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rainy day fund

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.)

HISD faces major changes

This is a very big story, but a key component to it is not discussed here.

Houston ISD officials said Saturday the district will need to cut about $200 million from its 2018-19 budget to bring spending in line with an increasingly gloomy financial outlook.

In an equally momentous move, Houston ISD officials also proposed far-reaching changes to how the district operates its magnet and school choice systems, some of the boldest moves to date by second-year Superintendent Richard Carranza.

Still reeling from Hurricane Harvey, Houston Independent School District officials revealed at a board meeting Saturday that the district is facing a double whammy: A multimillion-dollar, state-mandated “recapture” payment requiring districts with high property values to “share the wealth,” and an expected drop in enrollment and tax revenue because of the devastating storm, which severely damaged schools and delayed the start of classes by two weeks.

The proposed cuts come at an inopportune time, with the district battling to stave off a potential state takeover because of 10 chronically under-performing schools.

Although the measures outlined Saturday are preliminary and could change significantly before HISD’s board votes on them, officials acknowledged that the district is entering an uncertain time.

“It’s a sea change for HISD,” said Rene Barajas, the district’s chief financial officer. “But at the end of the day, from a budgetary perspective, we’re still going to get the job done. It’s just going to be harder.”

There’s a lot more and there’s too much to adequately summarize, so go read the rest. We know about the recapture payments, which even though they have been reduced due to Harvey are still significant. We know HISD has been talking about revamping its magnet programs for some time, and there’s a cost-savings component to that as well. We know that property values and enrollment have been affected by Harvey, and we know how daily attendance determines the amount of money the district gets from the state. So none of this is a surprise, though having to deal with all of it at once is a big shock.

What’s missing from this article is any mention of what the state could and should do to help ameliorate this blow. I think everyone agrees that if a school building is destroyed by a catastrophic weather event, it should be rebuilt via a combination of funding sources, mostly private insurance and emergency allocations from the state. Why shouldn’t that also apply to the secondary effects of that same catastrophe? It’s not HISD’s fault that its revenues, both from taxes and from state appropriations, will be down. There needs to be a mechanism to at least soften, if not remove, this burden. Bear in mind that one reason why the drop in property values is such a hit is because the state has shoved more and more of the responsibility for school finance on local districts. If Harvey had happened even a decade ago, the appraisal loss would still be felt, but not by as much. That’s not HISD’s doing, it’s the Legislature’s and the Governor’s and the Lieutenant Governor’s, all with the approval of the Supreme Court.

But what can be done can be undone. With little to no pain on its part, the Lege could tap into the Rainy Day Fund to get HISD past the worst of this, or it could recognize that the nearly one billion it appropriated last session for “border security” is little more than macho posturing, an endless boondoggle for a handful of sheriffs, and an sharp increase in traffic citations, and redirect some of that money to HISD and any other district in similar straits. There are other things the Lege could do, but all of it starts with the basic principle that the Lege should do something to help out here. When are we going to talk about that?

The Harvey effect on the state budget

You know what the solution to this is, right?

Senate leaders warned Tuesday that Hurricane Harvey could put a billion-dollar hole in Texas’ budget, an ever-growing number that could affect how much money is available for other state programs.

Only $20 million remains in the state disaster-assistance fund, Senate Finance Committee Chair Jane Nelson said at a public hearing Tuesday on the status of hurricane recovery efforts.

“Our state costs are escalating,” said Nelson, R-Flower Mound. “We need to be judicious. … If we, God forbid, had another disaster in the next 18 months, where would we get the money?”

The Legislature will not convene in a regular session until January 2019.

The state has spent more than $1.7 billion so far in state funds, along with billions in federal assistance, according to updated numbers provided to the committee on Tuesday. Legislative Budget Board officials said as much as $2 billion in additional state funds may be needed in 2019 to cover hurricane-related school costs.

[…]

[Land Commissioner George P.] Bush said that $1 billion in immediate state funding would allow temporary housing assistance to be speeded up. Those funds could be fully reimbursed later by the federal government, he said.

State Sen. Royce West, D-Dallas, suggested those funds could be borrowed quickly from the state’s Rainy Day Fund – a savings account – to expedite the housing recovery for thousands of Texans, some of whom are living in tents.

“We’d need to have a special session” to approve that borrowing, West said, drawing silence from other committee members.

Yes, that is what the Rainy Day fund is for. Not specifically for disaster recovery – that was the bogus justification invented by Rick Perry in 2011 as an excuse for not alleviating cuts to the public education budget – but to help cover budget shortfalls in bad times. The choice is pretty simple, either we draw money from the Rainy Day fund to help the thousands of people who remain displaced by Harvey, or we decide they’re not worth our time and compassion. No wonder Sen. West got no response when he brought it up.

What the Harvey needs are from the state

It’s not just about recovery. The long term needs, including mitigation against future events like Harvey, is where the real money will need to be spent.

More than one month after Harvey’s deluge hit, local officials, including Mayor Sylvester Turner and Harris County Judge Ed Emmett, testified at a state House of Representatives Appropriations Committee hearing that more than $370 million worth of debris removal and repair work on more than 50 government buildings has strained local coffers, necessitating quick aid and reimbursement from the federal or state government.

They also emphasized what likely will greatly exceed the costs of immediate recovery: how to prepare for the next storm. That could include billions of dollars for large-scale buyouts, a third reservoir on Houston’s west side, a reservoir on the Brazos River in Fort Bend County and hundreds of millions of dollars to jump start bayou improvement projects that have slowed in recent years without federal funding.

“There’s going to come a time where we have taken all the money from the feds, we have gotten all the money we’re going to get from the state, and we’re going to have to decide: What kind of community do we want to be?” Emmett said at the hearing.

Harvey’s record-smashing rainfall and floods damaged more than 136,000 homes and other buildings in Harris County and killed nearly 80 people across the state.

The Texas House Appropriations Committee and Urban Affairs Committee met at the University of Houston on Monday to understand public costs and where reimbursements from the Federal Emergency Management Agency, U.S. Army Corps of Engineers and other U.S. Congressional appropriations were being directed in the storm’s wake.

Emmett, Turner and Fort Bend County officials testified, as did Texas A&M University Chancellor John Sharp, who is coordinating the state’s recovery efforts. The heads of several other state agencies also testified.

The hearing came just three days after Gov. Greg Abbott visited Houston and presented Turner with a check for $50 million. The check almost immediately was spoken for, Turner said, mostly for debris removal and insurance costs.

Appropriations Chairman John Zerwas, R-Houston, said Harvey, in theory, qualified as the “perfect reason” to use the state’s so-called “Rainy Day Fund,” a savings account comprised of billions in excess oil and gas taxes.

Abbott had indicated as much last week but said he would tap existing state emergency funds and reimburse them from the Rainy Day Fund when the Legislature next meets in 2019.

“Before the Legislature acts, we need to ensure what the expenses are that the state is responsible for,” Zerwas said.

Yes, that would be nice to know. There were other hearings this week as well.

The first order of business, Harris County Judge Ed Emmett told the House Natural Resources Committee, needs to be a flood control plan for the entire state — and the Gulf Coast in particular.

The Texas Water Development Board is already in the process of crafting a statewide flood plan, with the help of $600,000 state lawmakers gave them earlier this year. Lawmakers haven’t yet promised to back any of the projects that end up in the plan.

Emmett, a Republican and former state lawmaker, said Harris County intends to put together its own flood control plan in the meantime, add up the costs of its recommended projects, then see how much the federal and state government want to contribute. He said he’ll be the first to push for a local bond package to make up the difference.

Property taxes are “the most miserable tax created,” Emmett said. “But it’s what we’ve been given to work with so we don’t have a choice.”

Emmett said Harris County’s plan likely will include another major dam to catch runoff during storms and relieve pressure on two existing reservoirs, Addicks and Barker. Those reservoirs, which filled to historic levels during Harvey, flooded thousands of homes that may not have been inundated with additional protections.

Emmett and the city of Houston’s “flood czar,” Stephen Costello, suggested the state tap its savings account, known as the Rainy Day Fund, to pay for such a project, estimated to cost at least $300 million. (Gov. Greg Abbott has said lawmakers can tap that fund in 2019 or sooner if they need it for Harvey relief; so far, he has written Houston a $50 million out of a state disaster relief fund.)

Costello said Texas should also consider creating a multi-billion dollar fund to support flood control projects similar to one the state’s voters approved in 2013 for water supply projects.

So far all of the talk is constructive, and even Dan Patrick is doing his part. The real test will be whether we follow up on any of this when the Lege reconvenes. Also, while this doesn’t directly answer my question about the SWIFT fund, but it does clearly suggest that it’s not intended for this kind of infrastructure. Which makes sense, given when it was created, but I had wondered if there was some flexibility built in. I would hope there would be plenty of support for a similar fund for flood mitigation.

Houston gets state recovery funds, property tax rate hike shelved

Was that so hard? I ask you.

Mayor Sylvester Turner

Mayor Sylvester Turner on Friday said he would withdraw a proposed property tax rate hike after Gov. Greg Abbott handed him a check for $50 million to help fund the city’s recovery from Hurricane Harvey.

The exchange came as the mayor and governor held a joint City Hall news conference, a sharp departure from the last several days when the pair had traded letters and criticism over each other’s Harvey response.

Turner had tried to pin his proposed tax hike on the state’s unwillingness to tap its $10 billion savings account, while state officials viewed the city as seeking a blank check rather than targeting specific emergency funds in the state budget.

Ultimately, Abbott said he would draw upon a disaster fund within the discretion of his office, producing the $50 million amount Turner had intended to collect from residents’ property taxes.

See here and here for the background. The Trib adds some details.

The money, which comes from the $100 million disaster relief fund appropriated to Abbott’s office during the last legislative session, will go toward immediate relief needs such as reconstruction, Abbott and Turner said at a joint news conference in Houston. Abbott said long-term recovery and preventive measures would be funded by the federal government and the state’s $10 billion savings account, known as the Rainy Day Fund, but not until exact costs for recovery are known.

“The time to use the thrust of the Rainy Day Fund is when the expenses are known,” Abbott said. “So the members of the Legislature know how best to use the Rainy Day Fund.”

[…]

During the Friday news conference, Abbott said there “is a possibility for a special session” to allocate funds for recovery and prevention once those costs are better known.

“Now that the hurricane winds are calm … it’s time that we begin the process of rebuilding Texas, and that’s a tall task,” Abbott said. “This is what the state of Texas is for … We’re proud to be here wearing the same jersey working for the same team.”

Still, Abbott said the $10 billion Rainy Day Fund would only be able to cover a “fraction of the costs” of longer term recovery and prevention. Turner added that he and Abbott have discussed future preventative measures such as a third reservoir for flood waters, which could cost up to $400 million, and expanding bayous, which could cost $311 million. The two said they have also discussed a “coastal spine” — a protective seawall and floodgate system — along the coast, which Turner estimated to be a roughly $12 billion project.

So the money ultimately came from a funding source Abbott controlled, not the Rainy Day Fund, though as noted there may be some use of that later on. I don’t care what the provenance of the money is, but I do wonder why this was handled so clumsily by Abbott. Was this always what he intended to do but just never could explain it lucidly, or was this where he ended up after realizing how ridiculous he looked? I have no idea. That said, one must give credit where it is due, so kudos to Abbott for eventually figuring this out and doing the right thing. Even bigger kudos to Mayor Turner for getting the job done. This is what we elected him for.

Abbott says he wants a list from Turner

A list of funding priorities, he says. Because he’s passive like that.

