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Steve Ogden

Senate restores some funds to Health and Human Services

Still not clear how they’re paying for any of it yet.

The Senate Finance Committee voted Thursday to restore a less-than-expected $4.3 billion in health spending in 2012-13 but promised to try to find more money in the coming weeks.

The panel adopted most of the recommendations made recently by the Medicaid subcommittee, including a widely sought provision reversing a planned 10 percent cut in Medicaid reimbursements for doctors and dentists.

Advocates had feared the cuts would force many physicians, already operating on thin margins, to stop seeing Medicaid patients.

But the committee held off on plans to reduce steep cuts to nursing home and hospital reimbursement rates despite fears that the action would force nursing homes to close and hospitals to pass higher costs on to other patients.

The Medicaid subcommittee, led by Sen. Jane Nelson, R-Flower Mound, supported spending almost $540 million to limit rate cuts to 2 percent for nursing homes and 3 percent for hospitals.

But Finance Chairman Steve Ogden, R-Bryan, backed away, saying the expense was too great — for now. “I don’t know yet how to pay for that,” he said.

Better figure it out fast. And it would be nice if we could find some ways to pay for it that aren’t one-time deals so that we don’t dig ourselves an even deeper hole for next time. Don’t get me wrong, I’m rooting for the Senate to pull this off and make things a little less horrible. With the House busy slashing and burning, I’m just trying to keep it all in perspective.

Where the Senate is looking for revenue

The hunt for $5 billion is on.

Higher driver license fees and a hike in college tuitions are among potential money raisers as a special Senate panel searches for $5 billion in “non-tax revenue” to help fund key services, Senate Finance Chairman Steve Ogden said Monday.

“There are no sacred cows. Everything is on the table,” Ogden, R-Bryan, said after naming senators to the new Finance subcommittee headed by Sen. Robert Duncan, R-Lubbock. He asked it to report back in about two weeks.

Ogden said the subcommittee also will look at such ideas as speeding up state tax collections, a proposal also being floated in the House by Appropriations Chairman Jim Pitts, R-Waxahachie.

Among other items, the panel will examine tax exemptions and look at whether funds such as endowments created by a tobacco lawsuit settlement can be used to help balance the budget, he said.

See here for some background. “Everything” comes with an asterisk next to it, since clearly taxes are not on the table. It also means that the structural deficit caused by the gap between revenue lost to the 2006 property tax cut and gained from the business margins tax will continue to go unaddressed, but as tax legislation must originate in the House and they’re not interested in dealing with it, it was never even near the table. Whether the answers this committee finds will be acceptable to the House is another matter as well. I’m not terribly optimistic, but I consider this one more step on the journey to the eventual realization that we can’t avoid talking about taxes forever. We have to try everything else so it will be the only thing left. EoW has more.

Time for a corporate income tax?

Maybe, but don’t hold your breath waiting for it to happen.

Senate Finance Chairman Steve Ogden, R-Bryan, said legislators should consider a constitutional amendment that would clarify that an income tax could be assessed on corporations but not individuals.

The objective would be to use the corporate income tax to replace the current franchise tax that is considered unfair by many businesses.

“Even if you lose your shirt, you still may be liable for paying the business tax because it isn’t an income tax,” Ogden said. “That business tax is a mess.”

Overcoming the visceral objection to an income tax will be tough — even if it would apply only to businesses.

“I think at least it’s something we should consider,” Ogden said. “I think the voters are reasonable people. If we propose reasonable solutions, I think they will give it serious consideration.”

If they can hear your reasonable proposals over the screeching and caterwauling that would be sure to accompany it, then sure, they’ll consider it. Good luck with all of the zombie lies that will be told. The point of this is that the much-reviled business margins tax, in addition to its other flaws, may be assessed on a business that lost money in a given year. This is because it was explicitly designed to not be an income tax, because that would be unconstitutional and Just Plain Wrong. Yeah, I don’t get it, either. Anyway, Ogden’s plan isn’t going to go anywhere because tax legislation must originate in the House, and House Ways and Means Chair Harvey Hilderbran has said no new tax bills will be forthcoming this session. So, barring anything unusual, we’re stuck with the system we have for at least two more years.

Comptroller finds a few more bucks

Better than a sharp stick in the eye.

Comptroller Susan Combs has revised the state’s 2011 revenue estimate by $300 million because of stronger-than-expected sales tax collections.

That change would reduce the deficit in the current budget to $4 billion and make an additional $300 million available for appropriation in the next two-year budget, which begins Sept. 1.

[…]

If sales tax revenue continues at this pace, the state could bring in $620 million more than Combs estimated, according to Eva DeLuna Castro of the Center for Public Policy Priorities.

It’s not much, but it does help. Every extra dollar Combs estimates is a dollar that won’t get cut. Of course, these newer estimates are based on the improvement in the economy, and the biggest threat to that is the huge number of job cuts that would be forced by the Republican budget policies in Texas and in Congress. So I trust you’ll understand if I keep my celebration of this news modest.

