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B-Cycle’s future

There’s some trouble in San Antonio.

San Antonio B-Cycle could be on the verge of following rideshare and disappearing from the San Antonio landscape, multiple sources have told the Rivard Report, unless it can win the local government, corporate and philanthropic financial support that bikeshare enjoys in cities like Boston, Philadelphia, Denver, Houston, and Austin. The same sources said Cindi Snell, the unpaid executive director since B-Cycle’s started here, announced at a Tuesday B-Cycle board meeting that she has decided to step down later this year. Snell has recently told friends and colleagues in the cycling community that she is exhausted after four years of unsuccessful efforts to win any major sponsorships and operating on a bare bones budget and pro bono support services to survive.

Sources say the B-Cycle board will have to consider shutting down or scaling back operations even as it seeks a new executive director, which it lacks funds to pay. One option would be to turn down the $1.2 million TXDOT grant to avoid the increased operating costs associated with an expanded network, but that would signal an end to rideshare’s growth in San Antonio, disappoint many neighborhoods awaiting stations, and the board would still face an underfunded system that would have to operate after losing Snell, bikeshare’s strongest and most visible advocate in San Antonio.

The bulk of funds that have built the San Antonio B-Cycle system flowed through the City’s budget from federal stimulus programs, and like the pending TXDOT grant, were for bikes and stations. Snell, co-owner of the Bike World cycling stores, has worked full-time for free while B-Cycle’s seven employees are paid modest salaries or hourly wages. The City, County and regional government entities do not contribute any funding to support B-Cycle. The 80/20 Foundation and Baptist Health Foundation have each contributed $50,000 grants this year, but no national company or locally-based company has shown interest in sponsoring bikeshare in the city.

That story, which has been shared 126 times after being posted to the San Antonio B-Cycle Facebook page, has generated promises from city leaders that they would work to save the program, but as yet I’ve not seen any reports saying that a sponsor or other funding source has been found. San Antonio was the first city in Texas to get B-Cycle, and it’s been very successful, with more stations and bikes and checkouts than Houston’s B-Cycle. It would be a big loss for them if it can’t sustain that success. Next City has more.

Meanwhile, Houston has a sponsor for its existing B-Cycle stations and is looking for more grant money to allow for further expansion.

Houston so far has avoided pitfalls, said Will Rub, director of Houston B-Cycle, by stretching the seed money it received from Blue Cross Blue Shield of Texas in 2013 to expand the system.

“That and the fact that we have operated on a very lean basis,” Rub said. “We have been able to cover approximately 70 percent of our operating expenses through the income generated by the system, therefore we’ve been able to stretch the sponsorship dollars. We’ve even had a few months where the system income has exceeded our monthly operating expenses.”

More money would help Houston to expand the system. Right now it is focused on downtown and nearby areas such as the Museum District, Midtown and Montrose. Adding stations or offering service in additional neighborhoods, like the Heights or close to the University of Houston and Memorial Park, would require corporate partnerships or grant funding.

Rub said he has applied for funding from the Houston-Galveston Area Council, which doles out some federal money for transportation options such as biking. The proposal would be for $3.4 million from H-GAC, with the local B-Cycle matching 20 percent of that with money they collect from fares or raise via other sources.

“If we receive the award we will put a plan into action that will result in adding 71 more stations over the next two-plus years,” he said.

The plan would also add 600 bikes.

“That would establish a very well networked bike share program,” Rub said.

If the H-GAC proposal does not happen, Rub said, finding a title sponsor would be hugely important to maintaining and expanding the system.

“We, along with the entire bike share industry, feel that we can provide a great deal of value to a title sponsor,” Rub said. “But bike share is still a relatively new industry and doesn’t have the advertising industry metrics to justify the investment, from a sponsor’s perspective. That is the challenge faced by many of the programs around the country.”

I hope they can get that grant and execute that expansion plan. I also hope they will have the same kind of backing from the next Mayor as they have had from the current one. You know how I feel about this sort of thing.

Fixing pipes needs to be part of the state water plan

The idea of conservation is to use less than you are currently using. When a large part of your water usage is due to leaks and losses, any sensible plan for conservation should start with addressing the underlying issues causing those leaks.

About 40 percent of the pipes supplying Houston’s water are still in use years past their life expectancy with some dating back nearly a century to the era of the Ford Model T and 2-cent stamp.

When last year’s historic drought and searing 100-degree temperatures put added pressure on the city’s aging infrastructure, it sprouted 11,000 leaks. Some of these ruptured pipes gushed for days and weeks.

The city lost or could not account for 19 percent of its water in the 2011 fiscal year that ended in June. That amount escalated in September and October of last year when about one-fourth of the city’s water was being lost, records obtained by the Houston Chronicle showed.

“We don’t need that much water running down a rat hole,” said Dale Thompson, a Houston engineer who has served on several water district boards. “For instance, I saw crews patch the same short stretch of Gessner near my home about five or six times this past year.”

[…]

According to recently released city records, about 40 percent, or 3,000 miles, of the pipelines winding through Houston have already been used longer than 50 years – which industry experts say is the average life expectancy for a pipe.

The city has no idea of the exact age of the bulk of these pipes – except that they are well past their prime.

A third of the city’s pipelines – some 2,500 miles – had their date of installation accidentally omitted when handwritten data was converted to new records about 50 or 60 years ago, authorities said.

Houston is not the only community reaching a critical juncture where it needs to replace aging infrastructure inherited from previous generations. The American Water Works Association released a report this year that warns $1 trillion will be needed to replace America’s aging pipelines over the next 25 years.

Ari Copeland, a water engineer with the association, said municipal governments don’t want to deal with the high cost of digging up and replacing these old lines. “Some in New England date to the 1800s and are still made of wood,” Copeland said.

That Trib story from last week about conserving water discussed fixing broken pipes as part of the overall picture. The reason municipalities don’t like having to deal with this is because of the large capital costs. It’s truly unfortunate that a few billion dollars to begin to address this issue wasn’t part of the original stimulus package of 2009 and hasn’t been seriously discussed since then, but there’s nothing we can do about that now. What we can do in Texas is insist that there be a provision for helping cities pay for repairs and improvements to their water infrastructure as part of the state’s overall water plan. Losing water needlessly like this costs everybody.

It’s not so easy being green

For cities, anyway, at this time.

Easy for him, at least

College Station, the maroon-hued home of Texas A&M University, is finding it is not easy being green.

Four years after launching an ambitious local effort to fight global warming, city leaders say their high hopes have fallen to hard economic realities, forcing them to abandon their green-at-all-costs approach.

The College Station City Council decided last month that its green efforts should be “fiscally responsible” and create “a real and tangible return of investment to the city.” The city also no longer will strive be a leader in energy efficiency and the reduction of emissions from carbon dioxide and other heat-trapping gases.

“Enthusiasm remains, but it is tempered by the current economy,” said Bob Cowell, the city’s planning director.

So, now the city, for example, will look at the cost of maintenance and the lifespan of a hybrid vehicle before buying one. If the objective is a greener fleet, the city may look at reducing its size, instead of adding another hybrid, Cowell said.

“We are being a little more deliberate,” he said.

The problem is that these things have sizable up front costs, which are recouped over some number of years in lower energy expenses. Cities and states are still feeling large effects of the economic collapse from 2008, so investments of all kinds tend to get deferred, no matter how good the payoff is. The federal government helped once with the stimulus, and it would make a lot of sense to do it again what with interest rates being as low as they are and the need being as strong as ever, but suffice it to say that ain’t gonna happen any time soon. So here we are, and when cities are able to start doing this again it’ll wind up costing them more, both from the lost time and from higher interest payments.

Texas’ unemployment rate spikes

Texas unemployment rate hits its highest mark since 1987. That’s probably not the kind of headline Rick Perry wants to read right now.

As Gov. Rick Perry touts job creation and limited government on the campaign trail, the Texas’ unemployment rate tied a 1987 record in July and the Austin-area took the brunt of the state’s job losses in the public sector.

The Texas Workforce Commission on Friday termed the employment results “mixed” because the state added 29,300 jobs but the seasonally adjusted jobless rate increased from 8.2 percent in June to 8.4 percent last month.

Having the state tie a 24-year high for unemployment rate could be coming at just the wrong time for Perry. Perry has long called Texas a national jobs-creation leader in a country besieged by unemployment. He traveled through Iowa this week on a bus with “get America working again” painted on the side.

