Off the Kuff Rotating Header Image

Comptroller

Precinct analysis: The two types of statewide candidates

When we look at the precinct data in Harris County, we can separate the statewide candidates into two groups. Here’s the first group:


Dist   Abbott   Valdez   Tipp  Abbott% Valdez%  Trump% Clinton%
===============================================================
CD02  146,399  112,272  4,345   55.66%  43.40%  52.38%   43.05%
CD07  127,414  111,248  4,285   52.45%  46.61%  47.11%   48.47%
CD08   18,751    9,906    390   64.55%  34.57%		
CD09   27,929   90,968  1,450   23.21%  76.51%  17.56%   79.70%
CD10   75,353   37,952  1,530   65.62%  33.50%  63.61%   32.36%
CD18   46,703  135,085  2,924   25.28%  74.31%  19.95%   76.46%
CD22   16,713   14,587    450   52.64%  46.60%		
CD29   35,234   81,191  1,209   29.95%  69.74%  25.46%   71.09%
CD36   64,462   34,237  1,486   64.34%  34.69%		
							
SBOE6 311,568  259,847  9,961   53.59%  45.47%  48.92%   46.59%
							
HD126  31,307   23,705    756   56.14%  43.09%  52.96%   42.99%
HD127  44,013   23,782    918   64.05%  35.08%  61.23%   34.90%
HD128  36,496   15,196    657   69.72%  29.40%  68.17%   28.75%
HD129  38,653   25,449  1,079   59.30%  39.70%  55.33%   40.06%
HD130  53,877   21,741  1,037   70.29%  28.75%  68.08%   27.94%
HD131   7,736   33,845    479   18.39%  81.39%  13.33%   84.31%
HD132  35,033   30,977    924   52.34%  46.93%  50.04%   45.68%
HD133  44,317   26,343  1,278   61.60%  37.28%  54.54%   41.11%
HD134  42,650   45,268  1,967   47.45%  51.49%  39.58%   55.12%
HD135  28,819   26,636    853   51.18%  48.03%  48.91%   46.80%
HD137   8,239   15,723    398   33.82%  65.62%  28.95%   66.96%
HD138  25,204   22,706    839   51.70%  47.39%  47.80%   47.83%
HD139  12,409   34,289    665   26.20%  73.43%  20.60%   76.12%
HD140   6,188   17,271    207   26.15%  73.62%  21.89%   75.07%
HD141   5,126   26,059    327   16.27%  83.56%  12.58%   85.20%
HD142  10,236   29,142    476   25.68%  74.01%  20.97%   76.20%
HD143   8,772   19,764    263   30.46%  69.26%  26.02%   71.03%
HD144   9,806   13,427    255   41.75%  57.79%  38.41%   57.72%
HD145  10,959   21,631    495   33.12%  66.37%  28.73%   66.91%
HD146   9,927   33,073    645   22.74%  76.91%  17.31%   79.44%
HD147  12,239   42,282  1,017   22.04%  77.55%  16.76%   79.00%
HD148  17,912   29,255  1,070   37.13%  62.02%  30.49%   63.83%
HD149  15,348   23,283    513   39.21%  60.27%  32.51%   64.25%
HD150  43,692   26,599    951   61.33%  37.84%  59.18%   36.62%
							
CC1    73,833  212,930  4,401   25.36%  74.25%  19.74%   76.83%
CC2   115,327  111,134  3,044   50.25%  49.07%  46.79%   49.48%
CC3   178,630  151,009  5,301   53.33%  45.81%  48.22%   47.63%
CC4   191,168  152,373  5,323   54.80%  44.35%  51.22%   44.42%


Dist    Hegar   Cheval Sander   Hegar% Cheval%  Trump% Clinton%
===============================================================
CD02  141,744  111,763  7,347   54.34%  42.85%  52.38%   43.05%
CD07  124,558  109,747  6,674   51.69%  45.54%  47.11%   48.47%
CD08   18,139    9,973    744   62.86%  34.56%	
CD09   24,211   92,612  3,102   20.19%  77.22%  17.56%   79.70%
CD10   73,125   38,247  2,784   64.06%  33.50%  63.61%   32.36%
CD18   41,793  136,421  5,291   22.77%  74.34%  19.95%   76.46%
CD22   15,699   14,868    917   49.86%  47.22%		
CD29   31,025   82,379  3,547   26.53%  70.44%  25.46%   71.09%
CD36   61,944   34,609  2,847   62.32%  34.82%		
							
SBOE6 303,287  257,168 16,226   52.59%  44.59%  48.92%   46.59%
		
HD126  30,142   23,892  1,398   54.38%  43.10%  52.96%   42.99%
HD127  42,379   24,118  1,729   62.12%  35.35%  61.23%   34.90%
HD128  35,212   15,517  1,260   67.73%  29.85%  68.17%   28.75%
HD129  36,953   25,598  2,034   57.22%  39.63%  55.33%   40.06%
HD130  52,413   21,902  1,867   68.80%  28.75%  68.08%   27.94%
HD131   6,299   34,617  1,050   15.01%  82.49%  13.33%   84.31%
HD132  33,520   31,387  1,765   50.28%  47.08%  50.04%   45.68%
HD133  43,710   25,739  1,843   61.31%  36.10%  54.54%   41.11%
HD134  43,113   43,043  2,548   48.60%  48.52%  39.58%   55.12%
HD135  27,400   26,976  1,576   48.97%  48.21%  48.91%   46.80%
HD137   7,616   15,855    774   31.41%  65.39%  28.95%   66.96%
HD138  24,206   22,771  1,438   50.00%  47.03%  47.80%   47.83%
HD139  11,085   34,800  1,223   23.53%  73.87%  20.60%   76.12%
HD140   5,335   17,585    638   22.65%  74.65%  21.89%   75.07%
HD141   4,010   26,763    682   12.75%  85.08%  12.58%   85.20%
HD142   8,720   30,011    976   21.96%  75.58%  20.97%   76.20%
HD143   7,578   20,159    879   26.48%  70.45%  26.02%   71.03%
HD144   9,069   13,595    738   38.75%  58.09%  38.41%   57.72%
HD145  10,071   21,588  1,157   30.69%  65.78%  28.73%   66.91%
HD146   8,749   33,458  1,166   20.17%  77.14%  17.31%   79.44%
HD147  11,030   42,308  1,741   20.03%  76.81%  16.76%   79.00%
HD148  17,117   28,580  1,885   35.97%  60.06%  30.49%   63.83%
HD149  14,471   23,550	1,002   37.08%  60.35%  32.51%   64.25%
HD150  42,040   26,807	1,884	59.44%  37.90%  59.18%   36.62%
							
CC1    66,298  215,259  7,805   22.91%  74.39%  19.74%   76.83%
CC2   108,715  112,237  6,847   47.72%  49.27%  46.79%   49.48%
CC3   173,303  150,515  8,863   52.09%  45.24%  48.22%   47.63%
CC4   183,922  152,608  9,738   53.12%  44.07%  51.22%   44.42%

Dist     Bush    Suazo   Pina    Bush%  Suazo%  Trump% Clinton%
==============================================================
CD02  139,352  114,931  7,003   53.33%  43.99%  52.38%   43.05%
CD07  121,500  114,267  5,747   50.31%  47.31%  47.11%   48.47%
CD08   17,965   10,096    794   62.26%  34.99%		
CD09   24,634   93,291  1,961   20.55%  77.82%  17.56%   79.70%
CD10   72,059   39,108  3,029   63.10%  34.25%  63.61%   32.36%
CD18   42,340  137,629  3,572   23.07%  74.99%  19.95%   76.46%
CD22   15,614   15,120    804   49.51%  47.94%		
CD29   32,067   83,045  1,983   27.39%  70.92%  25.46%   71.09%
CD36   61,471   35,448  2,621   61.76%  35.61%		
							
SBOE6 297,321  265,718 14,551   51.48%  46.00%  48.92%   46.59%
							
HD126  29,781   24,312  1,386   53.68%  43.82%  52.96%   42.99%
HD127  41,767   24,635  1,922   61.13%  36.06%  61.23%   34.90%
HD128  35,019   15,710  1,327   67.27%  30.18%  68.17%   28.75%
HD129  36,480   26,417  1,800   56.39%  40.83%  55.33%   40.06%
HD130  51,579   22,543  2,081   67.69%  29.58%  68.08%   27.94%
HD131   6,567   34,764    600   15.66%  82.91%  13.33%   84.31%
HD132  33,218   31,761  1,697   49.82%  47.63%  50.04%   45.68%
HD133  42,447   27,278  1,761   59.38%  38.16%  54.54%   41.11%
HD134  41,172   45,935  1,991   46.21%  51.56%  39.58%   55.12%
HD135  27,294   27,394  1,327   48.73%  48.90%  48.91%   46.80%
HD137   7,570   16,080    586   31.23%  66.35%  28.95%   66.96%
HD138  23,878   23,298  1,236   49.32%  48.12%  47.80%   47.83%
HD139  11,284   35,000    805   23.96%  74.33%  20.60%   76.12%
HD140   5,582   17,665    333   23.67%  74.92%  21.89%   75.07%
HD141   4,200   26,800    425   13.37%  85.28%  12.58%   85.20%
HD142   9,075   29,961    663   22.86%  75.47%  20.97%   76.20%
HD143   7,907   20,265    472   27.60%  70.75%  26.02%   71.03%
HD144   9,202   13,759    454   39.30%  58.76%  38.41%   57.72%
HD145  10,172   21,989    737   30.92%  66.84%  28.73%   66.91%
HD146   8,700   33,902    789   20.05%  78.13%  17.31%   79.44%
HD147  11,071   42,903  1,162   20.08%  77.81%  16.76%   79.00%
HD148  16,967   29,451  1,362   35.51%  61.64%  30.49%   63.83%
HD149  14,405   23,854    753   36.92%  61.15%  32.51%   64.25%
HD150  41,665   27,259  1,845   58.87%  38.52%  59.18%   36.62%
							
CC1    66,399  217,832  5,280   22.93%  75.24%  19.74%   76.83%
CC2   108,715  114,022  5,408   47.65%  49.98%  46.79%   49.48%
CC3   170,023  155,106  7,985   51.04%  46.56%  48.22%   47.63%
CC4   181,865  155,975  8,841   52.46%  44.99%  51.22%   44.42%

Dist    Cradd  McAllen Wright   Cradd% McAlln%  Trump% Clinton%
===============================================================
CD02  142,254  112,407  5,821   54.61%	43.15%  52.38%   43.05%
CD07  124,873  110,377  5,224   51.93%	45.90%  47.11%   48.47%
CD08   18,184   10,028    604   63.10%	34.80%		
CD09   24,262   93,623  1,880   20.26%	78.17%  17.56%   79.70%
CD10   72,996   38,698  2,336   64.01%	33.94%	63.61%   32.36%
CD18   42,236  137,094  3,852   23.06%	74.84%  19.95%   76.46%
CD22   15,798   14,978    685   50.21%	47.61%		
CD29   31,169   83,638  2,009   26.68%	71.60%  25.46%   71.09%
CD36   62,167   35,017  2,135   62.59%	35.26%		
							
SBOE6 304,098  258,654 12,833   52.83%  44.94%  48.92%   46.59%
							
HD126  30,251   24,086  1,030   54.64%  43.50%  52.96%   42.99%
HD127  42,508   24,260  1,399   62.36%  35.59%  61.23%   34.90%
HD128  35,341   15,690    935   68.01%  30.19%  68.17%   28.75%
HD129  37,121   25,810  1,593   57.53%  40.00%  55.33%   40.06%
HD130  52,323   22,196  1,573   68.76%  29.17%  68.08%   27.94%
HD131   6,309   34,963    620   15.06%  83.46%  13.33%   84.31%
HD132  33,485   31,713  1,390   50.29%  47.63%  50.04%   45.68%
HD133  43,854   25,773  1,499   61.66%  36.24%  54.54%   41.11%
HD134  43,326   42,975  2,125   49.00%  48.60%  39.58%   55.12%
HD135  27,450   27,296  1,167   49.09%  48.82%  48.91%   46.80%
HD137   7,649   16,001    542   31.62%  66.14%  28.95%   66.96%
HD138  24,239   22,956  1,126   50.16%  47.51%  47.80%   47.83%
HD139  11,169   35,002    865   23.75%  74.42%  20.60%   76.12%
HD140   5,367   17,822    347   22.80%  75.72%  21.89%   75.07%
HD141   4,009   27,021    417   12.75%  85.93%  12.58%   85.20%
HD142   8,785   30,256    626   22.15%  76.27%  20.97%   76.20%
HD143   7,582   20,499    483   26.54%  71.77%  26.02%   71.03%
HD144   9,100   13,835    444   38.92%  59.18%  38.41%   57.72%
HD145  10,152   21,880    733   30.98%  66.78%  28.73%   66.91%
HD146   8,760   33,730    801   20.24%  77.91%  17.31%   79.44%
HD147  11,235   42,469  1,283   20.43%  77.23%  16.76%   79.00%
HD148  17,266   28,762  1,437   36.38%  60.60%  30.49%   63.83%
HD149  14,470   23,827    675   37.13%  61.14%  32.51%   64.25%
HD150  42,188   27,038  1,436   59.70%  38.26%  59.18%   36.62%
							
CC1    66,771  216,622  5,478   23.11%  74.99%  19.74%   76.83%
CC2   109,186  113,684  4,717   47.98%  49.95%  46.79%   49.48%
CC3   173,478  151,759  6,871   52.24%  45.70%  48.22%   47.63%
CC4   184,504  153,795  7,480   53.36%  44.48%  51.22%   44.42%

These candidates, all of whom won by at least ten points statewide, carried CD07 and SBOE6, carried or narrowly lost HDs 132, 135, and 138, and did as well as Trump or better pretty much everywhere. Unlike Ted Cruz, these candidates held the base Republican vote and won back the Gary Johnson and Evan McMullen Republicans. These were the Republicans who had the least amount of controversy dogging them, the ones who for the most part could claim to be about doing their jobs and not licking Donald Trump’s boots. Yes, George P. Bush had Alamo issues, and Harvey recovery money issues (as did Greg Abbott to a lesser extent), but they weren’t enough to dent him. The most notable result in here is Abbott losing HD134. I’m guessing Sarah Davis will not be fearing another primary challenge in 2020.

