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Talmadge Heflin

Hoang to challenge Vo

Soon-to-be-former CM Al Hoang is not sitting still in the wake of his unexpected electoral loss.

CM Al Hoang

CM Al Hoang

Houston City Councilman Al Hoang, who narrowly lost his reelection bid in a surprise upset last week, has filed paperwork to challenge state Rep. Hubert Vo for his District 149 seat next fall.

There is much overlap between Hoang’s City Council District F and Vo’s state District 149, both of which center on Alief. Vo, a Democrat, was re-elected to a fifth two-year term in 2012. Hoang, a Republican, will complete his second two-year term on council this year, yielding in January to Richard Nguyen, an employee in the city’s Solid Waste Management Department who beat him by about 200 votes in last week’s election.

Vo said he has heard talk for years that Hoang may challenge him, but said he does not consider the councilman a rival. He also denied whispers that he had propped up council candidates against Hoang.

“It’s not my type. Every single election, if I don’t have this opponent, I would have other opponents,” Vo said. “Ten years ago when I decided to run, I wanted to serve the community. I hope anybody else who’s running for that district will have the same goal that I have.”

Vo acknowledged speaking with Nguyen earlier this year, but he said he merely advised him to have a platform, not simply oppose Hoang. “I gave him some advice, but I never publicly endorsed him, I never helped his campaign,” he said.

Hoang said Vo voiced support for Nguyen on Vietnamese radio, but added, “That’s democracy.” Hoang stressed he is pursuing no personal vendetta against Vo

“I just want to continue the good work I believe I’ve done for that area: Job growth, I want to continue that. I want to get the dollars from the state back so that we can continue work on the infrastructure, and also education,” Hoang said. “I’m a pro-life person because I’m a Christian. Those issues also prompt me to run for District 149. That is the most important distinction, the pro-life and pro-choice.”

I have no idea whether there’s anything personal to this or if Hoang always had HD149 in his sights for his post-Council career. HD149 is a fairly purple district, though Rep. Vo has not had any close calls since his razor-thin initial victory in 2004. He’s also never faced an Asian opponent, which may add a different dimension to the race. Numbers-wise, the district leaned red in the Republican wave year of 2010, though Bill White defeated Rick Perry there by a 53.7 to 44.8 margin. Compare that to 2008, in which President Obama carried the district by a 57.1 to 41.8 margin, and you can see that turnout is definitely a factor. Interestingly, 2010 was a less red year in HD149 than 2006 was, which suggests that demographic change in the district is also a factor. Be all that as it may, this is now the most interesting State Rep race in Harris County.

One more thing: While it is true that there is overlap between Council District F and HD149, it’s not quite true that there’s a significant overlap in the voters between those two districts. What I mean by that can be illustrated by the number of votes in the respective elections. Rep. Vo has run in and won five elections in HD149. Here are the vote totals for each of those five years:

2012 – 42,568
2010 – 29,945
2008 – 45,371
2006 – 23,253
2004 – 41,356

CM Hoang has run for District F three times. Here are the vote totals for those three years:

2013 – 6,126
2011 – 2,641
2009 – 9,565

Both districts are comparable in size – actually, Council districts are a bit larger – but the universe of voters in each is different, because turnout in the odd years is so much lower. While CM Hoang has a leg up on some of the opponents Rep. Vo has faced – and bear in mind, Rep. Vo twice defeated former Rep. Talmadge Heflin, and also beat HISD Trustee Greg Meyers, so he has won against people who have been successful running for office before – it’s fair to say there are a lot of voters in HD149 who have never cast a ballot that included him on it. He will still need to introduce himself to much of the district.

Just keep cutting till we tell you to stop

I have two things to say about this.

Now more than ever

Looking to get an early start on shaping budget discussions for the 2013 legislative session, the Texans for a Conservative Budget Coalition recommended Tuesday that lawmakers plan to reduce welfare spending, increase local control for public school districts, and consolidate or eliminate general revenue spending for several state agencies.

“The roadmap is very clear,” said Julie Drenner of the Heartland Institute, a conservative think tank and member of the coalition. “Government must prioritize spending on essential government functions only. When lawmakers look at questions, they must ask themselves only two questions: Do I reform it, or do I eliminate it?”

The coalition’s other members include the Texas Public Policy Foundation, Texans for Fiscal Responsibility and the Texas chapter of Americans for Prosperity.

[…]

State Rep. Ruth Jones McClendon, D-San Antonio, said the coalition’s proposals would damage the state.

“This proposed policy-making agenda is a pending disaster in this state for women and men of all ages, including college students, minimum-wage workers, public schools, educators, and public servants,” she said. “We cannot expect to undercut essential state programs … and still expect Texas to thrive in the future.”

The coalition began during the 2011 legislative session and is based on the tenets that the Legislature should not raise taxes, increase spending or balance the budget using the state’s Economic Stabilization Fund, or “Rainy Day” Fund.

It has reconvened now to address issues that are likely to develop as lawmakers create the 2014-15 state budget.

