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There’s no cheap housing in Houston any more

Jul 18th, 2022
by Charles Kuffner.
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What are we going to do about that?

In the sprawling Houston region, those who could not afford homeownership in the city’s urban core always had options. They could trade proximity for affordability.

But as rising home prices and mortgage rates push homeownership further out of reach for the average renter, the suburbs within Harris County are losing their reputation as an affordable haven, said Rice University’s Kinder Institute for Urban Research — just one example of how access to homeownership and quality housing has grown more difficult over the past decade, with challenges accelerating during the pandemic.

The Kinder Institute and Harvard University’s Joint Center for Housing Studies released Tuesday morning their annual reports on the state of housing in the Houston area and the nation. Together, they painted a picture of a deepening divide between the prospects of current homeowners, whose equity has been buoyed by record-breaking home price appreciation, and renters, who have seen the monthly costs of buying a home rise far more quickly than wages.

The median-priced home in the suburbs of Clear Lake and Jersey Village, for example, were priced between $162,000 and $175,000 in 2011, according to the Houston Association of Realtors. They now go for $300,000 to $317,000.

“You have to go farther and farther out until you find a home that’s affordable,” explained Stephen Sherman, a researcher at the Kinder Institute. “The whole saying is drive until you qualify. We’re finding that people will have to drive even more” — a development which will have rippling implications on traffic and the way floodwaters drain.

And no matter how far out you look, it’s difficult to find a home priced below $200,000 in Harris County these days, where the median home price is on track to soon surpass that in Houston, according to the Kinder report.

Nationwide, four million renters in the past year have been priced out from buying homes, the Joint Center for Housing Studies report found. That’s a concern, said Daniel T. McCue, senior research associate at the center, because “if the door is closing on homeownership, it would lock in some significant inequities in housing.”

[…]

Home prices have outpaced incomes because of a confluence of issues including the chronic underbuilding of homes (the building of which has failed to keep up with population growth for years), the increased demand for homes as millennials enter the homebuying market, surging construction costs as the pandemic interrupted supply chains around the country and the fact that most new construction is focused on the high end of the market.

“Suburban Houston — and new homes in suburban Houston — used to be extremely affordable,” said Lawrence Dean, the Houston regional director for Zonda, which does market research related to new home construction. Since then, the costs of land, materials and labor have all shot up. These days, it’s near impossible to build a home for less than $200,000, he explained.

Wood, fiber-cement siding and even land that’s ready for new homes became harder to come by and labor became scarce during the pandemic. According to the federal government’s producer price index, which measures the average change in selling prices, residential construction materials saw costs rise more than 30 percent in January 2022 from March 2020, when the pandemic began to disrupt businesses in the United States.

The Kinder report is here. This is a regional problem, but it’s also a national problem. It’s partly pandemic-induced, and so may ease up a bit over time, but it’s also driven by other factors, including some lasting effects of the pandemic such as working from home. The point about housing within the city of Houston now being generally less expensive than in the non-Houston parts of Harris County is interesting, as a lot of the population growth in the unincorporated areas has been driven by affordable housing. We’re still cheaper than many other parts of the country (though not by as much now) so some of that will continue, but some of it will be pushed into other counties, and perhaps some of it will come back within the city of Houston. I’d like to see what the demographers think about that.

In the meantime, this is a real problem for a lot of people, and it’s going to take some big ideas to fix. Which, I’m sorry to say, doesn’t exactly fill me with hope. The abundance of available land, the lack of restrictions on building, and the general attractiveness of Texas as a place to live has been a huge driver of growth in the area. What do we do when the first two aren’t making a difference and the third is no longer true?

A few words about the state of the Governor’s race

Jul 9th, 2022
by Charles Kuffner.
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There are many factors.

A school shooting in Uvalde that left 19 children and two teachers dead. The end of a nearly 50-year-old constitutional right to an abortion.

A history-making spring in Texas is laying the groundwork for a contentious final four months in the race to lead the state, where Republican incumbent Gov. Greg Abbott remains the favorite but is confronting his toughest Democratic opponent yet in Beto O’Rourke.

While O’Rourke works to harness the anti-incumbent energy spurred by the seismic events of the past few months, Abbott is banking on a general election centered on stronger issues for him: the economy and the border. But even as the national environment looks bleak for Democrats, O’Rourke has been able to keep the race competitive in Texas — and Abbott’s campaign is not taking any chances.

“People are energized right now, but you know, our job is going to be to keep them that way up until Election Day on Nov. 8,” said Kim Gilby, chair of the Democratic Party in Williamson County, a battleground county north of Austin that in 2018 went for both O’Rourke for U.S. Senate and Abbott for governor. “We can’t just lose sight — there’s so much at stake right now.”

Gilby added she was not worried about O’Rourke’s ability to keep people engaged, calling him the “Energizer bunny” of the campaign trail.

Abbott still carries most of the advantages in the race — money, for one, and a midterm election that is expected to favor Republicans across the country. The governor’s allies argue that voters are more worried about the skyrocketing inflation and illegal immigration — and that O’Rourke cannot separate himself from President Joe Biden, who is very unpopular in Texas.

“First and foremost, those [social] issues won’t overcome the reality of Biden’s economy and when you ask Texans what are their biggest issues, their answers are inflation, the economy and the border,” said Dennis Bonnen, the former Texas House speaker, adding he doesn’t think attitudes in Texas about abortion and guns are enough to move the needle. “Those are issues that have been around forever. The lines have been drawn … and I don’t see significant movement either way.”

Abbott himself has downplayed the political impact of Roe v. Wade getting overturned, arguing that his gubernatorial race in 2014 against then-state Sen. Wendy Davis was a “referendum on the issue of abortion” and he won resoundingly.

To O’Rourke and his supporters, though, this spring has been game-changing. His campaign said it has had 52,000 volunteer shift sign-ups in the five weeks since the Uvalde shooting, a 300% increase over the five weeks prior. After the Roe v. Wade ruling, which came on a Friday, the campaign set out to knock on 30,000 doors over the following weekend and hit 30,279 through 87 separate block walks statewide.

“For us to do that four months away from when this election is decided just shows you how energized the people of Texas are,” O’Rourke said on a Facebook Live afterward.

Beto mentions the latest Quinnipiac poll to bolster his case for optimism. This story came out before both the CBS/YouGov poll, which as noted was done at least partly before the Dobbs decision was released, and the UT/Texas Politics Project poll, which was done fully before Dobbs. We’ll surely get more polling data soon enough, and we’ll see fundraising reports soon. Those are the main objective things one can point to, the rest is mostly vibes. As Scott Braddock put it on the Tuesday CityCast Houston podcast, Abbott is the favorite but Beto has a chance. He’ll need a lot to go right – this story talks about those things, as well as the things that likely won’t go so well for him – and he’ll need to deliver a message that resonates. He’s been delivering a strong critique of Abbott, and he’s absolutely been drawing crowds and generating excitement. He’s just doing it from a non-advantageous starting point. Check back after we get some more of the objective stuff and we’ll see how the vibes are.

Texas misses the train

May 4th, 2022
by Charles Kuffner.
1 comment

Greg Abbott’s border hostage-taking has a cost.

The Mexican government said it intends to shift long-range plans to build a trade railway connection worth billions of dollars from Texas to New Mexico in the wake of Gov. Greg Abbott’s stepped-up border inspections last month, which were widely criticized as being financially damaging and may now leave a lasting impact on relations between Texas and its No. 1 trading partner.

Mexican Economy Minister Tatiana Clouthier said a planned rail and ports expansion — known as the T-MEC Corridor — to connect the Pacific port of Mazatlán to the Canadian city of Winnipeg would not use Texas, but instead the rail line would be routed along the far edge of West Texas up through Santa Teresa, N.M., about 20 miles west of downtown El Paso.

“We’re now not going to use Texas,” Clouthier said at a conference April 28 in Mexico City. “We can’t leave all the eggs in one basket and be hostages to someone who wants to use trade as a political tool.”

Clouthier was referring to what Mexican and U.S. officials and business leaders on both sides of the border have described as chaos generated by Abbott’s April 6 order requiring that all commercial trucks coming from Mexico to Texas go through “enhanced” safety inspections. Abbott said the move was necessary to crack down on human and drug smugglers.

Critics pushed back, saying the governor’s move was motivated by politics and noting that commercial trucks are already checked by U.S. federal authorities. They also noted that border security is a federal responsibility, and that while DPS officials can conduct vehicle safety inspections, they have no authority to conduct searches.

[…]

During a visit to Nuevo Leon, Mexico’s Foreign Minster Marcelo Ebrard told Milenio TV Sunday night that the stepped up inspections were “an extortion scheme, or rather it is extortion: I close the border and you have to sign whatever I say. That’s not a deal, a deal is when you and I are in agreement on something.”

Abbott’s office didn’t return a request for comment.

Jerry Pacheco, president of the Santa Teresa-based Border Industrial Association, called Clouthier’s announcement “a very positive step for New Mexico,” but cautioned that such a project will take years to complete and “anything can happen in that time.”

“I don’t think they’ve even gotten to finish a design yet,” Pacheco said. “So this is very much in the preliminary stages, but the very fact that we’re being discussed in the early stages is a positive thing. If this particular project doesn’t work out, there’ll be other projects that the Mexican government will have and they’ll speak favorably of New Mexico because they know we want to work with them in a constructive way.”

Pacheco said he’s already seen a sea change from the business community in Mexico and the United States.

“It’s been very interesting, but since Gov. Abbott’s truck inspections went away, our traffic numbers remain higher than normal in terms of northbound cargo shipments, which leads me to believe that what I thought would be a temporary fix is actually going to stick in the long term,” he said. Ciudad Juárez and El Paso business leaders “are referring to us now as a ‘very effective delivery route.’ ”

[…]

In many ways, Abbott’s inspections only boosted Santa Teresa, an already thriving community with a port of entry where companies also produce materials and components for factories in Mexico that assemble everything from computers, wind blades, consumer electronics and processed foods to automobiles and industrial equipment that they then ship back to U.S.-based businesses.

Industrial parks in Santa Teresa house big warehouses for products constantly crisscrossing the border, backed by a transportation network that includes an airport and railroad and distribution firms that manage the constant movement of goods in all directions. The entire industrial zone operates as one of the nation’s largest inland ports for truck-and-train transshipments across North America, although Laredo is the No. 1 crossing point for commercial rigs.

The Santa Teresa port has long offered a rapid alternative to congested border crossings in El Paso, where it generally takes two hours or more for northbound trucks to enter the U.S. In contrast, it takes it can less than 20 minutes in Santa Teresa, according to Pacheco.

“For businesses who haven’t used Santa Teresa Port of Entry, think of this alternative as a great, necessary idea,” said Franz Felhaber, president of Felhaber and Company Inc., a customs brokerage company that serves clients on both sides of the border.

I believe the technical term for all of this is “fuck around and find out”. Do things that are bad for business and business will look for opportunities elsewhere – that’s just Capitalism 101. I’m old enough to remember when Republicans cared about that sort of thing, but culture wars and identity have supplanted those values, so this is what we get.

Bloomberg News adds on:

It’s hard to quantify the economic impact of shifting a single rail line, it’s unclear what authority Mexico’s government has to dictate where the crossing would be, and the entire project is still in the very early stages and would take years to complete if it does come to fruition. And to be sure, Mexico has a history of announcing massive infrastructure projects that never get off the ground. But the minister’s comments underscore the frustration the government has with Abbott and the risk of jeopardizing a tight trading relationship.

Mexico is Texas’ largest trading partner, with more than $400 billion of goods crossing annually, everything from avocados that get turned into guacamole to chassis that get turned into pickup trucks. Exports from Texas are equivalent to 17% of the state’s economy, and about one-third of Texas exports go to Mexico.

The significance of the minister’s announcement is that “it’s not just necessarily them being hostile, but them taking a concrete step,” said Nitya Pandalai-Nayar, an economics professor at University of Texas at Austin. “Firms all over the country trade with Mexico, and many of them use Texas as the base for shipping to Mexico.”

You know the old joke about getting a donkey’s attention. Maybe this will get Greg Abbott’s.

Or maybe not. I have no doubt that Abbott and his minions will rabble-rouse over this – they’ll complain about “woke” companies and continue to throw billions of dollars at the border for the purpose of rounding up traffic violators and other misdemeanants, all for the purpose of ginning up the base. It’s been a successful electoral strategy for the most part (2018 being a notable exception), and they’re not going to change course now, or anytime soon without a strong reason to. That reason is, and can only be, losing a bunch of elections. The lesson that the business community needs to internalize is that the Republicans aren’t on their side any more. If they want their daddy’s Republican Party back, they need to get this current incarnation out of office. You and I know what they need to do, it’s just a matter of if they can figure it out. TPM, the Dallas Observer, Reform Austin, Daily Kos, the Current, and Dos Centavos have more.

Keeping the world safe from low tire pressure

Apr 23rd, 2022
by Charles Kuffner.
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Such a visionary.

State troopers ordered by Gov. Greg Abbott to inspect every commercial truck coming from Mexico earlier this month — which clogged international trade with Mexico — found zero drugs, weapons or any other type of contraband, according to data released by the Department of Public Safety to The Texas Tribune.

Earlier this month, Abbott ordered troopers to thoroughly inspect every commercial truck coming from Mexico’s four border states in what he described as an effort to stop illegal drugs and migrants from being smuggled into Texas. His order for increased state inspections was part of his response to the Biden administration’s announcement that it will lift Title 42 — the pandemic-era health order used by federal immigration officials to expel migrants, including asylum-seekers, at the U.S.-Mexico border. The expiration of the order is expected to increase the number of migrants seeking entry to the U.S.

Over eight days, starting April 8, troopers conducted more than 4,100 inspections of trucks. Troopers didn’t find any contraband but took 850 trucks off the road for various violations related to their equipment. Other truckers were given warnings, and at least 345 were cited for things such as underinflated tires, broken turn signals and oil leaks.

DPS Director Steve McCraw said at a Friday news conference with Abbott that the reason troopers hadn’t found any drugs or migrants in commercial trucks is because drug cartels “don’t like troopers stopping them, certainly north of the border, and they certainly don’t like 100% inspections of commercial vehicles on the bridges. And once that started, we’ve seen a decreased amount of trafficking across bridges — common sense.”

But Adam Isacson, director for defense oversight at the Washington Office on Latin America, an advocacy group for human rights in the Americas, said it’s not likely cartels stopped the smuggling of drugs because of the state’s inspections. He said many illegal drugs smuggled into the United States are hidden in small compartments or spare tires of people’s vehicles going through international bridges for tourists. He said if smugglers were trying to hide illegal drugs in a commercial truck, it’s most likely federal immigration officials found them before the trucks were directed to the DPS secondary inspections.