And then there’s the other group:


Dist  Patrick  Collier McKenn Patrick%   Coll%  Trump% Clinton%
===============================================================
CD02  134,530  123,364  4,744   51.22%  47.84%  52.38%   43.05%
CD07  113,520  124,555  4,659   46.77%  52.32%  47.11%   48.47%
CD08   17,737   10,768    482   61.19%  37.78%		
CD09   24,176   94,548  1,535   20.10%  79.64%  17.56%   79.70%
CD10   70,715   42,023  1,959   61.65%  37.27%  63.61%   32.36%
CD18   39,805  141,631  3,053   21.58%  78.06%  19.95%   76.46%
CD22   15,438   15,694    554   48.72%  50.41%		
CD29   31,998   83,846  1,559   27.25%  72.38%  25.46%   71.09%
CD36   60,359   37,854  1,812   60.34%  38.54%		
							
SBOE6 282,567  287,230 10,933   48.66%  50.41%  48.92%   46.59%
							
HD126  29,104   25,673    917   52.26%  46.87%  52.96%   42.99%
HD127  41,357   26,160  1,106   60.27%  38.75%  61.23%   34.90%
HD128  34,655   16,787    832   66.29%  32.63%  68.17%   28.75%
HD129  35,547   28,216  1,308   54.63%  44.25%  55.33%   40.06%
HD130  50,658   24,612  1,309   66.15%  32.70%  68.08%   27.94%
HD131   6,413   35,123    485   15.26%  84.56%  13.33%   84.31%
HD132  32,599   33,062  1,174   48.78%  50.35%  50.04%   45.68%
HD133  39,252   31,191  1,400   54.64%  44.28%  54.54%   41.11%
HD134  36,006   52,016  1,881   40.05%  59.09%  39.58%   55.12%
HD135  26,706   28,541    976   47.50%  51.66%  48.91%   46.80%
HD137   7,279   16,593    460   29.92%  69.51%  28.95%   66.96%
HD138  23,146   24,601    914   47.57%  51.52%  47.80%   47.83%
HD139  10,774   35,909    643   22.77%  76.92%  20.60%   76.12%
HD140   5,635   17,734    267   23.84%  75.89%  21.89%   75.07%
HD141   4,259   26,894    339   13.52%  86.33%  12.58%   85.20%
HD142   8,914   30,427    475   22.39%  77.34%  20.97%   76.20%
HD143   7,979   20,410    356   27.76%  71.89%  26.02%   71.03%
HD144   9,204   13,892    340   39.27%  60.15%  38.41%   57.72%
HD145   9,874   22,500    624   29.92%  69.50%  28.73%   66.91%
HD146   8,240   34,720    661   18.89%  80.82%  17.31%   79.44%
HD147  10,055   44,357  1,005   18.14%  81.52%  16.76%   79.00%
HD148  15,427   31,591  1,139   32.03%  67.19%  30.49%   63.83%
HD149  14,187   24,362    560   36.28%  63.20%  32.51%   64.25%
HD150  41,008   28,912  1,186   57.67%  41.35%  59.18%   36.62%
							
CC1    62,356  224,149  4,325   21.44%  78.24%  19.74%   76.83%
CC2   107,321  117,954  3,820   46.85%  52.36%  46.79%   49.48%
CC3   162,085  166,470  6,044   48.44%  50.67%  48.22%   47.63%
CC4   176,516  165,710  6,168   50.67%  48.42%  51.22%   44.42%


Dist   Paxton   Nelson Harris  Paxton% Nelson%  Trump% Clinton%
===============================================================
CD02  131,374  125,193  5,584   50.11%  47.76%  52.38%   43.05%
CD07  110,526  126,567  5,145   45.63%  52.25%  47.11%   48.47%
CD08   17,461   10,905    580   60.32%  37.67%		
CD09   22,756   95,621  1,776   18.94%  79.58%  17.56%   79.70%
CD10   69,879   42,292  2,315   61.04%  36.94%  63.61%   32.36%
CD18   37,644  143,124  3,522   20.43%  77.66%  19.95%   76.46%
CD22   14,945   16,014    661   47.26%  50.65%		
CD29   30,107   85,124  2,006   25.68%  72.61%  25.46%   71.09%
CD36   59,422   38,390  2,064   59.50%  38.44%		
							
SBOE6 276,028  291,144 12,389   47.63%  50.24%  48.92%   46.59%
							
HD126  28,595   25,962  1,059   51.42%  46.68%  52.96%   42.99%
HD127  40,368   26,724  1,388   58.95%  39.02%  61.23%   34.90%
HD128  34,331   16,926    953   65.76%  32.42%  68.17%   28.75%
HD129  34,659   28,775  1,503   53.37%  44.31%  55.33%   40.06%
HD130  50,144   24,667  1,597   65.63%  32.28%  68.08%   27.94%
HD131   5,962   35,453    594   14.19%  84.39%  13.33%   84.31%
HD132  31,919   33,536  1,333   47.79%  50.21%  50.04%   45.68%
HD133  38,500   31,627  1,519   53.74%  44.14%  54.54%   41.11%
HD134  34,670   53,010  1,988   38.66%  59.12%  39.58%   55.12%
HD135  26,040   28,961  1,137   46.39%  51.59%  48.91%   46.80%
HD137   6,947   16,823    508   28.61%  69.29%  28.95%   66.96%
HD138  22,512   24,996  1,056   46.36%  51.47%  47.80%   47.83%
HD139  10,181   36,255    806   21.55%  76.74%  20.60%   76.12%
HD140   5,278   17,999    326   22.36%  76.26%  21.89%   75.07%
HD141   3,945   27,091    461   12.53%  86.01%  12.58%   85.20%
HD142   8,433   30,706    636   21.20%  77.20%  20.97%   76.20%
HD143   7,497   20,734    470   26.12%  72.24%  26.02%   71.03%
HD144   8,863   14,133    440   37.82%  60.30%  38.41%   57.72%
HD145   9,363   22,898    704   28.40%  69.46%  28.73%   66.91%
HD146   7,745   35,131    702   17.77%  80.62%  17.31%   79.44%
HD147   9,489   44,762  1,125   17.14%  80.83%  16.76%   79.00%
HD148  14,665   32,054  1,298   30.54%  66.76%  30.49%   63.83%
HD149  13,639   24,788    628   34.92%  63.47%  32.51%   64.25%
HD150  40,369   29,219  1,422   56.85%  41.15%  59.18%   36.62%
							
CC1    59,111  226,367  5,082   20.34%  77.91%  19.74%   76.83%
CC2   104,324  119,859  4,573   45.60%  52.40%  46.79%   49.48%
CC3   158,349  168,865  6,731   47.42%  50.57%  48.22%   47.63%
CC4   172,330  168,139  7,267   49.56%  48.35%  51.22%   44.42%


Dist   Miller    Olson   Carp  Miller%  Olson%  Trump% Clinton%
===============================================================
CD02  133,022  122,897  4,709   51.04%  47.15%  52.38%   43.05%
CD07  112,853  123,473  4,148   46.93%  51.35%  47.11%   48.47%
CD08   17,596   10,756    460   61.07%  37.33%		
CD09   22,400   95,979  1,478   18.69%  80.08%  17.56%   79.70%
CD10   70,489   41,589  1,954   61.82%  36.47%  63.61%   32.36%
CD18   37,934  142,586  2,937   20.68%  77.72%  19.95%   76.46%
CD22   14,922   16,056    539   47.35%  50.94%		
CD29   29,391   85,809  1,720   25.14%  73.39%  25.46%   71.09%
CD36   59,684   38,022  1,678   60.05%  38.26%		
							
SBOE6 280,395  285,147 10,318   48.69%  49.52%  48.92%   46.59%
							
HD126  28,820   25,649    901   52.05%  46.32%  52.96%   42.99%
HD127  40,782   26,205  1,164   59.84%  38.45%  61.23%   34.90%
HD128  34,432   16,815    751   66.22%  32.34%  68.17%   28.75%
HD129  34,853   28,512  1,234   53.95%  44.14%  55.33%   40.06%
HD130  50,592   24,186  1,322   66.48%  31.78%  68.08%   27.94%
HD131   5,817   35,639    466   13.88%  85.01%  13.33%   84.31%
HD132  32,187   33,275  1,119   48.34%  49.98%  50.04%   45.68%
HD133  39,476   30,381  1,235   55.53%  42.73%  54.54%   41.11%
HD134  36,062   50,855  1,612   40.73%  57.44%  39.58%	 55.12%
HD135  26,173   28,770    954   46.82%  51.47%  48.91%   46.80%
HD137   7,027   16,723    444   29.04%  69.12%  28.95%   66.96%
HD138  22,745   24,700    896   47.05%  51.10%  47.80%   47.83%
HD139  10,210   36,245    632   21.68%  76.97%  20.60%   76.12%
HD140   5,137   18,147    295   21.79%  76.96%  21.89%   75.07%
HD141   3,844   27,252    347   12.23%  86.67%  12.58%   85.20%
HD142   8,357   30,855    466   21.06%  77.76%  20.97%   76.20%
HD143   7,196   20,967    432   25.17%  73.32%  26.02%   71.03%
HD144   8,757   14,258    391   37.41%  60.92%  38.41%   57.72%
HD145   9,296   22,924    597   28.33%  69.85%  28.73%   66.91%
HD146   7,705   35,073    583   17.77%  80.89%  17.31%   79.44%
HD147   9,614   44,494    987   17.45%  80.76%  16.76%   79.00%
HD148  14,974   31,507  1,108   31.47%  66.21%  30.49%   63.83%
HD149  13,659   24,763    558   35.04%  63.53%  32.51%   64.25%
HD150  40,576   28,972  1,129   57.41%  40.99%  59.18%   36.62%
							
CC1    59,268  225,889  4,130   20.49%  78.08%  19.74%   76.83%
CC2   104,218  119,731  3,843   45.75%  52.56%  46.79%   49.48%
CC3   160,755  165,766  5,607   48.40%  49.91%  48.22%   47.63%
CC4   174,050  165,781  6,043   50.32%  47.93%  51.22%   44.42%

Basically, these three are the exact opposite of the first group: Controversy, Trump-humping, ineffectiveness at what they’re supposed to be doing for the state, and underperformance relative to 2016. Not only did they all lose CD07, they lost SBOE6 and all three competitive State Rep districts. I mean, Justin Nelson won HD134 by over 20 points; Mike Collier just missed that mark. Except in the strongest Democratic districts, they all failed to achieve Trump’s numbers. (This suggests the possibility that Dem performance in 2018, as good as it was, could have been even better, and that there remains room to grow in 2020.) This is the degradation of the Republican brand in a nutshell. This isn’t just strong Democratic performance. It’s people who used to vote Republican not voting for these Republicans. Seems to me there’s a lesson to be learned here. What do you think are the odds it will be heeded?

New frontiers in strip club tax collections

A new-ish development in a decade-long battle.

Glenn Hegar

Dozens of “bikini bars” from Houston to San Antonio are suing the state after the Texas Comptroller accused them of skirting the so-called pole tax on nude entertainment and slapped them with seven-figure fees, according to the lawsuits.

The fight focuses on the state definition of nude, which includes any part of the buttocks or a woman’s breast below the top of the areola.

And in federal court, the clubs are questioning why they are taxed for bikini-clad performers, but not concert halls or sports venues that host cheerleaders and musicians wearing thongs or cleavage-baring tops.

“If they aren’t doing it to them, they shouldn’t be able to do it to a topless club or a bikini bar,” said attorney Casey Wallace, who is representing the Texas Entertainment Association, which brought the federal lawsuit in 2017.

The Comptroller’s office said it follows the law and determines which clubs should be taxed by looking at their social media posts and marketing. The office also sends inspectors inside to see what dancers are wearing.

“The agency is just trying to apply this in a common sense way,” said Ray Langenberg, Special Counsel for Tax Litigation for the Texas Comptroller of Public Accounts. “If they are called topless clubs, the claim they are not wears a little thin.”

The fees are being contested in a state appeals process by 34 clubs across Texas, including a dozen in the Houston area. At least 27 more clubs have filed lawsuits, including 14 clubs based in Houston, according to the Comptroller’s Office.

The lawsuits referenced in this story were filed last year; I’m not really sure why this is a story now, though perhaps there’s a court date about to happen. Be that as it may, it was back in 2014 that the State Supreme Court upheld the $5-per-customer fee, for which the original bill was passed in 2007. I’m not qualified to parse the legalities of what constitutes “nudity” in this context, but I do think that trying to apply it retroactively for a decade’s worth of collections is excessive. I mean, when the state reached a deal with Amazon in 2012 to start collecting sales taxes, part of the deal was that the state would quit trying to collect back taxes. Why does Amazon deserve a better deal than bikini bars? Assuming that the Comptroller is properly interpreting the law in the first place, which is not a sure thing, surely there would be room for a compromise.

SCOTUS and sales taxes

This ruling will be good for Texas.

Texas stands to gain hundreds of millions of dollars in tax revenue after the U.S. Supreme Court on Thursday ruled that states may force online retailers to collect sales tax even when they have no physical presence in the state.