You can see Combs’ letter about the revenue estimate revision at the Trib, which notes that it’s early in the session for such a revision; that may well portend a further change. In the meantime, however, it’s unclear whether this will affect the nascent consensus to use some of the Rainy Day Fund. The votes to make that happen aren’t quite there yet.

Meanwhile, Committee Chairman Steve Ogden, R-Bryan, shed possible light on why House Appropriations abruptly cancelled a scheduled meeting Monday morning, at which is was planning to approve a bill tapping $4.3 billion of rainy-day dollars to cover a deficit in the current cycle.

“The House is struggling mightily with that 60 percent — three-fifths — vote,” Ogden said, referring to the supermajority required to spend money from the rainy day fund in the current cycle.

On Monday, Senate Finance discussed an Ogden bill that would spend about $3 billion of rainy-day money on both the current deficit and the next two-year budget. Doing so requires a two-thirds vote in both chambers — which is the Senate’s normal threshold for bringing any bill to a floor vote.

But after a spirited argument of the state’s current predicament and the 2006 tax swap-school finance bill, Ogden delayed a vote on his bill, saying he could tell his colleagues weren’t ready.

Rep. Jim Pitts postponed a hearing in the House on the Rainy Day Fund after getting stood up by Perry’s office. While the consensus seems to be that the Senate will have the votes to be able to act on using the Rainy Day Fund, it’s a close shave in the House. As such, Peggy Fikac suggests that Democrats are trying to get a little leverage out of this.

Rep. Mike Villarreal, a San Antonio Democrat on the Appropriations Committee, said enough Republicans oppose the idea that Democratic support will be needed to reach 90 House votes.

“We’re going to make sure that our priorities are met,” he said. “And we’re going to make sure that we’re not taken for granted, but that we leverage to the extent possible a proper hearing of our priorities for the next two years.” Those priorities include health care for vulnerable Texans and education, he said.

One presumes that Democratic support for using the Rainy Day Fund was never in doubt. Given that, only 41 Republicans are needed to meet the 3/5 threshhold for spending RDF money on the 2010-11 biennium. I think that much is doable, based on the scattered reports of this Republican and that supporting RDF usage, but beyond that I’m not terribly optimistic.

Taking sides on Amazon

The Lege weighs in on Amazon, with opposing bills.

House Bill 2719, filed [Wednesday] afternoon by state Rep. Linda Harper-Brown, R-Irving, would favor Amazon’s efforts to avoid collecting tax for online sales by amending the state tax code to say that a company or individual can’t be classified as a retailer if if they — or a subsidiary or affiliate — operate or use “only a fulfillment center… or a computer server.” The bill defines a fulfillment center as “an establishment in this state at which shipments of tangible personal property are processed for delivery to customers.” The bill would also exempt a company meeting those criteria from having to give any state agency information about purchases made in Texas.

That measure is directly at odds with House Bill 2403, filed Monday by Rep. John Otto, R-Dayton, which aims to close loopholes in the Texas tax code that Amazon could use to support its claims that it doesn’t have to collect sales tax.

Otto said his bill is intended “to clarify the meaning of Texas law to prevent Internet retailers from evading tax liability that, to me, is established under current law.” Otto said he has talked with Sens. Steve Ogden, R-Bryan, and Tommy Williams, R-The Woodlands, about drafting a companion bill in the Senate.

Here’s HB2719, here’s HB2403, and here’s some background on this. I like this development for two reasons. One, Harper-Brown is going to be vulnerable next year pretty much no matter what happens in redistricting, and I’d rather have her on the wrong side of an issue like this. A little extra ammunition never hurts. Two, Otto is a Norquist disciple, so if he’s on board and recruiting Senate allies that strikes me as being a great omen for success. I’ll be keeping an eye on this.

Ogden on board with Pitts about Rainy Day Fund

State Sen. Steve Ogden, the chair of the Senate Finance Committee, joins with his House counterpart Rep. Jim Pitts in endorsing the use of the Rainy Day Fund to at least close the deficit from the 2010-11 biennium.

Senate Finance Committee Chairman Steve Ogden, R-Bryan, said he favors tapping rainy-day money at least to fill the current budget’s hole — which he puts at just over $3 billion.

Beyond that, Ogden said, he would support using additional rainy-day dollars “if necessary” to close a huge shortfall in the 2012-13 budget. Because his budget-writing panel “hasn’t voted on spending levels yet,” though, Ogden said he can’t say for sure if the additional funds would be needed.

[…]

To use rainy-day dollars to plug holes in a current budget, as Pitts proposes, three-fifths of the members present in each chamber must vote for it. It would take a two-thirds vote of those present in each house to tap the fund to help balance the 2012-13 budget that’s being written.

A Perry veto can be overridden by a two-thirds vote of those present in each chamber.

Ogden said going for three-fifths, not two-thirds — which lowers the maximum number of House votes needed to 90 from 100 — is “a House consideration.”

“I don’t know of any senators who’ve taken a hard position on how much rainy-day fund [money] to spend,” Ogden said. “Not one.”
Pitts, asked if he, like Ogden, would be open to using more rainy-day money to balance the next cycle’s budget, said: “No. I am proposing to use it for our current shortfall.”

