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Commissioners Court gets more aggressive on environmental enforcement

Good.

Commissioners Court on Tuesday voted to hire 61 employees across three departments in a bid to significantly boost Harris County’s ability to respond to environmental emergencies after finding numerous shortcomings in its efforts to manage three chemical fires near the Houston Ship Channel this spring.

The $11.6 million investment will go toward purchasing new equipment and add employees to the fire marshal’s office, pollution control and public health departments. It is the most aggressive effort yet by the new Democrat-controlled court, which took office in January, to grow the emergency response infrastructure in the county, home to the heart of the nation’s petrochemical industry.

A Houston Chronicle investigation found that the staffing levels of the three departments have for decades failed to keep pace with the growth of commercial activity along the Houston Ship Channel. Previous Commissioners Courts had not acted with the same sense of urgency after chemical incidents; the county never replaced the Pollution Control employees laid off during the Great Recession. Instead, court members prided themselves on finishing fiscal years with a large fund balance.

“All these resources we’re bringing to the table, after a careful analysis … will help us be in a much better position in the future,” said Commissioner Adrian Garcia, whose Precinct 2 included the sites of each of the chemical fires in March and April.

Harris County Judge Lina Hidalgo hailed the budget increases as the most significant investment in environmental protection the county has made in 30 years. Hidalgo said she was pleased the new monitors, for example, will allow the county to test air quality on a regular basis, in addition to during emergencies.

A report on the blaze at Intercontinental Terminals Co. released on July 29 concluded the county needed more equipment and manpower to monitor pollution and keep the public informed about safety risks. The 133-page “gap analysis” made a total of 49 recommendations.

Two days later, a fire at an Exxon plant in Baytown injured 37 workers.

[…]

Court members unanimously approved the budget increases for Pollution Control and the fire marshal’s office. Precinct 3 Commissioner Steve Radack was the lone opponent to increasing the size of the health department.

See here and here for the background. I’m glad most of the votes were unanimous – I mean, I don’t even know what the counter arguments are for this – but it’s still the leadership of the new Court that made this possible. Going forward let’s be more proactive so there will (one hopes) be less to have to react to.

On to the next big financial issue for the city

It’s always something.

Mayor Sylvester Turner

Four years ago, the main source of Houston’s deteriorating financial health — billions of dollars in unfunded pension obligations — loomed over the race for mayor, promising a massive test for the winner.

Now, Mayor Sylvester Turner, having overhauled the city’s troubled pension systems, is running for re-election and touting the reforms as his signature policy accomplishment. He faces several challengers, including Bill King, the businessman he defeated four years ago, millionaire lawyer and self-funder Tony Buzbee, City Councilman Dwight Boykins who has clashed with the mayor over firefighter pay and former Councilwoman Sue Lovell, as well as a handful of lesser known candidates.

Whoever wins will be forced to confront another simmering financial problem: Houston’s $2.4 billion unfunded liability for retiree health care costs, the result of years of deferred contributions, an aging city workforce and, experts say, growing medical costs that outpace the city’s revenue.

The total has grown in recent years by an average of $160 million a year, or more than $400,000 a day. That is less than the $8.2 billion unfunded pension liability’s $1 million-per-day growth rate, but enough to require swift and sweeping changes, experts and local officials say.

“We’re in the earlier stages in this. It’s not a crisis by any means, but it would be better to address it now,” Controller Chris Brown said. “We don’t want to let this thing grow to another $8 billion unfunded liability. … Let’s pay a little now instead of paying a lot later.”

The unfunded liability refers to the city’s obligations in the coming decades for retired employees’ medical, life and prescription drug insurance, commonly called other post-employment benefits, or OPEB. Houston has covered its OPEB expenses through a pay-as-you-go system, akin to making a minimum credit card payment while the balance grows.

[…]

“We have also been in discussions with the employee groups working toward consensus, while keeping in mind the sacrifices employees have made to help us achieve the city’s historic pension reform,” Turner said.