“The message we want to send with the revival of this coalition is, ‘That wasn’t the end,’” Joshua Treviño, the TPPF’s spokesman, said of the budget reductions in the 2011 session. “That was just a good start.”

1. This is basically the Paul Ryan Budget Plan for Texas. Protect a few things that the rich and powerful like, ensure those folks have to pay as little as possible, and cut the hell out of everything else. It has nothing to do with “priorities” or needs or anything else except lowering taxes for those who least like paying them. I guarantee you, every spending cut these guys would propose will be accompanied by an even larger revenue cut that will ensure the need for more of the same in the next budget. The goal is to exempt themselves from paying for anything.

2. Every Democrat needs to be talking about this. If it’s an election issue nationally (and it is), it’s an election issue here as well. According to Robert Miller, House Speaker Joe Straus is out there talking about “his priorities for the upcoming session as education, transportation infrastructure, water and positioning Texas for continued economic success while meeting the needs of a growing state” and that “Texas is a center-right state, it is not a far right state”. That’s not compatible with what these guys are saying, so either Straus doesn’t mean it, or these guys will attack him as a threat to their vision. Oh, wait, they already are. Straus may hold them off for now, but they’re not going to go away, and they are the direction the GOP is going. This is what Democrats need to be talking about. If the Republicans get into a high profile intra-party fight about it, so much the better, but it’s on us to make the case that they’re doing it wrong and we’re the better choice. A statement from Rep. Mike Villarreal that came out after this story appeared is beneath the fold, and EoW has more.

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Anti-tax zealots plump for casinos

Gambling yes!

Grover Norquist, the nation’s most prominent anti-tax crusader, wrote a letter last week to Texas legislators to call for expanded gambling.

“In light of the adverse economic impact that higher taxes would have, it is imperative that lawmakers consider all other options for balancing the state’s budget,” Norquist wrote. “There are a number of alternatives to raising taxes, the most preferable being an expansion of economic activity, and thus, the tax base. One way to do that would be to permit legitimate businesses to operate that are currently not allowed to do so. Research has found that permitting lawful and responsible gaming operations in Texas is one simple way to grow the Texas economy, thereby generating more tax revenue for the state.”

Representatives from groups that tried to pass gambling measures in the 2011 legislative session said they had nothing to do with the letter.

Gambling no!

The Texas Public Policy Foundation’s executive director, Arlene Wohlgemuth, and it director of fiscal policy, former state Rep. Talmadge Heflin, sought to counter a pro-gambling letter sent to state leaders last week from anti-tax crusader Grover Norquist, the president of Americans for Tax Reform.

[…]

“While we generally agree with our friends at ATR on tax and spending issues, when it comes to gambling, that is not the case. Their suggestion that gambling is a way ‘in which to rectify the anticipated budget imbalance’ is wrong,” Wohlgemuth and Heflin wrote.

The foundation’s preferred approach would lean more toward fiscal discipline as the state faces the likelihood of another budget shortfall ahead of the 2013 legislative session.

I’m generally agnostic to deeply ambivalent on the gambling question, but if those are my choices I say bring on the casinos and the racetrack slot machines. There are of course other choices, just not ones that these one-percenter chuckleheads are interested in. As we well know, we’ll need a better legislature for any other options to get traction.

Beyond that, I have no idea if any of this will make a difference or not. Neither argument is particularly original, so at this point it’s more a matter of which article of faith one subscribes to. The real question at this point is whether or not gambling will have a higher profile in 2013 than it did in 2011. My money’s on yes.

A matter of perspective

The Trib’s Thursday morning brief begins as follows:

Competing rallies on Wednesday provided a stark backdrop to the House vs. Senate tug-of-war playing out in the Capitol.

While one group of protesters called on the Legislature to roll back its proposed sweeping budget cuts, others demanded that lawmakers cut even further. The warring protests, which together attracted thousands, mirrored the debate playing out between the House, which on Sunday approved an austere budget bill that cuts billions of dollars from nearly all areas of state government, and the Senate, which has refused to cut as deeply as the House.

If you click on that second link, you see the following:

The first gathering on the north steps of the Pink Dome featured speakers representing conservative causes. They praised the lean version of HB 1, the general appropriations budget for the 2012-13 fiscal year, that is on its way to the Senate.

“It’s not a perfect bill, but it’s a bill that stays within our revenue,” said Talmadge Heflin of the Texas Public Policy Foundation’s Center for Fiscal Policy, the main organizer of the rally. “What (the Senate now) needs to do is focus on cuts rather than look for more revenue.”

He was joined by representatives from Americans for Prosperity-Texas, Americans for Tax Reform, Empower Texans, the Heartland Institute, the Liberty Institute, the National Federation for Independendent Business-Texas, and Tea Party leaders from Waco and San Antonio. Each speaker warned the Senate to not tap the state’s Rainy Day Fund.

The crowd included about 50 supporters who held up signs with slogans like “Teach fiscal responsibility; support the budget cuts!”