According to Abby Rapoport, Pitts was somewhat equivocal about using additional Rainy Day funds for this biennium. Governor Perry is opposing the use of any Rainy Day funds, claiming Pitts and Ogden are “moving too fast” for him. There are some things that nice Governors just don’t do without certain assurances, I guess. Maybe after he’s figured out where Mexico is we can bring it up again.

Ogden also spoke recently about what the current budget does to education.

Ogden said he visited the [Finance subcommittee on public education] today to encourage the senators to take a different look at the school funding changes they are considering.

“The proposed budget in public ed is draconian. So when you’re comparing these other options that actually cut spending from current law, don’t compare it to current law because we don’t have the money for current law, but compare it to what is in the base bill and see it if doesn’t look better,” Ogden said.

“The entire committee would like to add spending to public ed. What I just wanted to focus the members on is what the alternative is. The alternative is not current law. The alternative is the base bill,” he added.

Ogden formed two subcommittees to examine public school funding and Medicaid because they are arguably the most important issues facing budget-writers this session. They have been tasked with developing a consensus among both Republicans and Democrats on how much those programs need.

“If we cannot agree, we cannot pass a bill,” said Ogden, who added that the subcommittees will probably keep working past the the Friday deadline that he set.

Right now, Ogden said, he is “not even close” to having the votes to get the budget out of committee. He expects that the bill that comes to floor will spend more money than the introduced version, though he cannot say how much or where the additional money would come from.

“When we’ve got the votes, the bill is coming to the floor,” Ogden said. “Right now, I don’t have the votes so I don’t have a timeline.”

What I take from this is that pretty much no matter what they wind up doing, funding for public education will be worse off than it was before. They make may big improvements over the base budget and the $9.3 to $9.8 billion that was slashed from public ed, but they will not get back to even, let alone find a way to account for growth. Keep that in mind when the self-congratulations begin for how much “better” the final product is said to be.

The balanced budget fantasy

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

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

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

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

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

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

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

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

The business lobby’s guide to balancing the budget

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

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

How do we close that gap?

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

Difficult? Yes. Doable? Absolutely.

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

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

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

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

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

Is everything on the table or not?

Some things are more on the table than others.

Tax breaks that encouraged high-cost natural gas drilling in Texas cost state government $7.4 billion in lost revenue over six years and would cost the state billions more if continued, according to a study authored for legislative leaders.

The study by the Legislative Budget Board, which has not been publicly released, was created for Lt. Gov. David Dewhurst, Speaker Joe Straus, Senate Finance Chairman Steve Ogden and House Appropriations Chairman Jim Pitts.

It lays out an argument for Texas lawmakers to reconsider the industry’s breaks on its production tax as one way to help close the state’s expected budget shortfall of $27 billion and highlights questions about how the tax breaks are applied. It made no recommendations.

State leaders are looking at bare-bones budget proposals that on average would cut overall spending by about 15 percent and scale back state services, including education, across the board. They are weighing balancing the budget either with cuts or new revenue or a combination.

“Everything is on the table,” Ogden, R-Bryan, said Wednesday about the study. But Dewhurst said he is not inclined to increase taxes on the industry and still hopes to balance the budget without higher taxes.

I don’t know if this particular tax break is good policy or not. The energy industry folks quoted in the story all think it’s super swell, in case you were wondering. But why should we take the merits of this particular piece of policy into account when we haven’t done so for all of the things that are about to be devastated by budget cuts? If we’re going to talk about firing or furloughing teachers, closing nursing homes, making abused children sleep at CPS offices because there’s no other place for them, and putting mentally ill people in jail because we don’t have anything else to do for them, we’d damn well better be willing to talk about whether or not a handful of energy companies get to keep a tax break, and a hell of a lot more than that besides. Otherwise, please spare me the baloney about “everything” being “on the table”.

Kicking Grandma to the street

Another feature of the Republican budget.

Hundreds of nursing homes, including dozens in Dallas-Fort Worth, may close if lawmakers cut Medicaid as leaders propose, industry officials said Thursday.

Since last week, GOP leaders have introduced budgets in both chambers that would reduce by one-third the state’s budget for its 56,000 nursing home residents on Medicaid. Two-year spending would sink to $2.8 billion, from $4.2 billion.

“We are not crying wolf. Pieces of the sky are falling,” said Tim Graves, head of the Texas Health Care Association, a trade group that represents 500 nursing homes, most of them for-profit operations. He said the cuts would jeopardize about half of the state’s 1,100 nursing homes: those with 70 percent or more of patients on the Medicaid rolls.

Sen. Steve Ogden, R-Bryan, though, said he was “expecting that kind of input” and it’s why he’s opening budget hearings next week with a look at social services.

“The worst news is already out there,” said Ogden, head of the Senate Finance Committee. “Over the next few months, we’re going to try to improve it so at the end of the day, these cuts are not fatal.”