“It just seems odd to me that DPS would be that much of a deterrent for smugglers deciding whether to bring something after already passing through the gauntlet of CBP,” he said.

U.S. Customs and Border Protection routinely inspects commercial cargo coming from Mexico for illegal drugs and people being smuggled as soon as truckers cross the international bridges. CBP called Texas’ inspections duplicative and “unnecessary.”

Emphasis mine, and see here for the previous entry. Beto is out there talking about this stuff. We need more people on our team joining him in this.

On a related note:

According to an analysis by the Waco-based Perryman Group, the U.S. lost an estimated $8.97 billion due to shipping delays between April 6 and 15, the time in which Abbott’s rule was in effect. Texas alone lost $4.23 billion in gross product.

The economics firm based its estimates on a 2019 study it conducted on a separate border slowdown and updated the data to account for this month’s different circumstances, CEO Ray Perryman told Axios.

Perryman promised to release more detailed numbers later this week.

I haven’t looked to see if Perryman has followed through on that. I tend to like Ray Perryman’s projections in the sense that they generally align with my worldview, but I’m a bit skeptical of their provenance sometimes. I have no doubt that Abbott’s dictum had a negative effect on the economy – hell, that was the plan all along – but I don’t think it’s that easy to put a number on it. Anything that doesn’t come with wide error bars alongside it should be viewed with some side-eye. The concept is sound, the details are fuzzy, that’s all I’m saying.

Enron, 20 years later

Dec 6th, 2021
by Charles Kuffner.
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Memories.

It was hailed as the most innovative company in America, a hometown energy giant whose name graced one of Houston’s skyscrapers and the Astros ballpark.

Enron was founded in 1985 as a natural gas pipeline company and became one of the largest energy and commodities trading companies. Its incredible growth turned the company into the darling of Wall Street, an “it stock” that stood out even among rising tech giants during the height of the dot-com bubble. At its zenith, the self-proclaimed “world’s leading energy company” was the nation’s seventh largest corporation valued at almost $70 billion.

But it was a world of make-believe. On Sunday, Dec. 2, 2001, Enron filed what was at the time the largest bankruptcy in U.S. history after it became apparent that its gangbuster growth was based on accounting gimmicks and a web of lies. Enron’s 20,000 employees lost their jobs and $1.2 billion in retirement funds tied up in company stock; its retirees saw $2 billion of their pension funds evaporate.

Nancy Rapoport, who served as the dean of the University of Houston Law Center at the time of Enron’s collapse and wrote several books on the Enron scandal, recalled the company’s swift and stunning fall from grace.

“Before it blew up, we thought Enron was this amazing company and donor to the city of Houston, the arts and higher education,” said Rapoport, now the law school dean at the University of Nevada Las Vegas. “So it was a shock to all of us when we realized that Enron was so different from what we thought.”

Twenty years later, the shock of Enron’s downfall has long faded, but it remains a cautionary tale of corporate hubris and fraud. Its lessons still carry weight, especially as Theranos founder and CEO Elizabeth Holmes stands trial, accused of defrauding investors and patients about the viability and accuracy of its medical testing technology.

Enron’s Chairman Kenneth Lay and CEO Jeff Skilling convinced the company’s board, Wall Street analysts and investment banks of the energy company’s supposed success. Similarly, Holmes was able to sway investors and Theranos’ esteemed board including former Secretaries of State Henry Kissinger and George Shultz and Gen. George Mattis that the company could conduct hundreds of medical tests from a single drop of blood.

Rapoport said the lessons of Enron bear repeating. Corporate boards must ward against groupthink and company executives should heed Enron’s advertising tag: Ask why.

“If I had to pick a single lesson from Enron, it would be about being wary of charismatic leaders because they can charm and bully their boards into agreeing to things that in the light of day these sophisticated board members would never agree to,” Rapoport said. “Look at the board of Theranos. Like the board of Enron, you had super famous, super intelligent, super well-educated people, but they were captivated by charismatic leaders who broke down their defenses in terms of common sense.”

It’s a good trip down memory lane, so read the rest. I knew at least four people – two friends, one former co-worker who left for a job there, and a member of my extended family – who worked for Enron circa 2001. My wife later worked for Chevron, in what used to be the Enron building. The collapse of Enron began less than three months after 9/11, so to say the least we were in some very turbulent times, and there were all kinds of hot takes about how this was a massive, possibly fatal blow to Houston’s economic fortunes. All things considered, I think we’ve done all right since then. But it sure was a thing at the time.

The wrong track

Sep 18th, 2021
by Charles Kuffner.
1 comment

Interesting, but there are some key questions left unasked.

According to a poll conducted by Texas 2036, at least 92 percent of Texas voters said they were concerned about the future of the state, with 58 percent also stating they felt extremely concerned about it.

The Texas 2036 is a nonprofit organization that aims to build long-term, data-driven strategies to secure Texas’ prosperity. They recently commissioned a poll to longtime GOP pollster Mike Baselice’s firm, and who has worked with both Trump and Lt. Gov. Dan Patrick in the past.

The poll results, which were released on Tuesday, paint a grim picture of what Texans feel right now and their hopes for the future. It had 1,001 participants and was made 43% by cell phone, 23% by landline, and 34% through the web. It has a margin of error of +/- 3.1%.

The report shows that for the first time in the six years the question has been asked, more Texas voters (26%) said they feel financially worse off than they did the year before. Only 20 percent of the people being polled said they believe they are better off.

52 percent of voters said they believe that Texas is worse off than it was this time last year, a truly concerning fact considering last year the pandemic was at a considerable height and vaccines were not yet released. Only 13 percent said they thought the state was headed in a better direction.

The overwhelming majority of Texas voters agree with using federal COVID-19 relief money to fund large-scale projects and promote the state’s economy. This is something that state lawmakers can actually do in the upcoming third special session of the legislature.

The poll landing page is here, the press release for it is here, and all the data provided can be found here and here. It’s interesting and easy to read, so go check them out. The main thing that I came away thinking is “but who will the voters blame for their negative feelings?” I’ve noted the flip side of this question before, when I’ve asserted that the best hope for Democrats in general and Texas Democrats in particular is a strong performance by President Biden and a good economy to go with it. That works to a point, but only to the extent that the President gets the lion’s share of the credit for those good things. You can be sure Greg Abbott and his minions will do everything they can to grab that credit, and it will be up to the voters to decide who deserves it. The same is true for the blame – do you pin it on the Governor or the President? I can’t answer that question, and the pollsters don’t ask.

There are no electoral questions, and this is the first poll of its kind, so we don’t have any bases for comparison. One can certainly argue that this is a tricky spot for statewide Republican incumbents to be in, since they’re the closest ones to the situation and the ones that voters can take out their frustrations on in 2022. But again, they get to have a say in that, and they will do what they can to redirect and distract, as anyone in their position would. This is the kind of place where having a gubernatorial candidate would really help, since there would be a natural conduit for the message that the blame should apply to the guys in charge of the state. We don’t have that yet, so that task needs to be diffused outward for the time being. The point here is that this kind of data can be used by anyone, and so there needs to be a coherent message and a recognized messenger to get the viewpoint you like out into the discourse. For now at least, that’s on all of us. Robert Rivard has more.

Our COVID failures and our economy

Sep 14th, 2021
by Charles Kuffner.
1 comment

Remember when the goal was to get the economy going again?

The recent surge in COVID-19 cases is not only hitting the state in terms of lives lost, but it’s taking its toll on the Texas economy. That’s according to a new report from the Perryman Group, an economic research and analysis firm in Waco.

They estimate the state’s failure to contain the disease has led to nearly 72,000 job losses. The analysis also found on average, the state loses roughly $187,000 for every employee unable to return to work because of the pandemic. That amounts to total potential losses of about $13 billion per year, the firm found.

But they argue many of these potential losses are preventable.

“What we need to do right now is do everything we can to make it safer for people to return to work. That includes masks where appropriate. That includes safety in schools so people that have issues with their children in childcare and things like that that prevent people from returning to work,” said Ray Perryman, president and CEO of the Perryman Group. “These are what we call preventable [economic] losses.”

Perryman said certain industries are being hit harder than others.

“In terms of dollar impacts, obviously a worker in a tech industry per worker has a much bigger impact than say a worker in a restaurant. But from an industry perspective, the ones being hit the hardest are the ones you’ve been hearing about since the beginning of the pandemic that deal in interpersonal relationships – retail, particularly restaurants, salons, airlines,” he said.

He says getting more people vaccinated is also key to avoid future economic losses.

The full report is here if you want to read it, and there’s video of an interview with Perryman about this at the first link. Honestly, in the context of Texas’ economy, $13 billion is pretty small, as is 72,000 jobs. Not nothing, especially if you’re in one of the more affected sectors, but not so much that you’d notice it on a graph. The point that all of this was preventable, with more aggressive vaccination promotion and distribution, and a continued reliance on masks while allowing local governments to have the discretion they need to respond as they see fit, is still true. There’s no good reason why we have to be going through what we are going through now. It was all the result of Greg Abbott’s actions.

Metro moving forward on new BRT line

Aug 28th, 2021
by Charles Kuffner.
2 comments

As they should.

Even with fewer riders hopping aboard and a more dour financial outlook, Metro officials say the agency is full steam ahead on a host of projects aimed at adding buses to scores of routes and neighborhoods.

That includes an approval scheduled for Thursday by the Metropolitan Transit Authority board to commit $40 million to development of a planned bus rapid transit line from around Tidwell and Interstate 69 to Westchase, via Denver Harbor, downtown, Midtown, Greenway Plaza and Uptown.

The project, similar to the Silver Line along Post Oak that opened a year ago and uses dedicated bus lanes to deliver service to stations akin to light rail, is one of dozens in Metro’s $7.5 billion long-range plan. That plan, approved by voters in November 2019, relies heavily on federal grants, which could come quickly if Washington lawmakers approve budget and infrastructure bills in the coming weeks or months.

“If we can get our ducks in a row on as many corridors as we can, that is good for the agency,” said Metro board member Sanjay Ramabhadran.

Metro submitted a preliminary application for funding related to the so-called University Line bus rapid transit project to the Federal Transit Administration in late July. Houston transit officials heard back from their federal counterparts in one week, a quick turnaround for a first series of questions, said Shri Reddy, executive vice-president of planning, engineering, and construction at Metro. Among the issues raised by federal officials was more assurance that Metro had committed money for developing the project, prompting Thursday’s vote.

That story was published on Wednesday; on Thursday, the board approved the money as planned, while giving me a bizarre sense of deja vu.

Seriously, Afton Oaks? After all this time? I mean, it’s all residential on that stretch of Richmond, so I doubt any stops there would be busy, but geez. Anyway, Metro is projecting less revenue now than it had originally planned for and that could lead to some uncomfortable decisions about service levels down the line if actual revenue is in line with that, but that’s a concern for later. For now, this is a good start.

Our eroding reputation as a good place to do business

Aug 5th, 2021
by Charles Kuffner.
2 comments

If we don’t have that, what do we have?

Veteran Waco economist Ray Perryman is used to seeing an annual parade of best for business rankings that put Texas at the top.

Those rankings shape perceptions about the state’s business climate — a longtime selling point touted by politicians and economic development specialists alike.

That’s why Perryman finds one recent ranking “eerily disturbing.”

Texas fell to fourth in business news network CNBC’s annual ranking of best states for business, dropping two spots from its 2019 ranking. Virginia, North Carolina and Utah beat out Texas. The network didn’t do a 2020 ranking because of the pandemic.

So what led to Texas’ decline?

Look no further than the Lone Star State’s 49th place finish — ahead of only Arizona — in CNBC’s expanded category called life, health and inclusion. This year, that category included inclusiveness initiatives, health care resources, progress in ending the pandemic and other more traditional quality-of-life measures.

“This ranking is a compelling early warning signal that short-sighted, counterproductive policies risk eroding the progress over the past 30 plus years in building Texas to be the most competitive economy in the country,” said Perryman, president and chief executive officer of The Perryman Group. His firm produces economic estimates of everything from Texas’ epic winter storm to the consequences of Texas and Oklahoma leaving the Big 12 athletic conference.

“It’s an unforced error that the state can ill afford,” he wrote in his weekly column published on his website. The column was titled “This Stuff Matters!”

That column is here. As noted, Perryman is the go-to guy for timely economic projections on a variety of subjects. He’s also been a consistent critic of things like our chronic underfunding of education and more recently the various forms of anti-transgender bills, so in a sense this is confirmation of his priors. It also makes sense, especially at a time where it’s cities and diversifying suburbs that are the biggest components of Texas’ economic engine and yet also a constant target of the state government. It’s not crazy to imagine that more people who might otherwise seek high-paying jobs here will be turned off by what Greg Abbott et al are doing. As with polls, this is one data point and you shouldn’t go overboard with it, but it’s worth keeping an eye on.

Big XII accuses ESPN of sabotage

Jul 31st, 2021
by Charles Kuffner.
2 comments

Interesting!

In the long, sordid and divisive history of conference realignment, there has always been feverish levels of mistrust, backroom allegations and message board conspiracies when schools switch leagues. But in the decades of cloak-and-dagger maneuverings, political gamesmanship and rival in-fighting that have always accompanied realignment, we’ve never seen a moment like Wednesday afternoon.

Yahoo Sports first reported that the Big 12 sent a “cease and desist” letter to ESPN essentially demanding the television network stop plotting to sabotage and cannibalize the league. Commissioner Bob Bowlsby accused ESPN of attempting to “harm the league” for ESPN’s financial benefit. That wasn’t even the most memorable part.

From there, Bowlsby did a series of media interviews where he accused ESPN of plotting with another league – later revealed to be the American Athletic Conference per Yahoo Sources – to attempt to kill off the Big 12. Essentially, Bowlsby said he found evidence that ESPN had been “providing incentives” to a league to lure the Big 12 leftovers away after Oklahoma and Texas bolted without warning.

“What pushed me over the top was a couple of days ago when it became known to me that ESPN had been working with one or more other conferences and even providing incentives for them to destabilize the Big 12 and approach our members about moving away and providing inducements for the conference to do that,” Bowlsby told Yahoo Sports in a phone interview. “That’s tortious interference with our business. It’s not right.”

There’s more, so read the rest, and see the letter in the original story. ESPN denies the allegations, as you might expect. I have no idea what happens next, as I have definitely been operating under the assumption that this is going to happen and will very likely happen well before 2025, but this suggests there will be a lot more friction than I anticipated, and that the Big XII will aim to make it as expensive as possible for UT and OU. And, apparently, ESPN. We’ll see how that works out for them.

Meanwhile, since this is of course all about money, there’s this.

The decisions by the University of Texas and University of Oklahoma to seek to leave the Big 12 Conference to join the Southeastern Conference could affect more than just which teams they play. The decision can also have a big economic impact for the rest of the Big 12 and the communities that are home to their teams.