“They don’t need more revenue. They need to get government back in a Constitution-sized box,” JoAnn Fleming, chair of the Tyler-based Tea Party Caucus Advisory Committee, told the crowd to loud applause. “You cut off the fluff and get down to business.”

The “Texans for a Conservative Budget” rally had barely finished when thousands of public employees descended past them toward the south steps, chanting “No cuts!”

Organized by Texas Forward, the “Save our State” rally attracted citizens from around the state representing the Texas State Employees Union, Communication Workers of America, Texas Organizing Project and religious groups. Their concerns ranged from overtaxing the poor to the current version of the state budget, which proposes closing nursing homes and cutting education spending by $8 billion.

So fifty people attended the conservative “rally”, while thousands – Postcards cited rally organizers claiming 6,000 to 7,000 attendees – came to the rally against deep budget cuts. One was primarily populated by lobbyists, the other by real people. And they’re both lumped together under that unassuming “together attracted thousands” label. This is like saying that Hank Aaron and I together combined to hit over 750 home runs – absolutely true, and completely misinformative. Surely there was a better way to summarize this, even if it required a few more words. You can see photos from the real rally, the one that had actual people attending it, here, and some video of Sen. Kirk Watson addressing the crowd here. EoW has more.

From the “Stuff I’d like to see happen but won’t” files

You may recall that one of the LBB recommendations for helping to close the budget gap was to impose a $100 surcharge on the purchase of fuel-inefficient vehicles. I said at the time that I loved the idea but thought it had zero chance of being adopted. This Star-Telegram story about the surcharge does nothing to change that impression.

State officials are considering a $100 surcharge on the purchase of some new vehicles that don’t meet federal fuel efficiency standards. It’s one legislative proposal designed to raise more revenue and help reduce the looming, multibillion-dollar deficit.

“Despite the increased costs associated with inefficient vehicles, they are exempt from the federal gas-guzzler tax and do not pay any additional sales tax,” a recent Legislative Budget Board report said. “A surcharge attached to the sale of new vehicles with high emissions would compensate for the higher-than-average transportation-related costs these vehicles create.”

Critics say now is not the right time to levy more fees, surcharges or taxes on Texans.

“Some of these vehicles I believe that would get tagged with the surcharge are needed by small businesses for their livelihood — farmers, truckers,” said Talmadge Heflin, director of the Austin-based Texas Public Policy Foundation’s Center for Fiscal Policy. “We should be free to buy the kind of vehicle we need without fear of having to pay an extra surcharge just because of what we choose to buy.”

No bills have been filed to add the surcharge.

It would be nice if someone could explain the concept of an externality to Talmadge Heflin. Be that as it may, the only person quoted in the story favoring the surcharge was Rep. Lon Burnam, and sadly he is unlikely to wield much influence this session. I’m dubious about Rep. Elliott Naishtat’s bill to make online retailers pay sales taxes, but at least there is a bill filed for that. When and if there’s a bill filed for this, we can see if it makes sense to upgrade its chances from zilch to something slightly greater than that.

Howard declared the winner in HD48

At long last.

Rep. Donna Howard won the House District 48 seat by four votes over Republican Dan Neil, according to state Rep. Will Hartnett, R-Dallas. Hartnett was appointed to investigate their election after Neil challenged the results.

[…]

Hartnett’s recommendation goes now to a select committee chaired by Rep. Todd Hunter, R-Corpus Christi, which in turn will make a recommendation to the full House. The House’s decision is final. Neil can, if he chooses, withdraw his appeal at any time.

During the four-day hearing, Neil’s lawyer, Joe Nixon, argued the margin of votes was too close to definitively declare a winner. Howard’s lawyer, Randall “Buck” Wood, said Neil could not request a recount just because he did not like the results.

Seven voters moved out of Travis County but did not change their address before voting in the election, Hartnett wrote in his recommendation. Hartnett opened four ballots during the course of the trial and did not count one of those votes because of ineffective registration, which left Howard’s margin of victory at four votes, he said.

The full report will be out later; I’ll link to it when I find it. I expect Neil to withdraw his challenge before this ever get to the House, as Talmadge Heflin did in 2005 after contesting his close loss to Rep. Hubert Vo. But who knows, he may draw it out further still.

One important point to note, from Patricia Kilday Hart:

Representative Will Hartnett, Master of Discovery for the Election Contest for Texas House District 48 releases the following statement:

“After a thorough review of the numerous challenged ballots, I have concluded that Donna Howard won the House District 48 election by 4 votes.

Voters who had moved out of Travis County without changing their voter registration and returned to vote in their former precinct caused a net subtraction of 7 votes from Ms. Howard’s margin of victory. Counting 4 unopened ballots subtracted a net of 2 votes from Ms. Howard’s margin.

Striking 1 vote by a voter who was not effectively registered added 1 vote to her margin.

I have seen no evidence of any voter fraud or of any substantial errors by any Travis County election official. My report will be released later this evening.”