You’ll note that Sen. Ogden doesn’t make any actual commitment to keeping any of these nursing homes open, just that maybe the final budget wouldn’t suck quite as much for them. To be perfectly fair, I do believe that Sen. Ogden wants to minimize this, and that there will be plenty of support for that. But let’s not kid ourselves, the Republican Party is full of people – elected officials, outside agitators like Talmadge Heflin and Michael Quinn Sullivan, and everyday selfish types – who are perfectly happy with this state of affairs and just don’t care about the effects. When, not if, nursing homes are forced to close down because of Medicaid cuts, the responsibility for it is theirs.

Senate budget pretty much the same as the House budget

There had been some talk that the initial Senate budget would be a little less harsh than the initial House budget, on the grounds that the Senate budget would at least use some of the Rainy Day fund, but that was not the case in the end.

The Senate’s version of a starting state budget is, at $158.7 billion, $2.3 billion bigger than the House’s, but still would chop overall state spending by $28.8 billion, or 15.4 percent, from current levels.

The upper chamber’s initial budget proposal includes a total of $69.8 billion for public and higher education; the House version provides $67.7 billion for education. Their overall spending on health and human services is about the same (though some details differ). If you’re looking only at state money — general revenue funding — the Senate would spend $79.7 billion, compared to the $79.3 billion in the House plan presented last week.

The big difference in state spending, as with the overall budget, is in education. The Senate would leave public schools $9.3 billion short of what they’re due under current education funding formulas, about $500 million better off than the schools would do under the House plan. In either case, the Legislature would have to change its school funding formulas, and until they do that, there’s no way to know which school districts lose how much money. Technology allotment and pre-kindergarten early start grants aren’t funded.

Like the House, the Senate would cut more than $254 million from special item funding for state colleges and universities and $431 million from student financial aid programs (if the money becomes available, they’d add back $50 million of that financial aid, for a total cut of $381 million).

They do similar things in health and human services, cutting provider reimbursement rates by another 10 percent on top of cuts already made and without taking into account federal stimulus funds used in the current budget that won’t be available for the next budget.

No rainy day fund, or anything else to increase revenue. On the plus side, those four community colleges that would be shut down under the House budget have been spared. See, whining works if you’re a Republican.

As with the Pitts budget, the Ogden budget is also being called a “starting point”, from which we might consider using the Rainy Day fund to make the impact a little less terrible. I’m linking to that story specifically for the purpose of mocking someone who richly deserves it:

Advocates of limited government applauded a bare-bones approach as an initial step in the discussion.

“You shouldn’t start the discussion of your family budget with how much of the family savings account can we tap this month,” said Michael Quinn Sullivan, of Texans for Fiscal Responsibility.

Someone should inform Michael Quinn Sullivan about how actual American families have been living recently:

Over the two years ending September 2010, Americans withdrew a net $311 billion — or about 1.4% of their disposable income — from their savings and investment accounts, according to the Federal Reserve. That’s a sharp divergence from the previous 57 years, during which they never made a net quarterly withdrawal. Rather, they added an average of 12% of disposable income to their holdings of financial assets — including bank accounts, money-market funds, stocks, bonds and other investments — each year.

See, if it’s a choice between eating out or having premium cable or stuff like that, people will cut back in tough times. But if the alternative is to not eat two days a week, or to turn off the electricity on weekends, or otherwise cut out actual necessities for living, most people will do whatever they can to find the money to pay for them, whether that means taking another job, selling off prized possessions, dipping into savings, or going into debt. Somehow, that never makes it into conservative narratives about budget shortfalls.

A few thoughts from Opening Day

Just a few random bits from today’s festivities…

– In the end and despite the teabagger footstomping, the Speaker’s Race turned out to be a big nothingburger, which was what most rational people expected all along. There were a few deadenders, mostly Republican freshmen, who voted against Joe Straus. I can’t wait to see what kind of committee assignments some of them get, not to mention how they get treated in redistricting. Anyway, despite some speculation that they might get wooed by Team Paxton, in the end all the Democrats voted for Straus. At least they all knew enough not to go putting “Kick Me!” signs on their own posteriors.

– Putting it another way, what Harold says.

– Senate President Pro Tem Steve Ogden lays out the budget situation as he sees it. On the plus side, I am glad to see him call for reform of the business margins tax, with the apparent goal of generating more revenue. On the minus side, anyone who thinks the federal government needs a balanced budget amendment is either economically illiterate or doesn’t care that we’d have 15% or higher unemployment right now if we lived in such a world. Neither is a particularly comforting trait for a budget writer to have.

– Oh, and Ogden’s assertion that “It is impossible to balance the budget without making cuts in (education and health and human services)” is of course wrong. We can most certainly choose to raise enough revenue to do it, though I’ll agree that long term something needs to be done about Medicaid costs. (Like federalizing the program, just to pick one possibility.) The political will absolutely does not exist for this, but the point is that it’s a choice, not a physical law, that is forcing that course of action. It’s a choice the Republicans are making.

– Still having said all that, Ogden is much more in touch with reality than our Governor.