The proposals align with recommendations from a separate firm, Philadelphia-based PFM, which said in its 10-year Houston financial plan the city should eliminate OPEB coverage altogether for retirees or dependents who have access to other coverage.

Other cities have taken a similar approach, limiting cuts for retirees and older employees who were promised certain benefits, while requiring bigger sacrifices from younger and future employees with more time to prepare.

The good news here is that the city doesn’t need to go through the Lege to fix this, and the basic plan for a fix is already in the works. Mayor Turner will be proposing his plan later in the year, and most likely that will put the city on a path towards containing this problem. There’s still a big piece of the puzzle missing, though.

Even after reigning in the city’s OPEB liability, Brown said, the city faces numerous looming financial problems, including annual deferred maintenance and, in the recent city budget, recurring spending that outstrips recurring revenue. In addition, Houston has been operating under a voter-imposed cap on property tax revenue since 2004 and has trimmed its tax rate to avoid collecting more money than allowed.

“This is another piece of the larger problem that’s looming for the city of Houston, which is the structurally imbalanced budget,” Brown said. “Essentially, we want to be paying for all of our current expenses in the fiscal year in full. And we don’t want to defer anything out, i.e. kick the can down the road.”

Yes, the revenue cap, which costs the city many millions of dollars for no good purpose. There’s a lot the city can do to control costs, but not everything is within its power. Some things just get more expensive over time, and if the city is not allowed to reap the benefit of economic growth, it cannot deal with those expenses. If we can get past this issue, and Mayor Turner gets re-elected, then maybe, just maybe, we can get a rev cap repeal measure on the 2020 ballot. There will never be a friendlier electorate to deal with t.

Once more with more prosecutors

This time, it might work.

Kim Ogg

The Harris County District Attorney’s Office is asking county commissioners once again for more prosecutors to handle fallout from the botched Houston drug raid that left a Pecan Park couple dead earlier this year.

The latest $1.96 million funding request that will go to Commissioners Court for consideration Tuesday would add 10 positions to the office, including seven felony chief prosecutors and three investigators housed in the Civil Rights Division.

“What leaders fund speaks to what they think is important and our investigation of the Harding Street shootings is one of the most significant matters we have seen in decades,” District Attorney Kim Ogg said in a statement to the Houston Chronicle. “Community trust depends on us getting to the truth sooner than later; we need to add experienced prosecutors to our Civil Rights Division to handle an investigation this deep and wide.”

[…]

Already, it seems the latest proposed expansion may have more support from the politicians who hold the county’s purse strings. Previously, two Republican commissioners generally voiced their support for adding prosecutors, but this time Democrats look poised to back it as well.

“I’m proud that the district attorney and I have reached common ground in working with an independent consultant to help create a strategy that fosters public confidence in our criminal justice system,” Precinct 2 Commissioner Adrian Garcia said. “This additional resource is critical to supporting our law enforcement officers.”

Similarly, Precinct 1 Commissioner Rodney Ellis — who opposed the request last time around — said he will back it.

“The Harding Street tragedy raises concerns that are bigger than one officer — it’s about an entire system that needs to be held accountable,” he said. “I have worked with the DA to ensure this new request includes robust oversight by an independent third party to identify the failed safeguards that allowed for any miscarriage of justice to occur.”

See here for the previous update. If nothing else, it looks like Ogg took to heart the reasons why her previous asks were rejected. She’s already got the two Republican commissioners in line, so passage appears assured, and it’s just a matter of whether or not Judge Lina Hidalgo makes it unanimous. (Also of note: unlike the previous times, I’ve not gotten an email from the ACLU or TOP opposing the request.) Assuming nothing unexpected happens and this does go through, I’ll be very interested to see what they turn up. I feel confident saying there’s more to that botched raid than we know about right now.

Still no more prosecutors

I remain fascinated by this dynamic.