The latest unemployment numbers could weaken that message. The rate hasn’t been this high since the mid-1980s oil bust. And even though Texas has received numerous accolades for creating more jobs in recent years than any other state, 26 states had a lower unemployment rate in July.

In other words, Texas’ unemployment rate is slightly worse than the median, and is now only 0.7 points better than the national rate. What a miracle!

There’s more from the Chron and the Trib. I have often complained in this space about how a writer from some national media outlet will do a story about Texas that gets things fundamentally wrong, but so far it’s a non-Texan who has made a critical point about these figures that has been unmentioned by the locals. As Jared Bernstein has pointed out, an awful lot of Texas’ job growth in recent years has come from the govern sector. As quite a few of those jobs were in public education, the stimulus played a large role as well. We are of course now seeing many of these jobs get lost, thanks for the most part to the state’s budget cuts. Growth elsewhere is thankfully enough to offset that, and since many school districts had been prepared for even worse cuts than what they ultimately got, fewer education jobs than originally anticipated will be lost. The point is that Texas’ job picture is much better than it otherwise would have been in the past thanks to government hiring, and it will not be as good as it could be in the future thanks to government firings. You can’t talk about Rick Perry and jobs without talking about that if you want to tell the whole story.

Subsidies for jobs

Let’s be clear about what this is, shall we?

When Lt. Gov. David Dewhurst crisscrossed the state last year touting his program to provide state subsidies to anyone who would hire unemployed workers, Texas employers lined up.

To the state’s most powerful lawmaker, the rationale for wage subsidies was simple: The Texas economy would benefit and state government could save money if employers would hire Texans who were starting to receive unemployment benefits.

Put them to work rather than put them on the dole.

“We’re talking about creating jobs that will continue long term, not just for several months,” Dewhurst said at the time. “This is smart money.”

Over the past 15 months, more than 3,000 employers -— from conglomerates to mom-and-pop establishments — have answered the call. More than 12,000 people have been hired into jobs in call centers, restaurants, security firms, banks, warehouses and retail stores.

For every person hired into a $15-per-hour or less job, employers received $500 a month from the state for up to four months.

The Texas Back to Work program proved so popular that it spent its $16.3 million in state money in a matter of months and went on to spend an additional $5.1 million in federal funds. The U.S. Department of Labor also gave the program an award for being innovative.

Now after 15 months, Dewhurst has proposed that the Legislature allocate $15 million in state funds to extend the program. And that, in turn, raises questions about how effective the program has been at meeting its goals.

Has the program saved the state money? Has it created jobs? Or has the program used state money to fill jobs that would have been filled anyway?

This is what is commonly called an economic stimulus program. It’s when you spend government money for the purpose of enabling job creation. People tend to freak out when it’s done by a Democratic President, but when a Republican Lieutenant Governor does it, no one bats an eye. I’ll leave it to you to figure out why that is.

Federal education funds officially on their way

That’s $830 million that the Senate was counting on for education funds that it will now officially have.

Just two weeks after a bipartisan federal budget deal ended an eight-month impasse over $830 million in federal education funding, the U.S. Department of Education agreed Friday to send Texas the money that previously had been in dispute.

U.S. Education Secretary Arne Duncan quietly made the announcement on Good Friday. But Texas Republicans immediately declared victory in a two-front political war that had been waged for months.

“Today our schoolchildren and teachers received the funding they should have never been denied,” said Rep. Michael Burgess, R-Lewisville, who led Texas House Republican efforts to secure the aid. “This $830 million will give our schoolchildren, teachers and communities additional funding during this financial crisis. Today is indeed Good Friday.”

Burgess said he received word of the aid reversal during a conversation with Texas Gov. Rick Perry, who had condemned the attempt by Texas congressional Democrats to attach strings to the federal school funding.

Texas Democrats, led by Rep. Lloyd Doggett, D-Austin, had required the state to pledge that it would not divert the federal education funding to other uses as the Legislature attempts to plug a state budget shortfall.

Republicans will celebrate the political win, which resulted from the budget deal that avoided a federal government shutdown, and everyone in Texas is no doubt glad to have these funds, but Doggett was right to do what he did. In the end, this money will be used for education and not for plugging other holes in our own budget, so as far as that goes Doggett got some of what he wanted as well. What happens in 2013 will be up to that Legislature.

Doggett Amendment repealed as part of budget-shutdown deal

Oh, the things that can happen in the dark of night.

In a victory for Gov. Rick Perry, the most recent Congressional budgetary stopgap — passed Friday night to avoid closing the federal government — contains language that repeals the “Save Our Schools” amendment from U.S. Rep. Lloyd Doggett, D-Austin. The measure would have prohibited Texas from using federal dollars to replace state funding of schools.

Last summer, Doggett and other Democrats in the House supported an amendment to a bill allocating $10 billion in federal funding for education that said Texas couldn’t use its portion — $830 million — to supplant rather than supplement state public education money. Because Perry refused to guarantee future funding without the permission of state lawmakers, the Department of Education denied the Texas application for money. In a Jan. 10 New York Times letter to the editor, Doggett wrote that he worked to pass the measure because Perry and state lawmakers used $3.25 billion in federal stimulus dollars marked for education to replace state funding for schools in 2009.

The US House had repealed the Doggett Amendment in February, but that was before the hostage standoff that resulted in last weekend’s deal. Even before that, there was speculation that the funds would come our way, and indeed the Senate version of the budget assumed those funds would be available. I still wish someone would provide me with a roadmap for when federal money is pure and wholesome and when it’s the tool of the devil. Anyway, it looks like we will get this money after all, and given how dire the budget is there really isn’t a bad way for it to be used.

San Antonio bike share

I love the idea of B-Cycle, San Antonio’s new bike sharing program, I’m just not sure how well it will work.

“I think it will encourage faster infrastructure for bike lanes and all the things we need because suddenly it’s there, visitors will use it, and we need to make sure we can get around,” said Cindi Snell, executive director of San Antonio B-cycle and co-owner of Bike World, the local bike shop that won the contract from the city to run the new program.

This is also the first such bicycle-sharing program in Texas, a fact not lost on anyone Saturday.

“Yee haw,” Snell said. “We don’t ever do anything first. I’m just so excited that we have it before Austin.”

The city received stimulus funds, plus grant money for the program from the Energy Department and the Centers for Disease Control and Prevention. Bike World created a nonprofit called San Antonio Bike Share, which will administer B-cycle, a national bike-share program.

Bike World will maintain the bicycles and run the daily operations. The organization has hired a full-time operations manager who will monitor bike maintenance and ensure they are evenly distributed throughout the city, Snell said.

[…]

Bicycles, 140 total, will be distributed among 14 docking stations in or near downtown; all but one, at the UTSA Downtown Campus, are now open.

Users can rent the bicycles free for the first half-hour and $2 for each half-hour after that, or pay $10 and keep them 24 hours.

A seven-day membership is available for $24, and an annual pass costs $60 for adults and $48 for seniors or students.

I guess I’m thinking of it as a value proposition for the casual bike user. A decent new bike will run you a couple hundred dollars, or you can get a used bike pretty cheaply. I bought one a few weeks ago for $40. On the other hand, joining a program like this saves the hassle of looking for an affordable bike and won’t take up any space in your garage or apartment, so there is definitely some appeal. I wish them good luck with the effort.

When I read this story, I thought that Houston might have been a better fit for the trial run of this – we have a pretty decent bike infrastructure, and a lot of people living in the city’s inner core. Turns out I was right to think so – Houston is on the way to getting its own bike share program, thanks to a grant from the EPA that will help with the startup funds. Here’s a KUHF story and a Houston Tomorrow post about that. There’s also a Houston Bike Share Facebook page, though it’s not exactly overflowing with fans just yet. I wanted to know more, so I contacted Laura Spanjian with a few questions. Here’s what I learned:

– The City expects to have bike stations installed, electronic access system and customer website implemented, and bike sharing up and running by fall of 2011. This will begin with three stations at which five to seven bikes will be available, at the George R. Brown Convention Center, Market Square, and City Hall. Longer term, this will be extended to the rest of the city, with about 500 bikes available in all. A map of the pilot stations plus more information about how bike sharing works is here.

– In the meantime, logistical issues such as who will operate the bike share – in many cities, such as San Antonio, it’s handled by a non-profit – are being worked out. You can find out more details in this fact sheet Spanjian sent me.

– Houston has a number of excellent off-road bike trails, but the bike infrastructure on the streets is lacking. The task force working on this will be considering ways to make what we’ve got work better for bicyclists so that more people will be encouraged to give it a try.