– Speaking of which, Rick Perry’s top priorities for this session are eminent domain and “sanctuary cities”. I wonder if anyone has informed Aaron Pena about this.

Robert Miller predicted that the Senate’s traditional 2/3 rule would remain unchanged. Paul Burka suggested it might be tweaked to be a 3/5th rule as desired by Dan Patrick. According to the Quorum Report, the Senate has put off deciding its rules till tomorrow, with Patrick saying he doesn’t have the votes to make his preferred change. However, it strikes me as entirely plausible that certain legislation, such as a voter ID bill, will be exempted from the 2/3 rule, as was the case last year. We’ll know soon enough.

– Finally, for those of you who are wondering what life is like in the alternate universe where Bill White was elected Governor, here’s an email he sent out to his campaign mailing list:

The Texas comptroller announced yesterday that next year’s state budget shortfall, already tens of billions of dollars, will be $4.3 billion more because Texas has been running an operating deficit for its last two fiscal years. Cuts of twenty to thirty percent in higher education are being discussed in Austin right now.

Please click on this link to an article describing why improved and more accessible higher education is critical to the future of Texas and showing where Texas ranks relative to other states and countries: DMN: Employment growth and higher education by Bill White.

For the first time, young Texans are less educated than the generation of their parents. Cuts in public universities and community colleges will hurt Texas’ long run competitiveness for high wage jobs, where we have already fallen behind at current funding levels. More detail can be found in the 2009 Report of The Select Commission on Higher Education and Global Competitiveness.

You can share your concern by writing or emailing your local newspaper expressing your views on the importance of investing in education. Texas is a great state with great people and prospects. And certainly we can always spend public money more efficiently. But we should not miss the opportunity to prepare for a future with better education and training, resulting in rising incomes and greater opportunities.

So now you know. Not a whole lot else of interest is likely to happen until committee assignments are given out, so we get a little bit of calm before the storm. After that, the level of action will make “Deadliest Catch” look like a paddleboat ride at Hermann Park. Buckle up now and get ready.

UPDATE: Adding in a few opening day emails, from the Texas League of Conservation Voters, Planned Parenthood of the Gulf Coast, and Equality Texas. In addition, here are a couple of worthwhile press releases that respond to Governor Perry’s wacked-out priorities. First, from State Rep. Mike Villarreal:

Today Rep. Mike Villarreal expressed his dismay and concern about Governor Rick Perry’s official proclamation giving emergency status to divisive immigration legislation.

This rare first-day move by the Governor allows the Legislature to take up immigration within the first 60 days of the legislative session. The decision to put immigration legislation on the front burner ignores the true emergency faced by the Texas Legislature – the $27 billion shortfall announced by Comptroller Susan Combs the day before the session opened.

“Once again, the Governor demonstrates that he is a masterful politician.” said Rep. Villarreal. “Just when the public begins to learn that the state’s financial crisis is worse than California’s, he distracts us with a controversial issue that ultimately cannot be resolved by the state.”

“Texans deserve a state government that puts responsible governance over scoring political points,” Rep. Villarreal said. “Doesn’t he know the election is over? He won. Now it’s time for him take responsibility for our schools, our jobs, and the financial crisis he helped create.”

And from State Rep. Armando Walle:

Today State Representative Armando Walle (D-Houston) was sworn in to the Texas House of Representatives for his second term. After hearing Governor’s Perry’s call for emergency action on eminent domain and sanctuary cities, Rep. Walle released the following statement:

“The most pressing issue facing the Texas legislature is addressing the $27 billion shortfall that the Republican leadership has created and failed to address. Balancing the budget on the backs of uninsured children, the elderly, and hardworking everyday Texans is not the kind of approach that will make Texas stronger for future generations. The Republicans are driving the car, and we need to work together to get it out of the ditch. Running over the most vulnerable Texans is not the way to move Texas forward.

I find it very ironic that the Governor who brought you toll roads and Trans-Texas Corridor is calling to strengthen private property rights. We will face many challenges in the 82nd Session, and we must be guided by sound policy, not political pandering.

The call to address sanctuary cities is nothing more than a divisive political ploy aimed at distracting Texans from our state’s budget crisis. Law enforcement officers across the state understand that crime victims and witnesses are their most important resources for solving crimes. We cannot afford to alienate anyone who could be of assistance in solving crimes. The immigration system is broken and the federal government needs to act. And that should be our message to the federal government, so we can focus on the very real and challenging task of balancing our budget to build a stronger Texas.”

The Trib has more.

First they came for Medicaid

Then they came for public education.

School districts are being told they should expect to get an estimated $3 billion to $5 billion less in the next two-year budget as lawmakers begin wrestling with a $24 billion revenue shortfall in January.

That could mean less money for prekindergarten classes, teacher incentive grants and tutoring for students struggling to pass the state’s standardized tests.

And the state, in a highly unusual move, could also take a chunk out of the $37 billion Foundation School Program, which provides the direct per-student state aid to school districts.

“Going into the Foundation Program at this point ought to be a glaring red flashing warning about how serious this problem is,” said state Rep. Donna Howard , D-Austin, who brought in a school finance expert on Tuesday to meet with several area school district representatives about the looming cuts.