Kim Ogg

Harris County Commissioners Court on Tuesday rejected District Attorney Kim Ogg’s request for more staff to handle fallout from the Houston Police Department’s botched Pecan Park drug raid, the second time this year commissioners have turned down Ogg’s push for more prosecutors.

The court voted 3-2 along party lines after a feisty debate involving the court’s reform-minded Democratic majority, officials from Ogg’s office and the outnumbered conservative commissioners. In the end, Commissioners Rodney Ellis and Adrian Garcia joined County Judge Lina Hidalgo in turning down the request.

Added to the court’s agenda late Friday, Ogg’s request would have granted the district attorney’s office 10 new positions — seven felony chief prosecutors and three investigators — to handle what officials in Ogg’s office characterized as an overwhelming caseload aggravated by the Jan. 28 Harding Street raid.

The court’s decision came a day after HPD agreed to give prosecutors thousands of pages of records relating to their use of confidential narcotics informants, avoiding a legal showdown that loomed after prosecutors from Ogg’s office threatened to issue grand jury subpoenas to get the records.

Instead of granting Ogg more staff, Hidalgo, Ellis and Garcia voiced support for an external review by an independent third party. They also cited a Chronicle report that raised questions about caseloads and Ogg’s push for more than 100 new lawyers earlier this year, which the court also rejected.

[…]

In a statement, Ogg said her office “remains dedicated to fully investigating the Harding Street shootings” and said the shooting victims’ family members “and our entire community deserve to know the truth sooner, not later. Unnecessary delay creates hardship for everyone associated with this tragedy. If police misconduct led to the wrongful convictions of anyone, then every extra day served in the penitentiary waiting for justice increases the potential financial liability for Harris County taxpayers.”

Ellis, a longtime criminal justice advocate, told officials from the district attorney’s office that he did not feel comfortable receiving Ogg’s request late Friday, and urged King to meet first with an independent prosecutor before having commissioners vote on additional staff.

Hidalgo suggested that Ogg’s request was a reaction to coverage of the botched raid, telling King that Commissioners Court members “don’t write budgets based on headlines.”

See here for more on the first time Ogg asked for more prosecutors, here for more on that Chron story about caseloads, and here for more about the late ask for more prosecutors this time around. I can think of three things to say. One is that Kim Ogg should listen to Rodney Ellis and consult with someone outside Harris County about their staffing needs before taking any further action. Two, that consultation should include reviewing and revising those numbers the Chron cited, if only to present an alternative report that conforms to the specifications cited. And three, one way or another she needs to build or rebuild trust between her office and the Democrats on Commissioners Court, because she sure isn’t getting the benefit of the doubt from them. The campaign ads for her primary opposition are being written for them.

By the way, City Council passed the budget

In the end, this was pretty boring. Which is a good thing.

Mayor Sylvester Turner

Houston city council approved Mayor Sylvester Turner’s $5.1 billion budget for the upcoming fiscal year with little commotion Wednesday, authorizing a spending plan that was scrambled at the last minute by developments at the Legislature and a judge’s ruling that the voter-approved Proposition B is unconstitutional.

The council voted 12-4 in favor of Turner’s budget after approving a series of amendments during a nearly seven-hour session. The budget covers city spending for the 2020 fiscal year, which begins July 1.

About half the spending — $2.53 billion — will come out of the city’s tax- and-fee-supported general fund, which pays for most of the city’s day-to-day core operations, including public safety, trash pickup, parks and libraries. The city is set to spend about 1.9 percent more than it is projected to spend during the current fiscal year.

The remaining spending will come out of “enterprise” funds, which are supported by fees, including the Houston Airport System, and city utilities, which run on residents’ water bills.

[…]

Also complicating the budget was a bill passed by the Legislature that limits the fees telecommunication and cable companies pay cities to use their rights of way. That opened a spending gap of more than $16 million, according to city budget officials.

Wednesday’s budget approval followed consideration of more than 30 amendments proposed by council members.

