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NFIB

Sometimes, bad bills do die

The calendar giveth, and the calendar taketh away.

One of the the biggest priorities for Texas Republicans this session appears to be on the verge of legislative death. A series of bills that would broadly prohibit local governments from regulating employee benefits in the private sector died quietly in the House this week.

The business lobby has long been used to getting what it wants from the Republican-controlled Legislature, but now it’s waving the white flag. “It is dead. … The discussion got completely derailed,” lamented Annie Spilman, lobbyist for the Texas chapter of the National Federation of Independent Business, in an interview with the Observer. The group is one of the lead advocates for the preemption bills. “They really haven’t left us with any hope at all.”

Senate Bill 15 started as a straightforward measure to stomp out a broad swath of emerging local labor policies, like mandatory paid sick leave, in cities including Austin, San Antonio and Dallas. But it ended in the political gutter after Lieutenant Governor Dan Patrick insisted on removing language that explicitly protected local nondiscrimination ordinances (NDOs) for LGBTQ Texans in several cities. Patrick’s move was reportedly made at the behest of Texas Values, the state’s leading social conservative pressure group.

With the high-profile failure of Patrick’s 2017 bathroom bill and now the fight over NDOs, Texas businesses are growing increasingly furious that the lieutenant governor appears unable to stop poisoning their political agenda with right-wing social warfare.

Spilman said she sees it as another example of Patrick putting the priorities of the religious right before businesses. “I don’t think the lieutenant governor has listened to the business community in quite a while,” she said. “Our No. 1 priority was this preemption legislation to stop cities from overreaching, and despite our efforts to compromise with everyone involved, at the end of the day we were ignored and set aside.”

[…]

The House calendars committee finalized the House’s remaining floor agenda Sunday evening, meaning anything that wasn’t placed on the calendar is all but certain to be dead. The preemption bills were not on the list.

It’s suspected that part of the reason the bills died is that Patrick refused to consider any sort of NDO protection language in a compromise bill, according to conversations with multiple sources. Patrick’s office did not respond to requests for comment.

“I think the lieutenant governor was holding a firm line against that,” state Representative Eddie Rodriguez, D-Austin, told the Observer. But Rodriguez also attributes the preemption bills’ procedural defeat to Democrats’ willingness to hold together. “One of the calculations was about is the juice worth the squeeze. What would happen on the floor? We Democrats were holding a firm line of opposition … and [willing to] do whatever to kill them.”

See here, here, and here for some background. The NFIB can go pound sand as far as I’m concerned; they’re a bunch of ideologues who deserve to taste some bitter defeat. The best thing they can do for the state of Texas is get into a fanatical pissing contest with Dan Patrick. They’re now lobbying Greg Abbott for a special session, which is something I’m a little worried about anyway, if some other Republican priorities like the vote suppression bill don’t get passes. I can’t control that, so I’m just going to enjoy this moment, and you should too.

Why do business groups want to force sick people to go to work?

This is bad for society.

The city’s new ordinance mandating that most private businesses in Austin provide paid sick leave to employees — heralded by supporters as the most progressive labor policy in Texas when it won approval two months ago — is facing a legal challenge to prevent it from ever taking effect.

Proponents of Austin’s sick-leave rules, which are slated to begin Oct. 1, already faced the likelihood that some conservative state lawmakers would try to supersede the city’s authority by filing bills to overturn the new ordinance when the Legislature convenes again in January.

But a coalition of business organizations, including the Texas Association of Business and the National Federation of Independent Business, are aiming to render the rules toothless regardless. The group — with legal representation from the Texas Public Policy Foundation, a conservative think tank — filed a lawsuit in Travis County state District Court on Tuesday, seeking temporary and permanent injunctions against city enforcement.

“We needed to move quickly and stop any bleeding that might occur from this ordinance,” said Jeff Moseley, chief executive of the Texas Association of Business, which is the state’s most powerful business lobbying group. “It’s overreaching (by the city government), and it’s hard-hitting to small employers.”

Work Strong Austin, an activist group that supported the ordinance, called the lawsuit frivolous and said the business groups involved in it are “seeking to undermine the democratic process and take away this basic human right and public health protection right from 223,000 working families” in the city.

The ordinance requires that most private Austin employers give each worker up to 64 hours — or eight full eight-hour workdays — of paid sick leave per year. Small businesses with 15 or fewer employees are required to meet a lower cap of 48 hours of paid sick leave per year, or six workdays.

I’m going to let Ed Sills, in his email newsletter from Wednesday, break this one down:

The public policy rationales are solid as a rock. The public health argument alone should resonate for everyone. Who wants flu victims preparing food at a restaurant because they can’t afford to sit out an illness? Who wants to sit next to someone on a bus if they have a cold?

