Wednesday, July 26, 2017

#TXLEGE: Will House dithering force Abbott to call a SECOND Special Session?!?

"For God gives wisdom and knowledge and joy to a man who is good in His sight; but to the sinner He gives the work of gathering and collecting, that he may give to him who is good before God. This also is vanity and grasping for the wind."
Ecclesiastes 2:26

We've certainly had our issues with Governor Abbott this legislative session.  But, to his credit, Governor Abbott has shown significantly improved leadership during the special session.  Since the special session was called, we've generally been content with what we've seen.

Furthermore, the Senate has now passed the full special session agenda:

Meanwhile, in the house, we've seen...not much of anything.

We've had a few committee hearings, but none of the Governor's bills have yet to be voted out, and we're almost 30% of the way through the current special session.

House floor sessions have lasted about fifteen minutes each day.  They've passed one sunset bill...and that's it.  Tomorrow will be the first day with a real calendar, and only one of those bills implements one of the Governor's priorities.

[Note: Conceivably, one of the other bills up tomorrow could conceivably be amended on the floor into an acceptable version of the tree bill.]

The clock is ticking.

On the one hand, it would be a shame if the house's inaction forced the Governor to ask taxpayers to foot the bill for another special session.

On the other hand, another special session would present a golden opportunity to revisit Constitutional Carry (not to mention short-term rentals and historical zoning).

So we'll see; there are any number of grassroots priorities that should not have to wait until 2019, but we've also got fall plans that we'd prefer to not have to break to hang out at the Capitol.

Bottom Line: If the Governor's priorities start seeing significant floor action by Monday and Tuesday of next week, a second special session is still avoidable; otherwise, don't make fall plans....

#TXLEGE: Lyle Larson's cute little "Water" stunt....

"They are deeply corrupted,
As in the days of Gibeah.
He will remember their iniquity;
He will punish their sins."
Hosea 9:9

Well, at least some bills are moving in the house.

As part of house leadership's extended middle finger to Governor Abbott's special session agenda, today house natural resources committee chairman Lyle Larson heard several of his own bills related to water that Governor Abbott vetoed following the regular session.  Then the committee voted all of them out.  You read that correctly: Larson heard and voted out several bills that the Governor just vetoed; the embedded disrespect is deliberate.

When discussing water policy in Texas, it's important to remember that the whole thing is a corrupt bureaucratic morass.  Disgraced former state representative Jim Keffer was a master at this (see more here and here).  While we've never confirmed it, we've also heard rumors over the years that Larson and Todd Hunter have business interests related to water infrastructure...which makes the fact that a major desalination project in Hunter's district just secured funding last week all the more interesting.

As to the bills themselves, a couple of them (HB 26, HB 228) might have a certain amount of value on the merits.  But this is not the appropriate venue to discuss them.  According to a comment from Trent Ashby during the hearing, the house will probably attempt to push them through creative interpretation of the expedited permitting and the property rights sections of the special session charge [Note: They're probably on solid ground with a couple and nowhere near it on the rest].

In addition, the committee heard testimony on the water development slush fund they passed in 2013 (which, unfortunately, the voters subsequently ratified).  Apparently, they've issued a few billion in various forms over the past couple of years (mostly with multi-decade maturities), are planning to issue another $5.6 billion before 2025, and yet somehow still have almost all of the original $2 billion they were originally allocated in the bank.  Don't ask us how that math works.

Larson closed the hearing with an soliloquy about how "Texas will rue the day" it failed to spend a lot of money on water infrastructure when the next big drought hits.  On the one hand, we're all for prudent planning (and made the point several years ago that if Texas is serious about "infrastructure investment" there were other parts of the budget where they could find the money).  On the other hand, we've learned from experience that when politicians start screaming at the top of their lungs they frequently have something to hide.

Bottom Line: On a certain level, we're impressed by the chutzpah.


Note: That being said, there was one slide shown during the hearing that highlights the biggest problem with water policy in of Texas:

Agriculture consumes over 60% of the water in this state despite the fact that a tiny fraction of the population works in the industry, while all municipal use (ie. residential and commercial) is only 27%.


Tuesday, July 25, 2017

#TXLEGE: First major #SpecialSession day of House committee hearings.....

"Oh, let the nations be glad and sing for joy!
For You shall judge the people righteously,
And govern the nations on earth. Selah"
Psalm 67:4

[Note: We'll post links to the videos as they become available.]

The House had its first major day of committee hearings today.  We signed up to testify on seven bills and deliverd that testimony on four.  Bills we support will be listed in green, bills about which we are neutral will be listed in yellow, and bills we oppose will be listed in red.
  • HB 70 (Workman): "Relating to a property owner's right to remove a tree or vegetation."