Among the amendments approved were proposals to create new finance transparency requirements, change how the city sets its next budget and commission studies that could change how the city’s fleet management and solid waste departments operate.

In the end, there were no layoffs thanks to Prop B getting tossed by the courts. That could still get reversed on appeal so it’s not a settled matter, but for now it’s where we are. A respite from that drama, no matter how brief, is welcome.

On prosecutor caseloads

I’m still thinking about this.

Kim Ogg

When a line of prosecutors stepped up to the microphone at Harris County Commissioners Court in February, they told tales of long hours, endless to-do lists and bloated caseloads well into the triple digits.

Their impassioned pleas and barrage of data were part of the push by the Harris County District Attorney’s Office for an unprecedented $21 million expansion that would add more than 100 lawyers to its staff.

But despite a weeks-long campaign, District Attorney Kim Ogg’s budget request failed. Now, four months later, records obtained by the Houston Chronicle and The Appeal indicate that the attorney caseload figures used to justify the request appear to overstate the office’s workload.

The data presented to commissioners and the public did not reflect that about two-thirds of the felony trial bureau attorneys consistently handle a smaller number of complex cases. Instead, it frequently presented the caseloads of the remaining third of the attorneys — those who handle over 900 cases on average — as representative of the whole trial bureau. The office also counted every charge in an arrest as a separate case and included more than 200 cases put on hold after defendants had not yet been arrested or had fled after violating the conditions of their bonds.

Based on the numbers provided by the DA’s office, an average caseload for “felony two” and “felony three” prosecutors combined would be less than 600, if all positions were filled in each court — and would be even lower if chiefs were included. Exact staff assignments that month were not released with the data.

[…]

Four members of the Commissioners Court—including all three Democrats who voted against the budget request in February—did not comment on the caseload figures.

But Commissioner Steve Radack, a Republican who offered staunch support for Ogg during the budget cycle, said that he did not feel the DA’s office misrepresented data and reiterated his concern about the county’s refusal to fund Ogg’s request for more prosecutors.

“It’s extremely unfortunate that she didn’t get it,” he said. “Frankly, it’s a misjustice.”

During budget discussions in February, County Judge Lina Hidalgo — the Democrat who heads up Commissioners Court —questioned whether prosecutors could simply lower their caseloads by charging fewer people and leaning more heavily on diversion alternatives.

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

Though Adam Gershowitz — a William & Mary Law School professor who co-authored a 2011 study on district attorney caseloads — raised concerns about the representations in the data, such as the inclusion of bond forfeitures, he stressed that too few prosecutors can have a negative effect on the legal system, leaving people waiting behind bars as their cases get reset instead of resolved.

“We could have debates about if (prosecutors) should charge less and maybe they should,” he said. “But they are overburdened and it’s bad on so many levels when the district attorney’s office is overburdened.”

There’s a lot more, so read on for the methodology and the questions about how cases were counted. One issue was with classifying all types of prosecutors as having similar workloads even though one group has many more cases than the others, and classifying things as active cases that aren’t really. The explanations for why things were counted as they were don’t really make sense. Even with that, there’s support – not unanimous by any stretch, but it’s there – for more prosecutors, and for managing caseloads. Maybe if we can all agree on what the case numbers actually are, we can better agree on what the number of prosecutors should be.

Who cares about new mothers?

Not the Lege.

The new mothers contracted infections. They overdosed on drugs. Their hearts failed. They committed suicide.

The women died in different ways, but all perished within a year of giving birth. Rising rates of maternal mortality spurred Texas leaders in 2017 to reauthorize a special task force to study the deaths and figure out what to do.

But at the end of this year’s legislative session, public health advocates are frustrated that lawmakers left Austin without adopting the task force’s top recommendation: giving women access to health care for a full year after they give birth.

The Legislature agreed to spend $15 million over the next two years on postpartum depression and substance abuse treatment for some low-income women. But a far more sweeping and higher cost plan to expand Medicaid coverage for all eligible new mothers failed, despite having support from Republicans and Democrats.