– Along those lines, I asked Spanjian who the target audience is for a bike share program. She said not the hardcore bicyclists, since they have their own rides, but folks who have an interest in bike riding but also have concerns about safety. I presume this might include people who aren’t willing to shell out three or four hundred bucks on a bike on the chance they might not feel comfortable riding it but who could be persuaded to shell out, say, ten bucks for a day.

– B-Cycle, the group running the San Antonio Bike Share, will be in town on April 20 at the City Hall Farmer’s Market to demonstrate how the program works. I’m going to try to be there to check it out.

So there you have it. I’m looking forward to seeing how it goes in San Antonio, and how it gets implemented here.

House repeals Doggett Amendment

This may be a partial answer to my earlier question about the status of the $830 million in federal education funds that await Texas if Governor Perry will attest that they will be actually spent on education.

In the latest round of the political feud over $830 million in federal funding, House Republicans, led by U.S. Rep. Michael Burgess, R-Lewisville, passed a bill Saturday that blocks the enforcement of the Texas-specific Education Jobs amendment.

Republicans do not like the amendment, introduced by U.S. Rep. Lloyd Doggett, D-Austin, last summer, because it requires Texas — and only Texas — to guarantee that it will maintain state funding for education throughout 2013. Democrats support the amendment because it requires the state to use the federal money to supplement, rather than supplant, its public education funding.

[…]

“There is a clear path to get this money,” Doggett said. “All the governor needs to do is sign a three-page application, like the one he signed to get the $3.25 billion of aid he kept for purposes other than education.” That $3.25 billion would be the federal stimulus money— marked for education — Perry accepted in 2009 and used to offset spending in other areas of the budget.

In a statement, Burgess said, “The schoolchildren and teachers in Texas will finally have the opportunity to receive the $830 million they should have had in the first place. This money should have never been denied when the original bill passed, and it is a shame that Mr. Doggett put education funding at risk.”

The legislation still has to make it through the Democratically-controlled Senate, where U.S. Sens. Kay Bailey Hutchison and John Cornyn have sponsored a companion bill.

Two points. One, if this thing makes it through the Senate I have a hard time seeing it get Presidential approval, given that Education Secretary Arne Duncan recently warned Texas to fish or cut bait. What possible reason could President Obama have to fold on this and give Rick Perry an unqualified propaganda victory?

And two, I seem to have lost the ability to determine when it is that federal funds for Texas are evil and fascistic and must be resisted lest they pollute our precious bodily fluids, and when they are good and wholesome and must be fought for. Is there, like, a Wikipedia page or something I could use as a guide to aid me in these matters? Thanks.

The balanced budget fantasy

There’s really only one thing to say about this.

One of Gov. Rick Perry’s campaign staples last year was that America would be a far better place if it were more like the Lone Star State — limited government, fewer taxes, sensible regulation and, of course, a balanced budget.

Now, Perry and his cohorts in the Texas Legislature are making that critique more explicit by pushing for a resolution calling for a constitutional amendment that would force Congress to do what those in Texas are required to do: balance the budget annually.

Perry and Lt. Gov. David Dewhurst called for a federal balanced budget amendment in their inaugural addresses, and Perry declared support for a balanced federal budget an emergency issue, which means that lawmakers can begin to consider it right away.

“It fits into his overall philosophy about government and fiscal responsibility,” Perry spokesman Mark Miner said. “In Texas, at the end of the day, the budget will be balanced. It’s the Texas way versus the federal way, which is to continue spending without being accountable.”

Dewhurst, in an Austin American-Statesman article co-written with state Sen. Steve Ogden, R-Bryan, contended that Congress “lacks fiscal responsibility and is spending all of us into serious debt. … It is time for Texas to lead the way and seek a convention so that the states may propose a national balanced budget amendment.”

In Washington, another Texan is making a similar push. U.S. Sen. John Cornyn, R-Texas, along with U.S. Sen. Orrin Hatch, R-Utah, and 21 other senators introduced a balanced budget amendment to the Constitution last week.

Let’s put aside the economic illiteracy of this proposal – Lord only knows how much higher the unemployment rate would be right now if the federal government had been forced to cut a bunch of spending in 2009. And let’s put aside the irony of Perry, Dewhurst, et al lecturing others on fiscal responsibility given that they’ve presided over budget deficits in three of the last five Legislative sessions – they were bailed out of having to face up to it last time thanks to the federal stimulus that they all profess to hate – and given that they’ve built a structural deficit into Texas’ budget thanks to the irresponsible 2006 property tax cuts. Let’s just focus on one simple question: Why, after ten years of governoring, is this such a high priority for Rick Perry right now? I mean, it’s not like the federal government wasn’t running deficits during his first eight years in office. In fact, when Rick Perry took office, the federal government was in surplus, thanks to the economic policies of President Bill Clinton, but it didn’t take long for President Bush to fix that. But only now that Bush is safely out of office is Rick Perry concerned about this. Whyever do you suppose that may be?

The national folks notice Texas’ budget situation

You’ve probably seen this by now, but just in case you haven’t, here it is.

Texas Gov. Rick Perry likes to tell Washington to stop meddling in state affairs. He vocally opposed the Obama administration’s 2009 stimulus program to spur the economy and assist cash-strapped states.

Perry also likes to trumpet that his state balanced its budget in 2009, while keeping billions in its rainy day fund.

But he couldn’t have done that without a lot of help from … guess where? Washington.

Turns out Texas was the state that depended the most on those very stimulus funds to plug nearly 97% of its shortfall for fiscal 2010, according to the National Conference of State Legislatures.

We here are all familiar with the details, but it’s nice to see it get some play in the outside world. Three points to make:

1. The story does not mention the structural deficit caused by the 2006 property tax cut, which was supposed to be paid for by the business margins tax (among other things) but has not been. It’s easy to blame the economy for the dire straits we now face, and to be sure that’s a significant part of it, but Rick Perry and his buddies blew a multibillion dollar hole in the finances five years ago, and they still haven’t done anything about it. That cannot be emphasized enough.

2. I still don’t know what to make of Perry’s supposed national ambitions. I just don’t see how he gets elected President, and it’s not really clear to me how he’s an asset as a VP nominee either, but I’ll admit to a certain myopia on the topic. That said, a story line like this, coupled with subsequent headlines about 100,000 teachers getting laid off if there are no significant changes to the budget, just don’t seem like they’d play well in Peoria. How exactly is this a model for the rest of the country to follow?

3. I will always wonder how things might have played out if Perry really tried to block the stimulus money, and not just the relatively paltry amount for unemployment insurance, in 2009. No pain in 2009 meant no real counter to Perry’s ludicrous claims about how good things were around here. You could argue that in more ways than one, Barack Obama was the single biggest reason Perry got re-elected.

Krugman on the Texas budget deficit

By now, you’ve probably seen Paul Krugman’s column about the Texas budget deficit. He uses it to make some great points about the failure of the conservative slash-and-burn approach, but he missed a couple of facts that make it all the more damning.

How bad is the Texas deficit? Comparing budget crises among states is tricky, for technical reasons. Still, data from the Center on Budget and Policy Priorities suggest that the Texas budget gap is worse than New York’s, about as bad as California’s, but not quite up to New Jersey levels.

[…]

So what happened to the “Texas miracle” many people were talking about even a few months ago?

Part of the answer is that reports of a recession-proof state were greatly exaggerated. It’s true that Texas job losses haven’t been as severe as those in the nation as a whole since the recession began in 2007. But Texas has a rapidly growing population — largely, suggests Harvard’s Edward Glaeser, because its liberal land-use and zoning policies have kept housing cheap. There’s nothing wrong with that; but given that rising population, Texas needs to create jobs more rapidly than the rest of the country just to keep up with a growing work force.

And when you look at unemployment, Texas doesn’t seem particularly special: its unemployment rate is below the national average, thanks in part to high oil prices, but it’s about the same as the unemployment rate in New York or Massachusetts.

What about the budget? The truth is that the Texas state government has relied for years on smoke and mirrors to create the illusion of sound finances in the face of a serious “structural” budget deficit — that is, a deficit that persists even when the economy is doing well. When the recession struck, hitting revenue in Texas just as it did everywhere else, that illusion was bound to collapse.

The only thing that let Gov. Rick Perry get away, temporarily, with claims of a surplus was the fact that Texas enacts budgets only once every two years, and the last budget was put in place before the depth of the economic downturn was clear. Now the next budget must be passed — and Texas may have a $25 billion hole to fill. Now what?