    We testified in favor of the House version of the tree bill in the Urban Affairs committee.  We echoed the property rights related arguments you've seen delivered elsewhere.  We also pointed out that trees usually add value to a property, which means that property owners rarely want to cut them down, but in the cases where it's necessary they shouldn't have to wade through a cumbersome process to do so.

    But, let's be honest: This is not the first time this author has testified in front of the Urban Affairs committee this session.  We testified in favor of two separate property rights related bills in this committee during the regular session, and the Democrat committee chair refused to vote either one out of committee.  As chair of the urban affairs committee, Carol Alvarado has a bad recent record on moving property rights related bills.
  • HB 71 (Bohac): "Relating to the limitation on increases in the appraised value of a residence homestead for ad valorem taxation."

    We testified in favor of this bill in the Ways and Means committee.  To be honest, we were pleasantly surprised that Dennis Bonnen chose to give it a hearing.  It's well within the bounds of the special session call.

    The short version of why we support this bill is because there's two places to reign in the property tax system: the appraisal and the rate; while we fully support the discussion related to tax rates that's been generating more attention, we'd also love to do something about the appraisal system.
  • HB 124 (GREG Bonnen): "Relating to the date for ordering or holding an election to ratify the ad valorem tax rate of a school district."

    We signed up to testify on this bill in Ways and Means but were out of the room when our name was called.

    This bill would require tax ratification elections for school districts to be held alongside November general elections; this would make it harder for school districts to game the system by calling tax ratification elections at strange time where only district employees show up to vote.
  • HJR 18 (Howard): "Proposing a constitutional amendment requiring the state to pay at least 50 percent of the cost of maintaining and operating the public school system and prohibiting the comptroller from certifying legislation containing an appropriation unless the requirement is met."

    We testified neutrally on this bill in the Appropriations committee.

    As we explained in our testimony in the school finance testimony yesterday, we don't think it's entirely crazy to say that the state should pick up a greater share of the education tab.  But, for that deal to make sense, the additional state funding needs to be accompanied by some form of structural reform to the system or dollar for dollar reductions in local property taxes (preferably both).  But the house seems to really, really want to do a school finance package and we want to make clear what we would need to see to become interested.
  • HB 80 (Darby):  "Relating to a cost-of-living adjustment applicable to certain benefits paid by the Teacher Retirement System of Texas."

    We were out of the room when we were called to testify on this bill in Appropriation but we oppose it because it pours more money into the current broken system without any reform.

    Appropriations also considered multiple bills related to raiding the rainy day fund to pay for teacher health care, which would be a terrible idea.
  • HB 3 (Dennis Bonnen): "Relating to ad valorem taxation; authorizing fees."

    This is the property tax transparency bill Bonnen started pushing late in the regular session when the he was unable to get the automatic rollback election bill out of his committee.  We testified in favor of the bill as an improvement over current law.  But we also made it clear that we did not consider this bill sufficient to call the 85th legislative session successful on property taxes.

    This led to a moderately contentious exchange with Bonnen about the relative merits of transparency vs. automatic rollbacks.  Bonnen attempted to argue that we were saying that we'd be fine with taxing entities raising taxes just up to the limit into perpetuity.  We pointed out to the chairman that moving from a forgiveness based system to a permission based system was the biggest thing anyone was discussing at the moment.

    Another fun fact we realized after discussion of this bill: Mayor Adler also testified in favor of this bill; while this isn't the first time Mayor Adler and this author have agreed on an issue, the fact that he's supporting it should tell you everything you need to know about the practical effect it will have.
  • HB 4 (Dennis Bonnen): "Relating to the calculation of the ad valorem rollback tax rate of a taxing unit and voter approval of a proposed tax rate that exceeds the rollback tax rate."

    We had to leave before Bonnen called us to testify, but considering we'd had a sharp exchange of views during the previous bill he knows why this authors supports this bill.

    That being said, the most notable aspect of the testimony on this bill was that the local officials all showed up and lost their minds in opposition to this bill; had we been able to stick around, we would have pointed out to the chair that those people being that upset should tell you everything you need to know about which of his two bills would have had a greater impact.

    It's also worth pointing out that Drew Springer and even one of the Democrats on the committee grew visibly exasperated with some of the disingenuous claims made by the local officials; we'll see what that means for getting this bill out of committee.
Bottom Line: We'll know how quickly these bills are moving in a couple days.

Monday, July 24, 2017

#TXLEGE: Huberty LYING about School Finance and Property Tax Relief....

"They speak idly everyone with his neighbor;
With flattering lips and a double heart they speak."
Psalm 12:2

[Note: The committee hearing can be viewed here; our testimony can be viewed at the 1 hour 20 minute mark.]