The arguments in the lawsuit are frivolous and fatuous. TPPF is saying the ordinance violates the state’s prohibition on local minimum wage increases because paid sick leave is a form of a wage increase. That is utter nonsense.

If a benefit like paid sick leave counted toward fulfilling the minimum wage, employers right and left would pay less than $7.25 an hour and count the value of benefits they already offer toward the wage floor. Employers know they would be laughed out of court and roasted in the court of public opinion if they tried that.

The other “big idea” from TPPF is something called “substantive due process,” and therein lies a danger. Substantive due process reasoning was used by some judges in the first few decades of the 20th Century to strike down minimum wage, maximum hour and other laws. Unlike procedural due process, which guarantees fair trials and other safeguards that enable people in our legal system to make their cases, “substantive due process” was historically a card for employers to play when they didn’t like laws enacted by majorities to protect working people.

The U.S. Supreme Court occasionally recognized substantive due process, and a few examples are instructive. In 1905, the high court overturned a New York law limiting bakery employees to 60 hour a week. In 1923, the high court struck down minimum-wage laws using substantive due process analysis. In 1925, the court struck down laws banning “yellow-dog contracts” that required employees to agree not to join a labor union (this was in the pre-National Labor Relations Act days).

A changing majority on the Supreme Court during the Franklin Roosevelt era eventually flushed away substantive due process. By 1955, a unanimous court declared in Williamson v. Lee Optical of Oklahoma, “The day is gone when this Court uses the Due Process Clause of the Fourteenth Amendment to strike down state laws, regulatory of business and industrial conditions, because they may be unwise, improvident, or out of harmony with a particular school of thought.” The law upheld in the case was a state requirement that eyeglasses be fitted and duplicated by licensed optometrists or ophthalmologists.

The law is on the side of the paid sick leave ordinance, but the infection of the law by politics may be a different story. I would not bet my house, my car or even my fidget spinner that the Texas Supreme Court would uphold a paid sick leave ordinance. The high civil court is a haven for the business community in Texas. Moreover, Gov. Greg Abbott and elements of the Texas Legislature will take a shot at the ordinance – and potentially at ordinances that voters in San Antonio and Dallas might be considering in November – in the next legislative session.

One argument the business community will make to overturn Austin’s ordinance, and to preempt other cities from following suit, is that it’s just too hard on businesses that operate statewide to comply with different rules in different cities. (As if the more-than-statewide businesses don’t already have to do that outside Texas.) But fine, if that’s the problem, then pass a sick leave law at the state level, or even better in Congress. Sick people should be home getting better and not infecting everyone around them, so take away the economic incentive for them to drag their contagious selves to work. I do not understand the argument against that. KUT and Fox 7 Austin have more.

The revenue estimate is in

And under normal circumstances it would be very good news.

Texas Comptroller Susan Combs, laying out the parameters for state spending on the eve of the legislative session, said Monday that the rebounding Texas economy gives lawmakers $8.8 billion unallocated in state coffers for this budget period and an improving picture for the next two years.

The extra money has been eagerly anticipated by state lawmakers who two years ago slashed spending in the face of a budget shortfall.

In the 2014-2015 budget period, the state’s general revenue from taxes, fees and other income is estimated to reach $96.2 billion, with $3.6 billion earmarked for future transfers to the rainy day fund, Combs said.

The total $101.4 billion available for general-purpose spending through 2015 – taking into account the predicted $8.8 billion balance and future revenues – is 12.4 percent greater than the corresponding amount of funds available for the current budget period, according to the comptroller’s office.

To clarify what this means, Comptroller Combs is forecasting that the state will generate $96.2 billion in revenue for the next biennium. Of that, $3.6 billion is earmarked for the Rainy Day Fund, which leaves $92.6 billion. However, Combs is also saying that her forecast from two years ago was too low by $8.8 billion. You may recall that two years ago she predicted there would be $76.5 billion in revenue for 2012-2013, with $4.3 billion needed to close a shortfall from the 2009 budget; the Rainy Day Fund was used to cover most of that shortfall. In actuality, there turned out to be $85.3 billion. Oops!

You may wonder why Combs was so far off in her estimate. The DMN tries to be sympathetic.

Nobody is blaming Combs, but all recognize a two-year revenue forecast is not, by any means, an exact science.

“You’re always wrong,” said Billy Hamilton, revenue estimator when Bob Bullock was comptroller. “It’s just a matter of by how much.”

The Texas Constitution requires a balanced budget, so lawmakers can plan to spend only as much as they’re projected to bring in. A large portion of revenue comes from state taxes, which until recently had been on a relatively stable 40-year pattern, said fellow number cruncher and retired fiscal analyst Stuart Greenfield.

But in the last four years, the state’s economy has been especially volatile. Greenfield said tax collections have declined four times since the new millennium, most recently in 2010, but has been higher than average the last couple of years.