The move is not yet approved, but if it goes through, it could cost as much as $1.3 billion a year in lost athletic revenues, tourism spending and other economic activity for communities across the Big 12, according to an analysis by Ray Perryman, an economist and CEO of the Perryman Group, an economic consulting group in Waco.

Without Texas and OU, the rest of the conference is likely facing smaller television deals, lower attendance, and other negative consequences, Perryman said in a report released Thursday.

Ray Perryman is the go-to guy for this kind of economic analysis, and you have to respect his ability to crank them out in such a timely manner. I don’t doubt that the remnants of the Big XII will do worse without UT and OU, and some of that will trickle down to the cities the schools are in. I suspect those numbers are overblown, but I couldn’t say by how much. The report is here, judge for yourself.

Another data point on Biden and Latino support

Jun 11th, 2021
by Charles Kuffner.
Comments are off for this post

Of interest.

Hispanic voters were one of President Joe Biden’s biggest weaknesses in the 2020 election. Although sources differ on his exact margin, Biden’s advantage with Hispanics was the worst for a Democratic presidential nominee since 2004 — even as he had the strongest performance overall for a Democrat since 2008.

A look at recent history and polling reveals, however, that Biden may be primed for a comeback among Hispanics for a simple reason: He’s now the incumbent.

Take a look at Gallup polling during the Biden presidency. Aggregating all the polls it has conducted so far (in order to get a large sample size), Biden’s approval rating with Hispanics stands at 72% compared to a 55% overall approval rating.

That 72% is a clear improvement from how Biden did in the election with Hispanics. Biden won 65% of Hispanics, according to the network exit polls. An estimate from the Democratic firm Catalist (which lines up well with what we saw in pre-election polls) had Biden taking 61% of Hispanics. So this Gallup data suggests Biden’s support may be up anywhere from 7 to 11 points from the election.

Biden is doing better overall now than he did in the election. His approval rating is at 55% in the Gallup data we’re using here. Even controlling for a higher approval rating overall, Biden has had a disproportionate rise in support from Hispanics. He’s now doing 17 points better with Hispanics than overall, while he was doing 10 to 14 points better with them in the 2020 election.

Keep in mind, too, that unlike in an election, there are undecideds allowed in a poll. If we allocate undecideds equally between approval and disapproval for both Hispanics and overall, Biden’s approval rating is about 20 points higher with Hispanics than overall in Gallup polling.

(An average of recent CNN/SSRS, Fox News, Marist College and Quinnipiac University polls compared to their pre-election equivalent finds that Biden has had a similar disproportionate rise with Hispanics.)

This 20-point gap between how Hispanics and adults overall feel about Biden is wider than the last Democratic president saw in his first months on the job.

In aggregated Gallup data with undecideds allocated, Barack Obama’s approval rating was 17 points higher with Hispanics than overall in the first four months of his presidency. In the 2008 election, Obama did 14 points better in the exit polls with Hispanics than overall.

Obama saw an improvement with Hispanics relative to his overall performance, but not to the same extent that Biden may be getting.

We’ve discussed the incumbency effect before – David Beard was the first to call it to my attention, and I noted it my State Senate district analysis. As author Harry Enten points out, this effect for Presidents persists for winning and losing incumbents – George H.W. Bush also saw a rise in Latino support from 1988 to 1992, even as his overall vote share dropped tremendously. Obviously things can change, 2024 is a looooooooooong way off, and we don’t know if this effect is more or less uniform geographically and across different nationalities (i.e., Mexicans versus Puerto Ricans versus Cubans versus Dominicans, etc) or if it might be greater in places like California and Colorado versus Texas and Florida, but this is a thing to keep an eye on. It could make a difference in some key states next time around.

It may also have an effect in 2022, to the extent that approval of the President has an effect on the fortunes of the party in power for the off year. Specifically in Texas, where the Trump shift in Latino areas has been talked to death, this could mean that 2020 was an outlier, or at least it could mean that a trend in favor of Republicans for at least some Latino voters will be smaller in magnitude this next election. As noted in my first post about the State House districts, there really is a difference between the level of support Trump got in Latino areas and the level of support other Republicans got. Things did move in the GOP’s direction from 2016 to 2020, but not by nearly as much once you got past the Presidential race. I’ll have those numbers for you soon. One could argue that if the initial shift towards Trump was about jobs and keeping the economy open, that might actually benefit Greg Abbott more than any Democrat, since Abbott was singing from Trump’s playbook. Abbott’s favorability has taken some hits in recent months as we know, but the farther we get from the legislative session the more likely in my opinion that may fade. While this may be a leading indicator of good things for 2024, we just don’t know what effect if any it may have next year. It’s something to consider, but don’t put too much weight on it.

What was the effect of Texas’ early re-opening?

Jun 6th, 2021
by Charles Kuffner.
1 comment

Here’s a new study by a trio of economic researchers that attempts to answer questions about the behavioral, public health, and economic effects of Greg Abbott ending the statewide mask mandate and all restrictions on how businesses can operate, all on March 3 of this year. Short answer: Pretty much nothing changed.

This study explores a unique policy shock in Texas to identify the causal impacts of a statewide reopening on public health and economic activity. Texas was first state in the United States to enact a “100% reopening.” Executive Order GA-34, issued by Governor Greg Abbott, (i) eliminated statewide capacity constraints on all businesses, and (ii) abolished the statewide mask mandate (Abbott 2021). Texas’ “first mover” position makes the state’s reopening plausibly exogenous relative to other later-reopening states that followed suit and eased restrictions. Under Governor Greg Abbott’s order, local businesses were free to impose their own voluntary restrictions. Furthermore, unlike the imposition of local shelter-in-place orders which were permitted and widely adopted (Dave et al. 2020a), Governor Abbott advanced the legal position that no local order can supersede the state’s reopening order and legally impose COVID-related capacity constraints on local businesses or fine local residents for not wearing masks.4 At the time the reopening was announced, the state of Texas had administered 5.7 million vaccine shots to its residents, fully vaccinating 11 percent of its adult (ages 16 and older) population Centers for Disease Control and Prevention 2021b). By March 29, all adults 16 and older were eligible to obtain a vaccine (Harper 2021) and by April 13, 15.2 million vaccines had been distributed in Texas (Johns Hopkins University 2021), with 26 percent of the adult population completely vaccinated.5 This share had reached nearly 40 percent by mid-May 2021.

This study is the first to examine the impact of a statewide reopening in the midst of a mass statewide vaccination effort. We document three key findings. First, using anonymized smartphone data from SafeGraph, Inc. and a synthetic control approach, we find that the Texas reopening had little impact on stay-at-home behavior or on foot traffic at numerous business locations, including restaurants, bars, entertainment venues, retail establishments, business services, personal care services, and grocery stores. Second, using COVID-19 case and mortality data from the New York Times, we find no evidence that the reopening affected the rate of new COVID-19 cases in the five-week period following the reopening.6 In addition, we find that state-level COVID-19 mortality rates were unaffected by the March 10 reopening. These null results persist when we explore heterogeneity in the state reopening by urbanicity and political ideology of Texas counties. We find no evidence of social distancing or COVID-19 effects of the reopening across more urban versus less urban Texas counties as well as across counties where the majority of residents supported Donald Trump or Joe Biden in the 2020 presidential election.

Finally, we explore whether Governor Abbott’s reopening order generated short-run economic growth in Texas. Using weekly state-level data on UI claims per 1,000 covered jobs from the Bureau of Labor Statistics (BLS), synthetic control and difference-in-differences estimates show that neither continued UI claims filed nor new UI claims filed (per 1,000 UI covered job) fell in the five “full week” period following the March 10 reopening. Moreover, using state-level data from the St. Louis Federal Reserve Economic Data (FRED), we find no evidence that the Texas reopening reduced the short-run (March 2021) unemployment rate or employment-to-population ratio. Supplemental analysis of microdata from the Current Population Basic Monthly Survey (CPS-BMS) show no evidence that that the reopening affected employment-to-population ratios at bars, restaurants, or entertainment venues. Taken together, our findings underscore the limits of late-pandemic era changes in COVID-19 reopening policies to alter private behavior.

See here for my post about the end of the statewide mask mandate, which I contended should have waited another couple of weeks until more people were vaccinated. I still think that would have been the smarter policy, but what this study tells us is that a lot of people – both mask-wearers and mask-resisters – kept on doing what they’d been doing. In addition, localities that had mask mandates (at least up until recently) largely kept them in place, and businesses that required people to wear masks continued to do so.

That combination of factors is very likely why not much changed despite the new, relaxed rules. Cellphone mobility data was used in May last year to predict the second-wave summer spike, and the reason for it was that with the initial lifting of stay-at-home orders, people went back to pre-pandemic levels of activity, with predictable results. The authors’ point is that at this later stage of the pandemic, people’s behavior was much more accustomed to being restricted, so a change in government policy had much less effect on them. That also means it had much less effect on economic activity, contra what Abbott promised, for the reason that many had proclaimed for months, namely that you can’t really reopen the economy until most people feel comfortable enough to get back out there and shop and dine at restaurants and go to the gym and movies and whatnot. And they won’t feel that way until the pandemic is well and truly beaten, which means taking it seriously until it’s been controlled.

Anyway, there’s grist for a lot of mills in there, so check it out. It’s kind of dense, so if you’d rather have someone else summarize and analyze it for you, there’s this Atlantic story. If even that is too long for you, or if like me you have run out of free Atlantic articles to read, this Twitter thread from the author will have to suffice. He doesn’t touch on the economic stuff, just the health and behavior stuff, but his explanation of the theories about this are nice and succinct. I’m sure we’ll see further study on this topic – it’s too interesting and important for there to be just this one – but for now, this is what we have.

Two arguments against Abbott’s rollback of extended unemployment insurance

May 25th, 2021
by Charles Kuffner.
Comments are off for this post

It’s bad economic policy.

“I’m still nervous that we’re bowing out of this program before the labor market is fully healed,” said Dietrich Vollrath, an economics professor at the University of Houston. “The bad consequences of doing too much is limited,” he said, “but the bad consequences of doing too little can really be detrimental.”

About 800,000 Texans were receiving federal jobless assistance at the end of April, according to the most recent data. Nearly half of them — the self-employed or other gig economy workers — will lose all of their benefits at the end of June, when the governor is ending the additional aid. The rest will see a steep drop in their weekly checks.

[…]

While the Texas economy has largely rebounded from the height of the pandemic, when the unemployment rate topped 12 percent, companies across the state are still firing employees at two to three times the normal rate, according to Vollrath. He said that’s a sign the recovery remains fragile.

Labor experts already have some preliminary findings on the impacts of increased benefits during the pandemic. Economists at Yale University found that the $600 unemployment checks approved early on under the Trump administration did not significantly deter unemployed people from reentering the workforce.

Belinda Román, an assistant economics professor at St. Mary’s University, said ending the payments could backfire and instead drive people further into poverty. If it does work, she said, it may force at least some people into underpaid jobs that they have decided are no longer worth the time or health risk.

“My perspective is, pay better and that probably incentivizes a lot of people to come to work,” she said.

See here for the background. Those $600 checks also largely kept the economy from cratering a year ago. Taking away this benefit now, when the economy is still in recovery and lots of people are still not vaccinated and being cautious about going out, will mostly have the effect of making people who are already on the economic margins even poorer.

Also, too, there are other reasons why some businesses are having problems hiring.

Britt Philyaw, executive director of the Heard That Foundation, a Dallas non-profit that provides support for hospitality workers, said she doesn’t know of anyone who has turned down restaurant jobs to stay on unemployment.

“I find it really disturbing some of the things that I’ve seen on social media. I don’t like that the labor shortage is being politicized and how it is being said that people are lazy or they’re making more money on unemployment. I don’t think it’s the truth. The people we’ve worked with throughout the pandemic who were on unemployment and got their stimulus checks were not making ends meet,” she said.

What the pandemic did, in her opinion, was highlight the instability of restaurant jobs. The quirks of service industry work like tips and irregular schedules are often draws for many people in the industry, but they were cast in a different light when the pandemic hit, Philyaw said. Suddenly the things that were once perks of the business were no longer worth sacrificing health insurance, predictable pay and stability for.

“Something that is desperately lacking from the conversation is the fact that 70% of the population that works in the industry are women, some of them single with kids. I think that should be a huge part of the conversation,” Philyaw said.

The service industry labor market was already tight before the pandemic, and with even more jobs than there are workers, Philyaw said employees have the ability to be choosy about who they do go work for, which is making it even harder for employers, some of whom are offering sign-on bonuses and raising wages to attract new hires.

“People in front-of-house and back-of-house [of restaurants] are shopping around,” she said. “And they’re looking for things they value like, ‘Am I going to work in a safe environment? Am I going to work in an environment where I’m not going to be harassed or bullied or forced to work for free?’ So there’s just a lot of things at play, but I really don’t think it’s as simple as the stories that grab the most attention.”

For Andrea Winn, a long-time restaurant industry professional who’s held server, sommelier and wine director positions at Dallas restaurants like Bolsa and Abacus, the decision to leave the restaurant industry came when the downtown Dallas restaurant she was working at reopened over the summer and management did not adhere to capacity limits, mask mandates and other safety protocols.

She took a full-time job as a wine and beer buyer for Whole Foods, stepping away from the industry she loved and had worked in since completing her degree in history and getting out of a desk job she loathed. It wasn’t easy to leave the dining room — she was saying goodbye to higher pay, flexible hours and the ability to travel when she wanted — but the benefits outweighed the cons, she said.

“I have a job now [at Whole Foods] where I am guaranteed a certain amount of hours every week, I know how much I’m going to get paid, and I have health insurance and sick time. The sick time was a really big thing because working in restaurants, unless you are really sick, you are expected to work sick. You’re looked down upon, and your schedule will be threatened if you don’t [work],” Winn said.

There is a common perception that restaurant workers are young, uneducated and in the industry out of necessity, Winn said, and such thinking makes it easy to believe that the shortage of workers is due to an unwillingness to work. But the reality is the industry is made up of seasoned professionals like her who sought out restaurant and bar careers and are now choosing to pursue careers that offer a better quality of life, she said.

Some jobs are better than others. People who have kids at home and no child care available don’t have a lot of options right now. Making them desperate doesn’t seem like a good idea to me.

Trib polling roundup, part 3

May 6th, 2021
by Charles Kuffner.
Comments are off for this post

Once more, with approval ratings.

President Joe Biden

Texas Democrats think Joe Biden is doing a good job as president, according to the latest University of Texas/Texas Tribune Poll.

Texas Republicans don’t.