Answering Houston’s latest complaints over funding for Hurricane Harvey recovery efforts, Gov. Greg Abbott on Wednesday told Mayor Sylvester Turner the state can step up with more money as soon as the city gets a list of its top needs to the state.

Let’s meet quickly, Abbott said, as the deadline for an initial wave of federal funding is Friday.

After some verbal back-and-forth between the two leaders in recent days over funding for debris removal among other costs, Abbott wrote a four-page letter to Turner late Tuesday outlining seven different federal programs under which Houston will qualify for additional hurricane relief — from small-business disaster loans to special unemployment assistance to funding to help with food and housing needs.

[…]

“The Economic Stabilization Fund (the official name of the Rainy Day Fund) is a limited resource, and so it is imperative we understand the statewide financial situation before draining the fund only to learn of more financial obligations,” Abbott said in his letter.

“As of now it would be impossible to determine the highest and best use of ESF, because we do not yet know the extent of the losses . . . Texas should first use the full array of state financial resources and federal resources already available already available to us to respond to our current needs.

“Those tools should sufficient to respond to our needs, and Texans’ needs, until the next (legislative) session at which time a supplemental budget can be passed to pay for the expenses Texas has incurred. That supplemental budget will almost assuredly require using money from the Rainy Day Fund.”

See here for the background. I have no idea if Abbott felt a sensation akin to “shame” or “political pressure”, or if this story follows on the heels of the other one simply because there was information made available subsequently that added to the original picture. Be that as may, to address the substance of Abbott’s letter, let me first point you to this story in the Press:

Turner did give Abbott at least three specific examples of how Houston could use the Rainy Day Fund money in his letter Monday. For one, debris removal is projected to cost Houston $25 million, since FEMA is picking up 90 percent of the projected $250 debris removal tab. Turner has said structural damage to city buildings is now in the ballpark of $175 million — but meanwhile, the city’s flood insurance plan capped out at $100 million. In order to extend the plan through April 2018, so that the city still has flood insurance should another tropical storm make landfall this year, that’ll cost $10 million. The city must also pay a $15 million insurance deductible to recover on damages.

The mayor’s spokesman, Alan Bernstein, said that if the state were to hand over the $50 million to cover these insurance and debris removal costs, that is all the city is asking for and there will be no need to raise taxes.

$50 million is less than half of a percent of the total fund.

Is that list-y enough for you, Greg? Author Megan Flynn did a nice job of talking to some fiscal conservative types, none of whom could think of a good reason not to tap into the Rainy Day Fund for this. Note also that allocating $50 million from the $10 billion fund would “drain” it in the same way that spending a nickel on a piece of gum would “drain” a $10 bill.

The Chron editorial board, which reaches back to the 70s for a good analogy, also has a few minor corrections for our only Governor.

The governor rejected Turner’s request. He and Lt. Gov. Dan Patrick, another Houstonian, have said the mayor can use funds held by Tax Increment Reinvestment Zones for Harvey cleanup and recovery efforts. They’re mistaken. TIRZ bond funds are legally restricted to the use for which they were issued.

The governor has said the mayor’s request is unprecedented. Again, he’s mistaken. In 2013, the Legislature tapped into the Rainy Day Fund to help the Bastrop area recover from devastating wildfires. Bastrop County residents will tell you those fires were bad, but they didn’t cause damage expected to top $150 billion. That’s the toll Harvey wrought.

The governor has said the state has given Houston money. Again, he’s mistaken. The money that’s come our way is FEMA money destined for Houston and passed through the state, which keeps more than 3 percent for administrative costs. No state money has been allocated to the city for Harvey recovery.

Other than the folly of calling either Abbott of Patrick a “Houstonian” – Abbott has lived in Austin for all 20+ years of his political career, while Patrick is a “Houstonian” in the way all rich old white guys in the far flung master-planned communities and who think all cities are cesspools of crime and corruption because they don’t have enough rich old white guys like them living in them – I agree. What Abbott wants more than anything is a pretext to not do anything. If these falsehoods don’t work, I’m sure he’ll have others at the ready. The Observer has more.

Abbott has no interest in helping Houston

So much for that.

If the state taps into the Rainy Day Fund to help with recovery following Hurricane Harvey, it won’t be until the next legislative session, Gov. Greg Abbott said during a news conference Tuesday.

Abbott’s announcement comes after Houston Mayor Sylvester Turner wrote to the governor asking the state to use the $10 billion fund. Turner said without significant state help, Houston will be forced to raise property taxes for one year to bring in $50 million for recovery efforts, which would cost the owner of an average Houston house $48.

Turner said he would not have proposed the tax hike had the governor called a special session to tap into the fund.

Abbott, who has said the state has enough resources to address Harvey-related needs between now and the next legislative session, added Tuesday that the state has already granted Houston almost $100 million for debris removal and established an “accelerated reimbursement program” for recovery efforts.

Abbott said he would pay any invoice the city submits to the state within 10 days.

Turner “has all the money that he needs,” Abbott said. “He just needs to tap into it,” referring to money in Tax Increment Reinvestment Zones.

In an emailed statement Tuesday, Turner spokesman Alan Bernstein said Houston “cannot raid funds that the state has indicated cannot be raided – and which are largely for drainage projects to prevent future flooding anyway.”

Remember when we were talking about how Harvey has changed things in the state? Boy, those were the days. I believe this should settle once and for all what the Rainy Day Fund is for: Absolutely nothing. It’s an illusion. We should take all the money in this fund, convert it to gold bullion, and bury it in Greg Abbott’s backyard, perhaps next to one of the wells he had drilled to water his lawn during droughts. That would do us as much good as the fund actually does now. Maybe this might inspire someone to run against Abbott. It’s as easy an issue as you’ll get to run on. In any event, we’re on our own, because special sessions are for potties but not hurricane recovery. Thanks, Abbott!

UPDATE: Also, too, other parts of the state are in really bad shape. Sure, there’s insurance and FEMA and charity and volunteers, and all of those things should be utilized to the maximum. But does that mean the state gets off the hook, or that it just gets to sit back and wait to see what’s left over, which it then may get around to helping out with if it feels like it and if it doesn’t feel “blackmailed” by local officials who are trying to do their jobs? The lack of leadership here is as deep and pervasive as the rainfall was a month ago.

Mayor Turner lowers tax rate hike amount

I’m sure we’re all glad to see this.

Mayor Sylvester Turner

Mayor Sylvester Turner on Wednesday said the temporary property tax rate hike he has proposed would be cut in half after federal officials approved his request to increase reimbursement for the city’s Hurricane Harvey recovery efforts.

Turner earlier this month had pitched an 8.9 percent increase for one year, but said it would not be enough to cover all of the city’s cost of recovering from the unprecedented storm and flooding. It would be the first rate hike in two decades.

On Wednesday, he said that increase could be halved – to an extra $50 next yearfor the owner of a $225,000 home with a standard homestead exemption – thanks to a White House decision to boost reimbursement of many of the city’s recovery costs from 75 to 90 percent.

“We’re going to do everything we can to hold our line. We’re trying to minimize our request,” Turner said. “I understand what people’s concerns are with what they’re going through in their homes, and we don’t want to add to the burden.”

[…]

No tax hike would be necessary, Turner said, if state leaders agree to tap their roughly $10 billion rainy day fund. That suggestion drew support from council members.

“We need it now. It’s raining,” said Councilman Jack Christie, who has spoken against a tax rate hike. “We’re behind you to do that to where we don’t have to raise taxes.”

Several times in recent days, Gov. Greg Abbott has said he expects funds will be tapped to pay for Harvey costs, but said damage estimates must be completed before dollars are withdrawn. The latest tally Wednesday projected $574 million in damage to public infrastructure, including $177 million in Harris County.

“I think most people understand that Texas will be tapping into the rainy day fund,” he said in San Antonio last week. “The important thing, though, is that we address the economic issues appropriately. We need to first understand what obligations we’re going to have, how much they will amount to, and decide upon the best strategies to pay for that.”

See here and here for the background. You know what could eliminate the need for any tax hike whatsoever? If the state of Texas, which has some $10 billion sitting around doing nothing, were to cover the remaining costs that insurance and the feds won’t. I wonder if anyone has briefed Paul Bettencourt about this possibility, since he seems to be so entirely bereft of constructive ideas. To be sure, even Dan Patrick has been talking about using the Rainy Day Fund to help Houston and everywhere else recover from Harvey. That’s both good and necessary. But the city of Houston has to pay for things now, and it has to make sure it has the financial wherewithal to pay for those things now since it is not allowed to carry expenses over from one accounting year to another (this is another way of saying the city must “balance” its budget), so unless there’s a firm commitment in place from the state that the city can rely on, it’s got to make its own plans to pay for any uncovered expenses. If Paul Bettencourt and the usual suspects on City Council don’t like that, they are welcome to direct their concerns to Greg Abbott and Dan Patrick. The Press has more.

More on recapture and the Rainy Day Fund

There are some conditions that have to be met to get our recapture money back.

Houston Independent School District won’t have to hand millions of dollars to the state to spend at other schools if HISD needs that money to recover from Hurricane Harvey, but the district will have to apply for that money, Texas Education Commissioner Mike Morath said Friday.

The same goes for any of the roughly 250 school districts in declared disaster areas that are required to pay so-called recapture payments to the state as part of the “Robin Hood” program that siphons money from property wealthy school districts to give to property poor ones.

Morath, who leads the Texas Education Agency, said school districts will need to apply for the funds with the state and pay any recapture money not need for Harvey recovery. First, districts will have to exhaust their insurance and federal aid before trying to tap that money, he said.

“They have to have exhausted all their other funding sources first,” said Morath.

See here for the background. I get it, we want to make sure that all sources of recovery revenue are fully tapped. Let’s just make sure this doesn’t turn into a reason to nickel-and-dime the school districts, or to bury them under paperwork. The priority is the kids and their schools and teachers. We should not lose sight of that.

In related news, the state may make a bigger commitment to helping school districts recover.

Lt. Gov. Dan Patrick and Education Commissioner Mike Morath signaled Wednesday that the state will use rainy day funds to help schools saddled with Hurricane Harvey-related expenses, but the chances are slim that the state will delay state standardized tests planned for next spring.

Patrick, a Houston Republican, made vows to close to 45 superintendents from storm damaged areas in southeast Texas that he would support holding funding at current levels for school districts losing students due to Harvey, and for increasing money for school systems gaining displaced students.

[…]

Morath’s statements came one day after Patrick met with superintendents vowing state aid for storm-related costs not covered by insurance or the Federal Emergency Management Agency. The promise came during a meeting Tuesday between Patrick and administrators of school districts affected by flooding.

In a press release sent late Wednesday, Patrick doubled down on that support, but stopped short of promising the state would cover all costs not covered by insurance plans and federal agencies.

The state aid could help prevent deep financial cuts in the hardest-hit school districts, and it could keep districts’ “rainy day” funds intact. Several districts, including Houston and Aldine ISDs, dipped into their reserve funds this year to balance their budgets.

In a statement, Humble ISD Superintendent Elizabeth Fagen said Patrick “made it clear that it was his goal for districts to be made whole financially, both in terms of funding related to student attendance and facility repairs.” District officials don’t have an estimate of storm-related costs, but Kingwood High School, home to 2,800 students, will be closed for at least several months due to flood damage.

“The state’s intent to protect schools will help make a very difficult year more manageable, and we are encouraged,” Fagen said.

