutors will be counter to Ogg’s stated goals.

So how to resolve this? Grits suggests increasing the Public Defender’s office by an equivalent amount – Commissioner Rodney Ellis has suggested something like this as well, and the PDO is seeking more funding, so that’s on the table. I like that idea, but I also think it may be possible to assuage the concerns about what happens after the backlog is cleared by putting a time limit on the hiring expansion. Is it possible to hire people on one or two year non-renewable contracts, to get the office through the backlog but then have it return to a smaller size afterward? I’m just spitballing here, but if we agree that clearing the backlog is a worthy goal, then we ought to be able to find a way to ensure that doing so doesn’t lead to mission creep. I’m open to other ideas, but I feel like this is something that needs to lead to a compromise, not one side winning and the other side losing. I hope we can get there.