Every year, Texas loses $1.1 billion in uncollected sales tax, according to the Texas comptroller’s office — well over the $800 million the state will spend securing its southern border this year and next. That’s the result of the high court’s 1992 decision, now reversed, that retailers are responsible for collecting sales tax only in states where they had “nexus.” That decision — which predated the astronomical rise of the internet and the subsequent boom in online shopping — was outdated, argued lawyers for the state of South Dakota, who won the case this week.

That lost tax revenue is particularly meaningful in Texas, one of just a handful of states without a personal income tax. This May, for example, the state’s sales tax revenue totaled $2.76 billion.

[…]

Customers themselves owe sales tax on their purchases, but it’s sellers who are required to collect that money and send it to the government. States have little mechanism — and little incentive — to chase down sales tax on small-ticket purchases from average consumers when the retailers don’t do it themselves. Some of Texas’ largest online retailers — Amazon, for example — already remit sales tax to the state. Amazon has almost a dozen distribution centers in the state.

Texas is highly unlikely to gain back all of the $1.1 billion it’s currently losing, experts said, and any money the state gets back won’t come overnight. While the Texas comptroller has a great deal of taxing authority, some changes to the state’s tax structure might have to be carried out by the Legislature when it reconvenes in 2019, said Dale Craymer, the president of the Texas Taxpayers and Research Association. The Comptroller’s office is looking into that, a spokesman said.

“We welcome the court’s ruling in this case and are currently assessing any potential revenue impacts,” said Kevin Lyons, a spokesman for the agency.

I have long believed that the sales tax exemption for online purchases outlived its purpose years ago. This is not just for states like Texas but also for local governments that rely on sales tax revenue, and for traditional retailers who are no longer at an automatic disadvantage. Sales tax rates vary by locality, and not all items are subject to sales taxes, so this will be a challenge to set up, but that’s not our problem. Online retailers will figure it out, and life will go on. This was the right decision.

From the “Grab that cash with both hands and make a stash” files

Same song, second verse.

If budget writers don’t come up with money to address a state employee pension shortfall and mounting needs for public schools, health care and transportation, credit agencies are likely to downgrade Texas’ AAA rating in the near future.

That was the warning Comptroller Glenn Hegar gave lawmakers at a Tuesday hearing of the Senate Finance Committee in Austin. Though the Texas economy is growing at a healthy pace, Hegar said, the state’s budget is riddled with enough unfunded liabilities to worry credit rating agencies such as Moody’s and Standard and Poor’s.

“We’re not at a crisis,” Hegar said, but “we’re going in the wrong direction.”

A downgrading of Texas’ credit rating would make it more expensive for the state to borrow money — and perhaps damage state leaders’ credibility when advertising Texas as “open for business.”

“I want to avoid that, because I think that’s a black eye on the state of Texas,” Hegar said.

Rebounding oil prices, natural growth and migration to Texas have led to an increase in tax collections, according to the comptroller’s office. But much of that new revenue is already dedicated to historically underfunded programs such as the state highway fund, meaning that Texas lawmakers likely won’t have more money at their disposal in 2019 when crafting the next two-year budget.

At the same time, lawmakers will need to plug holes in the pension system for state employees, and they’ll face pressure to make solvent a health insurance program for retired teachers. On top of that, big bills coming due for Medicaid, the federal-state health insurance program for the poor and disabled that is perennially underfunded by the Legislature, could put the state budget $2.5 billion in the red before lawmakers even convene in 2019. (The state’s current two-year budget is about $217 billion.)

In addition, state leaders will have to tackle the bills from Hurricane Harvey recovery.

I’ll just say again here what I said in January: The vast majority of these issues are the result of deliberate choices made by our Governor, our Lieutenant Governor, and our Republican-controlled Legislature. Instead of seriously addressing the needs of the state, current and future, our Republican leaders have been obsessed with trivia, from bathrooms to plastic bags to trees. We have gotten by and done all right because times have been good, but we are in a far more precarious position for when the economy goes south than we should be. In the meantime, we are squandering this opportunity to ensure a better future for all of us by making such cavalier and ill-advised fiscal choices. Every Democratic candidate running for state office needs to internalize and articulate that message going forward.

2018 primary results: Statewide

Rep. Beto O’Rourke

Statewide Dem totals
Statewide GOP totals

Harris County Dem totals
Harris County GOP totals

(Please note that all results were coming in very slowly. I expect there will still be some precincts not yet reported by the time this publishes. So, I’m going to be less specific than usual, and may have to make a correction or two by Thursday.)

No real surprises here. Lupe Valdez and Andrew White will fight it out in the runoff. They combined for about 70% of the vote. Beto O’Rourke was a bit over 60% on his way to the Senate nomination. To be honest, I thought he’d score higher than that, but whatever. Statewide primaries are hard.

Miguel Suazo was near 70% for Land Commissioner, and Roman McAllen was near 60% for Railroad Commissioner. Mike Collier was leading by about seven points for Lt. Governor. The closest race was for Comptroller, where Joi Chevalier had a tiny lead over Tim Mahoney.

On the Republican side, Greg Abbott (90%), Ted Cruz (85%), Dan Patrick (75%), and Railroad Commissioner Christi Craddick (75%), who I didn’t even realize had an opponent, all cruised. Baby Bush and Sid Miller were in the high 50’s and so also on their way to renomination. That means the only statewide runoff will be for the Democratic gubernatorial race.

One note on turnout: In 2014, there were 554,014 total votes cast in the Democratic primary for Governor. The early vote tally for the Dem gubernatorial primary was 555,002. So yeah, turnout was up. Republicans will probably have 30-40% more total turnout statewide, but I fully expect Dems to top one million at this point.

Endorsement watch: A veritable plethora, part 3

Part 1 is here, part 2 is here, the full endorsements page is here, and today we have the rest of the statewides, which I appreciate since these are the races I wanted more input on.

US Senate: Beto O’Rourke

Although there are three candidates on the ballot in this primary, the obvious choice for Texas Democrats is O’Rourke.

Unlike Cruz, who’s widely disliked even by many of his Republican colleagues, O’Rourke has a reputation for reaching across the aisle to get what he wants. As the congressman for the city that’s home to Fort Bliss, O’Rourke has used his post on the House Committee for Armed Services and Veterans Affairs to secure bipartisan support for legislation to expand mental health care.
O’Rourke is refusing to accept PAC money, a principled decision that’s forcing him to run a vigorous grassroots campaign. He’s vowed to visit all 254 counties, including Republican strongholds where he hopes to win over not only swing voters but also Trump supporters disillusioned with Cruz. O’Rourke will need all the ground game he can get; Cruz rose to power by running a startlingly effective grassroots campaign against former Lt. Gov. David Dewhurst.

Yeah, completely obvious. Let’s not belabor this, there are more endorsements to get through.

Comptroller: Joi Chevalier

Joi Chevalier

Joi Chevalier’s background as a project leader and strategist in the tech sector gives her the managerial experience to serve as the state’s chief financial officer and oversee the office’s key responsibility of crafting budget projections for the Legislature.

Chevalier, 49, currently works in Austin as the owner of Cook’s Nook, a culinary incubator that offers space and resources to aspiring restaurateurs. Like so many Democratic candidates this election cycle, she told the editorial board that she was inspired to run by the current status of state and national politics, specifically pointing to the fact that Texas policymakers had no plan or response in place if the federal government failed to adequately fund the Children’s Health Insurance Program. She thinks that the comptroller’s office should use its available data to proactively publish reports that will make clear the consequences of losing CHIP, or not expanding Medicaid, or the litany of other decisions faced by Texas policymakers.

“Those numbers, while they are budgetary numbers, represent real lives and real people,” she told the editorial board.

Overall, she hopes to treat the office not just as a place for accurate accounting, but as a platform to set a vision of how the state should be governed.

Both Comptroller candidates got in late. Chavalier looked like the more interesting candidate at first glance. I’m glad to see my impression had merit to it.

Land Commissioner: Miguel Suazo

Miguel Suazo

Miguel Suazo, 37, is a Austin-based energy and natural resources attorney who also has offices in Colorado and New Mexico. Tex Morgan, 38, is a software engineer who served on the board of VIA Metropolitan Transit – San Antonio’s Metro system.

Based on his experience in the energy industry issues that comprise so much of the General Land Office responsibilities, and his more robust campaign, we endorse Suazo in the Democratic primary.

During his meeting with the editorial board, Suazo explained how the land commissioner should be working to help Houston recover after Hurricane Harvey and also prepare for the next storm. That includes better management of federal community development block grants and relatively inexpensive ideas for protecting the coast, such as restoring oyster reefs and erosion control.

“That’s just where I see lackadaisical leadership coming from the general land office,” he said.

This is the toughest race for me, with two candidates who appear to be pretty well matched. I don’t think you can go too far wrong in this one.

Railroad Commissioner: Roman McAllen

Roman McAllen

Even though the odds are heavily against them, two Democrats are running against each other for the right to face the winner (probably Craddick) in November. Roman McAllen, 52, is a bow-tie-wearing intellectual with a background in historic preservation and urban planning. Chris Spellmon, 60, is an easygoing veteran of local Democratic politics with a background in banking and business who’s now working in real estate.

Neither of them have a professional history in the energy industry. Maybe some people will find that refreshing, because railroad commissioners often have incestuous ties to the business they’re supposed to regulate. But neither of these Democrats seems deeply involved in the issues facing the railroad commission.

Both of them rightly complain RRC commissioners take too much campaign money from the energy industry. Both of them recognize the importance of fracking, but believe local communities should have the power to regulate it. And both of them firmly believe the RRC needs a new name reflecting its 21st century mission, because calling this important state agency a railroad commission helps it hide beneath the radar of too many voters.

Between these two candidates, McAllen seems to have a deeper awareness of the issues facing the RRC. He gets visibly riled up when he talks about drillers polluting water, injection wells causing earthquakes and the state government outlawing local fracking ordinances. If for no other reason, McAllen’s passion makes him a stronger candidate for Democrats to put on the ballot in November.

Well, it’s not like the RRC is currently overflowing with industry experience. Having a voice on there to balance the crazy and the corrupt would be useful.

Overall I’d say I approve of the Chron’s choices. We’ll finish this series off tomorrow with the races that feature Democratic incumbents.

From the “Nothin’ but good times ahead” department

Given the good economic conditions in Texas right now, you’d think the budget outlook would be better than it is.

The Texas economy is growing healthily, but that doesn’t mean state budget writers will have more money at their disposal next year, state officials said Tuesday.

In fact, though unemployment is low and tax revenue is on the rise, big bills coming due for the state’s highways and health care programs are giving Texas lawmakers reason for concern.

“I would like to offer a few words of caution for reading too much into the positive recent economic numbers,” Texas Comptroller Glenn Hegar told lawmakers at a Senate Finance Committee hearing.

As they often do, state budget writers last year underfunded Medicaid, the federal-state insurance program for the poor and disabled, which, alongside public education, makes up one of the largest shares of the state’s $217 billion two-year budget.

Then, during a special session called by Gov. Greg Abbott over the summer, state lawmakers shifted another $500 million away from the Texas Health and Human Services Commission to pay for public education programs.

As a result, lawmakers could face a $2.5 billion Medicaid bill shortly after they reconvene in Austin in 2019. Then there are the additional drains on Texas coffers from Hurricane Harvey recovery efforts, Hegar said.

That’s bad news for lawmakers given the comptroller’s prediction that the state will only have a $94 million “beginning balance” when lawmakers convene in 2019. By comparison, lawmakers had an $880 million beginning balance in 2017, which was ultimately a tight year for the state budget. Two years before that, lawmakers enjoyed a $7.3 billion beginning balance.

[…]

Another source of heartburn for budget writers is the ravenous state highway fund. In 2015, amid complaints of a highway system in disrepair, Texans voted to amend the state Constitution to require that up to $2.5 billion in sales tax revenue be dedicated to the highway fund.

That means that even as Texas collects more money from sales taxes — Hegar testified that sales tax revenue grew by an average of 10.3 percent over the last three months — the rest of the state budget will not benefit from that revenue since it is earmarked for the highway fund.

That was also an issue for budget writers in 2017. Last year, in order to free up some of that money for other purposes, Senate lawmakers pushed for an accounting trick that delayed a payment to the state highway fund into the next two-year budget cycle. That freed up about $1.6 billion for lawmakers last year, but it means there will be another bill to pay in 2019.

“In short, despite a strong economy and positive outlook for revenue growth in this biennium, it seems likely the next budget will be much like the one crafted in 2017, having to contend with restricted revenue relative to the spending trends of the state,” Hegar said.

Just a reminder: Underfunding Medicaid was a choice. Shifting money away from HHSC was a choice. The amendment to require all that highway spending was ratified by the voters, but it was there to be ratified because the Lege chose to put it there. Deferring that payment to the highway fund was a choice. And though the story doesn’t include it in its litany, spending nearly a billion dollars on boondoggle “border security” stunts was a choice, too.

We’ll probably be fine in the 2019 session, though the potential for shenanigans is always high. But remember, winter is coming, because it always does. When it does, we’re going to have a mess to clean up, one that was caused by the Republicans in charge of our state, one that could have been mitigated in many ways. I hope we’re ready for it.

(Note: This is the inspiration for the post title.)

The statewide lineups

Here’s the statewide lineup for Democrats. I’ll add in some notes afterwards.