I’m glad, but I’m not inclined to take Dan Patrick’s word on anything, so I’ll want to see how this plays out. I can’t think of a good reason why the state shouldn’t completely fill any gaps that are left by insurance and the feds. There’s plenty of money in the Rainy Day Fund, and using it in this fashion would help districts avoid painful cuts or possibly tax increases. There needs to be a commitment to getting every district, school, and student back to where they were before the storm. If that’s asking for a lot, well, Harvey did a lot of damage. Are we going to shrug our shoulders, or are we going to be up to the challenge?

Will we spend on some flood mitigation projects?

Maybe. We’ll see.

In the wake of Hurricane Harvey, Lt. Gov. Dan Patrick is calling for the construction of flood control infrastructure in the Houston area — things he said should have been built “decades and decades ago” — including a coastal barrier to protect the region from deadly storm surge.

“We need more levees. We need more reservoirs. We need a coastal barrier,” Patrick said late last week during an interview with Fox News Radio. “These are expensive items and we’re working with [U.S. Sens. John] Cornyn and [Ted] Cruz and our congressional delegation to … get this right. We’ve had three now major floods in three years — nothing at this level but major floods.”

The need is particularly pressing because of the state’s rapid population growth, Patrick added, noting that “a lot of that growth is around the Houston area.” And he said the billions in federal aid that Texas is poised to receive presents an opportunity for Texas “to really rebuild and do things that, quite frankly, should have been done decades and decades ago.”

[…]

State Sen. Paul Bettencourt said U.S. Rep. Michael McCaul is seeking $320 million to build another reservoir that would take pressure off Addicks and Barker. That’s exciting, Bettencourt said, because the Austin Republican “can lift more than the average congressman” as chairman of the House Homeland Security Committee.

McCaul’s office didn’t immediately respond to a request for comment. But last week during a meeting with officials in Katy, he described such a project as “long-term” and said he has discussed funding with Gov. Greg Abbott, the Federal Emergency Management Agency and the U.S. Army Corps of Engineers, according to a Houston Chronicle report.

“We need to look at long-term solutions from an infrastructure standpoint,” he said.

None of it will be covered by the $15 billion short-term relief aid relief package Congress has approved for Texas, and it remains to be seen whether Congress will pay for any flood-control infrastructure projects in Texas.

As the man once said, show me the money. What we have here is state officials talking about getting Congress to spend some money on projects here. There’s no indication of willingness to spend any state funds, which among other things would raise ticklish questions about how to pay for them (*). Maybe this Congress is willing to do that, and maybe it’s not. Let’s just say that the track record is not encouraging.

(*) You may recall that in 2013, voters approved a constitutional amendment to fund a water infrastructure fund that among other things could be used to build reservoirs. The idea of this fund, which came on the heels of the devastating drought of 2011, was to make more water available for cities and industry, but I see no reason why it couldn’t be tapped for something like a flood-mitigation reservoir. I don’t know the specifics of the legislation, and frankly I haven’t heard much about this, the SWIFT fund, since its approval. As such, I may be mistaken in what it can and cannot be used for. But at the very least, it seems like a decent starting point for discussion.

No special session needed to address Harvey flooding

So says Greg Abbott.

Gov. Greg Abbott said Friday another special session of the Texas Legislature won’t be necessary to deal with the response to Hurricane Harvey.

“We won’t need a special session for this,” Abbott told reporters, noting that the state has enough resources to “address the needs between now and the next session.”

[…]

In recent days, some members of the Texas Legislature have speculated that a special session to address the recovery seemed likely. They included state Sen. Paul Bettencourt, R-Houston, an ally of Lt. Gov. Dan Patrick and the chairman of the Senate GOP caucus.

“My personal assumption right now is that we will probably be back in Austin at work no later than January,” Bettencourt told the Houston Chronicle on Thursday.

Here’s that Chron story. A few details from it to help clarify:

“My personal assumption right now is that we will probably be back in Austin at work no later than January,” said Senate Republican Caucus Chair Paul Bettencourt, R-Houston, echoing the sentiments of other House and Senate members.

“The governor and the Legislative Budget Board have the ability to move around quite a bit of money in current appropriations, but it probably won’t be enough when all the bills come in. This storm is going to cost more than (hurricanes) Katrina and Sandy put together, and I’m thinking we’ll be breaking the $200 billion mark before this over.”

While the state would be liable for only a fraction of that amount, after insurance and federal payments come in, but whatever that (remaining) amount is will be something the Legislature will probably have to address.”

That, say other lawmakers, will most likely involve a politically charged debate over tapping the state’s so-called Rainy Day Fund — a $10 billion account officially known as the Economic Stabilization Fund — to pay for some of the storm-damage tab.

[…]

In a Thursday letter to House members, House Speaker Joe Straus said he will be issuing selective interim charges — directives for legislative recommendations — “in the near future to address these challenges” resulting from the massive destruction caused by Harvey, especially to schools.

“The House Appropriations Committee will identify state resources that can be applied toward the recovery and relief efforts being incurred today, as well as long-term investments the state can make to minimize future storms,” the San Antonio Republican said in his letter. “When the appropriate time comes, other committees will review the state’s response and delivery of services.”

The Legislative Budget Board, jointly headed by Lt. Gov. Dan Patrick and Straus, can make key decisions on reallocating state funds to meet emergency needs — up to a point, officials said. Half of its members — three senators and two House members — represent areas devastated by Harvey.

My guess is that Abbott is probably right and the LBB can cover this for now. Tapping the Rainy Day Fund, which I will point out again was created for the purpose of helping to cover budget shortfalls in times of economic downturn before being bizarrely recast as in-case-of-disaster savings by Rick Perry in 2011, may require the Lege, but that may be done in a way as to defer that action until 2019. My wonk skillz are limited in this particular area. Point being, if Congress can manage to allocate relief funding without tripping over their ideologies, there shouldn’t be that much for the state to have to pick up. We’ll see.

Budget deal reached

The one bill that must get passed is on its way.

After months of private squabbling and public threats of a legislative overtime session, the Texas House and Senate finally compromised to unveil a joint budget late Saturday.

Lawmakers, scrounging for cash in a tight-fisted legislative session, agreed to dip into the state’s savings account and to make use of an accounting trick using funds set aside last session for highway projects.

“We have reached a consensus on what I believe is a responsible, compassionate and smart budget for the people of Texas,” said state Sen. Jane Nelson, R-Flower Mound and the upper chamber’s top budget writer, at a committee hearing that lasted late into Saturday night.

“This has been a laborious process, I have to say,” said state Rep. John Zerwas, a Republican from Richmond and Nelson’s counterpart on the House Appropriations Committee. He called the budget “fiscally conservative” during “a time when it’s a little bit more lean.”

Budget documents indicated around $1 billion would come from the state’s Rainy Day Fund, a $10 billion savings account available to shore up the budget in difficult years. That money would pay for priorities such as repairs to the state’s aging mental health hospitals and bulletproof vests for police officers.

Nearly $2 billion more would come from an accounting trick related to transportation funding approved in 2015. The proposed budget would delay a payment to the state highway fund in order to free up that funding for other needs in the current two-year budget. The House had previously been critical of the possibility.

Though lawmakers were creative in tapping alternative money sources to avoid steep cuts this budget cycle, some high-dollar expenditures, notably Medicaid, the federal-state health insurance program for the poor and disabled, were not fully funded. That means lawmakers will almost certainly need to address those underfunded parts of the budget in 2019 — their next legislative session — in the form of a supplemental budget.

The House had originally intended to use $1.4 billion from the Rainy Day Fund, then considered upping it to $2.4 billion, while the Senate aimed for $2.5 billion in pay-delay gimmickry. Nice to see everyone can give a little to get a little, I guess. No budget is ever going to be good under our current political circumstances, but this one could have been worse, and that’s about all you can hope for.

In other business from Saturday:

On property taxes, the lower chamber unanimously approved an amendment that contained key language from Senate Bill 2 — which, among other things, requires local governments to give constituents more information about proposed property tax increases — and attached it to Senate Bill 669.

The House sponsor of the bill, state Rep. Dennis Bonnen, R-Angleton, had been trying to move the legislation for weeks, and it wasn’t scheduled to come to the House floor until early next week.

The Senate bill is an item Lt. Gov. Dan Patrick has deemed must-pass legislation — he threatened on Wednesday to ask Gov. Greg Abbott to call lawmakers back for a special session if that and other measures didn’t pass. Whether Bonnen’s amendment is enough for Patrick and the more conservative Senate is still unclear: Bonnen’s amendment lacked a key provision that would require voter approval for some tax rate increases, something Patrick stated repeatedly he wanted included.

[…]

An amendment by state Rep. Four Price, R-Amarillo, would extend the lives of several state agencies that were scheduled to “sunset” – or expire. A separate measure that dealt with that specific issue didn’t survive last week’s deadline for the House to pass bills on second reading.

But Price added his language to Senate Bill 80, a measure that seeks to streamline reporting requirements for state agencies. The Senate must now concur with the changes to SB 80 in order for Price’s amendment to survive.

“The goal of the amendment originally as contemplated would not have had to extend these agencies, but for the fact they were caught up in that last night on the calendar,” he said. “It goes hand in hand [so] yes, it had the effect of extending the agencies to 2021.”

SB2 was one item on Dan Patrick’s hostage list, while the sunset bill was his leverage for it. Late last night there was a limited bathroom amendment attached to a Senate bill (I’ll have more on this tomorrow), and SB2 isn’t as Patrick wanted it, so we can’t say as yet whether his tantrum has been mollified. I’m sure he will let us know soon enough.

House passes its budget

Mostly shenanigan-free, with a nice little side order of shade for a few people who deserve it.

After 15 and a half hours of debate on hundreds of amendments to the Texas House budget, lawmakers in the lower chamber passed the two-year, $218 billion document, with 131 votes in favor and 16 votes against.

The House vote included using $2.5 billion from the state’s savings account, colloquially known as the Rainy Day Fund. State Rep. John Zerwas, R-Richmond, thanked lawmakers for exhibiting “true leadership” with their willingness to tap the fund, “instead of electing to use an unconstitutional transfer from the transportation funding.”

That was a jab at the Senate, which last week approved its version of the two-year budget using a $2.5 billion accounting trick to free up funds dedicated to highway spending. The House must now work with the Senate, which is under the leadership of Lt. Gov. Dan Patrick, who vehemently opposes using the Rainy Day Fund, to reconcile their budget differences.

House lawmakers, debating the budget late into Thursday night, took several jabs at Patrick and other statewide elected officials throughout the evening.

Included in the fray were Gov. Greg Abbott, who saw one of his prized economic development programs defunded; Patrick, who heard a resounding “no” when his favored proposal to subsidize private school tuition with public funds was put to a vote; and Attorney General Ken Paxton, who lost more than $20 million from his agency’s budget for lawsuits.

On the winning side of the House budget debate were child welfare advocates, who saw funding for foster care and Child Protective Services tentatively boosted; social conservatives, who scored $20 million for the Alternatives to Abortion program; and the lieutenants of House Speaker Joe Straus’ leadership team who, in a display of unity, easily brushed aside most challenges from far-right Republicans.

Statewide GOP leaders took some of the heftiest blows in the House chamber. Lawmakers there voted to strip $43 million from the governor’s Texas Enterprise Fund, the “deal-closing” fund the state uses to lure businesses from elsewhere, and divide it into two equal pots: one for Child Protective Services and foster care funding, the other for a program that pays for disabled children’s physical, occupational and speech therapy services. Both are hot-button issues that have dominated the House’s budget negotiations during this legislative session.