We attended this afternoon's house Public Education committee and testified against Dan Huberty's terrible school finance bill.  This is a substantively similar bill to the bad policy wrapped in a sleazy process bill Huberty pursued during the regular session.  We suppose it's to Huberty's mild credit that at least he's no longer shadily attempting to push it under the radar while the public is focused on other issues.

But the fundamental problem about the bill hasn't changed: It pours a lot of money into the bureaucracy without structurally reforming the system or providing relief to taxpayers.

And, when Huberty attempts to portray this bill as a property tax relief bill, he's telling a bald-faced lie.

In theory, the legislature could write a school finance bill that included property tax relief.  It could be accomplished through a mechanism called a rate compression."  Huberty's bill doesn't have a rate compression.

Furthermore, the argument that some members of the house have made about the state picking up a bigger percentage of the tab for education spending isn't entirely crazy.  We say that primarily because the state collects revenue through sales taxes while local school districts levy property taxes.  But any increase in state expenditures needs to be met with a corresponding decrease in local expenditures and Huberty's bill doesn't do that.

For this website to get to a yes on a school finance bill, we would need to see either structural reforms so the system better serves children or meaningful property tax relief; Huberty's bill does neither.

Bottom Line: This is not a tax relief bill.  This is a spending bill.  And every time Dan Huberty tries to claim otherwise, he's lying.


Another interesting note about house leadership's priorities during the special session is that THIS bill also got a hearing today:
HB 197        Bernal                  
Relating to the bilingual education allotment provided under the public school finance system.
Bilingual education is a horrible idea that harms the people it claims to help and Dan Huberty heard a bill to put more money into it this afternoon.  Furthermore, during consideration of Bernal's bill, Huberty said that he had integrated its principles into his own school finance bill.  This is happening.

Sunday, July 23, 2017

#TXLEGE: Wrapping up Senate Testimony w/ Union dues and Annexation.....

"And the Levites, Jeshua, Kadmiel, Bani, Hashabniah, Sherebiah, Hodijah, Shebaniah, and Pethahiah, said:

“Stand up and bless the Lord your God
Forever and ever!
“Blessed be Your glorious name,
Which is exalted above all blessing and praise!"
Nehemiah 9:5

[Note: The B&C hearing can be viewed here (our testimony is approximately an hour in); the State Affairs hearing can be viewed here (our testimony is approximately three hours in).]

We testified in favor of two more bills today.  We got hissed at during the first.  During the second, we got a standing ovation.

  • SB 7 (Hughes) "Relating to payroll deductions for state and local government employee organizations."

    We testified about how taxpayers shouldn't be forced to subsidize partisan political activity.  Government bureaucrats are free to engage in any political they desire on their own time and their own dime.  But taxpayers shouldn't be asked to subsidize it.

    We also pointed out the need for a level playing field, so organizations (like the Texas Public Policy Foundation) that rely upon voluntary contributions aren't forced to compete at a structural disadvantage; several of the union people audibly expressed their displeasure with the TPPF comparison.
  • SB 6 (Campbell): "Relating to municipal annexation."

    We testified about how involuntary annexation wasn't cool when the Germans did it to France, it wasn't cool when the Soviets did it to half of Europe, and it's not cool today when the cities of Austin, Houston, and San Antonio are doing it in the state of Texas.

    That was the line that earned the standing ovation.

Saturday, July 22, 2017

#TXLEGE: Statements about several of today's bills....

Image result for texas senate

"Oh, let the nations be glad and sing for joy!
For You shall judge the people righteously,
And govern the nations on earth. Selah"
Psalm 67:4

[Note: The business and commerce committee hearing can be viewed here; our testimony on the health insurance bill can be viewed around the 1 hour 15 minute mark, our testimony on the not changing permitting rules in the middle of the game bill can be found around three hours.]

We signed up to testify on six separate bills today at the Capitol.  We were only able to deliver that testimony on two.  On the final four bills, our remarks are the testimony we would have given if we'd been able to stick around."
  • SB 8 (Creighton): "Relating to health plan and health benefit plan coverage for elective abortion."

    We testified that, similar to the local defunding bill from yesterday,  so long as our society is going to permit the slaughter of innocent children, they ought to at least not ask the rest of us to pay for it.

    That being said, we also realized later that eliminating abortion coverage from basic health insurance can only lower premiums.
  • SB 12 (Buckingham): "Relating to limiting the applicability of municipal and county regulations affecting real property." [Note: This is the bill that would prohibit cities from changing the rules for construction projects in the middle of the game.]

    One of the taxpayer-funded municipal propagandists used the phrase "using zoning to protect property values" and we found that an astonishing euphemism for using the coercive power of the state to artificially restrict housing supply.