[…]

Legislative leaders, who have vowed to close the budget shortfall without raising taxes, have not said whether they plan to cover the $2 billion school districts are projected to need for new students.

Senate Finance Chairman Steve Ogden , R-Bryan, said no decisions have been made about how to cut the state’s public education budget.

But one of the ideas being kicked around is to eliminate $2 billion in grant programs from outside the Foundation School Program, which includes the $400 million teacher incentive program and more than $200 million for prekindergarten.

No one is eager to raise local property taxes to make up for losing state revenue, said Mark Williams , president of the Austin Independent School District Board of Trustees.

“We’re getting to the point now that we will have to impact classrooms,” Williams said.

Remember, our Republican leaders have never gotten school finance right. When student performance suffers, and the dropout rate goes up again, and the state falls farther behind the rest of the country, you’ll know who caused it. Hair Balls has more.

The entitlement argument against removing a sales tax exemption

The House Ways and Means Committee, chaired by State Rep. Rene Oliveira, continues to examine tax expenditures such as sales tax exemptions, and the whining coming from some of the potentially targeted businesses is really starting to annoy me.

The $30 billion value of 2009 sales-tax exemptions is bigger than the $21 billion in sales tax collections that year. Of the exemptions, $8.1 billion are on items taxed by other laws. Another $10.1 billion is for materials used in manufacturing. Various services have exclusions estimated at more than $5.3 billion.

[…]

“Other states also have sales tax exemptions for materials purchased for manufacturing research and development. Texas needs its existing manufacturing sales tax exemption just to stay competitive,” said Luke Bellsnyder, of the Texas Association of Manufacturers.

Ronnie Volkening, of the Texas Retailers Association, said his group wants to preserve the tax exemption for bottled water, which it views as a food product. Extending the sales tax to such services as accounting could drive some businesses to seek providers outside Texas.

“It does affect the bottom line of any business,” he said.

Imposing the state sales tax on tattoos, tanning and body-piercing would mean an estimated $4.8 million a year, according to the state comptroller’s office. Tattoo artists and their studios do not like being singled out any more than would the largest industry with the priciest lobbyists pounding the Capitol hallways.

“That’s going to really upset me, actually. That will affect me financially,” said Antone Pham, a tattoo artist at the Texas Tattoo Emporium in Houston. “People already complain about how much tattoos cost sometimes. I’m going to tack a tax on to that? That’s going to make it harder for me to even make money.”

I’m okay with exempting materials used in manufacturing and R&D. But bottled water? Tattoos and tanning salons? Please. Bottled water is basically a luxury item that also has a role in hurricane preparedness, and I’ve already said I’d be fine with suspending sales tax collections on bottled water during hurricane season for affected areas. I can only marvel at the idea that tattoo parlors and tanning salons got exempted from the sales tax in the first place. That must have been an oversight on someone’s part, for which it is high time to be corrected.

Those things won’t bring in much money. Frankly, taking away all the remotely viable exemptions, leaving things like food, manufacturing items, medical and legal services untaxed, will only make a small dent in the deficit. But it needs to be done. Everyone else is sacrificing, and the public policy arguments against these exemptions are far more persuasive than the ones in favor of them. The end result may not be much, but it will reduce the need for more draconian cuts, and combined with a reduction in tax expenditures will go a little way towards making the overall system fairer.

Which is no doubt why some people want to hinder that effort:

Senate Finance Committee Chairman Steve Ogden, R-Bryan, said any change in exemptions should be part of an overall tax reform effort and should be revenue-neutral, meaning any additional money raised would be used for something such as lowering the tax rate. While that could bring in more money long-term by virtue of a broader base and more efficient collections, it would not help the looming budget problem.

“The best way to mess this up is to start talking about specific exemptions right now. It’s got to be put together in some sort of coherent package, where there’s give and take. You can’t just pick ’em off like they’re targets in a shooting range,” Ogden said. “Almost surely going into next session, any kind of sales tax reform, at least initially, would probably have to be revenue neutral, or it won’t pass. Nobody’s out there, Republican or Democrat, campaigning and getting elected on the notion that our problem in Texas is our taxes aren’t high enough.”

Are you kidding me? We’re $18 billion in the hole, thanks in large part to that ginormous non-revenue-neutral property tax cut of 2006. Steve Ogden knows this, and he knows fully well that Texas is among the lowest-taxed states in the country. This is tremendously irresponsible thinking, the kind that will ensure we have deficits every biennium. What exactly does Ogden think the appropriate level of state government services should be? Who does he think should be bearing the costs of the budget, and who does he think should get away with paying less? Who does he think is getting shafted now?

What constitutes a tax increase is open to debate, Oliveira said.

“Taking away an exemption from someone who no longer deserves it isn’t a tax increase.” he said. “I just don’t see how we can, at this point, bind ourselves to being revenue-neutral, when we have not seen the drastic cuts that are going to be required to deal with an $18 billion deficit. I couldn’t agree to that now.”