U. S. Senator Beto O’Rourke
U. S. Senator Edward Kimbrough
U. S. Senator Sema Hernandez
Governor Adrian Ocegueda
Governor Andrew White
Governor Cedric Davis, Sr.
Governor Demetria Smith
Governor Grady Yarbrough
Governor James Jolly Clark
Governor Jeffrey Payne
Governor Joe Mumbach
Governor Lupe Valdez
Governor Tom Wakely
Lieutenant Governor Michael Cooper
Lieutenant Governor Mike Collier
Attorney General Justin Nelson
Comptroller of Public Accounts Joi Chevalier
Comptroller of Public Accounts Tim Mahoney
Commissioner of the General Land Office Miguel Suazo
Commissioner of the General Land Office Tex Morgan
Commissioner of Agriculture Kim Olson
Railroad Commissioner Chris Spellmon
Railroad Commissioner Roman McAllen
Justice, Supreme Court, Place 2 Steven Kirkland
Justice, Supreme Court, Place 4 R.K. Sandill
Justice, Supreme Court, Place 6 Kathy Cheng
Presiding Judge, Court of Criminal Appeals Maria T. (Terri) Jackson
Judge, Court of Criminal Appeals Place 7 Ramona Franklin

Just a few tidbits about some of the later entrants into the races:

Sema Hernandez was on the SOS filing page for a day or two, then disappeared from it until deadline day. I have no idea what was up with that.

Edward Kimbrough is apparently from Houston. I can’t find anything online about him.

There were two late filers in the Governor’s race, because apparently eight was not enough. James Jolly Clark is from Austin and appears to have been involved in some interesting lawsuits. Demetria Smith is a perennial candidate from Houston.

Joi Chevalier is a culinary entrepreneur. At first glance at least, she appears to have an interesting profile. It would have been nice to have heard of her before now.

Tex Morgan is a programmer in San Antonio who serves as a VIA Metropolitan Transit trustee, and has an even more interesting profile.

Chris Spellmon was a candidate for HCDP Chair who ultimately endorsed Eartha Jean Johnson in that race.

Some of these races are perhaps a bit more interesting than I expected them to be. I’ll do a separate post looking at Congressional and legislative candidates later.

There weren’t any late entrants of interest for statewide races on the Republican side. Perhaps the most noteworthy thing is that Baby Bush got multiple challengers but no one opposed Ken Paxton. Given that there is a nonzero chance he could get convicted of a felony next year, that seems like a curious outcome. Hey, their problem, not mine.

The TDP touted its ginormous candidate tally late Monday. I’ll summarize as follows:

All 36 Congressional seats are contested, with 110 total candidates.
14 of 15 State Senate seats are contested, with 24 total candidates.
133 of 150 State House seats are contested, with 189 total candidates.

Someone with a much more in depth knowledge of Texas’ political history will have to say when the last time was that we had a similar set of Democratic primary races. I’ll try to do a similar let-me-Google-that-for-you overview of these folks in the coming days, as time allows.

Finally, one more news item of interest:

Former U.S. Congressman Nick Lampson just filed to run as a Democrat for Jefferson County judge, KFDM/Fox 4 has learned.

The deadline to file was 6 p.m. Lampson will not face an opponent in the primary, but is challenging Republican incumbent Jeff Branick in next November’s general election.

I’m a longtime fan of Nick Lampson’s, so I’m happy to see him stay involved. The incumbent switched from D to R this year, so it would be nice to send him packing. Stace and RG Ratcliffe have more.

Filing news: Jerry’s back

Former Land Commissioner Jerry Patterson would like his office back, please.

Jerry Patterson

Patterson, who was first elected as the state’s land commissioner in 2003, wants to head the agency that manages state-owned lands and the Alamo. He gave up the job to run for lieutenant governor in 2014, but came in last in a four-way GOP primary race.

Patterson has long been critical of Bush, including the office’s response to Hurricane Harvey. Since 2011 the office has also overseen housing recovery efforts after natural disasters.

“If your headline is that Jerry Patterson wants his old job back, that would be wrong,” Patterson told the Houston Chronicle. “I don’t need this job and I would prefer to be praising George P. Bush.”

He decided to run himself — after looking for someone else to make the race against Bush — because he believed he was “watching this agency crater for the past three years.” That criticism comes after watching the agency refuse to disclose details about the Alamo restoration project that the Land Office is overseeing and after seeing tens of thousands of Texas homeless after Hurricane Harvey while just two homes have been rebuilt so far.

“This morning, Harvey victims who have been sleeping in tents awakened to the snow,” Patterson said.

I’ll say this about Jerry Patterson: I disagree with him on many things, but he was without a doubt one of the more honorable people serving in government while he was there. He took the job of Land Commissioner seriously, he was a stalwart defender of the Texas Open Beaches Act, and in my view he always acted with the best interests of the state at heart. He’s not going to be my first choice, but I’d take him over Baby Bush in a heartbeat.

Land Commissioner was one of two statewide offices for which there had not been a Democratic candidate, but as the story note, that is no longer the case:

[Miguel] Suazo, an attorney from Austin, announced Friday he would run for the post as a Democrat.

No stranger to politics, Suazo worked as an aid to U.S. Sen. Jeff Bingaman, D-NM, in Washington D.C. and has also worked as an energy and environment associate for Wellford Energy Advisors, a manager for regulatory affairs for the the Biotechnology Innovation Organization. He has also worked as an oil and gas attorney in Houston.

“I am running for Land Commissioner because I am qualified for the office and eager to bring new leadership to Texas,” Suazo in a statement declaring his candidacy. “I represent small and large companies and also regular folks who need a job done. I know business and I know people . . . I’m self-made, nothing’s been handed to me. I intend to bring that approach to the General Land Office.”

Suazo, a proponent of block-chain technology, said he may be the first candidate in Texas to launch his campaign using proceeds from Bitcoin investments.

Here’s his campaign Facebook page. I’m so glad there will be a choice in November.

Other news:

– The other statewide office that was lacking a Democratic candidate was Comptroller. That too is no longer the case as Tim Mahoney has filed. I don’t know anything about him as yet beyond what you can see on that website.

– Someone named Edward Kimbrough has filed in the Democratic primary for Senate. Sema Hernandez had previously shown up on the SOS candidate filings page, but hasn’t been there for several days. Not sure what’s up with that, but be that as it may, it’s a reminder that Beto O’Rourke needs to keep running hard all the way through. On the Republican side, someone named Mary Miller has filed. As yet, neither Bruce Jacobson nor Stefano de Stefano has appeared on that list. It will break my heart if Stefano de Stefano backs out on this.

– Scott Milder’s campaign sent out a press release touting an endorsement he received for his primary campaign against Dan Patrick from former Education Commissioner Dr. Shirley J. (Neeley) Richardson, but as yet he has not filed. He did have a chat with Evan Smith of the Texas Tribune the other day, so there’s that.

– Believe it or not, Democrats now have at least one candidate for all 36 Congressional offices. CD04 was the last holdout. Among other things, this means that every county in Texas will have the opportunity to vote in March for at least one non-statewide candidate. Very well done, y’all. Republicans are currently skipping a couple of the bluer Congressional districts. They also have nine candidates for CD21, which is the biggest pileup so far.

– Here in Harris County, in addition to the now-contested race for County Judge, there are a couple of challenges to incumbent legislators. Damien LaCroix is once again running against Sen. John Whitmire in SD15, and Richard A. Bonton has filed in HD142 against longtime State Rep. Harold Dutton. Also, there is now a Democrat running in SD07, the district formerly held by Dan Patrick and now held by his mini-me Paul Bettencourt, David Romero, and a candidate in HD129, Alexander Karjeker. Still need someone to file in HD135.

The filing deadline is Monday, and that’s when any real surprises will happen. Enjoy the weekend and be ready for something crazy to happen on the 11th, as it usually does.

Filing news: Lupe Valdez is in for Governor

Here she comes.

Sheriff Lupe Valdez

Dallas County Sheriff Lupe Valdez announced Wednesday morning that she is running for governor, giving Texas Democrats a serious candidate for the top job with five days until the candidate filing deadline for the 2018 primaries.

“Like so many hardworking Texans, I know it’s tough deciding between buying food, finding a decent place to live, and setting aside money for college tuition,” Valdez said in a statement before filing at the Texas Democratic Party headquarters in Austin. “Opportunity in Texas ought to be as big as this great state, but it is out of reach for far too many, that’s why I’m running for Texas Governor. I’m a proud Texas Democrat. I believe good government can make people’s lives better, and I intend to do just that.”

Until Wednesday, six little-known Democrats had filed to challenge Republican Gov. Greg Abbott, who is seeking a second term in 2018. Andrew White, the son of late Gov. Mark White, has been exploring a run for weeks and is set to announce his campaign Thursday in Houston.

Any Democrat running for governor faces a steep climb against Abbott, who easily defeated the party’s 2014 nominee, Wendy Davis, and has built a $40 million-plus war chest for re-election. Texas has not elected a Democrat to statewide office in over two decades.

Speaking with reporters after filing, Valdez said she was undaunted by the challenge, particularly when it comes to fundraising.

“I think we’re going to raise whatever money’s necessary. I don’t believe that we need 40, 60, 90, bazillion dollars,” Valdez said. “Abbott may have the money — we’re going to have the people.”

The Trib has video of Sheriff Valdez’s announcement here. As you know, she was said to be in, then confusion reigned, and after that settled down it was assumed that she was in fact in, and so here we are. I think it’s reasonable to tamp expectations down a bit about how much money one can raise – no one is going to out-money Greg Abbott unless they have their own nine-figure checkbook to play with – but people power hasn’t gotten us very far, either. Valdez, if she wins the primary (more on that in a minute), ought to draw a lot of earned media and should gin up a fair amount of excitement, both of which in turn should help her bring in some cash so she can establish name ID. Of course, all these things were also true of Wendy Davis at this time in 2013, so. We have a lot of evidence to suggest that this year is different in ways that benefit Democrats, but certain fundamental rules still apply.

Speaking of that primary:

With less than a week left in the filing period, six little-known Democrats have filed to challenge Republican Gov. Greg Abbott next year, with two more prominent names expected to enter the race by the Monday deadline: Dallas County Sheriff Lupe Valdez and Andrew White, the son of late Gov. Mark White. An eight-way primary could be the party’s most crowded nominating contest for governor since at least the 1980s.

While Valdez — the only current elected official among the eight candidates — would immediately secure frontrunner status if she runs, she faces no guarantee of the kind of cakewalk to her party’s nomination that former state Sen. Wendy Davis enjoyed in 2014. White, who is set to announce his campaign Thursday in Houston, has been laying the groundwork for a serious bid, while some of the other contenders have been campaigning for months.

“I think that if Sheriff Valdez runs and if Mr. White also announces, then I think that the two of them would likely be the higher-profile candidates in the primary, and I think that voters in the Democratic primary in 2018 will have a lot of choices,” said state Rep. Chris Turner, the Grand Prairie Democrat who chairs the party’s caucus in the House and served as Davis’ campaign manager. “I think that dynamic is good and hopefully makes for an interesting choice and conversations for Democrats in 2018 in the primary.”

“I expect we’ll have a competitive primary, and I think that’s a good thing — it’s healthy,” added Ed Espinoza, the executive director of Progress Texas, a liberal advocacy group.

I agree with that, and I look forward to it. I’m working on a post about the huge volume of contested primaries up and down the ballot, and I think this will help shape the narrative to start out the 2018 election. That said, Dems don’t have candidates for Comptroller and Land Commissioner as I write this, and the thought occurs to me that we could reasonably repurpose a couple of the candidates in this race for better use elsewhere. Andrew White would make a fine candidate for Comptroller, where his more conservative social views won’t really matter but his business background should be a plus. And if I could pick one person from this crop to spend the next year haranguing silver spoon lightweight George P. Bush, it would be Tom Wakely. Neither of these will happen, of course, and both gentlemen could no doubt give me many reasons why this is all wrong. Get me decent candidates for Comptroller and Land Commissioner and I promise to forget I ever brought this up. For more on the Valdez announcement, see WFAA, the Current, the Trib again, Burkablog, and the Chron.

Elsewhere, there were a couple of Congressional announcements as Chip Roy, a former chief of staff to Ted Cruz, announced his candidacy for CD21, and longtime WFAA reporter Brett Shipp entered the fray in CD32, running as a Dem, bumping the total number of candidates there to six.

There were no major announcements in Harris County, but as has been the case every day there has been a lot of activity on the Democratic side. While the HCDP has not been publishing a running list of candidates for all offices, it has been updating this list of judicial candidates. It’s a bit oddly sorted, but you can at least get a feel for who’s running for what. By my count, in the district, county, and appeals courts – i.e., everything but the JP courts – there are 19 competitive primaries so far.

In other races, Alison Sawyer officially filed in HD134, leaving HD135 as the only box that really needs to be checked. There are now contested primaries in HDs 126 (Natali Hurtado and Undrai Fizer), 133 (Martin Schexnayder, Sandra Moore, and the candidate whose name I won’t mention, for whom you most emphatically should not vote), 138 (Adam Milasincic and Jenifer Pool), 139 (Rep. Jarvis Johnson and Randy Bates), 140 (Rep. Armando Walle and Matthew Mendez), 146 (Rep. Shawn Thierry and Roy Owen), and 147 (Rep. Garnet Coleman and Daniel Espinoza). At the county level, the HCDE At Large Position 3 race is now contested as well, as Elvonte Patton joins Josh Wallenstein. Let’s just say that endorsing organizations are going to have their hands very, very full.

Who will run statewide for the Dems?

For several statewide offices, it is unclear at this time who might run.

Rep. Beto O’Rourke

Lillie Schechter, the new chairwoman of the Harris County Democratic Party, has watched in recent months as at least seven candidates have come through the doors of the party headquarters to introduce themselves, eager for their shot at U.S. Rep. John Culberson, R-Houston.

That’s seven candidates that she can recall, but she may be forgiven for forgetting: Texas’ 7th Congressional District is one of several that have already drawn a swarm of Democratic candidates for 2018. The bonanza is unfolding not just in districts like the 7th — one of three in Texas that national Democrats are targeting — but also in even redder districts, delighting a state party that is not used to so much so interest so early.

“When we have competitive primaries, we get to engage with more Democrats,” Schechter said. “I do not see that as a negative thing.”