    Furthermore, we pointed out that housing costs are the biggest expense for the overwhelming majority of families nationally, in Texas, and here in Austin.  When abusive municipal governments, starting with but not limited to the city of Austin, change the rules in the middle of the game it drives up those housing costs.  This is terrible for upward economic mobility.
  • SB 13 (Burton): "Relating to the issuance of a permit by a political subdivision."  [Note: This bill would establish firm deadlines for cities and counties to deny building permits.  Unless the political subdivision actively denies the permit, it is considered automatically granted after a certain period of time.  Also prohibits county and municipal governments from mandating wage rates.]

    Everything aspect of this bill is awesome.
  • SB 14 (Hall): "Relating to a property owner's right to remove a tree or vegetation." [Note: This is the tree bill.]

    This bill has received a surprising amount of national attention, so there's not a lot that we have to add.  The property rights aspect of this discussion is obvious.  The only thing we would add is that the local politically entrenched disingenuous NIMBY crowd loves to use the tree ordinance as an excuse to delay construction and that anything that reigns in those people can only be a good thing.
  • SB 1 (Bettencourt): "Relating to ad valorem taxation."

    There's been a lot of ink spilled over property taxes, to which we will simply add that the current property tax system is an obvious macroeconomic storm brewing on the medium-term horizon and that it's one of the few things that could truly take down the Texas economy (local government debt is the other).

    Furthermore, lowering the property tax cap would benefit renters alongside homeowners.  Renters (even if they don't realize it) pay property taxes through their rent.  Unfortunately, renters don't receive homestead exemptions.
  • SB 18 (Estes): "Relating to a limit on local government expenditures."

    The flip side to clamping down on taxes is that you need to clamp down on spending as well and this bill does that.

    Furthermore, if you're serious about eliminating property taxes, making cities and counties live under spending caps  starts to make that a realistically viable option in four or six years down the line.

Friday, July 21, 2017

#TXLEGE: Thoughts about today's Senate Education hearing....

"The fear of the Lord is the beginning of knowledge,
But fools despise wisdom and instruction."
Proverbs 1:7

[Note: The hearing can be viewed here; our testimony on the school choice bill can be found around the one hour mark.]

The Texas Senate education committee is currently hearing two bills.  The first relates to parental choice and the second to school finance.  We testified "on" the former, and were signed up to testify "on" the latter but had to leave.

The most important item people need to understand about the current incarnation of the parental choice bill is that IT'S COMPLETELY DIFFERENT FROM THE BILL THAT WAS CONSIDERED DURING THE REGULAR SESSION.  SB 2, by Larry Taylor, would create "tax credit scholarships" for special needs students whereby outside parties can receive a state tax deduction for donating to certain scholarship funds.  This is a significantly more complicated mechanism that what was discussed during the regular session.  By contrast, during the regular session, the Senate proposed "education savings accounts" which would have taken money currently going into the bureaucracy and given it instead to parents to spend however they see fit.

We testified that we don't like that the Senate has shifted course between the regular and special sessions.  Furthermore, we worry that creating new tax credits conflicts with other long term goals related to tax simplification.  Senator Bettencourt largely agreed but asked us if we'd accept tax credit scholarships as a starting point, to which we have to say it depends on how they're structured.

Beyond that, we will note that we were impressed by an exchange Senator Campbell had with a rural superintendent.  When the superintendent attempted to claim no one in his organization supported increased parental choice, Campbell asked his whether his organization represented parents or superintendents.  Under questioning, the superintendent admitted his organization only represented the latter.

On school finance we were unable to testify, but we would have re-emphasized the point we made yesterday: IN THE EVENT THAT THE HOUSE AND SENATE REACH AN AGREEMENT ON SCHOOL FINANCE (which, to be honest, we don't think is going to happen), WE WANT IT TO BE POSTED FOR AT LEAST 72 HOURS BEFORE IT'S VOTED UPON IN EITHER CHAMBER.  In other words, we want to read the bill first.  But again, we think it's unlikely that the house and senate reach an agreement which would render the above paragraph moot.

That being said, depending on the details, the following broad principles could get this author to a 'yes' on a major school finance bill:
  • Significant movement toward student centered funding from district (ie. bureaucrat) centered funding.
    • Note: We think that's DOA in the house.
  • Significant Property Tax relief: To have the state pick up a greater share of the education tab might be a conversation worth having.  But any increase in state level funding must be offset by a decrease in local property taxes.  HB 21 from the regular session, in the form it passed the house, did not accomplish this objective.
  • Repurposing existing dollars from the bureaucracy into the classroom; the Governor and the Senate have said a lot of good things on this topic recently, but those provisions need to have teeth.
Bottom Line: We're currently neutral on both of these bills and we can plausibly see ourselves breaking either way.