How can we solve a problem if we can’t even agree we have a problem? How can we hope to meet the needs of a growing and increasingly needy population if we can’t ever look for new sources of revenues? The only way that Ogden’s position makes sense is if you think limiting revenue is more important than providing some minimal set of services. I don’t support that. I don’t even understand that. But if you’ve ever wondered why Texas has gotten sued so many times over things like school funding and health care for prisoners, now you know.

Business tax falls short again

Same story, next verse.

The state business tax again comes due Monday, and no one is suggesting it will yield near the approximately $6 billion originally forecast. The tax is expected to bring in $4.3 billion this year.

“I think it was set up to fail, and they succeeded,” said Sen. Kirk Watson, D-Austin, noting that the levy was passed to help cover the cost of a local school property tax rate reduction. “I think when it was passed, they knew … it would not cover the reduction.”

Senate Finance Committee Chairman Steve Ogden, R-Bryan, said the school finance package was a net tax cut at a time when the state had a surplus.

“To date, it’s been very successful in reducing the school property taxes and increasing the state share of funding public education,” Ogden said. “Going forward, it could be a problem because the state’s economy is in recession.”

No, going forward it will be a problem because it leaves us billions of dollars in the hole. That’s money that is supposed to be spent on public education, which we don’t have now and won’t have in the next biennium or the one after that, even if the economy comes roaring back. This will be a problem until we fix the margins tax, roll back some of the property tax cut, or both. To believe anything else is to deny the reality that’s been right there in front of our eyes from the very beginning.

Where there’s a sacred cow, there’s a lobbyist protecting it

The Star-Telegram reminds us that while legislators may be hunting for sacred cows to help fill the budget gap, actually bagging them will be hard to do.

The renewed look at tax breaks has generated a widespread case of jitters among lobbyists and interest groups, who are scrambling to build a case for their particular exemptions before next year’s legislative session. Many of the exemptions have powerful constituencies that would strongly resist any change.

“Any business or industry that benefits from such exemptions or exclusions would be well-advised to watch the interim hearings and be very involved in the session, because there won’t be many exclusions or exemptions that won’t be on the table,” said Gaylord Armstrong, a senior partner at the law firm of McGinnis, Lochridge & Kilgore and a veteran lobbyist who represents a variety of business, industries and trade associations.

[…]

[House Ways and Means Committee Chairman Rene Oliveira, D-Brownsville]’s hearings constitute the first broad-based review of sales tax exemptions in years and have generated a buzz about which items are likely targets. Bottled water, which currently isn’t taxed, is mentioned as a possible new revenue source, but retailers are gearing up to defend those exemptions.

“We are watching those hearings very closely,” said Ronnie Volkening, president of the Texas Retailers Association, saying that bottled water should be considered in the same category as food. “Water is essential to life,” he said. “Any time there is a natural disaster, one of the greatest needs is to get bottled water to people.”

[…]

The state’s medical community is prepared to fend off a possible tax on cosmetic surgery. “Medical practices are really not traditional businesses, and we don’t think the patients of Texas should be taxed for their healthcare,” said Dr. Susan Bailey, a Fort Worth allergist who will become president of the Texas Medical Association on May 1.

In many instances, she said, cosmetic surgery is often used for reconstructive purposes, such as for patients who have undergone surgery for breast cancer. “It’s difficult to take any one medical procedure and say that it’s not medically necessary,” she said.

But it is easy to say what’s generally covered by insurance and what isn’t, and I daresay the latter would include an awful lot of truly elective surgical procedures. Why shouldn’t they be subject to the sales tax? As for the bottled water exemption, give me a break. If the total amount of bottled water bought as part of hurricane preparation is more than two percent of all sales, I’ll be shocked. If we’re that concerned about it, a provision can be written in to allow for the suspension of the tax any time an area is under a hurricane watch.

This is just special interest politics at its most basic. Everything that has an exemption from the sales tax has been deemed to be different somehow than everything else. Some of these things, like child care and basic medical services, have a clear justification for being singled out. Many of these things do not, and should not be treated any differently no matter how much their lobbyists or trade associations squeal. We would do well to tune all of that out and evaluate these claims on their merits. EoW has more.

Nothin’ but good times ahead

In his recent conversation with the Chron’s Peggy Fikac, State Senate Finance Committee Chairman Steve Ogden said the following:

Q: How likely is it that lawmakers will face another big budget shortfall in 2013, with fewer resources to bridge the gap?

A: Wouldn’t want to speculate. Tell me what the price of oil is going to be in 2013. I’m serious. The price of oil’s 35 bucks, it’s going to be bad. The price of oil is about 100 bucks, I think Texas will be fine.

From Tuesday’s business section:

Oil rose 2.1 percent Monday to $86.62 a barrel, the highest close since Oct. 8, 2008, as growth in U.S. service industries signaled the economy is recovering from the worst recession since the 1930s.

“The market’s pausing for breath after such a big move- up,” said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. “With the recovery still at a fragile stage, and U.S. inventories ample, we’re unlikely to see prices surging to $100.”