Emphasis mine. Fraud, rampant fraud, was also alleged by Heflin in 2005, and it too turned out to be nothing. Be sure to remind your local teabagger of this the next time they rant about illegal immigrants stealing elections or whatever else the voices in their heads are telling them. A statement from Rep. Howard is beneath the fold.

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The business lobby’s guide to balancing the budget

Bill Hammond, the president and CEO of the Texas Association of Business, pens an op-ed with his preferred approach to the budget. The main thing to note is right here:

The state has $72.2 billion available for general-purpose spending during the 2012-13 biennium, leaving a $15 billion gap from the current general revenue spending of $87 billion.

How do we close that gap?

It will take grit and courage to address the shortfall without raising taxes, creating new fees or increasing existing ones.

Difficult? Yes. Doable? Absolutely.

First, let’s hold the line on general revenue spending at its current level of $87 billion for the biennium.

Given that the Pitts and Ogden budget drafts held the line at $72.2 billion, holding it at $87 billion – the amount spent in 2009 – would be a major step forward. It’s still not good, it still doesn’t acknowledge the state’s growth, it still shortchanges education because as Hammond would have it the structural deficit caused by the property tax cut and insufficient business margins tax continues to be ignored, but it’s a hell of a lot better than what’s currently being discussed.

Hammond’s methods for closing the $15 billion gap between what we spent in 2009 and what the draft budgets propose to spend now are a bit shaky. He starts with $6 billion from the Rainy Day fund, throws in another $2.5 billion from the Available School Fund, about which I confess I know very little, and grudgingly agrees to expanded gambling, which he says would generate another billion for this biennium. From there, he suggests some savings, delaying some payments by a day to put them in the next biennium, and waves his hands at “some of the thoughtful recommendations laid out in recent days by organizations like the Texas Higher Education Coordinating Board and conservative think tanks”, none of which suggests more revenue to me. I don’t have a problem with finding legitimate savings, though my opening bid for that would be the LBB recommendations, which do include revenue ideas as well, nor would I object to an accounting trick or two as a last resort, but these suggestions are not compatible with finding enough revenue to “hold the line” at $87 billion.

I don’t want to be too critical, because to me the main point is that Hammond is moving the chains in a direction I favor and is giving the Republicans his organization supports rhetorical cover for using the Rainy Day fund. It’s not where the state needs to be, but I’m more than happy to debate how to spend $87 billion instead of how to spend $72 billion. I hope that by writing this, Hammond is acknowledging that the mainstream consensus position is not with the Pitts/Ogden budget. That by itself would mean a lot.

Hammond’s op-ed can now also be seen in the DMN and at the Trib, where it’s accompanied by counterpoints from the CPPP’s Eva de Lina Castro and Talmadge “Kick Grandma to the street” Heflin. Wonder if he feels weird being in the “center” of this debate. Burka has more.

Senate stands down again

No vote on the rules till next week, so the 2/3 rule lives for a few more days.

In an hour-long caucus behind closed doors, Texas senators decided today to put off for a week a potentially acrimonious public debate over changing their rules. The discussion will occur next Wednesday, as Senate leaders had hinted yesterday.

In the meantime, the Senate will continue to operate under the rules it approved last session.

At issue: A proposal championed by state Sen. Dan Patrick, R-Houston, to change a rule that requires two-thirds of senators to agree before a bill can be brought up for debate. Most senators say they favor leaving the rule as it is. Patrick insists the two-thirds rule thwarts debate on important issues — read that as ones that Republicans want to pass, and Democrats don’t.

Under the current rule, because the 12 Democrats constitute a third of the Senate, they can block debate on some issues.

As Trailblazers notes, the rules the Senate operated under last session allowed for voter ID legislation to be exempted from the two thirds rule. If the default is to simply use the previous rules, which I believe is the norm, then that’s what we’ll get this session as well. This is what I expect to happen, but we’ll see. Burka has more.

There was a little bit of House action to note:

Rep. Todd Hunter will now chair the select committee in charge of determining the HD 48 vote. After a recount, incumbent Democrat Donna Howard won by just 12 votes—a result challenged by opponent Dan Neil.

The rest of the committee: Eiland, who will serve as vice-chair, Kolkhorst, Giddings, Guillen, Bonnen, W. Smith, Madden, and Lewis. State Rep. Will Hartnett remains the master of discovery.

After the committee was read, Hunter took the floor to tell members to “be very careful in discussing this matter.” Members could inadvertently cause problems by discussing the controversy in casual conversation. The committee will ultimately issue a report on the challenge.

Hartnett’s discovery report is still the main thing. In 2005, once his report made it clear that Talmadge Heflin had no case in his contest against Rep. Hubert Vo, Heflin withdrew his challenge before the House voted on it; it may have been before the committee vote as well, I honestly don’t remember. Point being, the hope is that this committee winds up having little to do.

We have a number for the hole

There’s actually more than one number that can be used to accurately describe the state budget deficit, depending on what your perspective is, but however you look at it, it’s big and it’s no longer projected or theoretical.