“We’re disappointed state leaders basically ignored the needs of uninsured moms and uninsured low wage workers this session, by not taking action on bills to extend postpartum coverage,” said Adriana Kohler, a senior health policy associate for the Austin-based advocacy group Texans Care for Children.

[…]

The funding, however, will likely cover only some of the roughly 136,000 pregnant women on Medicaid in any given month. And pregnant women who relied on Medicaid for their diabetes medication or other prescription drugs could still lose those benefits in the transition, some public health advocates said.

Other bills filed by Republicans and Democrats to expand the state’s Medicaid coverage for new mothers from two to 12 months, post delivery failed. The change would have cost the state upwards of $75 million a year, according to a fiscal note. The legislation passed the House, but died after not receiving a public hearing in the Senate.

Rep. Garnet Coleman, D-Houston, chalked it up to politics. “Republicans don’t want to be viewed as expanding Medicaid,” he said.

Just as a reminder, Greg Abbott made a last-minute attempt to put an extra $100 million into the budget for “border security”. The budget as adopted is spending over $5 billion to buy down property taxes. The Lege passed a tax cut on yacht sales, which won’t actually cost that much money but is still a tax cut on yacht sales. My point here is that this was not a decision based on a lack of available funds. It was a failure to act because the Republican leadership had no interest in doing it, for the reason Rep. Coleman cites. It was a choice they made, one that reflected their values. Keep that in mind when you hear the usual blather about being “pro-life”.

Lege passes on helping with the Census

Typically short-sighted.

But in a time when the census is tinged with partisan politics — mostly over Trump’s proposed inclusion of a citizenship question — Texas lawmakers adjourned without taking action to ensure a complete count.

State Representative César Blanco, D-El Paso, and Senator Juan Hinojosa, D-McAllen, filed bills to create a committee that would develop a strategy to ensure everyone is counted. The bills also would have allocated money to offer grants for local outreach efforts such as town hall meetings, community events, newsletters and other promotional documents, and census worker recruitment. Neither of the bills was given a committee hearing.

The two Democrats also unsuccessfully attempted to apportion money in the state budget for census outreach. Blanco’s proposal called for $50 million for the statewide complete count commission and another $50 million to offer local community grants; Hinojosa’s rider asked for a much more conservative $5 million for grants. Neither made it to the final state budget.

“It’s disappointing that we lost our shot,” Blanco told the Observer. “It wasn’t a priority for this legislative body, unfortunately.”

[…]

Texas could gain up to three new congressional seats after the 2020 Census, more than any other state stands to gain, but an undercount could cost Texas those potential seats. That shift in political power could be significant as the state shows signs of turning blue.

Many Texas Republicans believe it’s up to the U.S. Census Bureau to shoulder costs for census outreach, Blanco said, but the bureau has been underfunded by a total of $200 million since 2012. Supporters say the money is an investment that should return more than the upfront costs. That’s why more than half of states have made their own plans to ensure an accurate count of their populations in 2020. California has allocated more money for census outreach than any other state, with $100 million for 2018-19 and another $54 million proposed by Governor Gavin Newsom for 2019-20.

“If we don’t step up, the reality is California’s going to eat our lunch,” Blanco said at a press conference in April.

Gotta say, if we miss out on one of the Congressional seats we’re projected to get because of an inadequate count, this is sure going to look foolish. I hope other cities follow Houston’s example and do their own outreach. I don’t understand the Lege’s penury on this, they spent plenty of money on other things, but here we are.

Fee collecting time

Worthwhile effort, but keep expectations modest.

Marilyn Burgess

Harris County has an $80 million backlog of uncollected civil court fees dating back to the 1980s, new District Clerk Marilyn Burgess said, prompting her office to launch an aggressive collection effort.