[…]

Private school subsidies, a pet issue of Patrick and his Senate, also suffered a perhaps fatal wound on Thursday. House lawmakers voted 103-44 to prevent state money from being spent to subsidize private school tuition in the form of vouchers, education savings accounts or tuition scholarships. The proposal’s author, state Rep. Abel Herrero, D-Robstown, said it was “in support of our public schools and our neighborhood schools.”

[…]

Paxton’s attorney general’s office also saw funding gutted by House lawmakers who opted to instead fund programs that serve vulnerable children. Foster care funding would receive $21.5 million that was previously intended to pay for Paxton’s legal services budget under a proposal by state Rep. Ina Minjarez, D-San Antonio, that passed 82 to 61.

See here for more on the Enterprise Fund de-funding, which made me smile. Despite promises of shenanigans and roughly a gazillion amendments filed, there was more good done to the budget than bad. Which is not to say it’s a good budget, but it’s far from the worst we’ve ever seen. Take your positives where you can.

Especially when they involve Dan Patrick getting pwned.

In late March, lobbying group Texans for Education Opportunity used an online campaign to generate thousands of letters to 29 state representatives lobbying them to back education savings accounts, one of the subsidy programs in SB 3. Though the group claimed the letters were credible, the letters stirred up suspicion after no representative could find a constituent who remembered adding their name to that correspondence.

Of the 29 representatives targeted in the campaign, 26 voted Thursday to block money from funding “private school choice” programs.

RG Ratcliffe called it a “mugging”. As former Houston Rockets radio announcer Gene Peterson used to say, how sweet it is. Also, too, going back to the first story, there’s this:

Stickland had filed an amendment defund a state program for the abatement of feral hogs, which he’s become known for championing at the Legislature each session. Stickland railed predictably against the program, calling it “ridiculous” and a waste of money.

“It has not worked, and it never will work,” Stickland said, his voice rising.

That apparently offended rural lawmakers, notably state Rep. Drew Springer, R-Muenster. In response, Springer attached an amendment to Stickland’s proposal that would cut the same amount of funding for the Texas Department of Transportation, but only for roads and highways in Stickland’s hometown of Bedford.

Stickland took to the back microphone to cry foul.

“Someone else has chosen to make a mockery of this system and play gotcha politics,” he said before being interrupted. Laughter had erupted in the gallery.

“It’s funny until it happens to you,” he continued.

Springer and Stickland then confronted each other on the middle of the House floor and had to be separated by colleagues. Springer’s amendment ultimately passed, 99 to 26, forcing Stickland to withdraw his own proposal to which it had been attached.

What is best in life is to crush your enemies, see them driven before you, and hear the lamentations of Jonathan Stickland. And Briscoe Cain, too, the Chester to Stickland’s Spike, except without the victorious denouement for Chester. Look, just because the House passed a budget doesn’t mean this is the budget we’ll get. The Senate passed a budget, too, and there are lots of differences to be worked out between the two. The final version will be different, and some of the things we are cheering now may be undone in that. But that’s no reason not to cheer for the things that deserve it now. The Observer and the Press have more.

Senate passes its budget

It’s the one bill that has to pass.

The Texas Senate unanimously approved a two-year budget on Tuesday that would shift nearly $2 billion in public education costs from the state to local taxpayers.

The Senate’s $218 billion document now goes to budget writers in the House for debate.

“This is a lean budget, but it’s also a smart budget,” said state Sen. Jane Nelson, R-Flower Mound, the 2018-19 Senate budget’s lead author. “It responsibly meets the needs of our state.”

The Senate’s proposal would spend $106.3 billion in state revenue, which is a significant bump from the $103.6 billion budget Nelson originally rolled out in January. That puts the Senate’s total spending level much closer to the House’s than they were when the proposals were originally published.

Still, there are major differences in funding priorities and methods of finance that the two chambers will need to reconcile before the Legislature adjourns in May, setting the stage for some of the biggest points of contention this year.

Nelson touted her budget’s focus on education. The Senate proposal actually strips about $1.8 billion in state funds for education but uses local property taxes and other revenue to make up the difference. In total, Nelson said, her proposal would boost public school funding by $4.6 billion compared to the prior budget, including a $2.6 billion provision to cover student enrollment growth.

“Under our formula, the local share of education funding fills up the bucket first, as local property tax collections go up, the state share goes down,” Nelson said. “But in the aggregate, funding for education is going up every year.”

At the same time, the Senate is advancing controversial tax cut proposals that critics say would make it more difficult for the state and local governments to pay for schools. Last week, the upper chamber passed Senate Bill 2, which seeks to curb the growth in property taxes, and Senate Bill 17, which would cut the franchise tax paid by businesses in future years.

Emphasis mine. Note the on-the-nose Trib headline, “Texas Senate approves its budget, shifting school costs to local taxpayers”. Whatever else happens this session, I feel like at least the message that it’s the Legislature that is the main driver of property tax discontent has gotten out. Whether it’s gotten through is another matter, but at least it’s out there. I can’t recall that ever being the case before. The Chron has more on the Senate budget.

Meanwhile, over in the House:

The House Committee on Appropriations unanimously approved a two-year, $218.2 billion budget as a substitute for the Senate’s leaner proposal, putting the chambers on a collision course in the last two months of the session.

HB 1 now heads to the full House for a vote with contrasts to the $217.7 Senate proposal, which the upper chamber approved earlier this week.

House appropriators want to spend $2.5 billion from the Rainy Day Fund in their budget, leaving a $9.4 billion balance. That decision has touched off a public fight between House and Senate budget writers about whether they should dip into the state’s savings account.

On Wednesday, Chairman John Zerwas, a Republican from Katy, took a swipe at the Senate, which signed off on a maneuver that would delay until 2020 the transfer of $2.5 billion for transportation funding that voters approved in 2015.

“This budget does not rely on budget gimmickry that puts the state’s investment in transportation at risk,” he said. “The budget balances by cutting spending, prioritizing critical items and using a modest amount of (the Rainy Day Fund), for the exact purpose for which it is created.”

See here and here for some background on that. The conference committee for this one is going to be very interesting. The Trib 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.

House considers a bigger ask from the Rainy Day Fund

Needs must, as they say.

The proposal from state Rep. John Zerwas, a Richmond Republican and the House’s chief budget writer, would withdraw about $2.4 billion from the Rainy Day Fund as part of a supplemental budget to pay bills coming due for programs like Medicaid, the federal-state insurance program for the poor and disabled, and to pay for repairs to state-run institutions including mental hospitals and the School for the Deaf.

Previously, Zerwas advocated spending about $1.4 billion from the fund, which holds about $10 billion currently. He updated his proposal at Thursday’s meeting of the House Appropriations Committee, saying that without making a “modest withdrawal” from the savings fund, budget writers would be forced to make draconian cuts to public programs.

Entities that face budget cuts absent a cash infusion include the state’s public education system, pensions for retired teachers, and the Texas child welfare and foster care system charged with protecting vulnerable children from abuse and neglect, Zerwas said.

“Some members of our body have said publicly that our situation isn’t really that bad,” he said. “I can’t disagree more with that.”

Most legislative sessions, the Texas Legislature does not fully fund the cost of state programs, so lawmakers must typically pass a supplemental bill to cover the rest. Zerwas’ proposal would net some matching federal dollars, bringing the total value of the bill to $5.2 billion, officials said. About $3 billion would plug funding holes left by lawmakers in 2015, mostly in Medicaid and in a health care program for the state prison system.

The rest would go toward current needs, such as “deferred maintenance” costs at state-run institutions including mental hospitals, many of which are in disrepair.

See here for the background. I approve of Zerwas’ approach and appreciate what he is saying, but I would be remiss if I didn’t point out that a big part of the problem he is trying to solve is self-inflicted. As the story notes, tax cuts passed in the last session, at a time when oil and gas prices were low and the state’s economy wasn’t doing so well, cost $4 billion this biennium, while the referendum to dedicate a portion of sales tax revenue to the state highway fund has taken $5 billion out of the general fund. Zerwas had to file a separate bill to claw some of that money back. These were choices made by the leadership and the Legislature, the former because tax cuts are Republican crack, and the latter because we absolutely, positively refuse to consider raising the gas tax to meet our road needs. Budget gimmicks are just that, and whatever they purport to do, there’s always another gimmick to undo it. As a certain former President once said, reality has a way of asserting itself.

Bill to restore some budget flexibility filed

Call it the Law of Unintended Consequences Act of 2017.

The Texas House’s chief budget writer filed legislation Friday that would allow lawmakers to claw back billions of dollars that voters approved for state highways, freeing them up for other budget needs.

Texans overwhelmingly voted in 2015 to boost funding for the state’s public roadways and bridges, which have strained under a growing population. Proposition 7 amended the Texas Constitution to route some taxes collected on car sales to the State Highway Fund.

But House Appropriations Chairman John Zerwas, R-Richmond, filed a resolution Friday that would cut that initial cash infusion, aiming to free up money at a time when cash is tight.

House Concurrent Resolution 108 could cut the first transfer under Proposition 7 of nearly $5 billion in half, but only if two-thirds of lawmakers in both the House and Senate support such a move.

It’s a prospect made possible by what some lawmakers have called a “safety valve” in Senate Joint Resolution 5, the legislation that the Legislature approved in 2015 to send Proposition 7 to voters later that year.

See here for the background. I don’t expect this to pass – I really don’t think two thirds of the Senate will go for it – but I will be very amused if it does. Whether this is more or less likely to happen than tapping the Rainy Day Fund is now something we can test empirically. If nothing else, that’s a victory for science.

Zerwas proposes using Rainy Day Fund

We’ll see if this goes anywhere.

Rep. John Zerwas

The chief budget writer in the Texas House on Friday proposed using $1.4 billion from the state’s savings account to pay bills coming due for a wide array of the state’s health and human services programs.

The proposal from state Rep. John Zerwas, R-Richmond, would continue pay raises for Child Protective Services workers that state leaders ordered last year. It would also pay for renovations at the state’s aging mental health hospitals and state-supported living centers for people with disabilities.

And it would partially reverse a sweeping $350 million budget cut to a therapy program for children with disabilities ordered by the Texas Legislature in 2015.

The funding would come from the state’s Economic Stabilization Fund, also known as the Rainy Day Fund, a savings account lawmakers may use in tight budget years. That fund currently has about $10 billion.

“Using a small portion of the Economic Stabilization Fund, combined with spending reductions, is the responsible way for us to close out the current budget cycle and respond to the slowdown in our economy,” Zerwas said in a prepared statement.

This is for the supplemental budget, which is to say the budget passed by the 2015 Legislature, not for the one this Lege is working on. It will free up some money for the current budget if Zerwas’ proposal is adopted, in the sense that current revenues would not have to be used to close out the previous budget. Given the emergency that everyone agrees CPS is and the outcry that followed the cuts to the therapy program for children with disabilities, you would think this would be a relative no-brainer, but don’t count on it. The Rainy Day Fund morphed from being a tool to use to smooth out economic bumps to a lump of gold buried in the backyard that is never to be touched unless there’s a natural disaster, with the 2011 session in which cutting $5 billion from public education was seen as the better choice as the turning point. A supermajority is needed to tap the Rainy Day Fund, and I have a hard time believing Dan Patrick and his Senate sycophants will go for that. But at least someone had the guts to bring it up, so kudos to Rep. Zerwas for that. Keep an eye on this, because it may be a precursor of the larger budget fight between the chambers. If Zerwas gets his way, that bodes well. If not, things could get ugly.