Krugman is correct that we have a structural deficit, but that’s primarily the result of the 2006 property tax cut, which he didn’t mention. He also didn’t note that the budget was only balanced in 2009 because of the federal stimulus that Perry loudly hates at every opportunity. Depending on how you looked at it – and I confess, as I go through my archives, I’m a little confused about which numbers are referring to what – you’ll see figures like a revenue shortfall of $3.7 billion and budget shortfall of $9.1 billion cited. The rainy day fund could have covered either of those, but in the case of the larger number it would have mostly wiped it out, leaving nothing for this biennium. Point being, the big bad federal government and all those evil Democrats gave us a two year grace period. Not that you’ll ever hear that from the ruling party.

Anyway. For those who like visual aids, Open Left has you covered. Forrest Wilder deals with the factually-challenged response to Krugman that Perry is pushing. Finally, Kevin Drum notes the revenue problem that all states have been facing.

You’re gonna miss it when it’s gone

So long, stimulus dollars. You were nice while you lasted.

Texas’ $16.4 billion share of federal stimulus money winds down next year, a fading boon that will affect Houston jobs and research from the M.D. Anderson Cancer Center to the Metropolitan Transit Authority.

While Republicans have argued that the Obama administration’s emergency spending plan cost too much to create too few jobs, it did result in hundreds of thousands of jobs across the nation that will need other money to continue or face extinction over the next six months.

But the short-term difficulties of extending 2,184 federally subsidized jobs across Harris County pale against the wider challenges ahead as Texas’ state and local governments brace for even deeper cutbacks and as the White House and Congress work to trim the deficit and national debt.

And with politically conservative gains in the midterm elections, it’s likely that the loss of government-funded jobs is just beginning, both nationally and in Texas.

Yes, because throwing people out of work is so much better policy than incurring short-term debt at a time of record low interest rates.

I’ve been wondering lately how the last two years would have played out politically if the federal government hadn’t provided all those billions to help balance Texas’ budget in 2009. It’s hard to be objective about “what if” scenarios when you’ve just suffered a huge loss, but I have to believe that things would have been different. I’m just not sure how, and even with the result we had, I’m not sure that piling all the cuts and layoffs we’re sure to get now on top of the economy as it was in 2009 would have been worth the potential electoral mitigation. If the Democrats can’t make the Republicans own what they’re about to do in Austin, they can’t do anything.

Branch makes the case for stimulus spending

I don’t know if that’s what he intended, but it sure is what he did.

State Rep. Dan Branch, R-Dallas, said Thursday that Texas should consider seizing one advantage from hard times, which would be to let universities lock in contractors and borrowing costs at steep discounts.

“If there’s a real need for a building going forward, this is a good time to build,” Branch, who heads the House Higher Education Committee, said at an Austin forum sponsored by the online news outlet Texas Tribune.

Branch acknowledged that financial aid and academic funding are “on the table” for cuts next session because of the state’s huge budget deficit.

[…]

Branch said there’s no guarantee the Senate would go along.

Still, he said some of America’s most popular infrastructure projects – dams, bridges, parkways – were built during the Great Depression. Lean times present opportunities, he said.

“Interest rates are historically low and construction costs are down 20 [percent] to 30 percent,” he said. Campuses could spend a year on planning, Branch said, and the state could issue bonds in 2013, so costs over the next two years would be “almost nothing.”

This is basically the argument that many progressives have been making about infrastructure spending, and how this is absolutely the right time to be doing it. It would be a huge boost for the economy and for the employment rate, given that construction has suffered the most in this downturn, it would be an excellent long-term investment, and it would be taking advantage of historically low costs and interest rates. What’s not to love? I wish Rep. Branch lots of luck in convincing other members of his party of the wisdom of this idea.

The deficit debacle

Think things are bad now? Just you wait.

Texas faces a budget crisis of truly daunting proportions, with lawmakers likely to cut sacrosanct programs such as education for the first time in memory and to lay off hundreds if not thousands of state workers and public university employees.

Texas’ GOP leaders, their eyes on the Nov. 2 election, have played down the problem’s size, even as the hole in the next two-year cycle has grown in recent weeks to as much as $24 billion to $25 billion. That’s about 25 percent of current spending.

The gap is now proportionately larger than the deficit California recently closed with cuts and fee increases, its fourth dose of budget misery since September 2008.

Against the backdrop of the acrimonious campaign between Republican Gov. Rick Perry and Democratic challenger Bill White, Texas’ top elected and budget officials have guarded even more tightly than usual against leaks of information. But bad numbers continue to dribble out in legislative testimony and agency reports.

The bottom line: Public schools, college students and government employees, not just poor and needy Texans, might very well lose money, grants, benefits and even livelihoods during and after next year’s legislative session.

Emphasis mine. Keep that in mind the next time you hear Rick Perry trash California.

Dale Craymer, president of the business-backed Texas Taxpayers and Research Association, said next year very well could bring unprecedented retrenchments, including layoffs or furloughs.

“This budget’s not going to be solved with a single magic bullet,” said Craymer, a top budget adviser to former Govs. Ann Richard and George W. Bush. “It’s going to be solved by a number of very hard decisions that cause a lot of pain in a lot of different areas. So furloughs may indeed be part of the solution,” though even far-ranging layoffs of state employees wouldn’t close the budget gap by themselves, he said.

In 2003, the Legislature eliminated more than 5,300 full-time jobs with the state or its universities and two-year colleges. Already this fall, though, the state agencies alone – not counting potential layoffs at the campuses – have pointed to nearly 10,000 full-time jobs lawmakers might whack if they desire to cut most programs’ spending by 10 percent. Employee groups fear that health benefits, recently reduced, will take further hits.

“It’s going to be pretty gruesome,” Craymer said.

And just remember, all of this has happened with Republicans in complete control of the state. The 2009 budget was balanced entirely because of the stimulus that so many of our Republican leaders like to trash. We’ll get no such help this time around. Every bit of this mess is owned by Rick Perry, David Dewhurst, Joe Straus, and the Republican majorities in both legislative chambers. If you don’t like the situation we’re in, and especially if you don’t like the things they’re talking about doing to deal with it, don’t vote for them. Nothing will change until the leadership of the state changes, and even that is only the first step. The state is simply not ready today to deal with the fact that we have a wholly inadequate tax system that cannot meet the needs of our growing and changing population. I don’t have a whole lot of faith that we’ll get there before it’s too late.

Privately funded high speed rail?

From Houston Tomorrow:

A possible Houston to Dallas high-speed rail line was the topic of a Monday morning breakfast meeting featuring Yoshiyuki Kasai, the chairman of Central Japan Railway, Japan’s largest rail company and maker of the famed Japanese “bullet trains.” Kasai was hosted by the Greater Houston Partnership (GHP).

The company is developing plans to build a Houston/Dallas high speed rail (largely privately financed) as the first phase of a Texas system, according to the GHP invitation. Kasai used the meeting to brief the region’s business leaders on the details and opportunities that Houston-Dallas high-speed rail service would bring to the Houston region.

This sounds exciting, but it’s hard to know what a timeline for this might be, assuming it really is on track (no pun intended). The potential cost is pretty high, and while there may be federal funds available to offset some of those costs, there are many obstacles that could delay construction. I’m delighted to hear this is happening, but it’s way too early to get too worked up. Dallas Transportation has more.

Rick Perry loves the stimulus

He just hates to admit it.

When 47 state and territorial governors sent a letter on Feb. 22 asking for more federal matching dollars for Medicaid, Perry refused to sign. He likes to talk about how he thinks the American Recovery and Reinvestment Act is a waste of money.

Yet on Aug. 25 Perry wrote an unpublicized letter to Kathleen Sebelius, the health and human services secretary formally requesting that Texas receive the increased federal match for Medicaid. The extension is part of the Education Jobs and Medicaid Assistance Act, and gives states a 3.2 percent increase in the matching funds from January to March 2011, and a 1.2 percentage point increase from April to June 2011. Additional increases are available for each quarter during this period for states with high unemployment rates. This higher matching rate was originally slated to expire at the end of 2010.

Perry’s office released the letter only after the Observer inquired about Perry’s position on the matching funds. It appears the Obama administration has also grown weary of governors like Perry rejecting the stimulus program publicly, and then accepting the funds privately.