State Comptroller Susan Combs today said lawmakers will have $72.2 billion available to spend in general revenue over the next two years — nearly $15 billion less than they budgeted in the current period.

Combs’ official revenue estimate sets the limit for how much lawmakers can budget for state services.

Her estimate puts the shortfall in the amount needed to continue the current level of services – taking into account such items as population growth – at least at $27 billion, according to figures from the Center for Public Policy Priorities, which focuses on low- and moderate-income Texans.

[…]

Looking at state agency funding requests, the Center for Public Policy Priorities found that the state will need at least $99 billion in general revenue through the next two-year budget period, on top of closing a shortfall in tax collections in the current budget period.

Combs’ estimate includes a prediction that tax collections will fall $4.3 billion short in this budget period. Combs’ $72.2 billion figure takes that shortfall into account.

In addition to having to meet that recession-driven shortfall, lawmakers will be working without two sources of funding that they had last time they met: unspent state fund balances and federal stimulus money.

First things first: The $4.3 billion figure refers to the 2009 biennium budget. The amount of revenue that Combs estimated at that time for the two-year period was short of what we actually collected, so the first order of business will be to appropriate money to make up that gap. How big the hole is for this biennium then becomes a matter of opinion based on how much you think the state needs to spend to pay for what it does now.

Lawmakers budgeted $87 billion in general revenue spending in the current biennium; at least $6.4 billion of that money came from federal stimulus funds which aren’t available to budget-writers this time. Public and higher education and health and human services spending accounted for $73 billion of that; without the stimulus money, that leaves just over $7 billion that’s not in those two major categories.

The comptroller’s official biennial revenue estimate sets the limit, effectively, on what lawmakers have available to spend during the two-year period that will begin in September. There’s a shortfall between what’s available and what’s needed, but estimates of the size of that shortfall depend on the size of what’s needed. For instance, the Center for Public Policy Priorities, a think tank that advocates for the poor, estimates it would cost $99 billion over the next two years to maintain the services the state provides now; they put the size of the shortfall at about $27 billion. Former Appropriations Chairman Talmadge Heflin, now with the Texas Public Policy Foundation, a think tank that advocates for small government and free markets, estimates the shortfall at “$15 or $16 billion.”

In other words, the slash-and-burn TPPF is basing the shortfall on Texas not spending any more than it did two years ago. Thing is, Texas is a growing state – you might have heard about those four shiny new Congressional seats we’re going to get because we’ve been growing like gangbusters – and with all that growth comes added expenses. Much of the state’s increased population comes from children, which means we need to spend more on schools just to keep up. A lot of it comes from lower-income folks, which means things like Medicaid and CHIP need more revenue to keep up. That’s the reality of the situation, and it’s what the Lege will have to deal with.

Now the good news is that after more than a year of declining sales tax revenue, economic indicators are pointing in the right direction again. The next two years will be better for the state, and who knows, maybe in 2013 we’ll hear that this biennium’s budget came in under cost because we took in more money than we initially thought we would. But let’s not lose sight of the fact that the system we have in place now isn’t equipped to keep up with the state’s growth. Too many things are exempt from the sales tax. The property tax cut of 2006 created a structural deficit. We’re going to face many of the same problems in two years’ time even if the economy recovers to a large degree. In the meantime, we’ll be shortchanging schoolchildren and pushing the sick and the needy onto local governments.

Finally, it must be said that Combs’ figures, which you can see in detail here, stand in stark contrast to the denial and Pollyanna-ism that Rick Perry displayed all last year, as Greg and ThinkProgress document and BOR pointed out before the election. He can’t hide from it any more. For more, see statements from Rep. Mike Villarreal, Rep. Lon Burnam, and Sen. Wendy Davis; Vince has more as well.

Neil files for election contest in HD48

I suppose this was inevitable.

Republican Dan Neil is continuing his challenge of state Rep. Donna Howard’s razor-thin election night victory with an appeal to the Texas House of Representatives.

Neil, who trailed Howard by 12 votes after a recount earlier this month, filed a contest of those results with the secretary of state late Monday afternoon, the deadline for such a challenge.

The decision now falls to the House members, who must either determine the clear winner based on the evidence or send it back to the voters.

House Speaker Joe Straus will soon appoint a representative to lead the investigation as well as a committee to hear to the case and make a recommendation to the full chamber.

The vote of the House is the final word.

The House last heard such a case after Republican Talmadge Heflin, a former powerful committee chairman, contested his loss to Democrat Hubert Vo in 2004, said Jeff Archer with the Texas Legislative Council . Heflin’s appeal did not clear the committee.

Neil maintains that, of the 51,500 ballots cast in the western Travis County district, some were mishandled or lost, a handful of legal votes were discounted, and more than 1,900 ineligible voters participated.