Overall, the president gets good grades from 44% of Texas voters and bad grades from 46% — numbers that are better or roughly the same as the state’s most popular Republican leaders. Underneath Biden’s overall numbers, as with other officeholders in Texas, are starker partisan grades: 88% of Democrats said Biden is doing a good job, and 86% of Republicans disapprove of the work he’s doing.

Biden does a little better — but still poorly — with Republicans on how he’s handled the response to the pandemic; 14% approve, and 67% disapprove. But 92% of Democrats approve. And overall, 49% of Texas voters give Biden good grades on the pandemic, while 35% think he’s done a bad job.

Overall, 38% approve of Biden’s handling of the economy and 46% disapprove. Only 23% of voters approve of his response to immigration and border security, while 59% disapprove.

See here for Part 1 and here for Part 2. I had noted that 49-35 rating in Part 1 and was surprised by how positive it was. This makes more sense. It’s still good, and likely has boosted his overall rating, and it may make it harder for Greg Abbott et al to claim all the credit as COVID (hopefully) continues to retreat in Texas. Hard to know if it will have any effect on how people will vote – we know that Trump overperformed his approval rating in 2020 in part because people had a higher approval of him on economic matters. Biden lags a bit there, but that question is now mostly a proxy for partisan identification. We’ll see if that changes as the economy continues to recover.

As for the rest of the politicians polled, let’s make a table:


Name     App  Dis  None
=======================
Biden      44   46   11
Cruz       43   48    9
Cornyn     31   43   25
Abbott     43   45   13
Patrick    35   39   26
Paxton     32   36   31
Phelan     20   22   57

Congratulations to Ted Cruz for being the politician most people have an opinion about. I’m not sure he has anything further to aspire to. Maybe this is why John Cornyn is tweeting so much now, so he can close that gap.

The gaudy approval levels Greg Abbott had last year during the Summer of COVID are officially over. As noted before, his high approvals were mostly a function of him doing OK with Democratic respondents, who did not have the visceral dislike that others generated. Not any more. What this tentatively suggests to me is that there will be less separation in 2022 between Abbott and Dan Patrick and Ken Paxton, who along with Sid Miller ran several points behind Abbott in the 2018 election. If this holds, and all else being equal, I’d still expect Abbott to outperform Patrick and Paxton, but not by much, maybe a point or two.

It’s interesting to me that everyone has a net negative rating. Even before his COVID boost, Abbott was usually in the black on this. I looked in the crosstabs for the three Republicans that are up for re-election next year, and they tell the story of why they’re under water:


Name       Dem     Rep     Ind
==============================
Abbott    7-83   77-13   34-37
Patrick   5-75   63-10   24-33
Paxton    5-68   59-11   23-26

I’d have to do some more research, but I feel confident saying that Abbott was received less negatively by Dems in the past. Again, this might change as we move away from the legislative session – Rick Perry always seemed to be in worse shape at this point in the cycle than he was headed into an election – but it’s worth keeping an eye on.

The best time to buy a house in Houston was last year

May 2nd, 2021
by Charles Kuffner.
1 comment

Or the year before that, or the year before that…

The O’Neals are part of a nationwide real estate frenzy playing out in Houston that is propelling prices to new highs. Houses are frequently drawing multiple offers, often above the asking price and can sell in a matter of days if they’re in good condition, according to local real estate agents.

The median price of a single-family home reached $260,212 in 2020, up 6.2 percent from 2019, according to an analysis of home sales and prices compiled by the Houston Association of Realtors for the Houston Chronicle. The increase in the median sales price was nearly twice the 3.2 percent year-over-year gain in 2019, according to HAR.

The increase came amid demand fueled by continued low interest rates, an extreme shortage of houses on the market and a rekindled desire for homes in the suburbs stemming from the pandemic as people spend more time at home. At the same time, despite the rising prices, the pandemic forced people to cancel vacations, stop eating out and allowed them to pay down debt, giving them more buying power than ever. Some of that may carry over to the future.

“We have a new habit of spending a lot of time at home,” said Ted C. Jones, chief economist with Stewart Title. “We’ll definitely eat out more, but maybe not as much as we did 24 months ago.”

Meantime, said Frank Lucco, an appraiser with Accurity Qualified Analytics, “Houses are flying off the shelves.”

Lucco said he has never seen Houston home prices rise this quickly in his 43 years as an appraiser. Traditionally, home prices have risen 3 percent to 4 percent annually over the last two decades. The veteran appraiser has been constantly adjusting his appraisals upward to reflect Houston’s fast rising prices.

“There’s multiple contracts on houses,” he said. “It’s not uncommon for houses to sell in the same day it’s listed.”

In March, 2,165 houses in the Houston area — 23.2 percent of the month’s sales — sold for above asking price, according to HAR. That’s nearly three times the 8 percent that sold for more than asking a year ago.

Everyone reading this in Austin and its environs is no doubt nodding their head grimly. You want crazy home prices and bidding wars, that’s the place for it. The same is going on in the greater D/FW area as well. As this story notes, there’s a lot of demand out in the burbs, with their bigger houses and spacious yards that have been a blessing for many in the pandemic, but there’s also a lot of demand for the urban core, especially among younger buyers. There’s plenty of construction in my neighborhood, and I can’t think of any lots that have been on the market for more than a couple of weeks. Whatever else you might say, it’s better to be a place where people want to live.

Whither downtown?

Apr 19th, 2021
by Charles Kuffner.
4 comments

Nobody really knows when or if Houston’s downtown will return to something like it was pre-COVID.

Few areas of the local economy were hit as hard by the pandemic as downtown and few face as much uncertainty as the service sector — shops, restaurants, dry cleaners, hair salons — that depends on people coming to work in the city’s center. Even as the pandemic’s end appears in sight and companies begin to bring workers back to the office, it remains unclear how fast employees might return downtown and whether they will come back in the same numbers.

Already, some companies are planning to continue the remote working arrangements forced by coronavirus and embraced by both employers and employees. The financial services company JP Morgan Chase, which has some 2,300 employees in two buildings downtown, recently said it will keep some positions remote and reduce the number of people in its U.S. offices, reconfiguring them to reduce the space it uses by up to 40 percent.

The chemical company LyondellBasell, which has about 2,300 employees in its downtown office, said it will consider flexible, remote alternatives to in-person work. The pipeline company Kinder Morgan, which has about 20 percent of its 2,100 working in its headquarters on Louisiana Street, said it has not determined when and how it will bring back other workers.

A recent survey by Central Houston, an organization that focuses on the redevelopment and revitalization of downtown, found that 75 percent of downtown employers expect at least 10 percent of their workforce will transition to a mix of in-person and remote work.

Only about 18 percent of employees are working from the office downtown, according to Central Houston’s survey. About half the companies said they expect to bring 50 percent of their workers back to the office by June and 70 percent said they expect to have half their workforce in the office by September.

[…]

It’s hard to say when the downtown workforce will return to pre-pandemic levels, said Bob Eury, president of Central Houston. The Houston utility CenterPoint Energy said it plans to bring all its employees who have been working remotely back to the offices at 1111 Louisiana St. in June.

Also in June, the University of Houston-Downtown, which has nearly 1,400 employees, said it will bring full-time staff on campus at least three days a week. By July, the staff should be working regular Monday-Friday schedules, the university said.

But some companies are still figuring out when they’ll bring employees back and how many might continue to work remotely. Porter Hedges, a law firm on Main Street, still has most of its 220 employees working at home, but has not set a timetable for their return to the office.

Employees at EOG Resources are working in the office roughly half the week, the other half at home as part of the company’s phased reopening strategy. A spokesperson could not say how long the policy would remain in place.

Developers and property managers, however, are confident that offices will eventually fill with workers again. Travis Overall, executive vice president for Brookfield Properties, which owns 10 buildings downtown, said he doesn’t believe the pandemic will lead to a major restructuring of the downtown workforce over the long term.

Nobody really knows what will happen, because we’ve never experienced anything like this. We don’t have any precedent to point to. I feel reasonably confident saying that the courts and government buildings will be returning to full in-person business soon, and that will bring a lot of people back, but a lot of other businesses are up in the air. I also think that if there is a relative glut in office space downtown, lower rents will lure in some new occupants. It may take three to five years to see how it has all shaken out.

The economic effects of voter suppression

Apr 13th, 2021
by Charles Kuffner.
Comments are off for this post

From Forbes magazine last week:

The Texas economy could take a massive hit if the state enacts new voting restrictions—potentially costing the state’s economy tens of billions of dollars and tens of thousands of jobs—according to a study from the Texas-based economic research firm the Perryman Group, as the Texas legislature Thursday moved one step closer to making the proposals.

  • The potential loss of conventions, major sporting events and tourism could cost the state $16.7 billion in annual gross product by 2025, and nearly 150,000 jobs, according to the study.
  • Internal factors, like decreased business activity and lower wages in the state, could lead to the loss of $14.7 billion in household purchasing power by 2025, according to the Perryman Group.
  • Retail trade would take the biggest hit, according to the study, losing more than 50,000 jobs from drops in tourism and economic development alone.

[…]

“If you strip away all of the emotion and all of the politics and say ‘this is just what happens in the economy,’ that is what we’re analyzing,” Dr. Ray Perryman said in an interview with Forbes.

Perryman said his firm’s modeling relies on 40 years worth of data and academic research, which has consistently shown voting laws that are restrictive or have “the appearance of discrimination” lead to negative economic impacts. The negative impacts are already being seen in Georgia, Perryman said. The long list of companies condemning the state’s new law will likely mean fewer conventions in Georgia, which mean fewer visitors spending money in the state, while some socially conscious travelers also choose to stay away. The resulting domino effect and supply chain reaction will likely mean the economy takes a major hit, Perryman said.

There wasn’t much detail in that story, nor was there a link to the study in question, but Reform Austin filled in those gaps.

The Perryman Group looked at the two different buckets for the economic impact of the bills. The first was internal losses, which is what happens in the Texas labor market as it relates to earnings, employment losses and the spillover on household purchasing power. The second was external losses, which comes from reduced travel and tourism and economic development.

Decades of research showing restricting ballot access to certain groups has adverse impacts on their earnings. These lower earnings also impact workforce participation and employment, which in turn affect household budgets and consumer spending. The report found Texas could lose $9.4 billion in personal income, $14.7 billion in annual gross product and 73,000 jobs over the next five years with the proposed voting restriction measures.

Based on survey information, The Perryman Group has an idea of how many convention planners avoid states for controversial laws, like HB 6 and SB 7, to avoid an appearance of supporting the policy. The most recent national example is the MLB decision to move the All-Star game away from Atlanta for Georgia’s voting restriction laws. A single conference could cost Texas $54 million. A lost Super Bowl hosting opportunity could cost Texas $1.75 billion.

The study also looked at socially conscious consumers who have been shown to avoid such areas for travel, be it for business or leisure. The report estimates Texas could lose $4.1 billion in personal income, $6.6 billion in annual gross product and 60,000 jobs in the tourism sector over the next five years due to the proposed voting restriction measures.

On economic development, controversial laws tend to diminish the ability to attract knowledge workers and the companies that employ them for economic development. The report estimates Texas could lose $6.3 billion in personal income, $10.1 billion in annual gross product, and 89,000 jobs over the next five years because of the proposed voting restriction measures.

All of this impacts the tax base of the state and local governments. Not included in the fiscal notes of either bill are the estimates in the report of $832 million in direct losses to state coffers and $454.6 million in direct losses to local governments over the next five years. As for external losses due to reduced tourism and economic development, the state gets hit by $1 billion and local governments get hit by $802.5 million by 2025.

The study is here. Ray Perryman is the go-to guy for media-based economic forecasting, and I give him credit for addressing questions like these. I have no idea how to evaluate something like this – there are a lot of assumptions being made, and it’s not clear to me how many of them are based on past experience – but as we’re unlikely to get any kind of rebuttal from the Republicans, whose main arguments are basically “nuh uh, no it isn’t”, this is what we have. I’m happy to bring all the ammunition we can against this travesty, but the case against the current bills that will make it harder to vote is that they are anti-democratic, deeply racist, based on egregious lies, and wouldn’t actually do anything to solve the “problems” they claim they will even if one were to accept that there were such “problems” in the first place.

The problem with basing the argument against SB7 and HB6 on economic claims is that there’s no way to adjudicate them later on. If the Texas economy does more or less what it’s expected to do in the years to come, especially if it gets the boost that it should from the Biden infrastructure plan, then that gives the vote suppressors the opportunity to claim an undeserved victory. The case against making it harder to vote is that it’s wrong to make it harder for people to vote, especially when you make it a lot harder for some people than for others. Let’s not lose sight of that. The Current has more.

DCCC starts with two targets in Texas

Apr 11th, 2021
by Charles Kuffner.
27 comments

Consider this to be written in chalk on the pavement, pending the new Congressional maps.

Rep. Beth Van Duyne

The Democratic Congressional Campaign Committee announced Tuesday that it will target two Republican-held districts in Texas — the ones currently held by Reps. Tony Gonzales of San Antonio and Beth Van Duyne of Irving. They were one of 22 districts nationwide that the committee included on its 2022 target list, which it emphasized as preliminary due to redistricting.

Last election cycle, the DCCC sought to make Texas the centerpiece of its strategy to grow its House majority — and came up woefully short. They initially targeted six seats here and later expanded the list to 10 — and picked up none of them.

Van Duyne’s and Gonzales’ races ended up being the closest. Van Duyne won by 1 percentage point to replace retiring Rep. Kenny Marchant, R-Coppell, while Gonzales notched a 4-point margin to succeed Rep. Will Hurd, R-Helotes, who was also retiring.

The shape of those races remains very much in question more than a year and a half out from Election Day, most notably because Texas lawmakers are expected to redraw congressional district lines in a special session of the state Legislature later this year. Texas is on track to gain multiple congressional seats due to population growth. Republicans control the redistricting process and may be be able to make Gonzales’ and Van Duyne’s seats more secure.

On paper, Van Duyne’s 24th District looks to be the most competitive in 2022. It was the only GOP-held district in Texas that Democratic President Joe Biden won — and he carried it by a healthy margin of 5 points. The DCCC has already run TV ads against Van Duyne this year.

Biden, meanwhile, lost Gonzales’ 23rd District by 2 points. The 23rd District is a perennial swing seat that stretches from San Antonio to near El Paso and includes a large portion of the Texas-Mexico border.

As noted, the Republicans have their target list as well, which will also be affected by whatever the final maps look like as well as any retirements. CD24 is an obvious target, but if the map were to remain exactly as it is now I’d have several CDs higher on my list than CD23 at this point based on 2020 results and demographic direction. I’d make CDs 03, 21, 22, and 31 my top targets, with CDs 02, 06 (modulo the special election), and 10 a rung below. I’d put CD23 in with that second group, but with less conviction because I don’t like the trend lines. Again, this is all playing with Monopoly money until we get new maps.