Yet it’s just one part of the picture for Democrats at the outset of the 2018 election cycle. While the congressional races are overflowing with candidates, the party remains without a number of statewide contenders — a reality that is coming into focus ahead of Republican Gov. Greg Abbott’s anticipated announcement Friday that he’s running for re-election. Barring any last-minute surprises, Abbott will make his second-term bid official without the presence of a serious Democratic rival.

[…]

So far, Democrats have three statewide candidates they see as serious: U.S. Rep. Beto O’Rourke of El Paso for U.S. Senate, Houston-area accountant Mike Collier for lieutenant governor and Kim Olson, a retired Air Force colonel, for agriculture commissioner. They are without similarly credible contenders for governor, comptroller, land commissioner, railroad commissioner and attorney general — a seat considered particularly worth targeting because the GOP incumbent, Ken Paxton, is under indictment.

By far the biggest profile belongs to O’Rourke, who announced his challenge to Cruz in March. As the top of the ticket — assuming he wins his party’s primary next year — he stands a chance of being Texas Democrats’ standard-bearer in 2018, regardless of whom they ultimately put up for the other statewide jobs.

In an interview Monday, O’Rourke said he was not worried about the lack of company so far on his party’s statewide ticket.

“I can’t worry about what I can’t control, and so we’re just going to focus on our campaign,” he said.

But he also expressed optimism for the party’s prospects up and down the ballot in 2018 “as more people become aware of how significantly the dynamics have changed in Texas.”

The story notes that former State Rep. Allen Vaught is also looking at Lt. Governor, and it’s not impossible to imagine him running there with Collier shifting over to Comptroller again. I am aware of at least one person looking at the AG race, and if there’s one slot I feel confident will have a name in it, it’s that one. As for Governor, who knows. We wanted Julian Castro, but we’re not going to get Julian Castro. I had been thinking about Trey Martinez-Fischer, but he’s not interested. As with AG, I feel reasonably confident someone will run. I just don’t know how exciting that person will be.

As the story notes, there are many, many people running for Congress. At least five races, in CDs 02, 07, 21, 31, and 32, have multiple candidates, and some of those candidates have already raised a very decent amount of money. There are still plenty of races in need of candidates – CDs 22 and 24 come to mind, as well as SD16 and various State House seats – but I’m not worried about any of them yet. One way of thinking about this is to note that in the last three cycles, the number of Democratic challengers for Republican-held districts in the State House has been 38 in 2016, 37 in 2014, and 39 in 2012, with the latter being inflated by redistricting and the 2010 wipeout. Fewer than half of all Republican State House incumbents have had November opponents in each of these cycles. To be sure, one reason for that is that a large number of these districts are basically hopeless from our perspective, but there is more to it than that. If there’s ever a year to get a larger number of challengers for red districts, this is it. We won’t know the totals for certain until after the filing deadline, but this is something to keep an eye on. The DMN has more.

Who loves budget gimmicks?

The Senate Budget Committee, that’s who.

Texas Senate budget writers on Wednesday unanimously approved their two-year budget, which avoided some steep cuts by using an accounting trick to free up $2.5 billion state dollars that were originally slated to go to the state highway fund.

By delaying a diversion of sales tax money from August 2019 to September 2019, and therefore moving the funding from the 2019 fiscal year’s budget to the first month of fiscal year 2020, Nelson said her two-year budget had an additional $2.5 billion to spend on needs such as health care and schools.

The accounting maneuver “solved a lot of our problems,” Nelson told reporters shortly after her Senate Finance Committee approved the budget unanimously. She said the move would not affect the Texas Department of Transportation’s ability to pay for highway projects in 2019.

But House Speaker Joe Straus called the move “gimmickry” and likened it to “cooking the books.”

“Counting money twice in order to balance a budget is not a good idea,” Straus told reporters Wednesday morning. “This is the Texas Legislature. We are not Enron.” He was referring to a Houston-based energy company that collapsed in spectacular fashion because of fraudulent accounting practices.

[…]

Nelson said her proposed budget “meets our responsibilities” and “keeps Texas on the path to success and prosperity.” The proposal now moves on to the full Senate, where a full chamber vote is expected on Tuesday.

Nelson told reporters the Senate had no appetite to use the state’s Rainy Day Fund, a $10.2 billion savings account lawmakers have available to address budget shortfalls or emergencies.

See here for some background. Let’s be clear about two things. One, this is far from the first time this particular accounting trick has been used. Indeed, accounting tricks of all kinds are baked in our legislative DNA. They are a natural and totally expected outgrowth of the many artificial budget constraints that our Legislature is subject to. I wouldn’t claim that there’s anything honorable about any of this, but given that the constraints aren’t going away, I’d greatly prefer a bit of financial prestidigitation to slashing critical services.

That said, it seems crazy to me to resort to this sort of trickery when there’s more than enough money in the Rainy Day fund to actually pay for the things that need to be paid for. There was a time when the general consensus was that this is what the Rainy Day fund is there for. The diversion tactic doesn’t make that $2.5 billion in obligations go away, it just shoves them into the next budget cycle. Which is fine of the state’s finances wind up being better than the Comptroller projects them to be for the next two years, not so fine if not. Remember, the House wants to use the Rainy Day fund to plug a gap in the budget from the last session, which resulted in part because expenses were higher than we thought they would be. We have the wherewithal to take care of this problem now. Why wouldn’t we do that? The Chron has more.

Mike Collier will run for Lt Gov

Good.

Mike Collier

Lt. Gov. Dan Patrick is getting a Democratic challenger for re-election in 2018.

The Texas Democratic Party said Thursday that Mike Collier is stepping down as finance chairman to start a campaign for lieutenant governor.

“Dan Patrick has proven he is unworthy of leading this great state,” party Chairman Gilberto Hinojosa said in a statement Thursday. “I am proud to see a courageous Texan like Mike Collier put his name forward to serve.”

In his own statement, Collier said he is “assembling a campaign team to run against Dan Patrick for Texas Lt. Governor.” He added that he will make a formal announcement after touring the state and gauging support for his run.

“We need a Lt. Governor that brings Texans together, not an ideologue that chases headlines and drives us apart,” Collier said.

[…]

In a brief interview with The Texas Tribune after the announcement, Collier said he filed Thursday morning with the Texas Ethics Commission to run for lieutenant governor. He promised to run a “very policy-oriented, substantive campaign” involving many of the same issues he raised in his 2014 run.

While Texas Democrats are hopeful President Donald Trump’s unpopularity will help them in 2018, Collier said he does not see Trump factoring into his race.

“I’m going to run against my opponent,” Collier said. “My focus has been on the state of Texas.

Collier ran for Comptroller in 2014. He raised some money, ran a decent campaign, won a few endorsements, and generally made a good impression in a lousy year. He was mentioned as a possible candidate for Governor in that story about planning for 2018, but as I noted at the time, he makes more sense as a Lite Guv candidate, because he can go to the business lobby and present himself as a fine and credible alternative to Dan Patrick. Which doesn’t mean they’ll go along, of course – he’ll need to raise a crap-ton of money and have a really good plan for turning out Democratic votes to not get politely shown the door – but there’s a chance. Having him get started this early says a lot. You want to get in on it, go here and get on his contacts list. If we’re serious about making some noise in 2018, here’s our first chance to show it.

Here’s your 2018-19 revenue estimate

It’s pretty mediocre.

Facing sluggish economic forecasts amid low oil prices along with billions in tax revenue already dedicated to the state highway fund, Comptroller Glenn Hegarannounced Monday that lawmakers will have $104.87 billion in state funds at their disposal in crafting the next two-year budget, a 2.7 percent decrease from his estimate ahead of the legislative session two years ago.

Hegar told state lawmakers he expected a “slow to moderate” expansion of the Texas economy. Still, he said, the amount of revenue they will be able to negotiate over has fallen. That’s largely because lawmakers in 2015 moved to dedicate up to $5 billion in sales tax revenue every two years to the state’s highway fund, rather than being spent on other priorities such as schools, health care or reforms to the embattled Texas foster care system.

“We are projecting overall revenue growth,” Hegar said. “Such growth, however, is more than offset” by the demands of the state highway fund and other dedicated funds.

The revenue estimate does not determine the scope of the entire Texas budget. Rather, it sets a limit on the state’s general fund, the portion of the budget that lawmakers have the most control over. The general fund typically makes up about half of the state’s total budget.

Two years ago, Hegar estimated that the Legislature would have $113 billion in state funds, also known as general revenue. Adding in federal funds and other revenue sources, lawmakers would have $221 billion in total for its budget, as well as $11.1 billion in the state’s Rainy Day Fund, he said at the time. Lawmakers ultimately passed a $209.4 billion budget, which included billions in tax cuts.

On Monday, Hegar estimated lawmakers would have $104.87 billion in general revenue, and $224.8 billion in total revenue to write a budget for the 2018-19 biennium which begins in September.

See here for more on Hegar’s 2015 estimate, which would up being a tad bit optimistic, but not too far off. It won’t be surprising if this one is off a bit one way or the other – this is why 2014 Comptroller candidate Mike Collier called for more frequent revenue estimates during his campaign, so the course can be corrected as needed more often – but again I expect this to at least be in the ballpark. Assuming the economy doesn’t crash and burn and/or we don’t have ten percent annual growth under Dear Leader Trump, of course.

There are a lot of ingredients that go into making the budget sausage, and there are various things that can and will be done to avoid doing anything too painful. We could of course just assume this was a temporary dip and take a few bucks out of the Rainy Day Fund to smooth out the curve – that was its original purpose, after all; now it serves as a hole in the back yard into which we bury sacks of cash for no clear reason – but that isn’t going to happen. We do have your local property taxes bolstering the state’s bottom line, so be sure to send a thank you note to the State Supreme Court for that. And as always, remember that the biggest boost to spending in 2015 was tax cuts, but that’s never what the leadership has in mind when it says we need to “cut back” on expenses. We do things one way in this state, and will continue to do them that way until there are different people running the state. The Chron and BurkaBlog have more.

Texas finds a new way to be hostile to women’s health

I feel like it must be someone’s job somewhere to come up with stuff like this.

Right there with them

Right there with them

A group led by an anti-abortion advocate appears to be one of the largest recipients of state funding from the “Healthy Texas Women” program, which lawmakers recently created to help women find health care services paid for by the state.

The Heidi Group, a Round Rock-based center that has promoted alternatives to abortion to low-income women, is set to receive $1.6 million from the women’s health program, according to the comptroller’s office. That makes it the second-highest grant recipient on the current list, behind the Harris County public health department, which will receive $1.7 million.

[…]

The Heidi Group “will now be providing women’s health and family planning services required by Healthy Texas Women, including birth control, STI screening and treatment, plus cancer screenings to women across Texas,” state agency spokesman Bryan Black said in an email.

Black said the group had already recruited doctors to begin establishing family planning clinics across the state. He also said the women’s health program’s contracts were not final and that there were “more to come.” The program offers $18 million each year.

Abortion-rights supporters lambasted the Heidi Group’s contract.

“It’s very inappropriate that the state would contract with an organization that has never performed the services required by the contract,” said Heather Busby, executive director of NARAL Pro-Choice Texas, in a statement. “The Heidi Group is an anti-abortion organization; it is not a healthcare provider.”

This is a political advocacy group that has been given a contract to provide health care. What could possibly go wrong with that? The Observer gives another reason to be concerned:

[Heidi Group founder Carol] Everett made headlines in early August following her testimony at a Texas Department of State Health Services meeting on new rules about fetal tissue disposal in Texas. There, she asserted that currently allowable means of fetal tissue disposal could result in HIV and other sexually transmitted infections being released into public water supplies, which she later repeated to an Austin Fox affiliate. Her concerns are not echoed by any major medical or public health groups.

So this is like hiring Jenny McCarthy to run your immunization program. This is what the state of Texas under Greg Abbott thinks about women’s healthcare. The Press, which has a more sympathetic portrait of Everett, and the Current, which is harsher, have more.

Our tax system isn’t quite as stupid as it could be

Good news!

BagOfMoney

A Texas Supreme Court ruling has spared the state from having to issue billions of dollars in tax refunds to oil and gas drillers — a prospect that had had threatened to shake up the next legislative session.

The justices on Friday sided with Texas Comptroller Glenn Hegar in an arcane tax dispute that the Republican feared could have far-reaching consequences for the state’s budget outlook.

Denying Midland-based driller Southwest Royalties’ request for a refund, the court ruled that state law did not exempt metal pipes, tubing and other equipment used in oil and gas extraction exempt from sales taxes.

“Southwest did not prove that the equipment for which it sought a tax exemption was used in “actual manufacturing, processing, or fabricating” of hydrocarbons within the meaning” of the tax code, Justice Phil Johnson wrote for the majority in an opinion that affirmed decisions in lower courts. “Thus, Southwest is not entitled to an exemption from paying sales taxes on purchases of the equipment.”

See here, here, and here for the background. As noted in the story, some $4 billion or more would have had to be refunded to various businesses if the Supremes had ruled for the plaintiffs. Needless to say, that would have been bad news for the state, as well as for cities and counties who get their share of sales tax revenue, too. Thankfully, there is a bottom to the stupidity in our tax code. Good to know.

Abbott orders state agencies to obey the law

Better late than never.

Droppin’ dimes, droppin’ dimes

Gov. Greg Abbott and Comptroller Glenn Hegar on Wednesday ordered state agencies to stop paying departing employees by placing them on “emergency leave.”

“Pursuant to this directive, the use of emergency leave, administrative leave or other mechanisms to continue paying state employees who have ceased to work will be prohibited,” the directive from Abbott and Hegar stated. The directive will remain in place until the Legislature takes up the issue during next year’s legislative session, Abbott’s office said.

The Dallas Morning News and other media outlets have recently reported on the growing practice by agencies to keep departing employees on the payroll by placing them on “emergency leave,” often as a form of severance.