Sebelius wrote a you-better-check-yo-self letter on Aug. 16 letting governors know that although President Obama had signed off on the additional funds that 47 of them had requested, those funds would only be made available to states whose governors formally requested them. Apparently Perry blinked in this game of chicken and wrote his letter like a good governor should.

I believe the proper expression here is “Thank you, sir, may I please have another”. While Perry prefers money he can spend unaccountably, he’ll still take whatever he can get. Those $21 billion shortfalls aren’t going to fix themselves, you know. As long as he can still bite the hand that’s feeding him, it’s all good with Perry.

Sometimes the headline tells you all you need to know

Rep. Joe Barton celebrates Waxahachie clinic, which is expanding with stimulus he opposed. Actually, this one does have a bit more to it than that:

“There were two pieces of legislation that helped bring this about,” Joseph Gallegos, senior vice president of the National Association of Community Health Centers, said at Wednesday’s groundbreaking. “Part of this was economic stimulus funding, and the other was in the Affordable Care Act.”

The second is the federal health insurance overhaul, which Barton also opposed.

Way to jump in front of the parade, Smokey Joe! Link via South Texas Chisme.

Congress wants education money spent on education

It sounds simple, but around here these things never are.

State leaders on Thursday threatened to sue the federal government over a restriction Congress is placing on $830 million in education funding for Texas.

Texas educators and Democratic congressional allies, however, say the strings are necessary because of the way Gov. Rick Perry and the Legislature handled federal stimulus money last year.

The issue pits all of the state’s major education groups against state legislative leaders and involves Texas’ share of funding for emergency education jobs in a bill expected to get final congressional approval next Tuesday.

Texas congressional Democrats inserted an amendment they say is necessary to ensure the money goes to school children and Texas teachers. Educators remain unhappy that some $3 billion in federal stimulus money for Texas education last year was used to replace state money instead of increasing the investment in public education.

The bill moving through Congress would require Perry to certify that the emergency education money would not be used to replace state funds and that education funding would not be cut proportionally more than any other program.

Lt. Gov. David Dewhurst said on Thursday the state would sue if the measure passes.

Litigation could hold up the funding and deprive school districts of funds needed to avert layoffs, said U.S. Rep. Lloyd Doggett, D-Austin, author of the amendment.

“This money could begin flowing to these school districts now,” Doggett said. “The only thing stopping it is Governor Perry’s decision on whether to certify that federal education dollars will get to the school boards for local purposes.”

More huffing and puffing from Dewhurst et al is here. Am I the only one who feels like we could settle this a lot faster and more cheaply if we simply handed everyone involved a ruler and pointed them towards the men’s room?

Jokes aside, there’s no question that the Lege used those federal stimulus dollars for their own purposes last year, which is to say they filled in the budget hole, including the five billion or so of structural deficit caused by the 2006 property tax cut, and patted themselves on the back for being fiscally responsible. For Congress to insist that the money they’re allocating be spent on the purpose they intended for it should not come as a surprise to anyone. And if Governor Perry had spent the last 18 months acting like a grownup and not like a three-year-old coming down from a sugar high (not that I have any first-hand knowledge of what that looks like), maybe Texas wouldn’t have been singled out like that. Too late for that, unfortunately. Katherine, Phillip, and Martha have more.

By the way, the bill in question, which was passed by the Senate and will be passed by the House next week, included another $850 million in funds for Texas’ Medicaid program, all of which will put a nice little dent in the current budget hole. A press release from Rep. Garnet Coleman about that is beneath the fold.

(more…)

Texas 20/20 on the budget

Via First Reading, a group called Texas 20/20 has taken a look at what other states have done to deal with their budget shortfalls, and how that may apply to Texas in next year’s legislative session.

The author is former Deputy Comptroller Billy Hamilton, who was a high-ranking aide to Democratic and Republican comptrollers.

Here’s an excerpt: “The key lesson from this review of approaches in other states is that most have balanced their budget only by using a variety of approaches and making painful budget and revenue decisions. There is no simple solution to budget problems as large as those that Texas will face in 2011. When the size of the budget gap is large, lawmakers must approach the task of balancing the budget with creativity and innovation. They must also be willing to decide what the key state services are — what must be preserved and what can be pruned. That is the goal. Reality, as the examples in the other states demonstrates, is often different.”

The full report is here. I will simply note two things. One, this is a detailed illustration of what Ezra Klein has called the anti-stimulus, as all these cuts have acted as a drag of nearly equivalent force to the federal stimulus package of 2009. The scary thing is that there’s much more of this to come, with potentially hundreds of thousands of jobs – teachers, police officers, fire fighters, those kinds of jobs – at risk. That’s because state governments, by and large, are required by their constitutions to balance their budgets, all of which acts to magnify the effect of an economic downfall. The federal government can do something about this, and it did some of it last year, but between the utter intransigence and indifference to suffering of the Republican Party and the shameful fecklessness of too many Democrats, we’re unlikely to get any further action from the feds. I can’t even guess how much worse it would have to get for there to be a change in thinking, but at this point nothing is beyond imagining.

The second point is that as useful as this report is, it does not mention the multi-billion dollar structural deficit that Texas faces thanks to that ginormous unaffordable property tax cut from 2006. We may survive this legislative session more or less intact, and we may finally see better economic conditions by 2013, but we’re never going to truly solve our budget issues until we deal with that. BOR and Dave Mann have more.

How to really put the unemployed to work

Texas Workforce Commissioner Tom Pauken has the germ of a good idea here. Unfortunately, he’s incapable of seeing what it is, and so goes off a cliff with it.

“Even in good economic times, there were people in Texas who saw the unemployment system as simply another entitlement program, which it’s not,” Pauken, who served in the Reagan administration, told me. “Obviously there are a tremendous number of people — they’ve lost their job through no fault of their own. They’re doing everything they can to try to find work. How do you distinguish between those who are really out trying to find work and those who simply want to draw an unemployment check as long as they can?”

Pauken suggests setting a wage of, say, $10 an hour and having people who get extended federal benefits work enough hours to cover their unemployment payment — “rather than it continue to be a drain on the taxpayer dollars.”

The appointee of GOP Gov.Rick Perry said this would weed out people “who may be gaming the system,” provide a worthwhile task for those trying their best and possibly open job opportunities.

[…]

Pauken “has it all wrong — hard-working Texans should not be required to take a low-paying job that has no relationship to their skills and background using their limited unemployment benefits to subsidize their wages,” saidMaurice Emsellem of the National Employment Law Project. “Unemployment benefits were created as an insurance program to help people get back on their feet, not to add insult to injury by blaming workers and their families for the devastating economic mess we’re in thanks to Wall Street.”

The Texas AFL-CIO’sRick Levy called the idea “a perversion of the unemployment system … Really what he’s proposing is a public jobs program, but instead of paying people a living wage, we would make them work for their unemployment benefits.

“In many ways, it’s an insult to working families that are doing everything they can to scrape by right now,” Levy said. “Basically, it would be putting people to work but eliminating things like minimum-wage and safety and health protections that only attach if you’re part of the workforce.”

To address Pauken’s points, there are people who believe that fluoridation of the water supply is a Communist plot to brainwash the American public. We’re not required to take that viewpoint seriously, and we’re under no compunction to do the same with those who think that unemployment insurance is a scam for lazy people, either. I’m sure there are a few folks gaming the system out there, working hard to get a meager one-third of their former salary instead of finding a job that might pay a real wage, just as there are those who commit other kinds of fraud. The marginal benefit we’d likely get from trying to root them out in this fashion is minimal, especially when weighed against the indignity and inconvenience of those who are working diligently to find employment while receiving this insurance. Putting the insult aside, what’s the point? Pauken doesn’t even suggest a pulled-from-his-ear figure of how much his silly idea might save if it were to be implemented, which is a sure sign of its half-baked-ness.

Having said that, I’m all in favor of a program to get unemployed people back to work, which we clearly need. It’s called another federal stimulus package, this one containing enough money for cities and states to eliminate the many large anti-stimulus packages that have greatly harmed the economic recovery. There’s still a gazillion infrastructure projects that can and should go forward, not to mention a lot of beach cleanup – I like the idea of making BP put up a couple billion dollars to pay for workers to clean the beaches – and of course we’ll need a lot of job skills retraining for folks who’ve been unemployed long term. That’d do the trick a lot more effectively than what Pauken proposes, and it would be a long-term winner for the federal deficit as well as all those underfunded states. You want people working, Tom, there’s your answer.

Was there no one in Texas that could tell us about our broadband situation?