Just to state my priors up front: I believe there will be electoral opportunities in Texas for Congressional candidates, though they will almost certainly evolve over the course of the decade. I believe that if the economy and President Biden’s approval ratings are solid, the 2022 midterms could be decent to good, and that we are in a different moment than we were in back in 2009-10. I also know fully well that the 2022 election is a long way off and there are many things that can affect the national atmosphere, many of them not great for the incumbent party. I was full of dumb optimism at this time in 2009, that’s for sure. I also had extremely modest expectations for 2018 at this point in that election cycle, too. Nobody knows nothing right now, is what I’m saying.

What the American Rescue Plan means to Houston

Mar 13th, 2021
by Charles Kuffner.
28 comments

First and foremost, no layoffs.

Mayor Sylvester Turner

Houston and Harris County are expected to receive more than $1.5 billion through the stimulus bill approved by Congress Wednesday, providing a massive cash injection that city officials say will help close a budget shortfall widened by the pandemic for the second year in a row.

The measure provides local governments with their most generous round of COVID-related funding yet, and it comes with fewer spending restrictions than last year’s aid. Houston will receive an estimated $615 million, putting the city at more than $1 billion in direct federal relief during the pandemic, while Harris County is projected to receive $914 million — more than double its allotment from the first round of local aid last March.

“I’m hopeful and optimistic that we will be able to use this money to, essentially, bail the city out of a very dire financial situation,” said City Controller Chris Brown, who monitors the spending of Houston’s more than $5 billion city budget.

[…]

Local governments will receive half their federal aid within 60 days of Friday, when President Joe Biden will sign the bill into law, according to White House press secretary Jen Psaki. They will receive the second half of the funds at least a year later.

That means Houston will receive more than $300 million to offset its revenue losses next fiscal year, along with any potential shortfall before the current fiscal year ends June 30. [COVID recovery czar Marvin] Odum said the city finance department is projecting a budget gap of between $160 and $200 million next year, while Brown — whose office generates its own estimates separate from Turner’s administration — said he expects the shortfall to be even higher.

Brown noted that while finance department projections assume the city will see a less-than-1 percent reduction in sales tax revenue this year, the actual decrease has been 7 percent.

“The (Turner) administration, I don’t think, has properly evaluated the reductions in sales and property tax,” Brown said. “There’s a $40 million variance between us and (the) finance (department) in sales tax alone.”

Brown estimated city officials will have to lay off about a dozen city employees for every $1 million trimmed from the budget, meaning Houston could have been looking at more than 2,000 layoffs without any federal aid.

Instead, Houston’s relief will far exceed its budget deficit. The city also is expected to devote a chunk of the aid to direct COVID relief, such as testing and vaccinations. Turner’s administration exhausted the previous round of aid, totaling $405 million, in December. Those funds covered contact tracing efforts, city workers whose jobs were consumed by COVID, and relief to renters and small businesses, among other areas.

As the story notes, the ARP aid comes with fewer restrictions on how the money can be used than the CARES Act did, though the city was able to plug its deficit last year with those funds as well. The need for more funding has been known for a long time, and it’s only happening now because of the Presidential election and those two Georgia Senate runoffs. Elections have consequences, y’all.

Abbott lifts statewide mask mandate

Mar 3rd, 2021
by Charles Kuffner.
27 comments

Unbelievable.

Gov. Greg Abbott announced Tuesday that he is ending Texas’ statewide mask mandate next week and will allow all businesses to operate at full capacity.

“It is now time to open Texas 100%,” Abbott said from a Mexican restaurant in Lubbock, arguing that Texas has fought the coronavirus pandemic to the point that “people and businesses don’t need the state telling them how to operate” any longer.

Abbott said he was rescinding “most of the earlier executive orders” he has issued over the past year to stem the spread of the virus. He said starting next Wednesday, “all businesses of any type are allowed to open 100%” and masks will no longer be required in public. The mask requirement has been in effect since last summer.

Meanwhile, the spread of the virus remains substantial across the state, with Texas averaging over 200 reported deaths a day over the last week. And while Abbott has voiced optimism that vaccinations will accelerate soon, less than 7% of Texans had been fully vaccinated as of this weekend.

Texas will become the most populous state in the country not to have a mask mandate. More than 30 states currently have one in place.

Abbott urged Texans to still exercise “personal vigilance” in navigating the pandemic. “It’s just that now state mandates are no longer needed,” he said.

Currently, most businesses are permitted to operate at 75% capacity unless their region is seeing a jump in COVID-19 hospitalizations. While he was allowing businesses to fully reopen, Abbott said that people still have the right to operate how they want and can “limit capacity or implement additional safety protocols.” Abbott’s executive order said there was nothing stopping businesses from requiring employees or customers to wear masks.

[…]

Texans have been under a statewide mask mandate since July of last year — and they have grown widely comfortable with it, according to polling. The latest survey from the University of Texas and Texas Tribune found that 88% of the state’s voters wear masks when they’re in close contact with people outside of their households. That group includes 98% of Democrats and 81% of Republicans.

The absence of statewide restrictions should not be a signal to Texans to stop wearing masks, social distancing, washing their hands or doing other things to keep the virus from spreading, said Dr. John Carlo, CEO of Prism Health North Texas and a member of the Texas Medical Association’s COVID-19 task force.

Carlo declined to react specifically to Abbott’s order, saying he had not had a chance to read it. He also expressed concern that new virus variants, specifically the U.K. variant, could still turn back the positive trends cited by Abbott.

“We’re facing unacceptably high rates, and we still hear every day about more and more people becoming sick. And it may be less than before, but it’s still too many,” Carlo said. “Even if businesses open up and even if we loosen restrictions, that does not mean we should stop what we’re doing because we’re not there yet.”

It was clear from what Abbott said during President Biden’s visit that he was planning to take action to loosen restrictions. I was prepared for him to announce a step-down or a schedule or something more gradual. I did not expect him to just rip the bandage right off. I don’t know what to say, but Judge Hidalgo does, so let’s listen to her.

Harris County Judge Lina Hidalgo and Mayor Sylvester Turner slammed Gov. Greg Abbott Tuesday for allowing all businesses in Texas to fully reopen next week and lifting his statewide mask mandate, suggesting the governor timed the move to distract angry Texans from the widespread power outages during the recent winter storm.

“At best, today’s decision is wishful thinking,” Hidalgo said. “At worst, it is a cynical attempt to distract Texans from the failures of state oversight of our power grid.”

Turner said Abbott’s decision to rescind the COVID measures marked “the third time the governor has stepped in when things were going in the right direction,” a reference to the surges in cases, hospitalizations and deaths that ensued after Abbott implemented reopening guidelines last year.

“It makes no sense,” Turner said. “Unless the governor is trying to deflect from what happened a little less than two weeks ago with the winter storm.”

[…]

Before Abbott’s announcement, Hidalgo and Turner sent the governor a letter urging him not to lift his statewide mask mandate.

“Supported by our public health professionals, we believe it would be premature and harmful to do anything to lose widespread adoption of this preventative measure,” Hidalgo and Turner wrote, arguing the mandate has allowed small businesses to remain open by keeping cases down.

The disparity between Hidalgo and Turner’s concerns — that Abbott would simply lift the mask order but keep other restrictions intact — and his decision to fully reopen the state puts on full display the diverging messages Houstonians are receiving from their local Democratic leaders and the Republicans who run the state. While Hidalgo is telling residents to stay home and buckle down, Abbott is giving the green light for a return to normal life, albeit one where Texans govern themselves using “personal responsibility,” he said Tuesday.

We know how well that’s worked so far. The irony is that other parts of state government still understand what’s at stake:

I’d love to say that Abbott will suffer political blowback for this, but polling data is mixed and inconsistent.

Texas voters’ concerns about the spread of coronavirus are higher now than they were in October, before a winter surge in caseloads and hospitalizations, according to the latest University of Texas/Texas Tribune Poll.

Almost half of Texas voters (49%) said that they are either extremely or very concerned about the spread of the pandemic in their communities — up from 40% in October. Their apprehension matches the spread of the coronavirus. As cases were rising in June, 47% had high levels of concern.

Caseloads were at a low point in October, as was voter concern about spread. And sharp increases through the holidays and into the new year were matched by a rise in public unease.

Voters’ concern about “you or someone you know” getting infected followed that pattern, too. In the current poll, 50% said they were extremely or very concerned, up from 44% in October, and close to the 48% who responded that way in the June poll.

“The second, bigger surge seems to have had an impact on people’s attitudes,” said James Henson, co-director of the poll and head of the Texas Politics Project at the University of Texas at Austin. “In October, there was a trend of Republicans being less concerned, but this does reflect what a hard period the state went through from October to February.”

While their personal concerns have risen, voters’ overall assessment of the pandemic hasn’t changed much. In the latest survey, 53% called it “a significant crisis,” while 32% called it “a serious problem but not a crisis.” In October, 53% called it significant and 29% called it serious.

Economic concerns during the pandemic remain high. Asked whether it’s more important to help control the spread of the coronavirus or to help the economy, 47% pointed to the coronavirus and 43% said it’s more important to help the economy. In a June poll, 53% of Texans wanted to control the spread and 38% wanted to focus on the economy.

“The economy/COVID number is 2-to-1 in other parts of the country. Here, it’s almost even,” said Daron Shaw, a UT-Austin government professor and co-director of the poll. “What was a 15-point spread is now a 4-point spread.

So people are concerned about the pandemic, but also about the economy. Some of that may just be a reflection of the partisan split, but I have no doubt that Abbott thinks the politics of this are good for him, and that’s even before we take into account the distraction from the freeze. The scenario where he’s most likely to take a hit is one in which the numbers spike and a lot more people die. Nobody wants that to happen, yet here we are at a higher risk of it because of Abbott’s actions. It’s just enraging. So please keep wearing your damn mask, even after you get your shots. Wait for someone with more credibility than Greg Abbott to tell you it’s safe to do otherwise.

One more thing:

We both know how plausible that is. Texas Monthly, Reform Austin, the San Antonio Report, the Texas Signal, and the Chron has more.

The economic hardship of the freeze

Feb 25th, 2021
by Charles Kuffner.
1 comment

We may have power and water again (mostly), but some things that were lost can’t easily be gotten back.

Last Tuesday, as Houston temperatures hovered below freezing for much of the day, Gloria Sanchez’s lights — and heat — cut off and on. For Sanchez and millions of other Texans, necessities usually taken for granted — including warmth, water and access to food — had suddenly been thrown into question. Then she got a call from her manager at one of the two jobs she works to make ends meet. Bath & Bodyworks would close because of unsafe driving conditions.

With that, 32 hours of wages disappeared.

“It broke my heart,” Sanchez said. “Because I knew my check was going to come out short.”

The winter storm will likely cost the country $50 billion in damage and economic loss, according to an estimate from forecasting company Accuweather. Much of the economic impact will be felt by hourly workers like Sanchez, economists said.

“You need to think about what’s permanently gone and what has just been delayed,” said Patrick Jankowski, an economist at the Greater Houston Partnership, a business-financed economic development group.

Oil and gas production can ramp back up to meet demand. Sanchez’s 32 hours without pay are gone forever.

[…]

“It’s a kick while you’re down to all of the service industries, restaurants and others who were already battling through the pandemic,” said Peter Rodriguez, an economist and dean of Rice’s Jones Graduate School of Business. “So regrettably, it really exacerbates the pain for them, more than it creates new pains for other industries in particular.”

Last week had to have been especially tough for restaurants and retail, which have been dealing with the pandemic for a year already. Support your favorite neighborhood places, they could really use it right now. The one bit of good news for workers is that the federal COVID relief bill, which will include the additional $1,400 payments to many people, is on track to be passed soon. It may still take some time for the funds to actually get out to the recipients, though. It’s just going to be rough for a lot of folks this month.

The longer-term picture has some warning signs, too.

As for long term impacts, Rice’s Rodriguez fears employers may think twice about relocating their businesses, both to Texas generally and to Houston — no stranger to natural disasters — in particular. He said the prolonged outages could make it look like the state has unreliable infrastructure.

“It’s true that this is very rare, but that’s not the way it will play into the memories of people making investment decisions,” Rodriguez said. “They’ll wonder about just our overall ability to manage crises.”

We really need to get our act together. No one who hasn’t guzzled the Kool-Aid is still talking about Texas exceptionalism with a straight face.

Just raise the minimum wage already

Jan 31st, 2021
by Charles Kuffner.
33 comments

It’s long overdue, it’s going to help a lot of people, and it’s just the right thing to do.

More than a quarter of the Texas workforce — 3.5 million employees — would get a raise if Democrats succeed in their bid to raise the minimum wage to $15 an hour, though Republicans say the effort would also lead to as many as a million jobs lost in the state as businesses try to weather the coronavirus pandemic.

Roughly half of those working in some parts of Houston and San Antonio — the vast majority of whom are workers of color and women — would be affected by the plan, according to estimates by the Economic Policy Institute, a pro-labor group that used federal data to analyze the impact of the proposal.

Democrats say those numbers are evidence of how badly the wage increase is needed, with nearly 200,000 Texans making the $7.25 an hour minimum now, according to federal data.

[…]

Texas would be among the states most affected by the legislation. Just less than 3 percent of Texas workers are paid at or below minimum wage, according to U.S. Bureau of Labor Statistics data — among the highest percentages in the nation, according to the data. Texas is also one of 21 states that has not raised the minimum wage above the federal minimum, even as some other red states, including Florida and Arkansas, have done so.

“It’s been over a decade since Congress raised the minimum wage, and we must act with a sense of urgency to deliver for working families,” said U.S. Rep. Joaquin Castro, a San Antonio Democrat. Castro said 40 percent of workers in his district would see their annual income increase by an average of nearly $4,000 dollars.

“That’s money directly in folks’ pockets to help cover the costs of housing and child care, and also will directly stimulate our local economy as we recover from this COVID crisis,” he said.

There’s plenty of pushback in this story and in the Trib story from business interests and various bad actors, and I have no time or patience for any of it. I’m sure some jobs will be eliminated as a result of a minimum wage hike, though the experience we have from other states and cities shows that the apocalyptic numbers offered by opponents are just fearmongering. But yes, having to pay their employees more will no doubt lead labor-hostile institutions like McDonald’s to invest more in automation (which they were doing anyway), and some smaller businesses may have some struggles with it. The main effect will be just as Rep. Castro says – more money in the pocket of people who really need it, and who will spend it on food and clothing and other necessities, which will be a boost to the economy. The bottom line is that if the economy we have now can only be sustained by paying millions of people starvation wages, then the economy we have now is bad and needs to be changed. Full steam ahead, I say.

Here’s the official budget forecast

Jan 12th, 2021
by Charles Kuffner.
3 comments

“Could be worse” remains the watchword.