There were a couple of other contests filed in legislative races in 2004, and one in 2008, but all were dropped before they were heard by the House. From what I can tell, the last time that an election contest was upheld was after the 1980 election. It should be noted that even if Neil wins his challenge, that doesn’t mean he gets to be seated. According to Section 241.220 of the Elections Code, “In an election contest in which the election is declared void, the house or committee, as appropriate, shall include in its judgment an order directing the governor to order a new election.” In that 1980 case, the winner of the contest, who was a sitting Representative, lost the rematch election by a wide margin. Just something to keep in mind as we watch this unfold. My guess is that it’s more likely Neil withdraws his contest than he wins it, but we’ll see.

In the meantime, Howard has filed her response (called “special exceptions”) to Neil’s petition, which you can read here. Of interest, from the email that accompanied this:

“The level of detail in Mr. Neil’s petition does not match the seriousness of his claims. To demand the time and attention of the Legislature, I would have expected him to do more than just throw out a bunch of ideas to see what sticks,” said Howard.

The most notable deficiency was a vague reference to 1,900 ineligible voters. No specifics were given on who these voters are, whether or not they are registered to vote in House District 48, or whether or not they even voted in this election.

“The contestant in an election contest is required to provide specific information regarding the voters and votes in question. After reviewing what Mr. Neil has submitted, it is clear that he failed to perform the due diligence necessary to file a complete petition,” said Buck Wood who Howard has retained as her legal counsel.

Another puzzling allegation concerns those voters who live overseas, are eligible to vote only in federal elections, and cast a straight party vote. The contestant states that all of these ballots should be counted even though the voter wasn’t eligible to vote in the District 48 race.

“A closer inspection of these ballots reveals that Rep. Howard would have gained at least eight votes if straight ticket ballots from indefinite voters were tallied,” Wood said.

I haven’t seen Neil’s petition yet, but it is worth pointing out that there were some very specific claims of fraud made in the Heflin-Vo race of 2004. Most of them turned out to be bogus or unhelpful to Heflin’s cause, but they did identify specific voters whose ballots they said were invalid. One presumes Neil will either do the same or will drop the matter.

UPDATE: The Trib has more.

Howard still wins after recount in HD48

Her margin is margin is a bit smaller, but still greater than zero, and that’s what counts.

With the votes counted again, the Austin Democrat beat Republican challenger Dan Neil by just 12 votes, Travis County Clerk Dana DeBeauvoir said Thursday night.

Neil had called for the recount after Howard had been declared the winner of the Nov. 2 election by just 16 votes of more than 51,000 cast in northwestern Travis County’s District 48.

In the end, only a few mistakes were found — all of which were on paper ballots — and there were not enough discrepancies to change the outcome of the election, officials said.

Howard said she wasn’t surprised by the outcome but nevertheless was happy to put the recount behind her.

“I’m glad to have a final outcome that is actually final,” she said. “The work of the district continues.”

Before the results were announced Thursday, Neil sent out a news release complaining that the clerk’s office didn’t properly count several overseas ballots.

But DeBeauvoir said Neil’s concerns were unfounded.

That’s likely to be the end of it, though Neil may file for an election contest. There’s been at least one of those filed for the past few elections, with only the Heflin-Vo contest actually making it to the point of being investigated. My guess is if one is filed it will go nowhere, too.

Feel the fees

The Trib reviews the bidding from the 2003 legislative session as a preview for what’s to come next year.

The 2003 session most closely mirrors the current scenario — a national recession, a previous budget balanced with the use of one-time funds — and remains fresh in political minds. Then, the Legislature turned to deep budget cuts. Talmadge Heflin, the House appropriations chair in 2003 and the current director of the Texas Public Policy Foundation’s Center for Fiscal Policy, says that when projected revenues and expenditures are out of sync, “The task is not to get revenue up. It is to get expenditures down.” Social services like education, public safety, and health and human services took the brunt of the blow. Money from the Rainy Day Fund and relief from the feds (both chipped in more than $1 billion) helped. But that’s not all.

“They certainly didn’t do it on budget cuts alone,” says Dick Lavine, a senior fiscal analyst at the nonpartisan Center for Public Policy Priorities, which released a review of the 2003 budgeting process this week. Balancing the budget, he says, also required “new revenue, creating the appearance of new revenue, and cost-shifting.”

The “appearance” of new revenue comes from so-called smoke-and-mirrors provisions that, for example, shifted an $800 million payment to the Foundation School Program into the next biennium and deferred payments to the Employees Retirement System and Teacher Retirement System.

Cost-shifting refers to transferring the burden of paying for a service from the state government to its beneficiaries. The best-known example from 2003 was the deregulation of tuition at public universities. Those with state-subsidized health insurance also had to shoulder higher costs — including $790 million in new co-pays, premiums and other costs.

Measures that actually raised new revenue included entering a multi-state lottery (projected to bring in $102 million), establishing a quality-assurance fee for facilities for the developmentally disabled ($54 million) and hiring more auditors to get the most out of the existing taxes ($122 million). Other additional fees included a $1,000-a-year charge for three years for motorists’ first driving-while-intoxicated conviction.