I’m a little late in picking this up, so bear with me. Last week, the Texas Department of Agriculture published a map detailing where broadband access exists and doesn’t exist in Texas. Democratic candidate for Ag Commish Hank Gilbert, after criticizing the map as being much ado about not very much, then had some strong words about how the study that led to the map’s creation was funded.

“It was inappropriate for the Texas Department of Agriculture to outsource more than $3 million in federal funding to a Kentucky non-profit organization with a questionable record and significant ties to telecommunications companies when federal law allowed the state to conduct this project on its own,” Gilbert said.

He accused [Ag Commissioner Todd] Staples and the Texas Department of Agriculture of bypassing state agencies and public universities within Texas that could have completed the project.

“The fact of the matter is that federal law allowed the state or any of the public universities in Texas to conduct this project,” Gilbert said, citing the provisions The Broadband Data Improvement Act, 47 U.S.C. §1304, which states that multiple entity types-including government bodies-were eligible for the funds.

Gilbert also questioned why Staples would allow the Texas Department of Agriculture to do business with a company that has left controversy in its wake in North Carolina and Kentucky, signed restrictive non-disclosure agreements with telecom companies prohibiting disclosure of detailed coverage information, and has been accused of providing misleading information to the Federal Communications Commission.

Staples’ response to Gilbert’s charges came from his campaign. As yet, as far as I know, there has been no comment from the TDA itself about the substance of Gilbert’s remarks. (For that matter, neither has the Staples campaign.) Politics aside, that’s a pretty straightforward question: Why not fund the study through a Texas university? Surely any number of them could have done it, quite possibly for less than $3 million. This was paid for with stimulus money, so regardless of the actual price tag, it would have been nice to keep it here. It would be nice if the TDA could tell us why it chose not to do that.

Just a reminder about Perry’s unemployment tax increase

Lisa Falkenberg watches some video of Texas Workforce Commission Executive Director Larry Temple testifying before the Senate and reiterates something we knew.

Temple acknowledged Thursday to the Senate Committee on Economic Development that Texas’ decision not to take $556 million in unemployment stimulus dollars directly led to higher taxes for business owners and more borrowing from the federal government to replenish the state’s broke unemployment trust fund.

As you’ll recall, Gov. Rick Perry refused to accept a half a billion in federal unemployment stimulus dollars, saying there were too many strings attached, even though he knew the state’s unemployment fund was projected to go broke within months.

Temple testified Thursday that the commission has had to double the tax rate for businesses in order to replenish the unemployment fund. And he conceded under intense questioning from [State Sen. Kevin] Eltife that the hike wouldn’t have been as high if we’d taken the half a billion.

Earlier this week, Commission Chairman Tom Pauken notified lawmakers that the agency may have to issue $2 billion in bonds to feed the unemployment fund as time runs out on the state’s no-interest borrowing from the feds.

And for some businesses, the tax rate nearly tripled. You really need to see the video to get the full effect of Sen. Eltife’s questioning. Eye on Williamson has the key five-minute clip, which I’ve embedded here:

Sen. Eltife did his best to steer away from the politics of this, but we all know whose idea it was to turn down the unemployment insurance money. Rick Perry’s decision to do so was harmful to people who had lost their jobs and is now adversely affecting business owners. We knew this would happen, but he didn’t care.

Stimulus fight

As we know, HISD is reducing its workforce, including teachers, due to budget shortfalls. The Houston Federation of Teachers says that this is happening while there are a lot of unspent stimulus funds.

Houston Federation of Teachers leader Gayle Fallon pointed to Texas Education Agency spread sheets showing federal stimulus dollars and annual formula dollars, which are based on enrollment.

“We’re looking at hundreds of millions of dollars in unspent federal funds,” she said.

She’s talking about roughly $300 million, the majority of it consisting of federal stimulus dollars. The issue is being highlighted in The Houston Federation of Teachers’ next newsletter, which raised the question: Why is so much money left on the table when so many teachers might lose their jobs?

HISD Spokesman Norm Uhl said he has the answer.

“You can’t use it to offset general fund shortfalls,” Uhl said. “Federal funds have very specific rules you can use it for “A” but you can’t use it for “B.”

Fallon sent me a copy of her document, which you can see here. I emailed Uhl for a response, and this is what he sent to me:

The simple explanation is that some of those funds are for this year (through summer school) and will be spent this year. Some of the stimulus dollars we are spending half this year and half next year and there are some two-year funds that are part of next year’s budget. All of this money is already plugged into either this year’s budget or next year’s budget. It is NOT new money that can be used to cover general fund shortfalls. Federal funds have very specific rules or strings attached. You can spend it on “a” but not on “B” and you cannot supplant using federal dollars. In other words you cannot cover General Fund expenditures with certain federal funds. It’s called supplanting and it’s illegal.

I have to say, I’m still trying to figure all of this out. Not just this argument over stimulus funds, the whole debate over what Superintendent Grier is doing and whether or not it will be successful, where “successful” means better student performance and better graduation rates. I don’t know how I feel just yet about a lot of the stuff that’s going on in HISD. When I get it all straight in my head, I’ll let you know. In the meantime, I’m going to present whatever information I can. I hope it’s helpful to you as well.

Green University

Colleges and universities are on the green wagon.

“Green is good business,” said Pedro Alvarez, chairman of the civil and environmental engineering department at Rice University.

But it’s also about idealism.

“It’s not only a prerequisite to get a job but also something that genuinely appeals to this generation, how they could contribute to a better world,” said Barbara Brown Wilson, assistant director of the Center for Sustainable Development at the University of Texas at Austin.

Community colleges, boosted by stimulus funding and grants from the Department of Energy, push green technology work force training, from installing solar panels to building wind turbines.

Four-year schools have approached the field in different ways: Arizona State University established a School of Sustainability in 2007, offering bachelor’s and graduate degrees in the field. Rice offers a minor in energy and water sustainability.

Researchers at Texas Southern University are creating biodiesel from algae. The University of Houston has a class in carbon trading, and many architecture programs feature sustainable design as a core element.

But the concept is embedded in traditional disciplines, as well.

“Sustainability is part of everything we do,” said Alan Sams, executive associate dean of agriculture and life sciences at Texas A&M University.

I spent my college days taking impractical classes like math and economics, so I don’t have a personal basis for comparison. But I figure this is pretty standard stuff, and why not? It’s practical and it’s ideal, and that’s a combination you don’t get too often. The real question is what programs aren’t going this route, and why.

Geothermal energy

Interesting read about the town of Klamath Falls, Oregon, where they take advantage of an unusual feature to keep things warm.

A combination of hot rocks and water like those that created Yellowstone’s geysers have been tapped by the city to keep the sidewalks toasty since the early 1990s. They also heat downtown buildings, kettles at a brewhouse, and greenhouses and keep the lights on at a college campus.

Geothermal wells in this town of 20,000 mark one of the nation’s most ambitious uses of a green energy resource with a tiny carbon footprint, and could serve as a model for a still-fledgling industry that is gaining steam with $338 million in stimulus funds and more than 100 projects nationwide.

“We didn’t know it was green. It just made sense,” said City Manager Jeff Ball.

While it’s probably just as well that we don’t have self-heating sidewalks here in Houston, geothermal energy is a mostly untapped source of green energy, one that is now getting a more serious look.

Until now, geothermal energy has been limited by having to find the three essentials ingredients occurring together in one place naturally: hot rock relatively close to the surface, water, and cracks in the rock that serve as a reservoir.

Those limitations go away if engineers can tame a technology known as EGS, for Enhanced Geothermal Systems.

A 2007 Massachusetts Institute of Technology report estimates that EGS, with support, could be producing 100 gigawatts of electricity — equivalent to 1,000 coal-fired or nuclear power plants — by 2050, and has the potential to generate a large fraction of the nation’s energy needs for centuries to come.

“If we are going to try to achieve a transformational change in this country, geothermal should be part of that recipe,” said Jefferson Tester, chairman of the committee that produced the report and professor of sustainable energy at Cornell University. “It’s not treated that way. It’s typically forgotten.”

You can see that study here. The HMNS blog, from which I got that link, has some discussion of it. We do have at least one geothermal lease in Texas, or we did as of three years ago. I don’t know where that stands today, and the General Land Office website lacks a search function, so I can’t say for sure. Anyway, the stimulus bill steered some money into geothermal projects, so keep an eye on this. Every little bit of non-carbon energy helps.

TxDOT to give a little more focus to rail

So says Transportation Commission Chair Deirdre Delisi.