Texas lawmakers will enter the legislative session this week with an estimated $112.5 billion available to allocate for general purpose spending in the next two-year state budget, a number that’s down slightly from the current budget but is significantly higher than what was estimated this summer when the coronavirus began to devastate the economy.

Texas Comptroller Glenn Hegar on Monday announced that number in his biennial revenue estimate, which sets the amount lawmakers can commit to spending when they write a new budget this year. But he acknowledged that Texas’ economic future remains “clouded in uncertainty” and that numbers could change in the coming months.

Hegar also announced a nearly $1 billion deficit for the current state budget that lawmakers must make up, a significantly smaller shortfall than Hegar expected over the summer. That number, however, doesn’t account for 5% cuts to state agencies’ budgets that Gov. Greg Abbott, House Speaker Dennis Bonnen and Lt. Gov. Dan Patrick ordered this summer or any supplemental changes to the budget lawmakers will have to make.

Hegar’s estimates portend a difficult budget-writing session for lawmakers. But Hegar acknowledged that things could have been a lot worse. The $112.5 billion available is down from $112.96 billion for the current budget.

See here for the previous update. I continue to hope that Congress will throw a boatload of state and local aid our way in the coming months, which will also help, but at least we’re not in truly dire territory. And bizarrely enough, there may be a silver lining in all this.

But advocates hope the pandemic, combined with the revenue crunch, could lead to an unlikely bipartisan agreement. Before the pandemic hit, Democrats saw a takeover of the Texas House as key for advancing the prospects of Medicaid expansion in the state. But as COVID-19 has ravaged the state economy and thrown even more Texans into the ranks of the uninsured, Democrats are guardedly optimistic this could persuade enough Republicans to put aside their political hangups and support expansion—even as Republican Attorney General Ken Paxton leads a national lawsuit to eliminate the entire Affordable Care Act.

Texas is one of 12 remaining states that have refused the federally subsidized Medicaid expansion, despite having the highest rate and largest population of uninsured residents in the country. Expanding Medicaid would cover 1 million uninsured Texans and bring in as much as $5.4 billion to the state, according to a September report by researchers at Texas A&M University.

State Representative Lyle Larson, a moderate Republican, voiced his support for expanding Medicaid soon after the election, pointing to six GOP-led states that have done so in the past three years. “It is a business decision,” Larson wrote on Twitter, noting that the move would help with the revenue shortfall and COVID-19 response, address rural hospital closures, and expand access to care. Dallas County Representatives Morgan Meyer and Angie Chen Button, both Republicans, pulled out razor-thin victories to keep their House seats after voicing support for some type of Medicaid expansion in their campaigns.

Even conservative state Senator Paul Bettencourt acknowledged that the fiscal crunch will force consideration of Medicaid expansion. “My back-of-the-napkin analysis shows that’s a $1.6 billion item, like that—boom!” he told the Dallas Morning News in September. “I’m pretty sure we don’t have that falling out of trees,” he said. “You can put Medicaid expansion up at the top of the list. There will be a debate.”

But there’s still plenty of staunch opposition. “For those that promote [expansion], I haven’t heard what they’re willing to cut,” state Senator Kelly Hancock, a Republican who chairs the Business and Commerce Committee, said in November. “It’s easy to talk about it until you have to pay for it, especially going into this budget cycle.”

As with casinos and marijuana, the smart money is always to bet against Medicaid expansion happening. But this is a bigger opening than I’ve seen in a long time, and while that’s still not saying much, it’s not nothing.

State budget situation not quite as awful as feared

Dec 3rd, 2020
by Charles Kuffner.
Comments are off for this post

Still bad, but could be worse.

Despite “historic declines,” state lawmakers will have more money to work with in the upcoming legislative session than Comptroller Glenn Hegar expected over the summer, he said Monday. But Hegar did not outline specifics as state coffers continue to suffer from the economic recession spurred by the coronavirus pandemic.

Sales tax revenues, by far the largest part of the state budget, fell by 4.8% in the second half of the 2020 fiscal year compared with the same stretch last year, Hegar said. It was a much softer hit than he anticipated, thanks to Texans staying home and spending money on “staycations instead of vacations.”

Other revenue streams, such as taxes related to alcohol, hotel occupancy, and oil and gas, were down more than 40% in the same period this year compared with last, Hegar told lawmakers Monday during a Legislative Budget Board meeting at the Capitol.

“Revenues remain down significantly relative to a year ago, and well below what we expected to collect when the Legislature wrapped up work on the budget in 2019,” Hegar said.

Legislative budget writers decide how much money will be allocated for large state expenses like how much school districts get, how well health care programs are funded, which transportation projects get built and what amount state law enforcement gets based on how much the comptroller says will be available during the next two-year budget cycle, which runs from September 2021 through August 2023. Hegar will likely unveil that number as the session nears.

Hegar, whose office is in charge of collecting taxes owed to the state of Texas, last formally updated lawmakers in July, when he wrote a letter to Gov. Greg Abbott and lawmakers projecting the state’s current two-year budget to be roughly $11.5 billion less than originally estimated. That would put the state on track to end the biennium, which runs through August 2021, with a deficit of nearly $4.6 billion, Hegar wrote in July.

A few points:

– Let’s hope Hegar is a better revenue estimator than Susan Combs was. Her epic misfire in 2011 led to far more cuts being made than were needed.

– There are and will be plenty of stories written about how this is now the time that the Lege will consider marijuana legalization or casino gambling, because those things generate revenue that could be used to help stave off the deficit. The bit about gambling has been trotted out reliably every cycle since at least 2003, and it has never been true, in large part because the people who oppose expanded gambling still oppose it in deficit situations, and they remain with sufficient power to block it. I expect the same to be true for pot – it will happen when and if there is sufficient political support for it, and the budget situation will not be a factor.

– Also, too, people like Greg Abbott and especially Dan Patrick don’t want new revenue sources. They are perfectly happy to cut things out of the budget. Deficit situations are great opportunities for them.

– We could avoid all this if there is a federal COVID relief package targeted at cities and states. That’s only going to have a chance of happening if Dems win the two Georgia Senate runoffs, and even then it may be dicey. But it is a thing that Abbott et al could advocate for if they chose.

– Oh, yeah, the Rainy Day Fund. We didn’t use it in 2011 because Rick Perry decided that the fund, which was explicitly set up for the purpose of blunting the effect of economic downturns – hence the actual name “Economic Stabilization Fund” – was actually for natural disasters instead. I feel pretty confident that Greg Abbott will declare that COVID is no reason to tap the fund, and in the absence of a legislative majority to dip into it, it ain’t happening. (It’s possible some small amount may be used, if budget writers feel sufficiently desperate, and the nihilist caucus can be tamed or bought off. Don’t bet on it, that’s my advice.)

We’ll know more in January. Hope for the best. The Chron has more.

The economic effect of losing college football this fall

Aug 19th, 2020
by Charles Kuffner.
2 comments

I have some sympathy, but I also have some skepticism.

Texas’ five major conference football teams – Baylor University, Texas Christian University, Texas A&M University, Texas Tech University and the University of Texas at Austin — are massive economic drivers for their cities of Waco, Fort Worth, College Station, Lubbock and Austin, respectively, generating a flood of seasonal business for hotels, restaurants and bars in a typical year.

Economists and city leaders said canceling football would be devastating to local businesses that rely on the huge influxes of cash from home games.

“Forgoing even a single game costs the economy millions,” said Ray Perryman, a Waco economist and CEO of The Perryman Group. “Dealing with the health crisis is essential and must be given paramount priority, but the economic costs of restricting or eliminating college sports are very high.”

[…]

Doug Berg, an economics professor at Sam Houston State University, said towns like Lubbock and College Station would feel the impact of lost game day revenue more than larger cities like Austin with its more diversified business base.

Still, UT-Austin reported in 2015 it had a local economic impact of more than $63 million per home game.

A bigger proportion of municipal budgets in smaller towns is derived from sales and hotel occupancy taxes – both of which typically experience significant hikes during football season. For college towns, “it’s like losing Christmas,” Berg said.

The toll of losing football is “larger than we care to fathom,” said Eddie McBride, president of the Lubbock Chamber of Commerce.

One typical home game at Texas Tech, with an average attendance of about 60,000 people, pours “millions of dollars” back into the city of Lubbock, McBride said.

“We do count a lot on football,” McBride said. “It isn’t just sold seats…it’s going to people’s houses and buying food and drinks from the local grocery store and the beer store, and then going to the bars and the restaurants to watch the game.”

As we now know, the Big 12 will be playing football this fall, though what the situation with fans in the stands will be remains unclear. That’s not great for the Lubbocks and Wacos, but it’s not the worst case scenario, either. I can believe that Game Day is an economic boon in these smaller cities, but I’m way too skeptical of this type of financial forecasting to take the gloom and doom too seriously. The pattern is always big statements up front about what will or may happen, then no followup after the event in question to say what did happen. I’ve just been conditioned by too many of these in the past to take them at face value.

I mean sure, there will be fewer people visiting Lubbock and Waco on these Saturdays, and that will undoubtedly mean fewer hotel rooms rented and less beer consumed. That adds up to something, whatever it may actually be. One might speculate that the savings from fewer people catching COVID-19 as a result of this lessened activity balances this out. Maybe Ray Perryman can work up a spreadsheet on that.

Rental assistance

Aug 7th, 2020
by Charles Kuffner.
Comments are off for this post

We’re going to need a lot more like this.

Mayor Sylvester Turner

Houston on Wednesday added another $20 million to its rent relief program, aimed at helping thousands of tenants catch up on late rent payments.

City council voted unanimously to add the money Wednesday, more than doubling the initial program the city launched in May. Private donors, including Texans owner Janice McNair, gave $5 million toward the effort, and the city devoted another $15 million from the federal money it received from the Coronavirus Aid, Relief and Economic Security (CARES) Act.

The program requires concessions from landlords for them to receive the funds. They must forego eviction proceedings through September for all of their residents, even if only one of them is set to receive assistance. They also must waive late fees and interest on late payments, and agree to a payment plan for residents that are behind.

“The concern was, you took the money, and then a month later, you’re still trying to get them out,” said District F Councilmember Tiffany Thomas, who chairs the council’s housing committee.

The application window will open first for landlords, and then their tenants will be able to apply. Thomas said that will open some time in the next two weeks.

Mayor Sylvester Turner, who has rejected calls for a grace period ordinance that would give residents more time to catch up before getting evicted, said the assistance and resulting concessions provide for a more fruitful approach. He said a grace period worsens the financial liability those tenants will have to cover later down the road.

“When their grace period comes to an end, they are facing a tsunami of a situation where the financial obligation has not been eliminated,” Turner said of cities that have implemented similar policies. “What will happen is that at the end, the hole is so much bigger.”

Advocates have said a grace period would provide blanket coverage to residents who will not get access to the city’s relief funds, which Turner and others have acknowledged cannot meet the overwhelming demand.

See here for the city’s press release. I’m not sure why the city preferred this approach, but I do know that it’s in everyone’s interests to keep people in their apartments if at all possible. Losing their homes, especially at a time like this, will have devastating and long-term consequences, and not just for the newly homeless people – there will be more strain on the city’s social services, and it’s not like there will be a long line of other folks waiting to take the now-vacant apartment. We really need the Senate to act on the bill that the House passed months ago, because there are millions of lives at stake. If nothing else, surely we can all agree that putting a bunch of people out on the street is not going to help the economy. Keeping folks in their homes is the right answer no matter how you ask the question. All levels of government need to do their part.

Of course Abbott’s “Strike Force” are all Abbott donors

Jul 26th, 2020
by Charles Kuffner.
Comments are off for this post

I have three things to say about this.

Members of Republican Gov. Greg Abbott’s coronavirus “strike force” have contributed hundreds of thousand of dollars to his re-election campaign as the number of COVID-19 cases and the death toll has mounted, records show.

Since naming members of the Strike Force to Open Texas in mid April, Abbott pulled in just over $640,000 from appointees or affiliated groups, according to his most recent campaign finance report on file with the Texas Ethics Commission. All had donated previously to Abbott, one of the most prodigious fundraisers in Texas political history.

The new contributions drew fire from ethics watchdogs and the Texas Democratic Party, the latter accusing Abbott of having “profited off this crisis” and calling on him to return the money.

[…]

Among the latest strike force donors who gave to Abbott in the last six weeks: former Astros owner Drayton McLane, $250,000; Texas restaurant operator Bobby Cox, $137,596; South Texas businessman Alonzo Cantu, $25,000; the Border Health PAC, closely tied to Cantu, $150,000; Sam Susser, chairman of BancAffliated, $50,000; Bruce Bugg, chairman of the Texas Transportation Commission, $25,000; and Balous Miller, owner of Bill Miller BBQ, $5,000, records show.

Susser, the banker and investor who recently gave Abbott $50,000, said he gives money to the governor not to influence any policy outcomes but because he believes the governor is “doing a terrific job leading our state.”

“If any of those critics would like to have my job, and can do it better, more power to them,” Susser said. “I try to do the best I can. It cost me a ton of time and money to do those things. And I’m not very empathetic to whatever criticism may be out there.”

1. Duh!

2. I mean, seriously, this is the way Abbott has operated since Day One. Donors get appointments, and appointees make donations. As it ever was, as it shall be.

3. Hey, remember when Abbott first named the Strike Force, which was supposed to help him reopen the economy now that we had that pesky virus under control? And it had a couple of medical expert types who were supposed to help develop a strategy for comprehensive testing and tracing? Good times, good times. What metric do you suppose Sam Susser is using to evaluate his and his teammates’ performance on the Strike Force? Because from where I sit, I don’t think it would be that hard to find people who would in fact have done a better job. The bar to clear is not very high.

The cities still need COVID relief

Jul 22nd, 2020
by Charles Kuffner.
Comments are off for this post

Just a reminder, in case you’d forgotten.

Mayor Sylvester Turner

As Congress resumes work on a new coronavirus financial relief package, nearly 100 Texas mayors are pressing the state’s congressional delegation for more funding to address revenue losses incurred due to the economic downturn brought by COVID-19.

Texas received $11 billion in funds from the Coronavirus Aid, Relief and Economic Security Act, which were distributed among the state, counties and cities. Some Texas mayors said these have to be spent before the end of the year and for expenditures related to the pandemic response — and don’t address government entities’ losses in anticipated revenues related to decreased economic activity. Others said there’s been conflicting information about how the money can be spent.

Since March, the economic slowdown has directly hit cities’ revenues. According to the state comptroller, local sales tax allocations for cities in June dropped by 11.1% compared with the same month last year.