Turns out a little budget flexibility is a good thing

Some lessons have to be learned the hard way.

More than a year after Texas voters approved routing billions in state sales taxes to roads and bridges, some lawmakers are questioning whether the first payment of $5 billion should move forward as planned.

Texans voted in 2015 to boost funding for state’s public roadways and bridges, which have strained under the state’s growing population. Proposition 7 — loudly cheered by top Texas leaders and supported by 83 percent of voters — changed the constitution to route some taxes collected on car sales to the State Highway Fund.

But in an unusually tightfisted legislative session, some Texas lawmakers are raising the prospect of reducing that initial cash infusion to the State Highway Fund scheduled for this year to free up money for other state programs.

No one has publicly backed such a move, but key budget writers have privately discussed the option. And at a Senate Finance Committee hearing Monday, Sens. Kirk Watson of Austin and Charles Schwertner of Georgetown asked Legislative Budget Board staffers about how it might work.

It turns out that the enabling legislation for that referendum included an escape hatch, in which a two-thirds vote can be used to divert some of that $5 billion for other purposes. That probably won’t happen, though I presume it’s no less likely than a vote to tap the Rainy Day Fund to get through this session and hope that things will be better in 2019. We can certainly debate whether it should happen or not, but my reason for highlighting this is that it’s yet another example of why artificial budget constraints are so often a bad idea, whose main effect is to force budget writers to come up with creative ways around said constraints. I say it’s more honest to just let them have the flexibility to figure it out rather than be forced into certain choices, but that’s not how we do things.

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.

Tighter spending cap defeated

I consider this to be a victory.

BagOfMoney

The state’s constitutional spending cap will remain untouched this session, and House and Senate leaders are blaming each other for the lack of action on the arcane but politically important measure.

Senate Republicans had sought to tighten the rules that guide how much future state budgets can grow, but House and Senate negotiators said in interviews Sunday that talks between the chambers fell apart late Saturday on Senate Bill 9, the last bill standing on the matter.

“The Senate passed the people’s priorities, the Governor’s priorities and my priorities on the spending cap and ethics reform during this legislative session,” Lt. Gov. Dan Patrick said in a statement Sunday. “The House chose to ignore these very important bills.”

House Speaker Joe Straus argued it was the Senate that was intractable on an issue that defied simple answers.

“The House passed responsible, well-thought-out language that recognizes the spending limit is a complicated issue, not a sound byte,” Straus said in a statement Sunday. “The Senate rejected this approach.”

Under the Texas Constitution, state spending cannot grow faster than the state’s economy. Ahead of each legislative session, state leaders set a growth rate for state spending based on the estimated rate of growth in Texans’ personal income over the next two years. (The rate picked just before the current session: 11.68 percent.)

Gov. Greg Abbott joined Patrick in calling for basing the growth rate instead on the estimated combined growth in population and inflation, a figure that, more often than not in recent years, has been smaller in Texas than the growth in the economy. But the House, concerned about the impact on future Legislatures, preferred a non-binding measure that would have factored in how different areas of government spending grow at different rates.

In the end, the two chambers remained miles apart.

[…]

In the House, Appropriations Chairman John Otto, R-Dayton, viewed the Senate’s approach as unworkable. As the House’s lead budget writer, he also expressed concerns about how the bill would impact future Legislatures.

“All of you know we passed a very conservative budget out of the house,” Otto told House members last week. “It would have failed SB 9.”

Otto opted to replace Hancock’s population/inflation metric with limits for different areas of government spending, such as transportation and health care, with each one based on a combination of how spending in that category was expected to grow as well and how the population served by each category was expected to expand.

He also amended the bill so that those new spending limits were no longer mandatory, but would simply be reported to state leaders who then could choose to factor that information into setting the growth rate.

During negotiations with the Senate over coming up with a compromise version, Otto said his concerns about hamstringing future legislatures remained.

“I wanted it to be considered. I didn’t want it be the mandate,” Otto said. “I was happy to include what the Senate’s methodology was as well as the methodology that was in my substitute.”

Just a reminder, in addition to the existing cap, we also have a constitutional mandate for a balanced budget, which in its way serves as a spending cap, too. At a time when the state has a lot of short-term needs like its pension funds and all kinds of facilities that need maintenance, the Lege chose to hoard billions of dollars that may never get spent given how much harder it is to tap the Rainy Day fund. Restricting spending further, with a school finance ruling looming and an economy that has cooled considerably, is just plain nuts. I’m glad we managed to dodge this bullet for another biennium, but I don’t know how much longer that can happen in the absence of some fundamental changes in our politics.

Just a reminder, we still need to use less water

In particular, we need to water our lawns less.

Less of this, please

Even Texans with the greenest of lawns water them too much, many landscape experts say. And if everyone would turn on the sprinklers only twice a week — still probably more than necessary — the water savings would be significant, according to a report from the Sierra Club released Tuesday.

In the Dallas and Houston regions, about 52 billion gallons of water per year could be saved just by cutting back lawn watering, the report says. That’s enough to supply almost half a million Austin-area homes for a year. And the numbers include lawns with St. Augustine grass, among the thirstiest of choices for a green lawn.

“Even if you have [St. Augustine] and you want to maintain it, you don’t need to water as much as you have been doing,” said Ken Kramer, water conservation chairman of the Sierra Club’s Lone Star Chapter.

The projections are based on the known effects of twice-a-week lawn-watering restrictions in various Texas cities. Only a handful of cities, including Dallas, Fort Worth and Irving, have such limits in place year-round, regardless of whether there’s a drought.

Environmental groups say these findings show that addressing Texas’ water problems doesn’t always require building controversial new reservoirs or expensive infrastructure. While the Houston and Dallas areas are projected to double in population by 2060, the savings of twice-a-week-watering would double as well, to 95 billion gallons of water annually, the report says. That’s equivalent to more than half of what the proposed Marvin Nichols reservoir would provide for North Texas, if the controversial $3.4 billion project ever gets built.

I’ve blogged about this before. The Texas Water Development Board published a report recently about the state’s future water needs and how conservation could help meet them in a cost-efficient manner. Texas is a growing state, and its water needs will continue to grow as well. But some parts of the state a drier than others, and some parts are growing faster, and as we have seen a lot of these projects to bring more water to where it’s needed are quite expensive. It costs nothing to water your lawn less. Surely we all can see the value in that.

Voodoo economics

Also known as Dan Patrick’s budgetary contortions.

FerrisB_VoodooEconomics

Lt. Gov. Dan Patrick, joined by the Texas Senate’s lead budget writers, announced “a new bold proposal” Wednesday morning to allow lawmakers to cut property taxes and pay down the state’s debt without busting the state’s politically charged spending cap.

“Gosh darn, we know our businesses and taxpayers need tax relief,” Patrick said at a press conference. “But because of the cap, we are limited in what we can do.”

Lawmakers entered the session with an estimated $113 billion to haggle over, but are expected to hit the state’s spending cap at $107 billion. Spending beyond the cap would require a simple majority vote in the House and Senate, a move that Republican leaders have repeatedly insisted will not happen this session.

The measures filed Wednesday are an attempt to provide political cover for Texas lawmakers to tap more of the billions of dollars sitting in state coffers without being viewed by voters as freewheeling spenders. Republicans in particular are wary of a vote for breaking the state’s spending cap being used against them in future primaries to paint them as fiscally irresponsible.

“We have more money on hand than we believe any Legislature has ever had at one moment in time dealing with budget issues,” Patrick said. “There is no support for exceeding the spending cap, but that also means that when we leave, we will have approximately $4.5 to $5 billion in the state’s checking account.”

While a simple idea in theory, the spending cap in practice is a complicated measure that even some members of the Legislature have trouble grasping. The Texas Constitution says the government can’t grow faster than the state’s economy. State leaders set a growth rate of 11.68 percent for this session in December, based on the estimated rate of growth in Texans’ personal income over the next two years.

“For 36 years our state spending cap has helped enforce fiscal discipline, and we should be very cautious about any attempt to weaken it,” House Speaker Joe Straus said in a statement responding to Patrick’s proposals.

Well, gosh darn, Dan Patrick categorically refused to consider exceeding the spending cap in 2013 when some people wanted to more fully restore the cuts to public education spending, so right there is your first clue that this is little more than a gimmick and an attempt to hardcode Republican priorities into the state constitution. I’m a bit pressed for time, so I’ll point you to a couple of good analyses of this. First, from Ross Ramsey:

Lots of things would be possible right now without that spending cap in place; this year, it leaves as much as $6 billion in the state treasury that is out of budget writers’ reach. That has lawmakers dreaming of how to get around the cap, and there are ways to do that.

The first one is simple: Vote to spend more. If a majority of senators and representatives agree, they can spend more than the cap allows. This requires some intestinal fortitude from legislators, especially in primaries where voters will want to know how the state budget ballooned so quickly. Price-sensitive voters won’t like the answer unless they can be convinced that the extra money was well-spent.

A second, proposed Wednesday by Lt. Gov. Dan Patrick and Sens. Jane Nelson, Juan “Chuy” Hinojosa and Kevin Eltife, is complicated. They want to change the constitution to exempt spending on tax cuts and debt payments from the calculation of a spending cap. They would be able to take care of other items on their wish lists and keep spending past the cap on taxes and debt. Voters would have to approve, and it would take approval from two-thirds of the House and two-thirds of the Senate to get the measure to voters.

That’s more complicated, but it fits the recent pattern established by the state’s officeholders. They are scared to death of voters — so much so that they rely on a “Mother, may I?” approach to tough votes.

For two Novembers in a row, the state of Texas has gone to voters asking for more money, first for water and more recently for transportation.

Those didn’t involve taxes — lawmakers are allergic to that. But they were nervous about spending money, even on popular things — water projects during a drought and highway money for the state’s perpetual traffic jam — and asked voters for permission instead of just writing the checks themselves.

The state had the money it needed, sitting in the so-called Rainy Day Fund, but lawmakers didn’t want to just write a check themselves, for fear they would be labeled spendthrifts in the next round of primary elections.

Those would be Republican primary voters, of course, since those have always been the only voters Dan Patrick cares about or listens to. I’m old enough to remember back in 2011, during the (now known to have been mostly phony) budget crunch, when everyone compared that situation to households that cut back and tighten their belts and all those other virtuous things during hard times. Well, I don’t know how it is at your house, but at mine if the roof starts to leak or if the water heater breaks, I spend what I must to get it fixed. Somehow, that part of the household-as-budget-analogy never gets brought up.

And from Christopher Hooks:

The proposal makes a certain sense from the Democrats’ point of view—busting the spending cap probably means more money will go to state needs like education, even if Patrick wins his tax cuts. And it makes a certain sense for somebody like Eltife, who won’t have to stand in the way of tax cuts while other fiscal needs get attention, too.

But from Patrick’s POV, it’s a weirdly craven move. For one, he’s proposing to bust the spending cap—a sacred cow among conservatives—while saying loudly that he’s proposing to preserve it. And it contains a certain measure of political cowardice; if legislators wanted to, they could vote to bust the spending cap this session with a simple majority vote. Instead, they’re asking voters to make the hard choice for them, a move that seems eerily reminiscent of the dreaded Sacramento style of governance.

Furthermore, the amendment, if it passed, would privilege tax cuts over other kinds of spending. If the Lege ends up with $6 billion in additional revenue over the spending cap next session, it would virtually assure that that money would produce more tax cuts rather than, say, go back to schools or health care or roads.