“The bottom line,” says Dale Craymer, president of Texas Taxpayers and Research Association, “is that there’s lots of ways to raise revenues without raising taxes.” Craymer acknowledges that a tax increase — generally a political loser — might be the best way to raise revenue but says it’s untenable in this economy.

Let’s pause for a moment to give thanks that Talmadge Heflin is no longer in the Lege. Perhaps he’s forgotten that some of those budget cuts he helped push through led to a number of his fellow Republicans subsequently losing elections; just ask Arlene Wohlgemuth, for one. Bad public policy isn’t always bad politics, but thankfully it was in this case.

The simple reason why fees are more popular with the Lege than taxes is that fees hit fewer people, and in most cases they hit the people who have the least influence. Tuition deregulation is probably the biggest exception to that, and it’s why many candidates and officeholders have campaigned on re-regulating tuition ever since. And of course some fees, like the Driver Responsibility Program, were utter failures in their goals, revenue and otherwise. Not that any of this will matter, since “tax” has become a four-letter word. And don’t be surprised if we’re in a similar position in 2013, since nothing that is likely to be adopted will be anything more than a band-aid. EoW reaches back to 2006 for more.

Oh by the way, the unemployment trust fund is going broke

Floor Pass has the bad news.

The Texas Workforce Commission released its latest projection for the unemployment insurance trust fund balance, and the news is even worse than last month’s.

TWC estimates the fund’s balance will have plummeted to just $19 million by October 1 – that’s $840 million below the trust fund’s legal minimum balance of $858. Last month, the TWC projected an $813 million deficit.

[…]

This is the third consecutive month where TWC has projected the fund to be worse off than the previous month’s estimate. High numbers of layoffs have meant the fund is paying out much more in benefits than usual. To put it in perspective, in the last week of March 2008 TWC paid 95,000 claims to the tune of $27 million in benefits. In the last week of March 2009, the fund paid 250,000 claims and $74 million in benefits – that’s about a 275 percent increase in benefits payouts from the previous year.

TWC’s 2009 Trust Fund Projections

January projection: $447 million below the floor
February projection: $750 million below the floor
March projection: $813 million below the floor
April projection: $840 million below the floor

At this rate, unemployed Texans will have to start paying the state instead of vice versa. Tell me again why some people think we shouldn’t take the federal stimulus money for unemployment insurance? And seriously, Arthur Laffer? For real? I can’t think of a better argument for taking the stimulus money than the fact that Laffer and Talmadge Heflin say we shouldn’t do it. Take it away, Ed:

Ed Sills, spokesman for the state AFL-CIO, urged the state to take the federal unemployment benefits money so it can soften next year’s employer tax increase and help more jobless Texans.

Noting that Laffer in 2006 predicted there wouldn’t be a recession, Sills said, “Citing Laffer for advice on how to run the Texas economy is like relying on candy manufacturers to set dental policy.”

Yeah. EoW has more.

Will we or won’t we fix unemployment insurance?

There’s a lot of money riding on the answer to that question.

The lure of $555 million in federal stimulus money for additional unemployment insurance has Texas legislators mulling whether to expand unemployment benefits to more workers.

To get that money, Texas would have to implement some key changes to state law — including modifying some eligibility requirements to include tens of thousands of low-wage workers. Such changes have been considered but not enacted in previous sessions.

[…]

Gov. Rick Perry is reviewing the American Recovery and Reinvestment Act signed by President Barack Obama this month and the strings attached to all the money, a spokeswoman said.

The unemployment money would be the mostly likely candidate if Perry were to reject anything from the stimulus package.

Perry has said the stimulus money should be used only for one-time projects, not ongoing expenses.

“The hardest thing to remove from government is a temporary program,” Ken Armbrister, Perry’s legislative director, said at a Wednesday hearing.

[…]

The federal money could lessen the need for new taxes on business, said state Rep. Mark Strama, D-Austin, who is chairman of the Technology, Economic Development and Workforce Committee.

“Failure to adopt the policy changes … would result in a higher burden on business taxpayers in the immediate and near term during the recession” than would expanding the benefits, Strama said.

I can understand the reluctance to taking one-time money for potentially ongoing expenditures. But sometimes these are things you should have been doing anyway, and will at worst take on a relatively small expense while getting a worthwhile return on it. A little more analysis and a little less sloganeering would go a long way here.

The Workforce Commission is still determining how much the change would cost.

But an analysis of a similar 2007 bill put the price tag at about $35 million to $45 million a year as 74,000 additional workers would become eligible for benefits, according to the Legislative Budget Board.

The number, however, would probably be somewhat higher given today’s higher unemployment rates.

That change alone would open the door to Texas receiving $185 million of the stimulus money.

The Legislature has some options for how to tap the remaining $370 million. Lawmakers would need to enact two of four policy changes, such as allowing people to get benefits while searching for part-time work.

The Center for Public Policy Priorities, which advocates for low-income Texans, estimates that all of the reforms combined would cost $55 million to $75 million a year, so the federal money could cover the costs for seven years or more.