“The budget calamity looming over local governments is real and it requires extraordinary measures,” said a letter signed by 97 Texas mayors and directed to members of Congress. “We therefore fear that state and local revenue is going to take time to rebound. We also fear that if we do not stabilize our economy, we could see a drop in property tax revenue next year.”

In the letter, which included signatures of leaders from urban, suburban and rural areas, the mayors asked for “direct and flexible fiscal assistance to all cities.”

“What we’re asking [is] for direct assistance for state and local governments. Not for things like pension measures, none of that, but as a result of lost revenue as a result of coronavirus itself,” Houston Mayor Sylvester Turner said at a press conference Monday. “We are the infrastructure that supports the public and private sector, and at this point in time, we are needing direct assistance.”

We’ve known this for awhile, and the need is still there even if the city of Houston was able to kick the can down the road with this year’s budget and existing CARES funds. The simple fact is that cities – and counties, and the state, and to a lesser extend school districts – didn’t do anything to cause the problems they’re facing now. The analogy that some have made to a natural disaster is apt, and the effect will long outlive the original cause of the problem if it isn’t addressed. The US House passed a large bill a couple of months ago that would address these needs, but of course it has to get through the Senate, and you know what that means. If we had a functional state government, it would be advocating on behalf of the cities as well, because the loss of many thousands of municipal jobs will not do anything to help the state’s economic recovery. Our state leaders don’t see it that way, unfortunately, so the cities are on their own. It doesn’t have to be this way.

On a tangential note, the Slate podcast “What Next: TBD” did a segment on this very topic last Friday, and spoke to City Controller Chris Brown as part of their reporting. Check it out.

The state deficit is quantified

Jul 21st, 2020
by Charles Kuffner.
Comments are off for this post

Honestly, it’s not as bad as it could be.

Texas Comptroller Glenn Hegar delivered bleak but unsurprising news Monday: Because of the economic fallout triggered by the coronavirus pandemic, the amount of general revenue available for the state’s current two-year budget is projected to be roughly $11.5 billion less than originally estimated. That puts the state on track to end the biennium, which runs through August 2021, with a deficit of nearly $4.6 billion, Hegar said.

Those figures are a significant downward revision from Hegar’s last revenue estimate in October 2019, when the comptroller said the state would have over $121 billion to spend on its current budget and end the biennium with a surplus of nearly $2.9 billion. The state, Hegar said, will now have roughly $110 billion to work with for the current budget.

Hegar’s latest estimate, he stressed in a letter to Gov. Greg Abbott and other state leaders, carries “an unprecedented amount of uncertainty” and could change drastically in the coming months, thanks to the pandemic and, to a lesser extent, a recent drop in oil prices.

“We have had to make assumptions about the economic impact of COVID-19, the duration and effects of which remain largely unknown,” Hegar wrote. “Our forecast assumes restrictions [on businesses and people] will be lifted before the end of this calendar year, but that economic activity will not return to pre-pandemic levels by the end of this biennium.”

Returning to pre-pandemic levels, Hegar said, would not happen until consumers and businesses are confident that the virus has been controlled.

“Even then,” he wrote, “it likely will take some time to recover from the economic damage done by the deep recession caused by the virus.”

I mean, it’s not great, but this much deficit could be easily covered by the Rainy Day Fund, and there is still the likelihood that Congress will send some more relief money to the states. A lot can happen between now and when the Lege has to actually write and pass a budget, and some of those things are good. Of course, pretty much all of those good things are predicated on getting the virus under control, and let’s just say that’s a jump ball at best. As you might expect, Dan Patrick gets this exactly backwards, so, you know. But look, it’s pretty basic. If we can get the virus under control, we can get the economy going in a safe and productive fashion. Otherwise, it’s more of what we’re getting now. Seems simple, right? I hope our leaders see it that way, because we’re at their mercy.

A new homelessness initiative

Jul 10th, 2020
by Charles Kuffner.
Comments are off for this post

Good.

Harris County Commissioners Court voted unanimously on Tuesday to authorize $18 million for a two-year program serving the homeless as advocates project a rise in homelessness with the novel coronavirus.

The program is the county’s most ambitious partnership with the City of Houston for people experiencing homelessness, with $29 million to be pledged by the city and an additional $9 million or more from private donors. The city and county’s dollars come from federal money allocated through the CARES Act.

While the city and county have collaborated on homeless initiatives in the past, this is their biggest joint investment yet.

“With the current COVID-19 crisis putting so many people’s living situations at an increased risk, having access to stable housing options is vital for the entire community,” Precinct 2 Commissioner Adrian Garcia said in a press release. Garcia brought the funding request to the county court. In commissioners court, Garica said, “This will have the most significant impact on the camps we see.”

Not only are people experiencing homelessness more vulnerable to coronavirus because of preexisting chronic conditions and a lack of even basic hygiene options, they are at higher risk of spreading it to others because people living on the streets have nowhere to self-quarantine.

“Housing is healthier for people experiencing homelessness during the coronavirus,” said Catherine Villarreal, communications director for the Coalition for the Homeless. The Coalition will be administering the programs. “People experiencing homelessness are uniquely vulnerable to coronavirus because of chronic conditions.”

The Coalition hopes that the programs can begin by mid-August and will roll out in stages pending city and county funding and contract approvals, said Ana Rausch, vice president of operations for the Coalition for the Homeless.

The initiative will provide rental assistance for about 1,700 newly homeless people who don’t need much case management, house about 1,000 people experiencing homelessness, support about 200 people at risk of homelessness, provide more mental-health case management and begin a homelessness diversion program. The Coalition projects the program will help about 5,000 people.

The best evidence we have now says that the most effective way to ameliorate homelessness is to provide housing or housing assistance to the people who need it. Other services may be needed for people with addition or mental health issues (by the way, expanding Medicaid would help a lot with those, too), and it turns out that having a stable place to sleep and eat and keep clothes and other possessions makes addressing those issues a lot easier, too. It seems to me that the main objection to providing this kind of direct aid is that it’s some kind of moral hazard, as in “well, if we help SOME people then we have to help EVERYONE, and if we do that then who’s ever gonna want to do for themselves” or some such. Putting aside the fact that such sentiments are facially untrue, if there’s one thing we should be learning from the coronavirus pandemic it’s that everyone does in fact deserve help. Hard times can come for any of us, at any time, without warning and without it being anyone’s “fault”. I want to live in a society that recognizes this truth, because the next person who needs it could be me or someone I love. Imagine how much more progress we could make on controlling this pandemic if everyone whose business or employment is threatened by it knew they would be tided over until it passed. Maybe now that we’re starting to take this kind of action, we’ll recognize the need to continue it after the current crisis has passed. Houston Public Media has more.

The pause effect on bars and restaurants

Jun 28th, 2020
by Charles Kuffner.
2 comments

I feel terrible for them, but what could we do at this point?

Ed Noyes was trying to get some shut-eye when he woke up to seven different texts Friday morning.

Three of the five bartenders at his Fort Worth establishment — plus his girlfriend — delivered the news: Malone’s Pub had to shutter immediately under the governor’s orders. His employees wanted reassurances: Would the business survive? Should they file for unemployment? What were his next steps?

“We were just all in shock,” Noyes said.

On Friday morning, Gov. Greg Abbott delivered another economic blow to bars and other places that receive more than 51% of their gross receipts from selling alcohol. The establishments had to shut down by noon after a statewide surge in coronavirus infections officials said was largely driven by activities like congregating bars. There’s no immediate plan for when they’ll be able to reopen.

“The announcement just came out of nowhere,” Noyes said. “When I went to bed last night I thought we’d be open for the weekend, so this really blindsided me.”

Restaurants were ordered to scale back their operations to 50% capacity. And Abbott also banned river-rafting trips. They were his most drastic actions yet to respond to the post-reopening coronavirus surge in Texas.

But bars arguably faced one of the biggest challenges to operating in pandemic. Every tantalizing aspect of the nighttime hotspots — large crowds, prolonged bouts of close contact, mouths constantly open to drink or speak — clash with the health guidelines put in place as COVID-19 ravages the state.

[…]

Last weekend, the Texas Alcoholic Beverage Commission launched “Operation Safe Open” to ensure bars and restaurants were following coronavirus safety rules. As of Wednesday, 17 bars — out of nearly 600 businesses visited by the commission — got their alcohol permits suspended for 30 days.

In some enclaves, residents have complained about staff not wearing masks, social distancing measures not being enforced and tables not being cleaned after use.

“I went with a friend for a quick night out,” Steven Simmons, who lives in Tyler, said of a June 11 visit to a local pub. “Easy to enter the bar, just checked IDs and that was it. No social distancing being enforced, no hand sanitizer anywhere, tables were not cleaned after use or anything. Employees were not wearing a mask at all.”

But in other parts of Texas, including Austin and San Antonio, some bar owners say they’re trying to strike a balance between their livelihoods and business and public safety.

“We joke at the Friendly Spot Ice House that we make a ‘bestie pack,’” said Jody Newman, the owner of the San Antonio hotspot. “The pact is that people ‘friendly’ distance, that they mask up, that they have clean hands and that they be friendly and understand we’re all going through this together.”

Still, since opening during the first week in June, Newman said she’s seen about 30% of the business she would normally get at this time of year.

With Friday’s announcement, Newman said, “thousands and thousands of livelihoods hang in the balance.”

Here’s a local view of this dilemma.

“The whole thing is a mess for everyone. Obviously, we’ll have to adjust again,” said Alli Jarrett, owner of Harold’s Restaurant & Tap Room in the Heights, adding that reducing capacity means she will not be able to bring back workers she had hoped to re-employ. “It’s not just restaurants. It’s every single business – every segment of the population. We’re all in the same boat. It’s just really, really hard.”

[…]

Brian Ching, owner of Pitch 25 in EaDo, fears the worst. “I don’t know if the business will be here in a month, two months,” said Ching, who also is readying another bar, East End Backyard, to open in July. “We were able to get PPE but we’ve burned through it all.”

He is most concerned for his workers, he said. “This time around, being closed with no PPE, we are likely going to have to furlough employees. I feel for all of them. There seems to be no end in sight.”

Bar owner Andy Aweida said he worries what the bar shutdown will mean not just to his staff but to all those in the bar industry.

“We did everything we were asked and did it well. It’s unfair to them and many others. So many people are doing what is needed and playing by the rules,” said Aweida, a partner in the Kirby Group whose bars include Heights Bier Garten, Wooster’s Garden and Holman Draft Hall. “I truly feel horrible for all those amazing employees, staff and many other good, hard-working people this affects.”

Lindsey Rae, who opened Two Headed Bar in Midtown only six months ago, conceded that the first year for any business is the toughest. But the bar closures are catastrophic.

“This is going to be a financial disaster for us,” she said. “We are down 85 percent since the pandemic. All of our revenues are exhausted. We can only afford to operate for about one more month unless Gov. Abbott will give us some gleam of hope.”

Hope, however, seemed fading on Friday for Lukkaew Srasrisuwan, owner of the new Thai restaurant Kin Dee in the Heights. She saw six reservations cancel after the announcement.

“This is going in the wrong direction,” she said. “We are complying with the guidelines. We are a small restaurant and we just opened. This is tough.”

At 75 percent capacity, Kin Dee was “doing OK,” Srasrisuwan said. But not for long. “We can’t sustain at this level for more than one or two months,” she said. “I’ve seen the number of COVID-19 increase so I am not surprised by Gov. Abbott’s announcement but I am worried. We don’t want to lose our staff but I don’t know how to keep operating at this rate.”

For some restaurant owners, Abbott’s pullback was not unexpected.

“It’s about time, to be honest. I thought we reopened too soon,” said Christopher Williams, chef/owner of Lucille’s in the Museum District. “It’s the most responsible thing I’ve heard from (Abbott) in a while.”

Williams said he will be able to weather the capacity reduction because he was able to remain solvent by streamlining his menu, dropping prices, and increasing take-out. “At a time like this everyone needs to take profitability out of the equation. It’s about sustainability.”

George Mickelis, owner of the iconic Cleburne Cafeteria, said he was grateful for Abbott’s decision, and said he would be able to continue staying in business even at 50 percent.

“Obviously, no one wants to return to a complete shutdown and we pray that that is absolutely never necessary again,” Mickelis said. “We are all Texas tough and we will prevail.”

Two things can be true at once. This is a terrible blow to a crucial part of the Texas economy and culture. I’m much more of a restaurant person than a bar person these days, but bars are a key ingredient to neighborhood life, and a vital hang-out place for many people. They also employ a lot of people who’ve just been put back out of work at a time when we don’t know if there will be further federal assistance coming and the state of Texas has gone back to requiring out-of-work people to be actively job searching in order to get unemployment benefits. It’s also the case that we should have been a lot more careful and deliberate in allowing bars to reopen in the first place, precisely because everything about them makes them a prime vector for spreading a disease like COVID-19. I don’t know what else we could have done now, but it’s surely the case there are things we can and should have done differently before now.

Other businesses are now in a similar bind.

In the backyard of her business, Cutloose Hair, salon co-owner Ashley Scroggins watched a livestream Friday morning on her phone. On the screen was an image of Harris County Judge Lina Hidalgo speaking of the risks of COVID-19 to the region.

“Today we find ourselves careening toward a catastrophic and unsustainable situation,” Hidalgo said. “Our current hospitalization rate is on pace to overwhelm the hospitals in the near future.” She called for nonessential workers to stay at home.

Scroggins put down her phone and put on her mask. Then she walked into her salon, shut down the online booking system and began calling upcoming reservations: The salon was closing until cases subsided.

Officials have moved to contain the number of known COVID-19 cases spiking across the state, often through conflicting messages that left businesses attempting to weigh health risks against economic concerns.

While Hidalgo recommended nonessential workers stay home, she no longer had the power to enforce such a plan because Gov. Greg Abbott had superseded it with his own plan to reopen the state. Friday morning, Abbott rolled back portions of that plan — ordering bars and tubing and rafting establishments to suspend services and restaurants to cap dine-in capacity at 50 percent — but maintained other businesses could remain open.

That left salons, restaurants, gyms, offices, retailers and other businesses Friday to decide whether to heed Hidalgo’s call to return to the stay-at-home precautions she had the power to enact in March.

Many, like Cutloose Hair, decided shutting down on-premise operations was the right thing to do.

“It’s not getting better,” Scroggins said of the pandemic. “And the only way we can truly support our city is just to do what they’re asking us to do.”

It’s not an easy choice for many. My company, for which I’ve been working from home since March 6, two weeks before the city shut down, has suspended its plan to start bringing workers back to the office until further notice. I suspect there will be a lot more like this, and there should be. If you can reasonably work from home, there’s no good reason not to.

One possible small bit of hope for the bars and restaurants:

Under current state rules, restaurants and bars can sell beer, wine and liquor, but only in closed containers with their manufacturer’s seal intact.

The organization Margs For Life is lobbying to change that.