The practice first came to light after reports that Texas Attorney General Ken Paxton paid his first assistant attorney and communications director for months after they left the agency. Subsequent stories revealed the General Land Office continued to pay departing employees without using the emergency leave designation.

Representatives of both agencies said they will follow the governor’s new order.

“We appreciate Governor Abbott’s leadership,” said Marc Rylander, spokesman for the attorney general’s office. “We do not disagree with the Governor’s new policy for all agencies subject to the direction of the governor, and we will concur with it moving forward.”

Brittany Eck, GLO spokeswoman, said the agency will suspend the use of separation agreements until lawmakers decide how to proceed.

“We look forward to continuing our work with the Governor, Comptroller, and members of the Texas Legislature to not only clarify the law on this issue but also discuss how state agencies should manage its workforce in an efficient and cost-effective manner,” Eck said.

See here and here for the background. The Lone Star Project requested an investigation into this a couple of days ago. I guess it had finally gotten to the point where Abbott could no longer ignore the issue. Trail Blazers and the Chron have more.

More on severance pay and the Land Commissioner’s office

The law doesn’t apply here.

BagOfMoney

After reports of state agencies keeping former employees on the payroll after they stopped working, Texas Attorney General Ken Paxton and other agency heads have taken heat for stretching the rules on paid “emergency leave” to keep the ex-workers on the books.

But when 26 employees were paid for an additional one to two months after they quit working for the General Land Office, Land Commissioner George P. Bush didn’t use emergency leave or any other type of paid leave established in law to compensate them. Instead, Bush’s agency treated the former employees as if they were still working, sending time sheets to the comptroller’s office indicating they had shown up to work.

The arrangement raises questions about whether the agency properly awarded and reported the paid leave, which amounted to at least $383,000 for the 26 employees let go during Bush’s “reboot” of the agency after he took office in January 2015.

An additional 14 employees signed separation agreements when they left the agency after Bush was elected in November 2014 but before he was sworn in. Bush’s predecessor, Jerry Patterson, said those terminations should also be included as part of Bush’s agency reorganization because Patterson allowed Bush and his interim team to decide who should be hired and fired during that period.

[…]

State law spells out several types of paid leave — for such events as illnesses, vacation and deaths in the family — and the comptroller’s office requires agencies to indicate what type of leave an absent employee is getting by selecting a time sheet code that matches a leave category established in law.

The General Land Office, however, didn’t select any type of leave for the 26 employees with separation agreements, and the agency has since said it left the leave field blank because there was no leave category that corresponded to their circumstance. “Because there was not a more accurate code, we used what was readily available to us, and we didn’t want to miscategorize it as something that is not accurate,” agency spokeswoman Brittany Eck said.

For Buck Wood, a former deputy comptroller and expert on Texas government and ethics law, that omission is proof that the leave wasn’t authorized by state law.

“There’s got to be an appropriation, and there’s also got to be a law behind an appropriation that authorizes it,” Wood said. “In this case, neither exists. There is no such thing as severance pay (in state law), and there’s no appropriation for it, so it’s just totally and completely illegal.”

Also, Wood said, any time sheets approved by the General Land Office that indicated employees were still working after they had left the agency might constitute falsification of government records, a felony offense.

Bush’s staff said such payments are standard practice in the business world because they are efficient. Noting that none of the 100 employees who left the agency under Bush have sued for discrimination, Eck said the agreements save taxpayer money by reducing potential litigation risks and legal fees.

See here for the background. You almost have to admire their tenacity with the “it’s totally legit in the private sector” defense. Who cares that this is the public sector, or that knowing how our money is spent and how our public offices are being run are things we are supposed to value? Not George P. Bush, that’s for sure. You won’t get that kind of clarity of vision from just anyone. Ross Ramsey has more.

Lawsuits and low oil prices

Both are threatening the next Texas budget.

BagOfMoney

Last week, lawyers for the state of Texas got the latest in a string of bad legal news.

A lawsuit challenging the state’s foster care system as inhumane appeared to gain steam when an appeals court rejected the state’s request to stop the appointment of two “special masters” to recommend reforms.

The overhauls that have been discussed so far would be pricey to implement — as much as $100 million per year, according to rough estimates from the state comptroller’s office. But they actually are on the lower end of all the extraordinary legal expenses the state is facing at a time when stubbornly low oil prices are simultaneously threatening to blunt its coffers.

Three other lawsuits against the state — two of them pending before the Texas Supreme Court, with rulings expected soon — could cost the state billions if it ends up on the losing side. Experts say the state may have the cash to cover one of them in a single budget cycle, but probably not any more than that — especially if low oil prices persist, dampening the state’s stream of tax revenue. That could mean budget cuts when lawmakers meet for the 2017 session, at least if the Republican-dominated Legislature remains steadfast in its refusal to tap the state’s nearly $10 billion Rainy Day Fund.

Two of those three lawsuits, both tax cases, could cost the state a combined $10.4 billion in tax refunds and up to $2 billion in collections per year beyond that, according to the comptroller’s office, which is closely monitoring them.

Potential cost estimates do not exist for the last case — a high-profile challenge to the state’s public education funding system — but past school finance rulings have cost the state billions.

Such sums would handily eclipse the state’s $4.2 billion projected surplus, which could itself dwindle if oil prices remain low and further blunt tax collections. (Comptroller Glenn Hegar has already lowered projections once.)

“Any of those by themselves are a huge hit,” said Dale Craymer, president of the business-backed Texas Taxpayers and Research Association. “But if you start losing two or three of those issues then, yeah, it’s much more questionable that the state’s general revenue reserves are sufficient to cover that.”

See here and here for some background. There’s not much that can be done about the price of oil, though after years of living it up, and of politicians claiming credit for all that robustness, I doubt there’s much sympathy out there for us. The rest are the result of policy and/or legislative decisions, some of which may well bite us in the bottom line. I’m rooting for the Supreme Court to stick it hard to the Lege on school finance, but the other cases I’d rather see the state win. As much political hay as there is to be made in a chaotic situation, there’s nothing good from a public policy perspective on those cases, and I have little faith the Lege would do a good job cleaning up the mess. But on school finance, all bets ought to be off. We’ll see how it goes.

The Supreme Court hears that case about how stupid our tax system is

There’s a lot of money riding on the outcome.

BagOfMoney

With billions of dollars at stake, the Texas Supreme Court heard arguments Tuesday in a tax showdown whose outcome could shake up the next legislative session while straining the historically friendly relationship between state lawmakers and the iconic oil and gas sector.

Throughout a spirited debate over arcane accounting rules and oil-tinged science, the justices offered few clues as to how they might rule.

“They’re all great poker faces,” said James LeBas, an economist with the Texas Oil & Gas Association and a former chief revenue estimator for Texas, following arguments.

The case ultimately focuses on a single question: Are metal pipes, tubing and other equipment used in oil and gas extraction exempt from sales taxes?

[…]

David Keltner, an attorney representing Southwest Royalties, argued that certain extraction equipment clearly fits the exemption’s definition.

The company’s equipment “processes” West Texas crude by separating it into marketable oil and gas, he argued, at times pointing to a chart that displayed the various stages of petroleum extraction. Once the crude is brought up from the ground, it is no longer part of a mineral owner’s estate, he said.

“It is tangible personal property. People own it,” Keltner said. “If you were to hold otherwise, there would be serious consequences.”

Among the consequences he named: Texas regulators would struggle to hold drillers accountable for the oil they extract.

Arguing for the state, Texas assistant solicitor general Michael Murphy disagreed, arguing that minerals are not “tangible personal property,” and that Southwest’s equipment was not necessarily responsible for transforming the crude.

“Southwest’s mineral extraction is really like gathering raw materials,” he said, dubbing the mechanics “pre-production or pre-processing.”

“Until that oil and gas bubbles out of the ground, it’s part of the [real estate].”

Justice Phil Johnson, questioned that interpretation.

“It’s not personal property in the tubing, when it’s coming up, it’s still realty?” he asked. “Even though it’s outside the ground, outside the natural environment?”

Justice Eva Guzman wondered how Texans could determine the precise moment the crude changes phases. “But how would we know when?” she asked.

Keltner, the driller’s attorney, said that instrumentation on the surface would reveal that information. Murphy disagreed.

Murphy also pointed to a separate tax exemption on the books for purchases of some of the same equipment in question — if it’s used for offshore drilling outside of Texas. Texas lawmakers, he said, would not likely intend to consruct overlapping exemptions.

He also argued that the court must revert to a narrow interpretation of the tax code — siding with the state — if a rule is deemed ambiguous.

But Keltner argued that the wording clearly supported the driller’s side, and that denying the exemption was unfair. He listed several other purchases that Hegar’s office has allowed companies to write-off under the policy — including equipment that speeds the ripening of bananas.

“Our concern here is, that we have a new stance applied to the oil and gas industry differently,” he said. “A banana is going to ripen anyway. That is inevitable.”

See here and here for the background. As I said, it’s all angels-dancing-on-the-head-of-a-pin stuff, just with billions of dollars on the line. There’s a part of me that’s rooting for the court to rule for the plaintiffs on the grounds that this would force the Legislature to take action and try to make our tax system better. It quickly gets overwhelmed by the much larger part of me that recognizes the huge potential for mischief and malfeasance by the Lege if this door ever gets opened. So for better or worse I do want to see the state win.

Supreme Court to decide just how stupid our tax system is

Oh, goody.

BagOfMoney

The Texas Supreme Court on Tuesday will hear arguments in a case that could deliver a multi-billion windfall to struggling oil and gas producers by taking a major bite out of state tax revenue.

The issue before the justices may sound arcane: Are metal pipes, tubing and other equipment used in oil and gas extraction exempt from sales taxes? But a yes to that question, brought by a Midland-based driller, could trigger a flood of refunds that would wipe out the state’s projected $4 billion budget surplus, Texas Comptroller Glenn Hegar warns.

“This one’s as big as they come,” the Republican said in an interview. “The neon light lights up, because of the sticker shock.”

Southwest Royalties, a subsidiary of Clayton Williams Energy, filed its lawsuit in 2009, just before improved technology unleashed a surge of oil production that transformed the U.S. energy landscape. Susan Combs, Hegar’s predecessor, was named in the original lawsuit, which has wound through the court system for years.

[…]

Granting the exemption would affect more than the company’s tax bill, Hegar argues in court filings. It would “impose a severe financial penalty on Texas taxpayers” amounting to $4.4 billion in 2017, and $500 million each year after that as companies around the state seek to cash in, according to estimates compiled in 2012.

On Tuesday, the justices will parse the language of a sales tax exemption for goods and services used in the “actual manufacturing, processing, or fabrication of tangible personal property,” and consider how that description relates to the mechanics of petroleum extraction.

The case hinges on whether certain extraction equipment — like casing, pipes, tubing and pumps — fits the definition cited in the exemption.

[…]

Ideally, judges decide such cases only on their merits, experts say, but the budget impact can factor into their decision-making.

Warnings from the comptroller’s office already seem to have helped its cause in this case.

At a hearing in 2012, Travis County District Judge John Dietz said he would rule in favor of Southwest Royalties, only to later reverse his position in a written decision.

The driller suggests that a Wall Street Journal article quoting dire warnings from Combs swayed the judge.

An appeals court in Travis County upheld Dietz’s written decision, backing the comptroller’s interpretation due to “a lack of clarity” in the way lawmakers wrote the exemption.

Hegar cited those earlier rulings in expressing confidence that Texas would ultimately prevail.

“The state’s legal arguments are 100 percent valid,” he said in an interview. “The law is not on the side of those asking for the tax refund.”

But Dietz’s initial inclination may have telegraphed that Southwest’s arguments are “pretty strong,” Dale Craymer, president of the business-backed Texas Taxpayers and Research Association and a former chief revenue estimator for the state, told the Tribune earlier this year.

See here for the background. Just a reminder, it is well within the Lege’s power to clear this up. Now maybe the Supreme Court will bail them out, and maybe if they don’t some other case will jump up and bite the state’s bottom line in the bottom. And again, the Lege could fix it if they wanted to. I think we both know how that’s going to go.

We have a messed up tax system in this state, part deux

Sooner or later, it’s going to collapse under its own weight.

BagOfMoney

The state’s highest civil court last week agreed to hear a case hinging on whether metal pipes, tubing and other equipment used in oil and gas production should be exempt from sales taxes. While the issue is arcane, the impact to the state could be significant.

Texas Comptroller Glenn Hegar is sounding the alarm that a ruling favoring the industry could force the state to issue tax refunds of as much as $4.4 billion — enough to wipe out the state’s projected budget surplus.

“This is very serious, real money,” said Hegar, the state’s chief financial officer, this week in an interview.

Midland-based Southwest Royalties, a subsidiary of Clayton Williams Energy, sued the state in 2009 — just before a drilling boom transformed the U.S. energy landscape — after Susan Combs, Hegar’s predecessor, rejected a claim for refunds on purchases dating back to 1997. Over the years, the case has wound its way through the court system.

Now, the state’s Supreme Court justices are set to weigh the company’s appeal of a lower court’s ruling amid concerns that a prolonged drilling slowdown might hurt Texas’ bottom line.

It is one of two ongoing tax cases — the other filed by the parent company of AMC movie theaters — that budget watchers fear will cost Texas millions in past and future tax revenue if the final outcomes don’t go their way. Hegar called the pair of cases “two of the biggest potentially that could impact what appropriators do in the next legislative session,” though he expressed confidence that the state would prevail in both.

The oral arguments in the drilling case, set for March 8, are likely to enthrall accountants and chemistry teachers alike. The justices will need to parse the language of a sales tax exemption for goods and services used in the “actual manufacturing, processing, or fabrication of tangible personal property,” and debate how that description relates to the mechanics of petroleum extraction.