Finally, it’s a move that’s emblematic of Patrick’s emerging leadership style—impulsive, seemingly thought-up on the fly and done with little consultation with his legislative partners. House Speaker Joe Straus gave an exceptionally cool statement in response: “For 36 years our state spending cap has helped enforce fiscal discipline, and we should be very cautious about any attempt to weaken it.”

But Patrick’s proposal points to a reality about the new era in the Lege: Patrick and the generally suburban-oriented senators who represent the new vanguard are not amenable to government spending and value tax cuts above almost all else.

Yes, that’s what this is about. It’s what basically all of the budgetary tricks and sleights-of-hand are about, including the spending cap itself. It’s a convenient excuse for not doing what you didn’t want to do anyway, like restoring cuts to public education, and it’s an opportunity to restrict the terms of debate further by forcing certain priorities ahead of others. I feel the same way about things like proposals to dedicate certain taxes that have otherwise been for general use to specific purposes. I get why Sen. Hinojosa is playing along, but I fear he’s being suckered. This is a bad deal, and we should hope the House rejects it.

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.

Three signs of possible trouble ahead

#1 – Watch out for falling oil prices.

Warning-Danger-Zone

The bedrock supporting Houston’s economy will shift in 2015, and while these tremors will not bring disaster, they will bring changes that some will find painful.

The collapse of oil prices in 2014 has made it very difficult for economists, both public and private, who until recently assumed oil would only drop to around $85 a barrel based on greater supply and less demand. Almost none expected prices to touch $54 a barrel, as they did this month, and not all assumptions are in question.

The volume of the oil oversupply and the tepid growth in the global economy forced oil companies and international agencies to re-evaluate year-end economic forecasts, and most revisions predict the price of oil is unlikely to reach $85 a barrel for at least 18 months to two years.

Predictably, oil companies have started cutting their capital expenditure plans for 2015. Marathon Oil Corp. says it will spend $1 billion, or about 20 percent, less next year. ConocoPhillips, another Houston-based oil company, also said it would cut its budget by 20 percent. Rosetta Resources, a much smaller Houston company, reduced its spending plans at least 16 percent.

[…]

The effect on the Texas and Houston economies is now a matter of intense debate, but under no scenario will it be positive. The oil and gas industry is responsible for between 11.7 percent and 13.5 percent of the economic activity in Texas last year, depending on the analyst.

A Federal Reserve Bank of Dallas model calculated that if prices remain in the $55-a-barrel range, Texas could lose 128,000 jobs in the first half of 2015. In all, 2.7 percent of all jobs in Texas are tied to the oil and gas industry, the bank said.

Analysts at JPMorgan Chase warned clients that Texas could face a recession next year. Barclay’s Bank warned that the Texas housing market correlates with oil prices, and therefore could take a major hit if oil prices stabilize at current levels.

As some other folks have observed, Rick Perry sure has been lucky these past few years, and is getting out of town at one heck of an opportune time. The rest of the column above is devoted to the effect on the Houston-are job market, which it says will slow down but not go backwards over the next two years or so. Two other effects of this, which the column does not have the space to explore, are 1) the Rainy Day Fund, which gets much of its revenue from energy taxes and fees, and which is now being used quite a bit as a source of funding for things like water and roads, since our Legislature and statewide Republican leadership won’t do anything about them, and 2) the city of Houston’s booming revenues will take a hit as well, and this will come at a time when certain short-term expenses have come due. As such, the absolute worst thing we could be doing is passing meaningless tax cuts or handing out special deals to appease the stupid revenue cap that we passed in 2004. We will regret these actions going forward.

#2 – Due in large part to item #1, we could be sitting on a housing bubble.

Houston has one of the most overvalued housing markets in the country, according to a national financial rating agency.

Home prices in the Bayou City are 19 percent overvalued — the second-highest in the nation after Austin — according to Fitch Ratings’ fourth quarter Sustainable Home Price report. Fitch measured how far current home prices have deviated from the historical norm, looking at data such as household income, unemployment rates, population growth, mortgage rates and rental prices.

Fitch’s report comes two months after Trulia Inc. (NYSE: TRLA) placed Houston on its quarterly “Bubble Watch” report for having one of the most overvalued housing markets nationally. While the initial report from the San Francisco-based online real estate company sparked fears of a possible housing bubble, Fitch predicts a housing slowdown across Texas — including Houston — next year.

Texas housing markets have remained relatively stable despite a volatile national market. While average home prices nationally grew 38 percent between 2000 to 2006 — before the housing market crash of 2007 — Texas averaged a “comfortable” 18 percent growth. The Lone Star State “remained largely on the sidelines” during the most recent housing bubble, the Fitch report said.

Since the Great Recession however, the Texas economy has been booming, buoyed by the state’s strong energy sector. The job growth has attracted thousands of new residents to Texas, fueling the homebuying rush and homebuilding frenzy. Today, the Texas housing market is about 11 percent overvalued, according to Fitch.

However, Texas’ current housing boom is “out of character with its price history,” and is unsustainable in the long run, said Fitch director and analyst Stefan Hilts.

It should be noted that not everyone agrees with Fitch and its gloomy outlook. That said, the meteoric rise in property values in and around Houston is way out of sync with our (now not so accurate) reputation as a cheap place to live, and the proliferation of luxury properties, especially inside the Loop, sure feels unsustainable to me.

#3 – Beware of stuff like this.

The Texas Building Owners and Managers Association say “unpredictable and uncontrolled” increases in property values put significant burdens on the state’s businesses and could lead to many leaving Houston to avoid the appraisals.

The group has launched a statewide initiative “Taxed out of Town” to push for appraisal reform, according to a recent statement from the advocacy organization, which represents commercial properties in Texas.

“This issue affects everyone, not just commercial real estate. Commercial property taxes are paid by the businesses that lease space in Texas,” said Tammy Betancourt, executive vice president of the group’s Houston chapter. “Higher commercial property taxes lead to increased operating costs for Texas business owners, rents for tenants, and costs for goods and services.”

The group says that in some parts of Houston, property valuations have increased by more than 100 percent in the last two years. In 2013, commercial properties’ valuations across the city increased 53 percent on average and another 18 percent in 2014. Similar double-digit increases have occurred around the state. The group says these rates have risen not just sharply but erratically and small businesses have difficulty planning for the future.

“Texas takes pride in being pro-business, but the current property appraisal process is anything but. If runaway increases in commercial property valuations are allowed to continue to burden Texas’ businesses, the end result will be stalled local growth, decreased job creation, and local businesses and investors looking elsewhere to do business,” Betancourt said.

The group hopes appraisal reform and tax relief will be a key issue of the upcoming Legislature session.

Their press release is here and their website is here. It’s little more than generic complaints about high appraisals and exhortations to contact your legislator and tell them to Do Something about it. As you can see, they may get their wish for a slowdown in appraisal increases, though perhaps not by the means they have in mind. It’s hard for me to interpret this as anything other than a plan to pursue some goodies for themselves, couched as always in the weasel-speak of “fairness” and “job creation”. Anyone who is truly concerned about making the appraisal process better and fairer for all Texans has plenty of other things to concern themselves with. I point this out mostly as a reminder to keep an eye out for stuff like this. Unless you have your own high-powered lobbyists in Austin, the policies that are being pushed generally aren’t written with the primary goal of benefiting you.

The inadequacy of Prop 1

Better than nothing, but not by much.

The campaign to steer state reserve funds to road projects is not being waged with yard signs and televised debates but, rather, with chamber of commerce lunches and a smattering of direct mailings.

Though largely a quiet campaign, supporters of Prop. 1 said they are optimistic the proposal will pass muster with voters, and, they hope, set up subsequent efforts to shore up Texas’ teetering highway system.

“There is a basic underlying support among longtime Texas voters to funding highways,” said Lawrence Olsen, executive vice president of Texas Good Roads, one of the groups backing Prop. 1.

The measure, if passed by voters Nov. 4, would take half of the money from oil and gas production taxes now filling the state’s economic stabilization fund – also known as the rainy day fund – and redirect it to transportation. Texas Department of Transportation officials would use the money to maintain and expand state roads, many of which are choking because of population growth and rapid expansion of oil and gas production in Texas.

Based on current estimates by the state comptroller, splitting the money between the rainy day fund and transportation projects would mean about $1.7 billion for each in the first year. That figure, however, is dependent upon oil and gas production, which could be affected by recent drops in oil prices.

The money is not nearly enough to meet all of the state’s highway needs, making Prop. 1 more of a first step than a long-term solution, supporters said.

“Everybody is optimistic that the winds are at our back when we head into what will be a challenging legislative session,” said Brandon Janes, chairman of Transportation Advocates of Texas. “It would be nice to say we have a healthy margin on Prop. 1 to show the support to get legislators moving on this.”

To adequately maintain roads and improve those stressed by population and economic growth, TxDOT estimates the state should be spending $5 billion more a year, leaving a $3.3 billion gap even if Prop. 1 passes.

This is the problem with Prop 1 in a nutshell. It’s a painless little band-aid that will alleviate some of the immediate problems but doesn’t really do a damn thing to solve anything. We’re still not ready or willing to have a frank discussion about what our state’s transportation needs are – remember, TxDOT has been throwing around giant numbers for years that represent wish list items and other pie-in-the-sky ventures in addition to genuinely needed projects – or what the best solutions going forward will be – surely I’m not the only one who recognizes that investing gazillions of dollars on road building is kind of a 20th century approach, but it’s all there is from TxDOT and the Lege – never mind how to pay for them. Just about everybody has endorsed Prop 1 – their campaign website is here – and I suppose I’ll be a good soldier and vote for it as well, but I’m not enthusiastic about it. If I thought for a minute that defeating this would send a message of “We want you to work on solving the underlying problems!” and not “We don’t want you to spend any money on anything ever again!”, I’d vote No and feel good about it. As I know full well that’s not how the world works, I’ll vote Yes and bitch about it afterwards, then console myself with the thought that maybe now that the easy answers have been applied, we might be able to gingerly approach the somewhat harder answers. That won’t happen either, but I can tell myself it will. Burka, who is on the same page as I am, has more.

We need to take better care of our water

We lose way too much of it because our infrastructure is old and in need of replacement.

At a time when the Lone Star State is facing a grave water shortage and its population is expected to double by 2060, billions of gallons are hemorrhaging from Texas’ leaky old pipes.

The exact loss is unknown as only 10 percent of the state’s 3,500 utilities were required to report their 2012 losses. But in Houston, enough water seeped from broken pipes to supply 383,000 residents for one year.

According to city records, Houston pipelines gushed 22.4 billion gallons of water in 11,343 leaks last fiscal year. That equates to about 15.2 percent of the city’s total water supply.

No state standard exists on an acceptable loss rate, but some utilities manage to hold their losses to single digits.

Proposition 6, which Texas voters approved last month, could help fund some Houston pipeline improvements since 20 percent of the $2 billion was set aside for statewide conservation efforts. The fund is designed to secure the state water supply for the next 50 years.

“We are still working on establishing the rules for using this money. It should be available by 2015,” said John Sutton, Texas Water Development spokesman.

Mayor Annise Parker’s spokeswoman, Jessica Michan, said the city plans to go after the conservation funds.

Michan said the city already has a separate request in with the TWD for $71 million to rebuild 130 miles of pipe. That request is still pending.

Alvin Wright, Houston’s public works spokesman, said it would take an “astronomical sum”- several billion dollars – to upgrade Houston’s entire system.