Founder Kareem Hajjar, also a partner in the Austin law firm Hajjar Peters LLP, is talking with Texas food and beverage associations to build support for an emergency order to let bars sell mixed drinks in containers that they seal on premises.

“While that work continues today, Margs For Life has evolved into a community of people who are either in the industry or support the industry, where we can share news and events, and help one another be as profitable as possible during this pandemic,” Hajjar told the Current.

Margs for Life’s proposed rule change, proponents say, would help restaurants and bars reduce inventory — and allow some facing dire financial circumstances to stay afloat.

“I’m privileged that I work at a bar that has granted me the ability to do to-go cocktail kits… But bars and restaurants would benefit from FULL to-go kits,” said David Naylor, a bartender at San Antonio craft-cocktail bar The Modernist, via a Facebook post. “Manhattans expertly built, Negronis that don’t require you to amass a stocked bar… ALL these are possible if [Gov. Abbott] would allow it.”

Abbott has expressed support for this idea.

Abbott originally signed a waiver March 18 allowing to-go alcohol sales, in an effort to support struggling restaurants after they closed their dining areas. The waiver was originally to last until May 1, but it was extended indefinitely. Abbott teased that this change could be permanent, tweeting at the time, “From what I hear from Texans, we may just let this keep on going forever.”

Abbott again tweeted late Saturday that he supports the idea of extending his temporary waiver. State Rep. Tan Parker, R-Flower Mound, replied, saying that he will file a bill in the upcoming legislative session to make it happen, also advocating to allow restaurants to continue selling bulk retail food items to go.

[…]

The Texas Restaurant Association submitted a proposal Thursday evening to Abbott’s office, asking to expand the waiver to also allow mixed drinks with liquor to be prepared, resealed and sold.

Cathy Lippincott, owner of Güero’s Taco Bar in Austin, said its margarita to-go kits were very popular during the beginning of the restaurant shutdowns, but as dining rooms began to reopen, sales dwindled. Now, days could go by without the restaurant selling a single kit.

Under the Texas Alcoholic Beverage Commission guidelines, restaurants can only serve liquor in manufacturer-sealed bottles and with the purchase of food. For several restaurants, including Güero, this means their drinks are served in do-it-yourself kits, where customers mix the ingredients and liquor together.

Lippincott believes that if mixed drinks were also allowed to be served to go, she could see that being a popular option.

I support this as well, and any action that can be taken now to achieve this should be taken. And then, when the Lege convenes in January, we should not only pass a law to make this permanent, but also revisit all of our archaic and anti-competitive laws that govern the manufacture and sale of beer, wine, and liquor. You know what I’m talking about. Let’s please at least let this terrible pandemic be a catalyst for something good.

Put a pause on that reopening

Jun 27th, 2020
by Charles Kuffner.
2 comments

At this point, we had no other choice.

Gov. Greg Abbott on Friday took his most drastic action yet to respond to the post-reopening coronavirus surge in Texas, shutting bars back down and scaling back restaurant capacity to 50%.

He also shut down river-rafting trips and banned outdoor gatherings of over 100 people unless local officials approve.

“At this time, it is clear that the rise in cases is largely driven by certain types of activities, including Texans congregating in bars,” Abbott said in a news release. “The actions in this executive order are essential to our mission to swiftly contain this virus and protect public health.”

Bars most close at noon Friday, and the reduction in restaurant capacity takes effect Monday. Before Abbott’s announcement Friday, bars were able to operate at 50% capacity and restaurants at 75% capacity.

As for outdoor gatherings, Abbott’s decision Friday represents his second adjustment in that category this week. Abbott on Tuesday gave local governments the choice to place restrictions on outdoor gatherings of over 100 people after previously setting the threshold at over 500 people. Now outdoor gatherings of over 100 people are prohibited unless local officials explicitly approve of them.

Abbott’s actions Friday were his first significant moves to reverse the reopening process that he has led since late April. He said Monday that shutting down the state again is a last resort, but the situation has been worsening quickly.

I can’t emphasize enough that none of this had to happen. Greg Abbott laid out four metrics for reopening when he first lifted the statewide stay-at-home order: Declining daily case rates, positive test percentages below a certain level (I forget what exactly, maybe seven percent), three thousand contact tracers hired by the state, and sufficient hospital capacity. None of the first three were ever met, even at the beginning, and the predictable result is that now the fourth one is no longer being met. We could have driven the reopening by the metrics, instead of saying “on this date we’ll roll back these things and allow these things to resume”, but we didn’t. Greg Abbott made that decision. What is happening now is on him.

And so, here in Harris County, where our leaders’ efforts to take this pandemic seriously were entirely undercut by Greg Abbott, we are paying the price.

Harris County Judge Lina Hidalgo on Friday moved the county to the worst threat level, calling for a return to the stay-at-home conditions of March and April, as COVID-19 hospitalizations continue to spike.

She also banned outdoor gatherings of more than 100 people in unincorporated Harris County, while urging mayors to do the same in their cities.

Hidalgo described in dire terms the danger the pandemic currently poses, and said the county is at greater risk than at any other time since the outbreak began here in March.

“Today we find ourselves careening toward a catastrophic and unsustainable situation,” Hidalgo said. “Our current hospitalization rate is on pace to overwhelm the hospitals in the near future.”

Her remarks were a rebuke of Gov. Greg Abbott’s phased reopening strategy, which she said allowed Texans to resume normal life before they were safe. They also contradicted the rosy picture Texas Medical Center executives painted a day earlier of the system’s ICU capacity.

Hidalgo unsuccessfully lobbied the governor this week for the power to issue more restrictions, her office confirmed. Abbott’s refusal to let local officials again issue mandatory stay-at-home orders leaves Harris County “with one hand tied behind our back,” she said.

[…]

Though she lacks the power to require compliance, Hidalgo implored all county residents to follow the same rules as her stay-at-home order in March and April. That means residents should stay home except for essential errands and appointments, work from home if possible, wear a mask in public and otherwise avoid contact with other people.

Only a collective change in behavior can reverse the accelerating trend of COVID here, Hidalgo said. The alternative, she warned, is grim.

“If we don’t act now, we’ll be in a crisis,” she said. “If we don’t stay home now, we’ll have to stay home when there are images of hospital beds in hallways.”

Hidalgo and Dr. Umair Shah, the county’s health director, offered no concrete timeline for how long restrictions would be needed. The county judge noted that in some other states, lockdowns of up to three months were needed to bring the virus under control.

A tripling of cases and hospitalizations since Memorial Day have placed intense pressure on state and local leaders to act. With Abbott’s blessing, Hidalgo and other local leaders have issued mandatory mask orders since last week, mandating businesses to require their customers wear facial coverings.

The governor effectively gutted Hidalgo’s original order requiring residents to wear masks at the end of April by preventing any punishments from being levied against violators. Enforcement never was the point, Hidalgo said Friday, but she blamed the governor for signaling to residents that mask-wearing was unimportant.

See here for the background. We can’t know what shape Harris County would be in now if Judge Hidalgo had been allowed to make her own decisions instead of being overruled by Abbott. But it’s hard to say we’d be any worse off than we are now.

Of course, some people still think it’s all sunshine and puppies up in here.

Texas Lt. Gov. Dan Patrick went on national television to declare Texas is not running out of intensive care hospital beds and to assure viewers that the state is “not stepping backward” in re-opening businesses.

Speaking on Fox News Channel on Thursday night, Patrick acknowledged new COVID-19 cases are increasing in Texas, but assured viewers it was expected.

“We have seen a spike in cases. We expected that,” Patrick said pointing to increased testing. “Our hospitalizations are up, but here’s the good news, the good news is we’re not seeing it translate to the ICU unit or into fatalities.”

You can read the rest if you want, but really, what you need to do is CLAP LOUDER!

There is one piece of good news:

The Trump administration reversed itself and extended support for testing sites in Texas on Friday.

The extension followed a public outcry after TPM revealed on Tuesday that federal help was set to end on June 30.

Health and Human Services Assistant Secretary Brett Giroir said in a statement that his agency would support five testing sites in Texas for two weeks longer than initially planned.

Sens. Ted Cruz (R-TX) and John Cornyn (R-TX) sent a letter to HHS Secretary Alex Azar on Thursday requesting an extension of support for the free, drive-through testing sites.

Local officials in Texas have spent weeks clamoring for the sites to be extended. The move comes as cases and hospitalizations in the state have skyrocketed, and as Gov. Greg Abbott (R) has paused the state’s reopening.

“Federal public health officials have been in continuous contact with our public health leaders in Texas, and after receiving yesterday’s request for an extension, have agreed to extend support for five Community-Based Testing Sites in Texas,” Giroir said in a statement. “We will continue to closely monitor COVID-19 diagnoses and assess the need for further federal support of these sites as we approach the extension date.”

See here for the background. It’s two weeks’ worth of good news, which isn’t enough but is better than nothing. Now let’s extend that out to infinity, or whenever we don’t need testing at scale, whichever comes first.

One more thing, just to hammer home the “it didn’t have to be this way” point:

Texas is also a wee bit larger than Taiwan, with less density and public transportation. They’re already playing baseball in Taiwan, have been for a few weeks now. I’m just saying.

It’s really hard out there on the restaurants

Jun 20th, 2020
by Charles Kuffner.
6 comments

I feel for them, but none of this is unsurprising.

Celebrating her birthday in Galveston, Melinda Prince walked out of Yaga’s Cafe on Thursday full of coconut shrimp. What she didn’t realize was one of the employees at the restaurant may have been working while infected with the coronavirus.

Prince found out three days later through a post from the restaurant’s Facebook account.

“I freaked out,” said Prince, who plans to quarantine for two weeks and get tested if COVID-19 symptoms arise.

Facebook posts from Yaga’s Cafe, whose managers did not respond to requests for comment, indicate other employees have since been tested for the coronavirus, the restaurant voluntarily closed, a professional cleaning crew was hired and recent customers were also encouraged to get tested.The Galveston eatery is not alone. Restaurants and bars across Texas — including in Austin, Dallas, Houston, San Antonio and San Marcos — have closed recently due to concerns about potentially spreading the coronavirus, according to social media posts and local news reports.

I wish there were a better answer. What should happen is another round of stimulus money from Congress – the original PPP idea was fine, if incredibly clunky at first – because we really can’t just reopen everything and hope for a return to normalcy. The virus is still out there, and we’re not doing nearly enough about it. At least we will have some new face mask orders, which should help a bit. Restaurants are a huge piece of our economy, with a ton of jobs at stake, and we’re not doing nearly enough to help them through this crisis. I don’t know what else to say.

Metro’s long road

Jun 7th, 2020
by Charles Kuffner.
1 comment

It will be awhile before bus and rail ridership returns to pre-COVID levels.

Metro officials predict it will be months, and possibly years, before bus and rail service ridership return to pre-COVID-19 levels in Houston as economic uncertainty, a lack of firm dates for schools to reopen and commuters choosing to drive dents transit use.

“We have to understand some businesses are not going to reopen, period,” said Kurt Luhrsen, vice president of planning for Metropolitan Transit Authority.

Bus and rail use in the region, always dwarfed by automobile use, faces not only lost riders in fewer workers and students, but also questions circulating among some critics about whether it is safe to ride.

[…]

Transit officials eliminated fares in mid-March to reduce contact between bus operators and riders, a roughly $6 million monthly loss for the agency.

The biggest hit to Metro’s coffers, however, is a decline in the region’s sales tax revenues. Within Metro’s coverage area that includes most of Harris County along with Houston and 14 other cities, the transit agency is funded mostly from a 1 percent sales tax. Metro’s internal finance analysts expect revenues from the sales tax to drop by $102 million, about 13 percent of what the agency had budgeted for fiscal 2020, which ends Sept. 30.

“We are making some assumptions now,” Metro CEO Tom Lambert cautioned board members last week, noting sales tax revenues take two months to assess, meaning the latest figures are from March. “The reality is, we will probably get a couple months, and won’t know the impact until June.”

In the interim, the federal financial response will supplement Metro’s losses, and appear, based on estimates, to maintain the current budget. Metro’s share of Federal Transit Administration funds is $180 million, which officials said would cover all operations and fare revenue declines in the current budget.

The long-term outlook is less certain.

Since the close of the Houston Livestock Show and Rodeo and a stay-home order in Harris County began on March 11, transit use in the region has dropped to about 40 percent of normal. Even as state officials began reopening many Texas businesses in early May, bus and rail use has continued to remain half or less of typical work days.

“Downtown is still relatively empty compared to what we have all come to expect,” Luhrsen said, noting that surveys of central business district offices by the Houston Downtown Management District found only about 10 percent of workers have returned.

Exacerbating the return is Houston’s reliance on the oil and gas industry, which remains mired in a downturn that means fewer people reporting to offices.

That uncertainty and industry furloughs, combined with a tough spring for food service workers and no students reporting to campuses, are expected to result in steep losses for Metro’s local bus service, rail lines that service the University of Houston and Texas Southern University, as well as commuter bus routes that connect many suburban dwellers to downtown white-collar jobs.

Park and ride poses the most difficult ridership to predict, Luhrsen said. Local bus and rail service already have started to tick upward, forcing Metro to gradually increase some frequency on routes to maintain buses at half-capacity.

[…]

Metro board member Lex Frieden also encouraged transit staff to consider assuring residents about the safety of the system.

“Many people will stop to think, what are the odds of being exposed,” said Frieden, an expert in disability rights and access, who often works with individuals most at risk from the virus.

In areas hit hard by the COVID pandemic, notably New York City, some studies have shown public transit packed with riders helped spread the illness because others were inhaling air fouled with the virus.

According to transit and health officials, no positive COVID diagnosis in the Houston area has been traced to exposure on a bus or train or transit stop, though 25 Metro workers or contractors — 14 of whom had contact with public — have tested positive for the virus.

In Houston, trains and buses typically are far less full than a New York subway and transit use accounts for 3 percent of trips regionally. Fewer people means fewer chances for positive cases to spread.

Metro is following Centers for Disease Control guidelines to limit riders and bus drivers being within six feet and encouraging — but not requiring — riders to wear masks. Frieden said if contact tracing and other data become available, Metro should make it public.

I feel like riding the bus or train, with everyone wearing a mask and with a brisk hand-washing afterwards (which we always should have done but for the most part never thought about), is probably fine. I wouldn’t want to be on a ride longer than 30 minutes or so, but the fact that no COVID cases have been linked to transit in Houston is encouraging.

It will take awhile for ridership to bounce back, but once there is a vaccine and the economy has stabilized, it should begin to do so. Metro needs the economy to hum again more than anything else, as that affects its revenue as well as its ridership. In the long run they’ll be fine, but it will be bumpy in spots. At least there were federal dollars to help tide things over for the short term.

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