The case hinges on whether certain extraction equipment — like casing, pipes, tubing and pumps — fits the definition cited in the exemption.

See here for the background on the other case. Honestly, it’s all angels-dancing-on-the-head-of-a-pin stuff, and no one who isn’t a specialist will understand the ruling when it gets handed down. Which frees me up to think about the political angle, and what I think is this: With the state economy potentially in a multi-year slump, a budget that may fall into deficit again regardless of this case or the school finance case, and a property tax system that privileges the wealthy and powerful at everyone else’s expense, the time may be ripe for a candidate to grab the Mary Beth Rogers playbook and make a case for giving our state government a complete overhaul. The case for change, if things don’t get better, will be compelling. The counter, as always, will be to blame the federal government, and to be sure that will exert a strong allure on many. But after 15 years of all-Republican control, and multiple cycles of Republican candidates promising to fix the budget and build the economy, maybe there will be room for people to consider an alternative. Just something to think about.

AG’s office upholds Abbott’s line item vetos

Of course it does.

NO

Gov. Greg Abbott was well within his powers when he vetoed more than $200 million in funds approved by the Texas Legislature this year, Texas Attorney General Ken Paxton’s office wrote in an opinion issued Monday.

[…]

The nonbinding opinion, written by First Assistant Attorney General Chip Roy, has the potential to shore up the governor’s power over the budget-writing process if Roy’s interpretation ultimately held up in a court of law.

“The provisions vetoed by the Governor each designate a specific purpose and the amount to be used therefor, and they are items of appropriations subject to the Governor’s veto” Roy wrote.

Abbott’s office praised the opinion Monday evening.

“The Attorney General’s opinion upholds the governor’s constitutional authority to limit unnecessary spending and ensure fiscal solvency,” spokesman John Wittman said.

The Budget Board is co-chaired by Lt. Gov. Dan Patrick and House Speaker Joe Straus, and its members include the chairs of the House Appropriations and Senate Finance committees who write the budget. Like Abbott, Patrick also publicly criticized the board’s argument — so much so that he wanted a special committee to review the budget board and other legislative agencies. Email traffic between his office, the board and the House speaker’s office made it clear that a top Patrick aide had seen the board document in advance and approved sending it to Hegar.

The vetoes covered funding for projects at several state agencies and higher education institutions.

The largest funding item at issue was for $132 million from the Texas Facilities Commission’s budget to build a state office building in San Antonio to replace the G.J. Sutton State Complex. State Rep. Trey Martinez Fischer, D-San Antonio, has previously urged the city of San Antonio to consider legally challenging Abbott’s veto, noting that the new building is expected to play a key role in the revitalization of the city’s East Side area.

See here, here, and here for the background, and here for the AG opinion. I’m not qualified to address the legal points of this, but it’s hard to escape the feeling that the fix was in. I said before that this probably needs to be resolved by the Supreme Court, so I hope the city of San Antonio takes up TMF’s call to sue over this. Perhaps a better question to ask, especially of Republicans, is if it’s such a good idea to expand the Governor’s powers in this way. It’s certainly open to debate whether this is a good idea or not, but shouldn’t we at least have that debate? I’m just saying. The Chron and Trail Blazers have more.

We have a messed up tax system in this state

The latest exhibit:

BagOfMoney

The volatile oil and gas industry already has prompted Texas Comptroller Glenn Hegar to reduce his state revenue estimate, but that may not be the last of the bad budget news.

A court decision potentially could cost Texas around $1.1 billion a year in franchise tax revenue, plus require four years’ worth of refunds totaling another $6 billion, according to the comptroller’s office.

“It could be enormous. Enormous,” Hegar said in an interview about the possible effect of the lawsuit brought by American Multi-Cinema, which so far has won its court battle for a bigger deduction from its franchise tax payments.

If the 3rd Court of Appeals ruling in the case stands, the two-year refund due AMC is calculated at nearly $1.2 million.

But Hegar is predicting a potentially much bigger hit for the state based on the assumption that a wide range of businesses would be quick to take advantage of the deduction awarded Missouri-based AMC. The state is asking the court for a rehearing.

The AMC lawsuit centers on the franchise-tax deduction for “cost of goods sold,” which includes such things as the raw material used to make an item.

The 3rd Court of Appeals ruled in the lawsuit in April that exhibiting a movie amounts to a “good” because it’s “perceptible to the senses,” fitting the definition of tangible personal property. Therefore, the court said, AMC can include its auditorium expenses as production costs when figuring its franchise-tax deduction.

“As a practical matter, the court’s holding could potentially treat a business exhibiting a movie as producing TPP (tangible personal property) in much the same way that a carpenter produces a chair or desk” and allow many other service providers to claim deductions, Hegar wrote to state leaders in June.

“It could be lawyers, accountants, people that mow yards. It’s just unbelievable how broad it was,” he said. It opens the door to deductions for their computers or other equipment. “You can even argue that now when somebody comes and mows your yard, you sit in the back yard and you smell that grass, and it’s real pretty. It’s perception to your senses.

“The list just doesn’t stop,” Hegar said. “It would kind of be like the kids’ Christmas list in a Santa Claus movie. It’s a real long list. It just keeps on rolling out the door.”

In a similar fashion, this ruling could also affect the state sales tax, and that could wind up offsetting some of the franchise tax loss. Or maybe not – estimates of the possible total cost of this ruling are in the $6 billion per year range. That’s getting into some real money, at a time when the state could wind up also being on the hook for a lot more money to public education. Like the public ed issue, this will ultimately be decided by the Supreme Court, but the ultimate responsibility lies with the Lege, which could clarify what the franchise tax covers or – since abolishing the franchise tax is the current fetish – replace it with something else. I wouldn’t hold out much hope.

The economy takes its toll on state revenue

Nothin’ but good times ahead, though, right?

Transportation funding could take a hit under new revenue projections by State Comptroller Glenn Hegar, who on Tuesday lowered his forecast of state tax collections by $4.6 billion in the face of a volatile oil and gas industry.

Hegar’s new forecast still leaves more than enough money to pay for the overall spending plan approved by lawmakers for the two-year budget period that began Sept. 1. Legislators left funds on the table and ended up with a bigger-than-expected balance when the state closed out the last fiscal year.

The new projection, however, affects the funding expected to be available for the high priority of addressing Texas’ congested roads. It lowers the oil and gas revenues anticipated to be funneled into transportation by $685 million.

“The reality is oil prices have continued to stay lower than what they were projected back in January,” Hegar said in an interview, adding that volatility in the industry makes forecasting difficult.

“We’ve sat down with different major companies and we’ve said, ‘OK, what’s the oil price?’ And boy, they are like a bunch of crawfish,” Hegar said. “It’s impossible to truly predict what the future holds, especially in this volatile commodity.”

In January, Hegar had anticipated the price per barrel of oil would be $64.52 in the 2016 fiscal year that started Sept. 1 and $69.27 in 2017. His Tuesday estimate lowers that to $49.48 and $56.52, respectively.

[…]

The budget approved by lawmakers this year totals about $209.4 billion in state and federal funds, of which more than $106 billion is state general-purpose spending.

In January, Hegar predicted that lawmakers would have $113 billion in state revenue available for general-purpose spending for the 2016-2017 budget period that began Sept. 1, and that tax collections would total about $97.8 billion.

On Tuesday, Hegar lowered his forecast of the revenue available for general spending to $110.4 billion and projected that tax collections would total about $93.1 billion.

The reduced projection of tax collections is separate from lawmakers’ decision to slash the state business tax, Hegar said.

It should be noted that the Lege underspent its original two-year revenue projection by about $18 billion. One could say that was prudent fiscal management, and one could say that it was excessively penurious at a time when there are many unmet needs, and one would have a claim to being right in each case. All I know is that for all the bragging our state leaders like to do about what economic geniuses we are here, a lot of it still comes down to good geological luck and the whims of the world energy market. Keep your seatbelts fastened, it’s unlikely to get any smoother in the near term.

Revisiting the Texas-Amazon sales tax deal

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

Amazon

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

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

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

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

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

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

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

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

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

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

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

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

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

Hegar punts LBB veto issue to Paxton

Duck!

NO

Describing the debate as one that “goes to the heart of separation of powers within Texas government,” Comptroller Glenn Hegar announced Wednesday that he will not authorize more than $200 million in funds approved by the Texas Legislature but vetoed by Gov. Greg Abbott as the comptroller waits for the attorney general to settle the issue.

“There are complex questions related to the governor’s vetoes, so I am seeking clarity and requesting guidance from the attorney general’s Office,” Hegar said in a statement.

[…]

For several weeks, the issue was awaiting a decision by Hegar, the state’s chief financial officer. The governor’s office strongly disagreed with the budget board, sending a 29-page memo to Hegar decrying the Legislature’s attempt to use “magic words” to block the governor’s authority.

On Wednesday, Hegar said he would not dole out the funds at issue for the time being.

“I am lapsing the funds for all items objected to by the Governor and will treat the items in question as vetoed,” Hegar said. “However, if advised otherwise, those appropriations can be made available immediately.”

[…]

Hegar’s decision comes less than a week before the start of the fiscal year on Sept 1, when the budget approved by lawmakers this year goes into effect. His 15-page request to Paxton demonstrates the complexity of the dispute. Because Abbott’s vetoes targeted budget riders rather than appropriations, Hegar seeks clarity on not only the validity of the vetoes but also what to do about the impacted agencies’ budgets if the vetoes are upheld. Should Hegar reduce each agency’s budget by the vetoed amount? And if those agencies can still get the funding, can those agencies then choose to spend some of their budgets on the projects Abbott vetoed anyway?

“This is a constitutional issue that goes to the heart of separation of powers within Texas government,” Hegar said. “I have a fiduciary duty to Texas taxpayers to ensure their hard earned dollars are spent in a manner that is consistent with the constitution of the state of Texas.”

See here and here for the background, and here for the AG opinion request. Putting aside my lack of confidence in Ken Paxton, I kind of think this one needs to be settled by the Supreme Court. The Lege can then take a crack at clarifying what the Constitution says if it wants. We’ll see how it goes.

Still reviewing the video on the line item vetoes

Any day now.

NO

With varying degrees of concern, a smattering of government offices and higher education institutions around the state are waiting to learn the fate of more than $200 million in funds that the governor might — or might not — have excised from the state budget.

The Legislative Budget Board is challenging several of Gov. Greg Abbott’s line-item vetoes, arguing in a July 21 letter to Comptroller Glenn Hegar the governor has no authority to veto some of the items because they were included in budget riders. The challenged vetoes include funds for public projects and money for research at colleges and universities.

“The Comptroller’s Office is reviewing the documents provided and working to determine next steps,” spokeswoman Lauren Willis said Thursday.

Abbott is pushing back against the challenge, even encouraging potential political donors to help.

“Unelected bureaucrats want to strip Governor Abbott of his line-item veto authority in order to grow government and increase spending and debt. Join our fight with a contribution!” his campaign wrote in an email Wednesday that linked to his donation page.

Abbott has repeatedly boasted he cut off $386,000 meant for the Southern Regional Education Board, a nonprofit that helps states develop education policies, that would have been used “to finance the promotion of Common Core,” a charge the Board has denied.

The largest item vetoed would have provided $132 million to build a new state office building in San Antonio to replace the G.J. Sutton State Complex.

“The renovation project was intended to play a major role in the revitalization of the East Side and would have been an enormous boon to the City of San Antonio,” state Rep. Trey Martinez Fischer, D-San Antonio, wrote in an email to the San Antonio mayor and city council last week. “I find Governor Abbott’s unprecedented and possibly unconstitutional actions deeply worrisome.”

Martinez Fischer encouraged the city to consider legally challenging Abbott’s veto if necessary.

See here for the background. It’s hilarious to see Abbott fight this by appealing to donors decrying his battle against “unelected” enemies – you know, like Joe Straus and Dan Patrick, who has been his typically weaselly self in all this – but that’s your modern Republican Party for you. In the end, the amount of money involved is a pittance, though the project in San Antonio sounds like a fairly big deal, but the spectacle is what it’s all about. It’s just a matter of posturing and trying to be the most macho, as that’s what they care about the most. See this Trib story and Burkablog for more.

Vetoes: You’re doing it wrong

Oops.

NO

Some of Gov. Greg Abbott’s line-item vetoes in the state budget might be invalid, the state’s Legislative Budget Board said in a 14-page letter sent Tuesday to Texas Comptroller Glenn Hegar.

The director of the LBB said the governor’s veto proclamation, listing line items he chose to excise from the new budget, doesn’t have the effect Abbott apparently intended.

“The Proclamation from June 20, 2015 seeks to veto the appropriation for a number of purposes and programs contained in House Bill 1,” LBB Director Ursula Parks wrote. “However, in nearly all instances the Proclamation does not veto the actual appropriation but rather seeks either to veto non-appropriating rider language or informational items. As it is the case that the Governor may only veto items of appropriation, for the reasons outlined below I believe that many of the items in HB 1 referenced in the Proclamation remain valid provisions.”

That letter amounts to a rebuke of sorts from the leaders of the Legislature to the new governor. The LBB is co-chaired by Lt. Gov. Dan Patrick and House Speaker Joe Straus, and its members include the chairs of the House Appropriations and Senate Finance committees who write the budget, along with six other legislative leaders from both chambers.

“In our analysis, most of the actions in the Proclamation have the effect neither of actually reducing agency or institution appropriations, nor indeed of eliminating legislative direction on the use of funds,” Parks wrote. “The Proclamation seeks to go beyond what is authorized in the Texas Constitution, is in many respects unprecedented, and is contrary to both practice and expectation since adoption of the Texas Constitution in 1876.”