Well, water conservation is on Mayor Parker’s third term agenda. I don’t know how much they’ll be able to fund via this mechanism, but perhaps there are some high-value projects that can be done first. This sort of work really needs to be done, and should be prioritized because the fewer the leaks, the less new capacity that will need to be built. There’s plenty of this kind of work to be done across the state, and around the country. Ideally, there would be a federal program to provide grant money for all this work, but Republican nihilism plus an obsessive myopia about the deficit means that will never happen. Prop 6 was far from perfect, but it was the best we were going to get. Let’s make the most of it.

There are no new ideas, but there are plenty of bad ideas

There’s so much wrong with what Greg Abbott wants for Texas that it’s hard to know where to begin.

BagOfMoney

In his first major policy address as a gubernatorial candidate, Attorney General Greg Abbott proposed tighter constitutional limits on state spending and increased constraints on the multibillion-dollar Rainy Day Fund.

Abbott laid out his “Working Texans” plan, which is based on fiscal reform to reduce the scope of government, during a campaign stop Monday in Brownsville.

Abbott said that if he were elected governor, he would propose two constitutional amendments to keep state spending tied to population growth and inflation and to safeguard the Rainy Day Fund, the state’s savings account, from “being raided” by the Legislature.

Additionally, Abbott said the governor should be given “expanded line-item veto authority” to reduce excessive spending. He will face former Texas Workforce Commission Chairman Tom Pauken in the 2014 Republican primary.

“I am willing to take on the task of making difficult decisions to reduce government spending when at times the Legislature may not be able to do so,” Abbott said, according to prepared remarks, adding that the state has seen “a troubling trend” of using the Rainy Day Fund to cover “what should be core government operations and expenses. “

Instead, Abbott wants to limit the excessive spending of the fund by only allowing it to be used to meet unforeseen revenue shortfalls, to reduce existing debt, to pay for state disaster relief and to address one-time infrastructure payments.

[…]

In his proposal, Abbott also emphasized the importance of finding a permanent source for additional transportation infrastructure, including a proposal to constitutionally divert a portion of the motor vehicle sales tax to road construction and maintenance.

“We need to stop diverting transportation funding away from building roads,” Abbott said. “Money raised for roads should be spent on roads.”

Texas Politics has this in bullet point form. Let me open with what Burka has to say:

Abbott’s ideas will have the effect of constricting the state’s economy rather than expanding it. He says next-to-nothing about public education, for example, nor does he address health care; in other words, he ignores the two biggest and costliest areas of state services. The only solace one can take in Abbott’s vision for the future of the state is that it resolves the question of whether he would be better or worse than Rick Perry. Astonishing as it may seem, I think he is worse than Perry.

The question must be asked: Is Abbott’s vision what Texans want for their government — or their families? Is this really a state whose leaders have no interest in improving the lives of its citizens? Is Texas really going the way of Arkansas and other backward states where all that matters is guns?

Well, there’s also hating on gays and “illegal immigrants”, plus suing the federal government, but you get the idea. I guess it hasn’t occurred to Abbott that the reason we’re dipping into the Rainy Day Fund for a water infrastructure bank is because we have a vast unmet need for water infrastructure projects and no other politically acceptable way to pay for them. He’s also probably not noticed the gaping hole in Texas’ transportation funding, and the fierce resistance to any way of paying for some of it. Oh, and there’s also the judgment against the school finance system – the suit is being relitigated, but I don’t expect a substantially different outcome – and the millions of uninsured Texans that he and his cronies try not to acknowledge. Clearly what we need is a rigid and restrictive spending cap, because that will solve all these problems with the magic of the free market, or something like that.

The Observer shows the degree of Abbott’s ignorance on the subject.

The idea of tying spending to inflation and population growth is not a new one. It’s been popular among elements of the right for years. The Texas Public Policy Foundation, uber-activist Michael Quinn Sullivan and even Perry have flogged the proposal for years. But it’s never gone anywhere for two main reasons—one, there is little appetite in the Texas Legislature for tying their own hands; two, it’s a bad idea.

Texas is already a (relatively) low tax, minimal services, small government state. Indeed, as Nate Blakeslee pointed out in a January Texas Monthly profile of Sullivan, state spending as a share of both the state’s gross domestic product and personal income has been trending downward for two decades. For personal income, which is what the Comptroller uses to set a spending limit, the share of spending has decreased from around 5.2 percent in the early ’90s to just over 4 percent today. Even using the population-plus-inflation spending limit, Texas’ budget has stayed under that limit for the last decade, according to an analysis by the Legislative Budget Board.

In other words, there’s just not a spending problem in Texas. Which is not the same thing as saying there’s an inequity problem when it comes to how revenues are collected (not having a state income tax, for example, means the poor and middle class take it on the nose with regressive sales and property taxes).

Still, tying the state’s budget to inflation and population growth could further constrain state government. You could pretty much forget about ever investing more in public schools, higher education or infrastructure, at least during non-flush times.

In April, the Legislative Budget Board crunched the numbers. The growth in personal income used to set the spending cap for 2014-2015 was 10.71 percent. In other words, the state could spend almost 11 percent more than it had the previous biennium. Using population growth plus inflation instead would limit spending growth to 6.82 percent. That would mean $2.7 billion less for state leaders to work with. That’s not a huge number given that the 2014-2015 state budget includes $95 billion in general revenue. But lowering the spending limit now would have a compounding effect over time.

That’s probably the point—force future generations to subscribe to the current model of low-ish taxes and minimal services. Abbott more or less admitted as much during a press confab after his Brownsville speech.

“By imposing these standards by constitutional provision it means that for generations there will be limits in the growth of spending in this state,” he said, according to the Associated Press.

However, the Legislature has shown little appetite for any of the proposals Abbott is touting. A bill tying the spending limit to population-plus-inflation is filed every session… and goes nowhere.

The Lone Star Project points out that much of what Abbott is proposing is constitutionally redundant as well. The good news is that by going the constitutional amendment route, Abbott starts from a position of not having enough votes for his ideas, and being unlikely to get any more support for them. But the best way to prevent bad ideas from gaining a foothold is to beat them back at the ballot box.

The water campaign begins

The most high profile constitutional amendment now has a campaign behind it.

Water Texas PAC

Supporters are laying the groundwork for an aggressive effort to educate voters and drown out opposition with roughly one month before early voting starts. A coalition of political action committees and business groups are leading the push.

The strategy will be bankrolled by a combination of those forces. A political action committee named Water Texas created specifically for the campaign is being led by House Speaker Joe Straus, R-San Antonio, and Rep. Allan Ritter, R-Nederland.

Like any high-powered campaign, the political playbook for the water proposition is set to include television and radio ads, direct mailers, phone banks, op-ed pieces and stump-like speeches, as well as meetings with local leaders. A heavy dose of Web and social media activity also is part of the formula.

In all, supporters are gearing for a potential multimillion-dollar campaign.

“We can’t risk losing this election. It’s too important for the future of the state,” said Bill Hammond, president and CEO of the Texas Association of Business, one of a number of groups backing the strategy. “This is just like any candidate who has to go out there and do the blocking and tackling to make sure they win an election.”

I think this is likely to pass – the advocates are much better funded and organized than the opposition, most people inherently understand the need to Do Something about water in Texas, and most amendments get passed as a matter of course. But who knows? The Water for Texas people have a Facebook page and a webpage, and I found another pro-Prop 6 Facebook page out there while looking around. While I don’t think this is the best thing ever, it’s good enough for me to support. What do you think about it?

Meet your Constitutional amendments

The Trib runs down the nine proposed constitutional amendments that will be on the ballot this November.

First on the ballot will be HJR 62, by state Rep. Chris Turner, D-Grand Prairie, which would authorize the Legislature to provide a property tax exemption for the spouses of veterans. This amendment specifically authorizes a tax exemption for all or part of the market value of the residences of spouses of military members who are killed in action.

Second will be HJR 79, by state Rep. Dan Branch, R-Dallas, which would eliminate a requirement for a State Medical Education Board and a State Medical Education Fund. Neither is in operation, with the State Medical Education Board having been defunct for more than a quarter-century.

HJR 133, by state Rep. Linda Harper-Brown, R-Irving, will appear third on the ballot. The amendment would extend the tax exemption period on storing aircraft parts in the state and would provide more tax relief to aerospace manufacturers, which often hold such parts in inventory for an extended period of time.

HJR 24, by state Rep. Charles Perry, R-Lubbock, will follow and authorize the Legislature to give a partial property tax exemption on charity-donated residences to disabled veterans or their surviving spouses. The amendment would strike the current requirement that qualifying residents be “100 percent” disabled.

SJR 18, by state Sen. John Carona, R-Dallas, will appear fifth on the ballot and would allow homeowners age 62 or older to use reverse mortgages to purchase residences. The current law only expressly allows traditional mortgages, which lets such homeowners borrow against the equity of their homes. The amendment would allow the prospective borrower to use a Federal Housing Administration-insured home equity conversion mortgage to help buy a new home.

Next will be SJR 1, also known as the Rainy Day Fund Amendment. The amendment would create two funds to help finance key projects in the state water plan by pulling about $2 billion from the Texas Economic Stabilization Fund. Authored by state Sen. Tommy Williams, R-The Woodlands, the amendment has been opposed by conservatives who have argued that pulling money from the Rainy Day Fund would endanger Texas’ economic health.

HJR 87, by state Rep. Sergio Munoz, Jr., D-Palmview, will appear seventh on the ballot. It would authorize home-rule municipalities to choose how to fill city council vacancies if the positions have less than 12 months remaining in a three- or four-year term. The amendment would remove the requirement to hold a mandatory special election for those positions.

HJR 147, by state Rep. Bobby Guerra, D-Mission, will come next on the ballot. It would repeal a constitutional provision authorizing the creation of a hospital district in Hidalgo County.

Last on the ballot will be SJR 42, by state Sen. Joan Huffman, R-Houston. It would authorize the State Commission on Judicial Conduct to use additional disciplinary actions — including public admonition, warning, reprimand, or required additional training or education — against judges or justices after a hearing. The current law allows the SCJC to issue a public censure or recommend a judge’s removal or retirement.

SJR1 is the water infrastructure fund. The road building fund item that finally passed in Special Session 3 won’t grace the ballot until 2014 by agreement, so as not to have two referenda that tap the Rainy Day Fund on the same ballot. The rest of them, I gotta say, I know little to nothing about. Most of them are probably no big deal, and most of them will likely have little to no campaigning done for or against them, so we’ll have to see what the usual suspects have to say about them going forward. If you have an opinion about any of them, please speak up in the comments. Stace has more.

And that’s a wrap on Special Session 3

Hallelujah.

Finally no more sequels

The Texas Legislature adjourned its third special session since May on Monday night after passing a measure estimated to increase transportation funding by $1.2 billion annually if Texas voters approve it next year.

“Let’s adjourn this mutha,” said state Sen. John Whitmire, D-Houston, after the Senate had sent House Bill 1 back over to the lower chamber for final passage.

It was the third try by lawmakers since the end of the regular session to pass a measure to boost funding for the cash-strapped Texas Department of Transportation without raising taxes or fees.

Gov. Rick Perry praised both chambers for “increasing funding for transportation without raising taxes, which sends an incredibly strong message that Texas is committed to keeping the wheels of commerce turning, while protecting taxpayers.”

[…]

The latest version is estimated to raise $1.2 billion a year for TxDOT, a fraction of the more than $4 billion TxDOT has said it needs in additional annual funding to maintain current congestion levels as the state’s population grows.

The plan now requires the Legislature to vote in 2025 to continue the diversion or it would stop. It also requires TxDOT to find $100 million in “efficiencies” over the 2014-15 biennium and put that money toward paying the agency’s multibillion-dollar debt.