“Really since the creation of the Texas Department of Transportation, roads were seen as the only solution and we’re learning very quickly that we can’t keep up with enough of the road demand,” Deirdre Delisi, Chair of the Texas Transportation Commission, said this week.

Under the Bush administration, to which Delisi is a one-time political consultant, rail was not considered as important to the state’s transportation needs as were highways. However, that has changed. The U.S. Department of Transportation under the Obama administration has begun to focus more on alternative transportation, including a push during the passage of the stimulus plan, on high-speed rail.

“We’re actually in the process of changing our strategic plan at TxDOT to include rail, both passenger and freight, to improve air quality and to improve congestion on the roads,” Delisi said.

Other densely-populated states, including Florida, have long since created plans for elaborate rail systems. Those received closer attention under the American Reinvestment and Recovery Act as they were considered “shovel-ready”. “We’re behind in Texas, relative to other states who have more of a robust rail infrastructure. But we’re aggressively pursuing it where it makes sense, where it’s feasible, where folks want it and where it makes good economic sense,” she said.

We are indeed way behind other states on this, and it’s lost us money and opportunity. It’s nice to hear the words – we’ve never heard these particular words before – but if they’re not matched by deeds, it won’t mean much. There’s an audio clip at the link if you want to hear more. Thanks to Houston Tomorrow for the link.

D Magazine on John Carona

Interesting profile, worth a read, on State Sen. John Carona, who’s become somewhat of a radical in his party for actually being old-fashioned enough to try to solve problems and make government work. I think he’s right about this:

With their mantra of no new taxes, the Republican-controlled Legislature does not have the money to build more roads. Suburban Republican representatives, whose communities are threatened with traffic strangulation, find themselves caught in a vise of their own making. The only solution they have is to outsource road building to private companies, which then make their investments back with tolls. Meanwhile, by 2012, when it runs out of cash, the state’s road-building agency, TxDOT, will sit idle. As Lt. Gov. David Dewhurst noted recently, TxDOT is one of the world’s largest engineering firms, with 12,199 employees, 1,120 of which are licensed professional engineers.

Does it make sense to outsource when TxDOT has the capability—but not the money—to meet the state’s exploding need for better transportation? Carona thinks outsourcing is financially reckless. “It costs the taxpayers 3.5 times more to outsource than to build,” he says, “because, unlike the state, private toll-road developers use equity from firms like Goldman Sachs, which command double-digit annual returns to their investors, and they require multiyear exclusive agreements so that out-year profits go to the private consortium rather than back to the state or its taxpayers.” He lays the blame squarely at the feet of his own colleagues. “Fiscal responsibility means nothing to them,” he says with disgust. “They only worry about the next primary.”

He goes further: “Republican office-holders once cared about the nation’s interests. Now they only care about self-interest and special interests.”

Carona figures that the cost of bringing the road system back into balance with a healthy combination of free and toll roads is a roughly 10-cents-per-gallon tax increase. The average driver might pay an additional $8 per month. By contrast, continuing to outsource road construction over the next decade could wind up costing North Texans $8 per day in unavoidable tolls. In July 2008, the average price for a gallon of regular gas in Dallas was $3.98. In January of this year, it was $2.61. Industry experts are predicting that the average price will rise back to $3.25 by this summer, due to a number of factors such as lower refinery production and investors buying oil as a hedge against inflation. And, of course, there’s always the prospect of an Israeli attack on Iran’s nuclear facilities, which would cause oil prices to soar. In the rough-and-tumble world of international oil markets, a 10-cent gas tax in Texas barely registers.

I’ve done toll road math many times in this space, so you know I agree with this. The choice here is really simple, and I think it will be a much easier sell than many of our current officeholders seem to believe. Roads don’t magically build themselves. The money has to come from somewhere. Increasing the gas tax will cost you a lot less than paying a toll. Any politician who can’t explain this to people really ought to consider another line of work. Obviously, one may believe there’s a better solution, and if you do then more power to you, as long as you’re honest about it. But if all you’ve got is reflex and fear, then please do us a favor and get the hell out of the way.

Where I disagree with Carona, and I daresay with D Magazine and its traditionally conservative viewpoint, is here:

Money is John Carona’s favorite subject, and how Republicans have handled it since their takeover of state government has left him deeply disillusioned. From the post-Civil War period until the rise of George W. Bush, the Republican Party was seen as the party of business and the economy. It stood for prosperity, balanced budgets, and fiscal responsibility. No more. Says Carona: “The Democrats are the party of overspending. The Republicans are also the party of overspending. The only difference is that the Republicans are hypocrites about it.”

Texas today, after 15 years under two Republican governors, is facing a $21 billion deficit in the next biennium (if sales tax collections continue to worsen, the hole could grow deeper). After applying $9 billion from the Rainy Day Fund (which the deficit will entirely wipe out), the state will be $12 billion in the hole. Deficits are the single most regular feature of Republican fiscal management. Last year, the state was saved from a $12 billion deficit only because of a grant from the federal stimulus package, which almost all state Republican politicians say—in public—they opposed. (In private, they nearly fainted with relief.)

The hypocrisy part, I agree with. But the problem right now isn’t overspending, it’s undertaxing. That ginormous 33% property tax cut, which the business margins tax hasn’t come close to offsetting, blew a huge hole in the budget. In the 2007 session, $14 billion was appropriated for public schools to make up for money lost to them by the property tax cut. About $8 billion of that was to be made up by the margins tax and the increased cigarette tax, though we knew from the beginning that the margins tax would fall short of projections. In the end, the gap was about $8 billion, or almost $2 billion more than originally expected. How much less dire would our situation look right now if we had all that money back, because we didn’t cut property taxes that much and/or because we created a better business margins tax?

We can go the 2003 route and take a chainsaw to the budget again, screwing the poor, the sick, the young, and the old as we did before, but the structural deficit will still be there, even if a return to economic growth papers it over a bit. Just as the 1991-era gas tax is insufficient to provide for the state’s 2010 transportation needs, the state’s tax system overall is insufficient to cope with our growing and increasingly needy population. We’re not going anywhere till we get our hands around that.

Sales tax collections keep going down

That sound you hear is the budget writers gnashing their teeth.

In more grim news for Texas’ budget, state Comptroller Susan Combs said Friday that monthly sales tax collections are down again, the eighth straight month of double-digit declines.

Collections for January — the period that reflects December holiday shopping — were down by 14.2 percent compared with a year ago.

[…]

“Eight consecutive months of double-digit declines — there is no parallel for what we’re seeing with the sales tax,” said budget expert Dale Craymer, president of the Texas Taxpayers and Research Association.

You wonder what effect all this will have on the Governor’s race. Is Governor Perry going to keep running ads that proclaim what great fiscal shape Texas is in? How are any attacks he’s going to make on Houston’s fiscal shape going to play when contrasted with this?

Speaking of Houston’s fiscal shape, I forget where I saw this, but Houston’s sales tax collections were equally crappy in January, and we got back a smaller amount from the state than last year. Expect the next communication from Controller Ronald Green to be a glum one.

Combs has predicted the state will collect $21.2 billion in revenue from the sales tax in the fiscal year that began Sept. 1, slightly more than the $21 billion collected in fiscal 2009.

So far, however, collections are about $1.2 billion below the amount that had been collected by this time in the last fiscal year.

For the sales tax to bring in as much this year as originally projected, Craymer said, it “would have to grow by 11 percent for the rest of the fiscal year, and clearly that’s not going to happen.”

Sales tax collections represent more than 56 percent of the state’s tax revenue and more than 24 percent of overall revenue.

Lawmakers already expect to face a funding gap of at least $12 billion to $13 billion when they meet in regular session in 2011 to write the next two-year state budget. That figure does not account for new spending to meet the demands of a growing population.

It’s gonna be ugly. And all this is without taking into account the long-term structural deficit that was created by the irresponsible, unaffordable property tax cut of 2006, for which the business margins tax is a completely inadequate replacement. Somebody needs to be talking about this, because it is not sustainable.

One small glimmer of hope:

Craymer said Texas could be eligible for some additional stimulus money if federal legislation passes.

The irony of that just kills ya, doesn’t it?

Smart meters

Ever wanted to check your house’s power usage online? You will, or at least you’ll be able to.

CenterPoint Energy, along with other distribution utilities and IBM, is expected to launch an online portal, www.smartmetertexas.com, this month that will allow customers to monitor usage in real time regardless of which retailer provides their electricity.