Abbott’s office received the letter Tuesday afternoon and did not have an immediate comment, but argued in a memo last month that the governor’s vetoes were within the law. Lauren Willis, a spokeswoman for Hegar, said the comptroller’s office is still reviewing the LBB letter.

It says, in effect, that the governor vetoed items in the budget that he doesn’t have the power to veto, an assertion Parks sourced back to Abbott himself. In his proposed budget earlier this year, Abbott said that he wanted to expand the governor’s line-item veto authority and suggested amending the state constitution to take care of that. The Legislature made no such amendment.

“The implication in this statement supports the analysis that the Constitution currently provides limited and specific authority in this area; authority that the Proclamation seeks to extend,” Parks wrote.

The LBB letter is here, and the Abbott memo on which it was based is here. Nothing like having your own words used against you, is there? This isn’t a LePage level of failure, but it would be pretty embarrassing if it holds up. On the plus side for Abbott, his buddy Dan Patrick is there for him, even though he is also on the LBB. Intrigue! Ross Ramsay has more.

Whither the monarch butterfly

We should try to keep them from going extinct. That would be bad.

The state’s chief financial officer has approved a $300,000 grant to investigate why the number of monarch butterflies is declining in Texas, and what can be done about it.

The bottom line for Comptroller Glenn Hegar, however, is less about butterflies than it is about commerce.

The state’s interest in the study by the University of Texas at San Antonio includes the potential economic impact on Texas should the federal government decide to list the official state insect as a threatened species.

Kevin Lyons, Hegar’s press secretary, said that if the iconic butterfly is listed, “many industries important to our state’s economy could be affected, from agriculture to land development to energy production.” Texas, he said, is trying to take the lead nationally on monarch conservation efforts.

“This crucial research will help us develop voluntary best management practices to conserve the monarch butterfly while minimizing the impact on economic activity,” Hegar said in a statement announcing the grant.

The monarch study is the latest funded by the state in an effort to “gather data on species under review so it can respond appropriately to proposed listings … and find the right balance of protecting our natural resources and our state’s economy,” according to the website for the Interagency Task Force on Economic Growth and Endangered Species, which Hegar chairs.

[…]

In Texas and other states, studies weighing economic development against the cost of saving endangered species have become the latest battleground between environmental groups and big business.

“We’ve seen this with the sage grouse, wolves, freshwater mussels and other species,” said Andrew Rosenberg, director of the Center for Science and Democracy at the Union of Concerned Scientists in Cambridge, Mass. “The argument is that if we have to protect anything, the world will end, when actually it won’t. There is a public benefit to protecting butterflies and other species, but it’s hard to monetize. … Studying the economics of a listing is a very clever way of saying the cost will be high – something most people can understand – when that doesn’t measure the cost of losing a species.”

In Texas, officials said the monarch study will evaluate the abundance and distribution of the otherwise unremarkable nuisance plant known as milkweed, the butterfly’s primary food source.

If the butterfly is listed by the U.S. Fish and Wildlife Service as threatened, officials fear much of the state could be affected because Texas is a major flyway for the annual migration of the monarch between Mexico and Canada each year.

Environmental groups seeking to have the monarch listed note that the butterfly’s population fell from about 1 billion in the mid-1990s to just 35 million last winter, the lowest number ever logged.

“There’s been an 80 percent decline in the population, a precipitous decline,” said Lori Ann Burd, the environmental health director for the Arizona-based Center for Biological Diversity, one of three groups that filed to have the monarch listed. “They can’t survive in smaller numbers. We’re really at the precipice with the monarch.”

That’s actually a 96.5% decline, which sounds pretty bad to me. Butterflies have an important role to play in pollinization, so to say the least there would be a significant cost if they were to become endangered or worse. Let’s for once please not be penny-wise and pound-foolish here.

Budget deal

What Christopher Hooks says.

BagOfMoney

Texans, you can put down your pitchforks and douse your torches: The edibles you’ve squirreled away in your emergency bunkers can be safely consumed. Life can begin anew. The tax cut war between House and Senate has been resolved, which means that barring a catastrophic screw-up—say, Comptroller Glenn Hegar realizing he misplaced a decimal point in the revenue estimate—we won’t need that special session on budget issues that legislative observers and hack journalists have worried you all about so much.

Is the package—a $3.8 billion dollar bundle of franchise and property tax cuts—any good? Well, that depends on your point of view. Most everyone, save some Democrats and probably a few right-wing senators, is about to tell you, loudly, that the budget deal is very, very good. There’s a great deal of face-saving to be done. This is the point of the session at which former enemies congratulate each other for the finest and most noble works of government since Periclean Athens: Patrick himself posited that this might have been the best legislative session in the state’s history.

The business lobby did pretty well in the tax deal, but the picture is a bit more complicated for most of the other players. The widespread perception outside the Capitol will be that Patrick “won” by getting some property tax cuts past the House. Meanwhile, Texans are getting a raw deal—with too small a tax break to make a real difference for most, and less money coming down the pike now and in the future for basic services like education.

[…]

Patrick wanted and needed a signature victory for this session, his first. After all this furor, Patrick is likely to win for his constituents a smaller-than-expected tax break that most Texas homeowners—the people whom Patrick is expecting to give him credit—won’t even notice, because they’ll be swallowed up by rising rates and home values. Average homeowners might pay about $120 less in property taxes than they might have otherwise, but how many will notice or care as their taxes continue to go up? The only thing that can bend the property tax curve downward is a substantive reorganization of the state’s overall tax structure. Anything else is a band-aid, and not a long-lasting one at that.

It’s not really the stuff that launches political careers skyward. Some of Patrick’s supporters have said the Legislature can rededicate itself to real property tax reform next session, but that seems doubtful. The economy will likely have cooled, and the state may face a budget hole thanks to the school finance lawsuit and other looming budget issues. This session may have been the last, best opportunity to do a big tax cut deal.

At least the teabaggers aren’t happy, though I suppose that’s the default state for them. The best thing I can say about this session is that it’s almost over, and at least a few of the awful bills that could have passed didn’t.

Reforming property tax appraisal protests

From the inbox:

Sen. Rodney Ellis

Sen. Rodney Ellis

Senator Rodney Ellis (D-Houston) releases the following statement regarding Senate Bill 1084, his bill to create a fairer property tax appraisal system in Texas:

“Homeowners and local communities across Texas are shouldering an unfair burden when large commercial property owners manipulate the property tax system to drive down their property values and property tax bills,” said Senator Ellis. “While most homeowners pay taxes on the real value of their property, many large commercial property owners routinely use appeals and lawsuits to avoid paying their fair share. When large commercial property owners shirk their responsibility, ordinary homeowners pay more property taxes to make up the difference. That’s not fair, it’s bad public policy, and it needs to change.”

SB 1084 closes the loophole related to how owners of business properties worth more than $1 million present their cases in court. No longer can lawyers for these property owners game the system, “cherry-pick” properties, or make adjustments that do not follow generally accepted appraisal techniques just to drive down their appraised value. Instead, they must select a reasonable and representative sample of comparable properties located within the county and based on similarities in location, square footage, age, and other conditions.

Relief can only be granted by a court if the appraisal ratio of the property exceeds the median appraised level of the comparable properties by 10 percent.

The bill also requires the Comptroller to adopt rules that establish standards for the equal and uniform appraisal of industrial, petrochemical refining and processing, and utility properties. Lastly, the bill allows courts to award attorney’s fees to appraisal districts that establish that the property in litigation was appraised in an equal and uniform manner.

The Legislative Budget Board examined the issue in the agency’s January 2015 Texas State Government Effectiveness and Efficiency Report. SB 1084 is based on LBB recommendations, as well as numerous meetings with homeowners, appraisers, counties, and cities around the state.

Photos from today’s press conference can be viewed and downloaded here. Video of the press conference can be viewed here.

As you know, this subject has been a minor obsession of mine lately; see here and here for examples. The game is rigged, with a small number of high end properties essentially dictating what their taxes are, while appraisal districts and the vast majority of homeowners are left holding the bag. I don’t know what the odds are of this bill – the Houston Business Journal reports that there are several similar bills out there, including a couple by Republican Senators, though I can’t say how any of them compare to SB1084 – but any step in the direction of fairness and equity is long overdue. Better Texas Blog has more.

Hegar’s first revenue estimate is in

We’ll see how it holds up.

BagOfMoney

Amid concerns that tumbling oil prices could push the Texas economy into a recession, Comptroller Glenn Hegar offered a cautiously optimistic tone on the future of the Texas economy Monday, announcing that lawmakers will have $113 billion to haggle over in crafting its next two-year budget.

“Our projections are based on expectations of a moderate expansion in the Texas economy and reflect uncertainties in oil prices and the possibilities of a slowing global economy,” Hegar said.

The biennial revenue estimate sets a limit on the state’s general fund, the portion of the budget that lawmakers have the most control over. The general fund typically makes up nearly half of the state’s total budget.

Hegar predicted that Texas will take in $110.4 billion in revenue from taxes, fees and other income during the 2015-16 biennium. Hegar’s $113 billion projection also includes money expected to come from leftover funds in the current biennium. With the addition of federal funds and other revenue sources, lawmakers should have a total of $220.9 billion for the 2016-17 budget.

The state’s Rainy Day Fund is also projected to grow to $11.1 billion by the end of the next biennium if lawmakers choose not to use any money in the fund.

The state will end the current biennium, which ends Aug. 31, with $7.5 billion in leftover funds, Hegar said. That surplus will be split three ways between general revenue, the Rainy Day Fund and the state highway fund.

Two years ago, Comptroller Susan Combs estimated that the Legislature would have $208 billion for its budget, including $101.4 billion in general revenue and $11.8 billion in the Rainy Day Fund. Lawmakers ultimately passed a $200 billion budget.

[…]

The liberal Center for Public Policy Priorities has estimated that lawmakers will need to increase general spending from the current $95 billion to $101 billion to maintain the state’s current level of services. More than half of that $6 billion spike comes from Health and Human Services, where an increase in medical costs and Medicaid cases in particular has grown.

Don’t expect that to happen. Indeed, if Dan Patrick has his way, it will never happen. The good news is that this is a reasonably sunny estimate, meaning The Lege will be able to do at least some of the things it wants to do without too much voodoo, assuming it doesn’t impose some ridiculously lowball artificial limits on itself, which it must be noted is always a possibility. But just because there’s revenue available doesn’t mean it isn’t spoken for, or at least in demand. The Observer explains.

On one hand, it’s not a crisis budget, and it’s not one that will require legislators to make cuts (though they might anyway.) The office of Lt. Gov.-elect Dan Patrick released a brief statement that characterized the comptroller’s estimate as a green light for his agenda, which has included the promise of significant tax cuts: It provided “adequate revenue to secure our border, provide property and business tax relief while focusing on education and infrastructure. I intend to accomplish these goals.”

On the other, the “surplus” is a lot less than it looks at first glance, in part because the amount of budget trickery the Legislature has employed over the years. Gov.-elect Greg Abbott and Patrick have called for ending road funding diversions and making the Texas Department of Transportation whole again. But about $3 billion in additional revenue is needed to end diversions, and TxDOT says it needs an additional $5 billion just to keep the system at the current level of congestion—that is, without making any forward progress.

In education, the state has not yet gotten back to the level of funding that preceded 2011’s gargantuan cuts to public ed—a portion was restored in 2013, but a significant amount of money is needed even beyond what was the case in 2011, thanks to population growth. And it’s unclear how proposed voucher programs would affect the system’s overall cost.

And then there’s tax cuts. The truly sweeping tax overhauls that were talked about during the election, like substituting property taxes for increased sales taxes, seem to have fallen off the radar for now. In the past, GOP lawmakers of all stripes have passed minor tax bills and sold them to the voters as massive ones. That may be Patrick’s play, but even modest tax reductions will shave the “surplus” down in a hurry.

The question as always is what gets prioritized, and what gets left out. I believe this is an accurate summary:

Budget expert Dale Craymer, president of the business-based Texas Taxpayers and Research Association, pointed out that lawmakers in writing the next budget will have the cushion of unspent cash and “a pretty solid non-oil-and-gas base to our economy.”

Still, he said, the “three great wants” of tax relief, transportation and public education are big-ticket items.

“The state is still in a good position to deal with maybe one of these,” Craymer said, “but certainly not all three.”

I’d say that’s the priority order for the Republicans. What happens if the Supreme Court forces them to deal with public education, especially if they don’t leave themselves any room to do so? Your guess is as good as mine.

Hegar officially resigns his Senate seat

As expected.

Glenn Hegar

State Sen. Glenn Hegar, the Katy Republican who will become state comptroller in January, notified Gov. Rick Perry on Friday that he will resign his Senate Seat as of Dec. 5, paving the way for the governor to call a special election.

Hegar won 58.4 percent of the vote on Election Day to succeed Comptroller Susan Combs. He was widely expected to resign from his seat early to allow for a special election to take place sooner, allowing his replacement to join the Legislature during next year’s legislative session. If not for his move to comptroller, Hegar’s Senate term would have lasted until 2016.

“I am extremely honored, humbled, and grateful to the citizens of Texas who have elected me as their next comptroller, and I look forward to serving the taxpayers of this great state,” Hegar wrote. “I extend my deep and profound gratitude to the constituents of Senate District 18 for allowing me to be their voice in the Texas Senate for the last 8 years.”

The possibility of a special election to replace Hegar has been the subject of speculation for more than a year, when it became clear Hegar planned to run for comptroller. That strategizing among those interested in replacing him intensified in March, when he won the Republican primary and became the immediate front-runner in the general election.

See here for the background. To no one’s surprise, Rick Perry has already called a special election to fill Hegar’s seat for December 6, since it just won’t do to leave a Republican seat open any longer than necessary. Did Perry also schedule a special election to replace Mike Villarreal in HD123? Don’t be silly. He’ll get to that when he’s good and ready.