No one knows the true cost because that would be driven by how many more people took advantage of the benefits, said Talmadge Heflin of the Texas Public Policy Foundation, which advocates for limited government.

“The upside is all short-term,” Heflin said. “The downside in future years will greatly outweigh any upside.”

Funny, you could say the exact same thing about those big property tax cuts we enacted last session when we had some extra cash lying around. I don’t recall there being a whole lot of angst from certain quarters about how we were going to pay for it going forward – there may have been something about the beauty of the free market, or the Laffer curve, or magic pixie dust, I’m not sure. You want to talk about something that’s tough to get rid of, try repealing an irresponsible tax cut. In contrast, this would cost about $150 million per biennium – likely less in the future when the economy improves and more people are working again – which is about 0.2% of the total state revenue we have for this period. It would also help a lot of people who could really use it, and would be quite economically stimulative, as the recipients would be spending all that money on frivolities like food and housing. Seems like an easy decision to make, if you ask me. Patricia Kilday Hart sums up the hearings, in which Texas Workforce Commission Chair (and former chair of the Republican Party of Texas) Tom Pauken spoke in favor of getting stimulus money, as follows:

So, to review:

1. An escalating unemployment rate means the trust fund is paying out 120 percent more than it did this time last year and

2. At current rates, the trust fund will be broke by fall and

3. Bill Hammond [of the Texas Association of Business] doesn’t want to take any federal stimulus money to fix it because somebody might have to pay higher taxes in the future.

Like I said, seems like an easy call to me. Press releases from the AFL-CIO of Texas and Senators Rodney Ellis, Eddie Lucio, Leticia Van de Putte, and Representative Joe Deshotel, who are urging Governor Perry to declare this a legislative emergency, are beneath the fold.

(more…)

We have the beginnings of a budget

And with it, some idea of how deep the hole is.

Maintaining basic state services over the next two years will cost Texas almost $84 billion, $3.7 billion more in general revenue than the state expects to raise during that period, according to the Senate budget introduced Tuesday.

To close that gap, lawmakers will have to choose between cutting costs, raising more money or dipping into a rainy day fund that is projected to have $9.1 billion available.

The key words in those paragraphs are “maintaining basic state services”. In other words, if we just do what we did two years ago, we’re $3.7 billion in the red. Keep that in mind when you hear people talking about cutting spending.

That gap could also grow considerably because the base budget, prepared by the Legislative Budget Board staff, will serve as the starting point for the Senate and House to begin hammering out the nitty-gritty of the 2010-11 budget.

Nor does the proposal cover increased demand for services in all areas, said Eva DeLuna Castro, a budget analyst with the Center for Public Policy Priorities, which advocates for low- and moderate-income families.

Lt. Gov. David Dewhurst said in a statement that the budget meets his priorities of “holding the line on state spending, continuing the record local school property tax cuts and funding essential services for the most vulnerable in our society.”

But Talmadge Heflin, a former House appropriations chairman, said more spending restraint was needed.

“The Texas Legislature needs to get to work on pruning the next state budget back within the available revenue,” said Heflin, director of the Center for Fiscal Policy at the Texas Public Policy Foundation, an advocate for limited government.

Heflin had more to say than that – Burka has his statement, along with a suitable reply. Heflin is delusional, but he’s got a lot of company. I hope that people will associate him and his positions with the budget disaster that came out of the 2003 session and will at least consider other possibilities.

The Morning News has more details:

The Senate’s version spends $171.5 billion over two years – 1 percent more than in the current two-year budget cycle; the House, $170.8 billion.

The key differences between the two chambers’ plans were that the Senate’s would spend $200 million to fix state schools for people with mental retardation; $148 million to expand teacher merit pay programs; and $200 million to maintain current financial incentives for better performance by state universities and colleges.

Both versions would leave intact most of the $9.1 billion that Comptroller Susan Combs last week predicted would pile up in the rainy day fund by September 2011.

The Senate plan proposes $3.7 billion of spending that’s not covered by Combs’ revenue estimate – of which $1.4 billion would occur only if textbook money can’t be distributed from the Permanent School Fund, battered by recent stock market dips.

The House’s base budget would draw down the rainy day fund by $3.3 billion, or maybe only $1.9 billion if the textbook money is freed from the school fund.

Both bills include a provision spelling out how cuts would be made to balance the budget, if lawmakers balk at tapping the rainy day fund. Spending the money, derived mostly from oil and natural gas production taxes, requires a supermajority in each chamber.

So if all goes well and there’s enough votes to tap into the rainy day fund, we’ll spend about $2 billion of the $9 billion that it contains. That doesn’t seem like too big a withdrawal to me. If not, if there’s enough Heflin acolytes to insist that we leave all that money under the mattress, then we get to cut basic services again. Which will be just a dandy thing to do in an economic turndown. The fun begins next week when both chambers reconvene. You can see both proposals on the Legislative Budget Board‘s website, and you can see Sen. Ogden’s SB1 here. Thanks to Eye on Williamson for the links.