Without the portal, customers who have the new devices called smart meters have had to seek their usage data through their electricity retailers or by buying a monitoring system.

CenterPoint has installed about 180,000 smart meters so far as part of a four-year program to install them throughout its service area in Southeast Texas.

Because meters take about two months to go fully online, only 130,000 customers will have immediate access to their electricity data on the Web site, CenterPoint spokeswoman Leticia Lowe said.

CenterPoint originally planned to install meters at all its customers’ businesses and residences by 2014, but a $200 million federal grant will help it finish the job by 2012, the company says.

I’m all for making more information available to people, and if this does help folks reduce their monthly bills, so much the better. But as of right now I share Loren Steffy’s skepticism.

Perhaps if the readout [on the usage monitor from CenterPoint we had installed a year ago] had enabled us to actually make changes that would affect our bill, it would have mattered to us more. Maybe if we could buy our electricity based on the time of usage instead of simply the amount, the monitor would have been a useful tool.

But for all the promise of innovation that was supposed to come with deregulation, consumers have seen few changes other than higher and more confusing bills. Smart meters are arriving in the Houston area long after they should have and with fewer options than consumers deserve. And, because CenterPoint remains regulated, ratepayers are shouldering the cost just like the old days. Even some electric retailers I’ve spoken with say they’re skeptical that the new meters will bring significant changes to the market.

Yeah, it sounds better than it probably will be to me, too. Without knowing what exactly is drawing the bulk of your power, how can you sensibly adapt your behavior? And not to put too fine a point on it, but this won’t do anything for folks who don’t have Internet access. A federal grant to do energy audits for lower-income folks, coupled with some money to help them get basic fixes – you know, like this – would probably do a lot more to save people money and reduce consumption at the same time. Sure, go ahead and roll out the smart meters – we’re already paying for them, after all – but don’t expect it to mean much.

More recycling coming

Good news.

The city is poised to expand its automated recycling program to an additional 50,000 households, allowing roughly 1 in 5 Houstonians the opportunity to put paper, plastic, soda cans and glass into one wheeled trash-can-sized bin instead of a garbage can.

[…]

About $2.8 million in federal stimulus dollars paid for the new green bins. The remaining expansion of the automated single-stream recycling program, which comes with a $28 million price tag, is expected to be paid for as the city saves money from not having to pay for landfill space and selling recycled materials.

The target date for new neighborhoods to begin being added is April 5. No indication in the story or on the city’s recycling page as to which neighborhoods will be added. The new biodegradable bag ordinance will generate some of the savings that will help pay for the expanded recycling. KUHF has more.

HISD may race to the top

Despite the earlier decision by Governor Perry to not let Texas compete for “Race to the Top” stimulus funds, school districts like HISD may get the chance to apply for them on their own.

President Barack Obama announced Tuesday that he would seek $1.35 billion in next year’s budget to expand the $4 billion grant contest and let individual school districts — instead of just states — apply.

The Democratic president took an indirect jab at Republican Gov. Rick Perry, who said last week that Texas would not compete for as much as $700 million in Race to the Top funds. Obama said that opening up the contest would help “innovative districts like the one in Texas whose reform efforts are being stymied by state decision-makers.”

Obama likely was referring to the Houston Independent School District, which last week adopted a policy linking student test scores to teachers’ job evaluations and dismissal decisions — a key part of the president’s education reform agenda.

HISD Superintendent Terry Grier, who lobbied the Obama administration for a grant contest for districts after Perry opted out of the competition, said Texas’ largest school system would be well positioned to win funds.

“We have an independently elected board of education,” Grier said. “I believe they are uniquely positioned to make the decision as to whether or not the district should apply for these types of funds. But I was excited to hear the president’s standing.”

School officials from Galveston and Clear Creek also said they would be interested in competing for money. Some district leaders, however, expressed concerns about possible federal mandates attached to a grant.

School Zone has more. If the argument against these funds is the conditions that come with them, what do you say to a school board that is willing to accept those conditions? I don’t have a position on this, I’m just wondering what, if anything, Governor Perry will try to do about it.

No race to the top

By now you’ve probably heard the news that Governor Perry has directed the Texas to not compete for “Race to the Top” stimulus funds.

Gov. Rick Perry said today that Texas will not compete for up to $700 million in federal grant funding for schools.

His decision to snub the Race to the Top grant competition defied pleas from several Houston-area school leaders who said their districts could use the money. But Perry, joined by state Education Commissioner Robert Scott, said the money was not worth the federal mandates.

Texas, Perry said, “reserves the right to decide how we educate our children and not surrender that control to the federal bureaucracy.”

Phillip boils it down:

  1. Texas was eligible for up to $700 million in federal education dollars, if we submitted a “Race to the Top” application
  2. The Texas Education Agency spent between 700-800 hours preparing the application
  3. Perry has refused to send the application, as officials have said the $700 million would be “too little money” — despite the fact that over 200 local school districts have had to raise taxes in order to pay for the structural deficit created by Perry and Dewhurst in 2006
  4. Refusing to send the application nullifies Texas’ ability to compete for other grants

See also State Rep. Garnet Coleman’s letter to Perry about this. The Trib adds on.

State applications are due next week (Jan. 19), and the agency has been preparing the lengthy document for several weeks.

“It’s a waste of taxpayer money that so much time was put into this application,” said Kirsten Gray, spokesperson for the Texas Democratic Party. TEA confirmed that the agency has spent significant time on the application, and Gray says the application has already been put together.

“There’s just absolutely no excusable reason to not allow Texas to compete for this money,” she said.

Others agree.

“Every reason that I’ve heard so far to turn down the money makes no sense,” said Rep. Scott Hochberg, D-Houston, who chairs the House Appropriations Sub-Committee on Education.

Hochberg argues Perry’s decision was not motivated by policy.

“I think it’s all about politics because it makes absolutely no sense to not even apply for a significant amount of money that can be used to help our schools,” he explained.

[…]

Hochberg says the funds could have a significant impact if the state used them the right way.

After all, he said, per year the potential grant money is “roughly the total that we added to school funding in the last biennium that everyone is bragging about.”

It must be noted that the Texas chapter of the American Federation of Teachers also opposed the Race to the Top funds. A letter from their Chair Linda Bridges to Perry and others is beneath the fold. Their objections are similar to those of the HFT regarding the teacher evaluation proposal – specifically, they object to things like more standardized tests. Perry’s objection is all about politics and the primary, as just about everything else he does is. He’s predictable, I’ll give him that much.

(more…)

Perry (not) for President

By now you’re probably aware of the current Texas Monthly cover story, in which Paul Burka makes the case that Rick Perry is positioning himself for a run at the Presidency in 2012. I don’t care to get into a detailed analysis of this – I’ll leave most of the heavy lifting to Bob Moser – but there is one thing that needs to be in the discussion: The 2011 legislative session is going to be brutal, and if Rick Perry is Governor, it will exact a large toll on him, since as Texas’ longest-service executive, it’ll all be on him. Consider:

– Sales tax revenues continue to decline. We’ve collected a billion dollars less than we thought we’d collect. Oh, and the Rainy Day Fund is poorer than we projected, too. That’s a recipe for disaster right there.

– The choices that the Lege will face are:

  • Slash spending, which always sounds good to some people until they have to come up with specifics.
  • Dip into the Rainy Day Fund, whose balance Perry has bragged about. That not only takes a supermajority, which means convincing a bunch of Republicans to do it, but also leaves Perry open to charges of “deficit spending”, under the same logic that people have applied to Bill White and the use of the city of Houston’s reserve funds.
  • Roll back the unaffordable and unpaid-for property tax cuts of 2006. One presumes Perry would prefer to have an appendage or two chopped off to this.

None of these will look good for Perry on the campaign trail, especially when you consider that many of his top rivals – Mike Huckabee, Sarah Palin, and Mitt Romney, to name three – are not currently in office, so they themselves will not be in a similar position. Slashing spending may be the “right” answer for him politically, but that’s sure to leave some unhappy Republican legislators, whose priorities will have to take a hit for this to be meaningful, in its wake.

– And the backdrop for all this will be a stream of stories about how Texas only balanced its 2009 budget due to $15 billion of stimulus money, whose purpose Perry and use has been dishonest about.

Now, none of this is to say that Perry couldn’t take a shot at the GOP nomination for 2012. But however things look for him today, he can’t get there without going through 140 rough days next year, if he does manage to get re-elected. His prospects have to be evaluated in that context.