Hamilton, now the interim chief financial officer for Capital Metro, Austin’s public transportation provider, estimates Combs was off by $6 billion to $8 billion in the tax revenue estimate for the current biennium. Greenfield says it’s worse, predicting tax revenue will be closer to $11.5 billion more than what Combs suggested.

Officials from the comptroller’s office declined to weigh in on Greenfield or Hamilton’s forecast, but spokesman R.J. DeSilva said that with growth in the oil and gas industry and car buying, the revenue for fiscal 2012 is up $3.7 billion from her forecast, and lawmakers will have the most up-to-date projections when they convene.

Greenfield said tax collections have held at 10 percent since the beginning of fiscal 2011, peaking in October 2011 at close to 16 percent. Hamilton says the result is “we’ll be swimming in money.”

“It’s going to be a big number because the sales taxes are going like gangbusters and performing at a rate that nobody in their right mind would predict,” Hamilton said.

This is all well and good, but the bottom line of Combs’ misfire is that the Lege cut billions of dollars from the budget that ultimately didn’t need to be cut. We may be able to do something good with this extra money now, but we can’t go back two years and un-fire all those people who lost their jobs as a result of the Republicans’ budgetary chainsaw massacre. We can’t go back and un-shortchange all the school districts and students that took those cuts right where it hurts. It’s all so much bloodstained water beneath the bridge.

Given that we can’t un-screw the past, the best thing we can do is work to make things better going forward. This is what many people, such as State Rep. Mike Villarreal, State Sen. Jose Rodriguez, and the Texas AFT, both of whom are calling for the restoration of the $5.4 billion that was cut from public education last session, are doing. The problem, and the danger, is that some people are saying that what this means is that we have too much money.

Can Texas afford to eliminate its state business tax?

As the federal tax bite grows, there is a nascent movement at the Texas Legislature to phase out the tax, commonly called the margins tax, without replacing it.

Business leaders and some conservative lawmakers say the tax, which taxes gross receipts as opposed to profits, is complicated and not applied evenly. Other critics of the tax say dropping it would make the state’s business climate even more attractive.

At first blush, eliminating the tax without a replacement might seem improbable. The tax raised $4.5 billion in 2012 and accounted for 10.3 percent of the state’s total taxes, according to the comptroller’s office.

Budget writers are already warning that any “surplus” from the rebounding economy must be used to restore $11 billion in cuts to public education and other programs from the 2011 legislative session and to pay for the accounting gimmicks lawmakers used to sidestep more cuts and tax increases. And the courts are hearing another constitutional challenge to the school finance system — similar to the one that prompted the 2006 creation of the margins tax — that could make more demands on the state pocketbook.

State leaders are also talking about weaning themselves from $5 billion of dedicated taxes and fees diverted from their intended purposes over the years to help balance the state budget.

Finally, more business leaders are expressing concerns about the need to invest in education, workers’ training, water, transportation and other long-term needs essential for a good business climate.

Despite those hurdles, Will Newton, executive director of the Texas chapter of the National Federation of Independent Business, or NFIB, argued that public services can’t expand without a growing economy.

“We’re starting the debate in the wrong way,” Newton said. “We need to ‘invest’ in the private sector to grow (state) revenue.”

Let’s be clear here and state that the NFIB, which was and continues to be a rabid opponent of the Affordable Care Act – they were, in fact the named plaintiff in the lawsuit that sought to declare the ACA unconstitutional – is acting solely in its own interest. They’re seeking a tax cut, as we all do, and hoping that we’ll forget that the margins tax, however flawed and kludgey it may be – was designed to help pay for a one-third cut in property taxes. How do they expect us to fund that massive expenditure now? By assuming, in the words of Molly Ivins, that it’s nothin’ but good times ahead. I mean, sure, we’ve had two ginormous revenue shortfalls in the last decade, but seriously, who expects that to ever happen again? No amount of empty blather about “investing” should distract from this point.

One more point: As the Trib notes, even with this healthy revenue forecast, we’re still behind where we ought to be.

“$108 billion is what it takes to actually undo the last session and get us back to where we used to be,” said Eva DeLuna Castro, senior budget analyst for the Center for Public Policy Priorities, a left-leaning Austin-based think tank.

Early in the session, lawmakers are expected to commit several billion dollars to paying off bills that were purposely left unpaid at the conclusion of the 2011 session, including nearly $5 billion for Medicaid. That leaves the actual size of the surplus unclear.

“A lot of that gets sucked up right away just paying for the last session,” Castro said.

One hopes that the nearly-as-fat-as-it’s-allowed-to-be Rainy Day Fund would be tapped for that, since that’s what it’s there for, but the odds that the votes are there for that are basically nil. But this is the way we need to drive the discussion. We’re on more favorable turf now, let’s take advantage of it. Trail Blazers, the CPPP, and TM Daily Post have more, and you can see the official estimate here.