Burgess said she was shocked when an employee told her shortly after her election in November that the county had stopped attempting to collect the fees in 2011 — a revelation that surprised the county’s auditor. She has since launched a new collection effort, but only expects to successfully recoup about $20 million, from the past three years of billing.

“It’s important to the county, because if we collect that, that’s $20 million less that Commissioners Court has to assess in property taxes from the taxpayer,” Burgess said.

An influx of millions would provide a boost to the county court system, which is still struggling to recover from Hurricane Harvey and is looking for ways to pay for a long-delayed new family courthouse.

[…]

According to Burgess, an account manager informed her in November that he had told his supervisors that the district clerk’s office was failing to collect certain categories of civil court fees. The department’s accounting system shows the district clerk mailed invoices for these fees eight times from 2001 to 2011, but not again until January, when Burgess took office, she said. About one-third of fees owed to the district clerk remain unpaid from 2017, for example.

Starting with the most recent bills, Burgess said her staff will work to collect fees as far back in time as possible. At a certain point, she said, labor and postage become more expensive than what the county could hope to collect.

“Right now, we’re doing pretty good with what we’re collecting, but we’re in 2018,” Burgess said. “When the payments stop coming, we won’t go any further back.”

Some of this is process, which can always be improved, and some of this is effort, which will run into diminishing returns. The city did something like this for debt collections back in 2011, at a time when finances were very tight. It made sense, and it did make a dent, but you’re never going to come close to the topline amount. We’ll see how well District Clerk Burgess does with her initiative.

Deal apparently reached on school finance

We await the details.

Texas’ top three political leaders declared Thursday that the Legislature had reached agreements on its three main 2019 priorities: A two-year state budget, a comprehensive reform of school finance and legislation designed to slow the growth of rising property taxes.

Republican Gov. Greg Abbott broke the news on the lawn of the Governor’s Mansion in Austin, just a few days before the Legislature is scheduled to gavel out. Both chambers will need to sign off on the three negotiated bills — House Bill 1, the proposed budget; Senate Bill 2, the property tax bill; and House Bill 3, the school finance bill — before the regular session ends Monday. Language for the compromised legislation, much of which was worked out behind the scenes between lawmakers from the two chambers, had not yet been made public as of Thursday afternoon.

“We would not be here today, making the announcement we are about to make, without the tireless efforts of the members of the Texas House and Senate,” said Abbott, flanked by Republican Lt. Gov. Dan Patrick, House Speaker Dennis Bonnen, R-Angleton, and other House and Senate members who played key roles in negotiating the three pieces of legislation. Almost five months beforehand, as state lawmakers began tackling the issues before them, Abbott, Patrick and Bonnen had pledged from that same spot in front of the Governor’s Mansion to work together and deliver on meaningful school finance and property tax reform.

“Frankly, we’re more together than we’ve ever been,” Bonnen said. “The people of Texas are those who win.”

[…]

According to a flyer detailing some of the components of the compromise reached Wednesday night, the school finance bill will include funding for full-day pre-K and an increase in the base funding per student, which hasn’t changed in four years. It also pumps in $5.5 billion to lower school district taxes up to 13 cents per $100 valuation on average by 2021 — though leaders dodged questions Thursday on exactly how and where the extra money would come from.

The compromise bill, Bonnen said, would reduce recapture payments that wealthier districts pay to shore up poorer districts by $3.6 billion, about 47%. But he also said the state could not afford to completely eliminate recapture, also known as “Robin Hood,” because it would cost too much to completely reimburse school districts from state coffers alone.

The bill will include funding for districts that want to create a merit pay program, giving more to their higher-rated teachers. Though the House decided to nix this from its initial version of the bill, the Senate put it back in and apparently won the fight to keep it in.

On the surface, it sounds pretty decent, though of course the devil is in the details. Where is that $5.5 billion coming from? What does “funding for full-day pre-K” mean? How would recapture change? By necessity, we will have answers soon, as the session ends on Monday, but until then this is more a possibly tantalizing promise than anything else. Stay tuned.

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.