“They’re a $20 billion a year agency and a lot of us believe that they can tighten the belt,” said state Rep. Joe Pickett, D-El Paso and the author of HB 1.

A repeated sticking point on the plan has been whether and how to create some sort of minimum balance, or floor, for the Rainy Day Fund’s balance below which tax revenue could not be diverted to transportation. The version passed by both chambers Monday will require a select joint committee of legislators to recommend a minimum balance before each regular legislative session. Then members of both chambers will be given a chance to vote in favor of that minimum balance or a different balance. If a majority of both chambers can’t agree on one by the 45th day of the session, then the committee’s recommendation will be enacted.

That final provision drew the support of several House Republicans who had been wary of the plan beforehand.

About damn time. For all of the wailing and gnashing of teeth that led to this “what took them so long?” compromise, it’s still little more than a Band-Aid that leaves most of the problem un-addressed and hostage to ideology. I doubt it will lead to other states to cease their badmouthing of Texas’ inadequate infrastructure as a way to undermine its appeal to businesses. But it did accomplish the task of getting everyone the hell out of town before any further wingnut wish list items could be added to the agenda. For that alone, kudos all around. The item will be on the 2014 ballot, not the 2013 ballot, so don’t look for it this November. I’m sure you’ll hear about it again before you get to vote on it.

Yeah, they’re still working on a transportation funding bill

The committee hearings will continue until morale improves.

Same hair and same amount of crazy as Rick Perry

After consulting with members from both the House and Senate, state Rep. Joe Pickett decided to make some minor changes to his latest transportation funding proposal. On Thursday — the third day of the third special session — a House committee gave his altered proposal its endorsement.

Pickett added a provision to the plan that would require the Texas Department of Transportation to find $100 million in “efficiencies” over the 2014-15 biennium and put that money toward paying the agency’s multibillion-dollar debt. Paying off that much debt early would save the agency $47 million in debt service payments, Pickett said.

“I wanted a buy-in by the agency,” Pickett said. “I wouldn’t propose it if I didn’t think they were up to the challenge.”

In a 6-1 vote, the House Select Committee on Transportation Funding approved House Joint Resolution 1, with state Rep. Senfronia Thompson, D-Houston, voting no. The committee voted unanimously in favor of the related House Bill 1.

The House is expected to try to pass the plan again early next week. Because it involves amending the Constitution, HJR 1 needs support from 100 members of the 150-member House. A similar plan failed 84-40 on Monday, a day before the end of the second special session. Pickett and others said they believe the measure failed because 23 members were absent that day, not because there aren’t 100 members of the House who support the plan. A version of the legislation also failed in the first special session.

I would argue that the bill didn’t fail in Special Session 1, the bill was failed by David Dewhurst, who chose to play politics rather than let it come to a vote before Sen. Wendy Davis’ filibuster. Perhaps enough members will show up for the floor vote this time around, or Rep. Pickett’s changes will get enough Republicans to support it, so that it doesn’t meet the same ignominious fate as in Special Session 2. And good Lord will I be happy to get a break from blogging about special sessions.

Maybe the same failed approach will work this time

It could happen, right?

Same hair and same amount of crazy as Rick Perry

Transportation experts now estimate that the state needs $5billion a year to keep Texas moving. The proposal that fell apart in the House this week would add less than a billion annually.

And after months of wrangling, relations between the House and Senate have grown increasingly testy. Republicans, who control both handily, have split between fiscal conservatives concerned over government spending and business-backers concerned over growth and infrastructure.

The House created a special committee to look at the issue. The Senate immediately passed the same measure that failed in the House, to siphon part of the state’s rainy day fund for the Department of Transportation.

“We’re beginning with the House and its working group at the same point where we left it off,” said Sen. Robert Nichols, the Jacksonville Republican leading the effort.

Sen. Dan Patrick, R-Houston, had a different term for it: “This is like legislative Groundhog Day.”

House Speaker Joe Straus, R-San Antonio, also predicted more of the same. He said he doubted the required two-thirds of House members would support the Senate bill.

“I don’t think that you can keep pushing uphill the same bill that was losing support, not gaining, as the summer wore on,” Straus said. He has decried the effort to address a major threat to the state’s economic health without considering new revenue sources.

“The governor has made it clear that this isn’t an issue that he is willing to allow us to step back and take a more comprehensive approach to,” Straus said. “So we’re here. We should do what we can that attracts the necessary votes — and take it piecemeal if that is what he is asking us to do.”

The divisions are deep on any proposal, and getting 100 of the 150 members to coalesce behind any plan will be difficult, Straus said, pledging a “good-faith effort.”

During the regular session, legislators rejected any suggestion to hike gas taxes or increase fees on car registrations.

As Paul Burka likes to put it, we don’t have policy in this state, we have ideology. An approach that relied on policy might suggest some combination of right-sizing the gas tax, floating bonds, enabling toll roads where reasonable, and – I know this will sound crazy, but stick with me – seeking sensible alternatives to building more roads. The ideological approach insists that there is blood in this stone, we’re just not squeezing it hard enough. Good luck with that. To be fair, while Speaker Straus clearly recognizes the problem here, it’s not clear that there would be enough support for the sensible approach. Even if Rick Perry were to be replaced by an alien that preferred sensibility to sloganeering, I don’t know that you could find a majority in the House and two-thirds of the Senate to back an increase in the gas tax, no matter what other provisions were in there. (What’s that you say? We don’t need a two-thirds majority in the Senate in a special session? Silly rabbit, we only drop the two thirds rule for important things, like voter ID and abortion restrictions.) As with many other things, nothing will change until the composition of our government changes.

Special Session 3: Beyond Thunderdome

Beyond ridiculous, if you ask me, not that they did.

Same hair and same amount of crazy as Rick Perry

Standing before mostly empty chairs in the 150-member Texas House on Tuesday, House Speaker Joe Straus adjourned the second special session and announced that Gov. Rick Perry would be calling them all back for a third special session later in the day.

After gaveling in the House at 2:36 p.m., Straus briefly thanked members for their time and hard work during the second special session before acknowledging Perry would probably call a third special session 30 minutes after both chambers had officially adjourned the second special session.

“See you in 30 minutes,” he quipped, telling the few dozen House members in the Capitol to stick around for the opening of the third session.

An aide to Perry confirmed that the governor plans to call a third special session shortly.

Some Republicans would like to blame the Democrats for this fine mess they’re all in.

“I think we need to remember why we are having this extra special session. One state senator, in an effort to capture national attention, forced this special session,” Capriglione told the Fort Worth Star-Telegram. “I firmly believe that Sen. Wendy Davis should reimburse the taxpayers for the entire cost of the second special session. I am sure that she has raised enough money at her Washington, D.C., fundraiser to cover the cost.”

State Rep. Chris Turner, D-Grand Prarie, who leads the House Democratic Caucus, said Capriglione calling on Davis to reimburse taxpayers is “absurd.”

“The special sessions have largely been political and just a continuation of decade-old culture wars that do very little to resolve policy and do a lot to continue to divide Texans and in the process wasting a lot money,” Turner said. “The decision to call a special session is the governor’s and governor’s alone, he has to decide if its worth the costs.”

State Rep. Joe Moody, D-El Paso, tweeted Monday evening that Dewhurst should have passed the transportation bill in the first special session on the night of Davis’ filibuster.

Lt. Gov. is blaming House for TXDOT $. History lesson: he had SJR ready to go in the 1st Special & killed it to score political pts #txlege

— Joe Moody (@moodyforelpaso) July 29, 2013

A resolution to fund transportation had cleared both Houses and members of either party had said publicly the measure had enough support to pass. Dewhurst declined an appeal from Democrat lawmakers to bring up and pass the measure before the abortion filibuster began and the measure – like the abortion restrictions – failed to pass the first special session.

“It seems to me the lieutenant governor’s priority was focusing on partisan issue of abortion and trying to score political points rather than taking care of the business of the state ready to be resolved,” Turner said.

Not to mention, as Texpatriate points out, that Capriglione can’t count votes.

Anyways, the House only voted 84-40 in favor of the bill, sixteen short of the supermajority required for passage. Among the 40 dissenting votes, only 13 were Democrats. This means that even if every Democrat in the room had supported the bill, it would have failed. Make no mistake, the Tea Party killed HJR2.

And as I noted that’s a lot of absentees and/or abstentions. The Republicans only needed six Democratic votes to get to 100 if they were uniformly in favor. They got 27 Yeas, so any shortfall is indeed their fault.

Rumor has it that once again there will be other items on the call. At least one additional item, if there are to be any, would be welcomed by members of both parties.

Despite broad bipartisan support, Texas lawmakers have been unsuccessful this year in their efforts to pass a bill issuing tuition revenue bonds — or TRBs — to fund campus construction around the state. Returning for yet another special session, which Gov. Rick Perry called on Tuesday, may provide them with an opportunity to try again.

“I don’t think any of us have ever given up hope,” state Rep. Donna Howard, D-Austin, said. “We would certainly like to see TRBs on the call.”

At the end of the regular session, the TRB bill was held up by political jockeying as the clock ran out. In the two subsequent special sessions, Perry did not add the issue to the official to-do list. Lawmakers could have tried to move a TRB bill, but when the legislation is not on the governor’s special session call, it’s easy to defeat on a technicality.

Before the second special ended, Perry indicated that he might consider adding TRBs to that call. “Once we get the transportation issue addressed and finalized, then we can have a conversation about whether or not there are any other issues that we have the time and inclination to put on the call,” he said.

But a plan to address the state’s transportation funding needs failed, and so TRBs were never added. Now, Perry has called lawmakers back for a third 30-day special session, and transportation funding remains the only item on the agenda — for now.

“If and when both chambers pass the transportation bill, I believe very strongly that the governor will add TRBs to the call,” state Sen. Judith Zaffirini, D-Laredo, said.

Zaffirini pushed for a TRB bill for the last three regular sessions and has already filed a bill in the just-called special session. State Sen. Kel Seliger, R-Amarillo, and state Sen. Kirk Watson, D-Austin, are among the 21 co-authors on Zaffirini’s legislation and have also filed TRB bills of their own.

No other items as yet, but it’s early days.

As for the main event, a little leadership might help it finally get passed.

Rep. Joe Pickett, a leading House transportation policy writer, says the Legislature’s infantry is exhausted and it’s time for a meeting of the generals.

“We’ve taken this pretty far a couple of times now,” Pickett said of lawmakers’ efforts this summer to provide a modest boost in state funding of roads and bridges.

But the push got snared by abortion politics in the first special session. In the second, it caught its pants leg in a complex bramble of disagreements that include philosophical clashes over how much money is needed in the state’s rainy day fund; many Democrats’ resentment that public schools play second fiddle to infrastructure in the state budget process; and increasingly petty resentments among Republicans who run the show. The whole thing is playing out as top Republicans figure out their futures, in a game of musical chairs for statewide offices, and lowly Republicans look over their shoulders to see if they’re getting a primary opponent this winter.

“Maybe the Big 3 should meet and see if they have any suggestions on how to get this over the line,” Pickett said, referring to Gov. Rick Perry, Lt. Gov. David Dewhurst and Speaker Joe Straus, R-San Antonio.

“Give us some guidance or an outline” Pickett pleaded. He said several lawmakers belonging to both parties have suggested that the top leaders should huddle.

A better funding mechanism wouldn’t hurt, either. But don’t hold your breath waiting for that. BOR and Texpatriate have more.