Not quite at Ogden’s magic number, but there’s plenty of time for that. And since the price of oil was hitting a 52-week low at under $44 around this time last year, I’d say we’re in better shape than we’ve been in awhile. I look forward to seeing the sunny financial statements that are sure to be forthcoming from the Comptroller’s office. Not this month, mind you, but next month for sure.

First, you have to admit you have a problem

Peggy Fikac has a frustrating conversation with State Senate Finance Committee Chairman Steve Ogden. I say frustrating because I know he knows what the correct answer to this is, and I also know he’s never going to say it out loud:

Q: When you look at the challenges that are facing you, is the problem the recession or is there a systemic problem with the way the budget is structured year after year?

A: Well, how about yes and no? I think last session if you really go through all the numbers, we used about $6 billion of the stimulus money to balance our budget … I think it was a smart thing to do in the context of we didn’t use the rainy day fund to balance our budget, or we didn’t make Draconian cuts to balance our budget. Well, depending on how much federal assistance we have next session, we’ll be faced again with the same decision: Should we make cuts? Should we use the rainy day fund? Or should we use federal funding stimulus money?

Ogden is a budget writer. He knows fully well what the effect was of the 2006 property tax cut – how much revenue was forsaken, how much was supposed to come in to replace it, how far short of projections those other sources fell, and how much general revenue had to be tapped to make up the difference. He also knows that this isn’t going to change by itself. If we can’t say what the problem is, we have no hope of fixing it. And one consequence of that is it means we can’t fix some other problems as well.

Q: On another financial challenge you’ve already been looking at, four in 10 Texas school districts are using reserve funds to help balance their current budgets. Public school enrollment is growing, with most of that growth coming from low-income families. Another school finance lawsuit may be filed to force changes. Do you think the Legislature will change the school funding system in 2011 to give school districts access to more money to educate the growing population?

A: I don’t know. There’s not more money out there, so any changes in the school finance system would have to be made in ways that use the money we do have more efficiently, more equitably and maybe reduces — this term hasn’t been used before in school finance, but I think it’s relevant — the diversions. … I think there is some merit in looking at whether a lot of that money that’s out of the Foundation School Program should actually be in it, but at the end of the day, this is not magic. No one should expect next session large increases in funding for anything. And so you’re going to have to tighten your belt.

Of course there’s more money out there, if we’re willing to admit the reason why we’re so strapped to begin with. But apparently we’re not, or at least Sen. Ogden is not, and so we have to pretend that we are unable to adequately fund our schools instead of giving the honest answer that we don’t consider it a sufficient priority. One bit of dishonesty leads directly to another.

Having said all that, I will give Sen. Ogden credit for this:

Q: You have called the state tax system “rickety.” What is the biggest problem with it?

A: It’s rickety in the sense that the sales tax laws are very confusing, and there are more exemptions than there are items subject to the sales tax, and we would do ourselves some good if we went in there and cleaned up that statute. … I personally think if we had a broader-base, lower-rate sales tax it would improve things in Texas. But there’s a key in there. I mean, if you broaden the base, you can lower the rate. I’m not trying to raise taxes.

If Sen. Ogden is sincere in his desire to hunt sacred cows, then at least some good may come out of the next legislative session. At the very least, this mindset makes it harder for the Dan Patricks of the world to push their maniacal property tax for sales tax swap. It’s a small step but it’s an important one, given where we were on this as recently as 2005.

Election results: The Lege

There are way too many races to recap here, and since the Trib has done such a thorough job of it, I’ll leave the heavy lifting to them. A few highlights:

– Steve Ogden easily won re-nomination in SD5, and Kip Averitt was returned to the ballot in SD22. Each faced fringe opponents, so these are good results as far as maintaining a functioning Senate goes. Averitt as we know had sought to drop out. He may yet do that, at which time we’ll get appointed nominees from both parties; if he changes his mind, he’s in, as no Dem filed originally.

– Borris Miles won by a razor-thin margin over Al Edwards in HD146. The margin as of this morning was all of eleven votes. Yes, you can expect a recount, and that’s a small enough number that there’s a chance the outcome could change. Don’t carve anything into stone just yet. A statement from Miles’ campaign is beneath the fold.

– Despite some predictions that Rep. Terri Hodge, who recently pleaded guilty to lying on her tax returns and stated her intention to resign after being sentenced, would still win her primary, challenger Eric Johnson defeated her by a large margin. There is no Republican challenger, so Johnson will be sworn in next January.

– Rep. Betty Brown, best known for her inability to handle Asian names, lost. That’s good. Rep. Tommy Merritt of Longview, who had faced primary challenges every cycle this decade for his opposition to Tom Craddick and other acts of heresy, also lost. That’s not good. Rep. Delwin Jones is in a runoff. On the Democratic side, Reps. Dora Olivo of Fort Bend and Tara Rios Ybarra of South Padre Island lost, and Rep. Norma Chavez of El Paso is in a runoff. Go click those Trib links for more.

That’s all I’ve got for now. I’ll post links to more coverage later as I see them.

(more…)

How are you going to balance the budget?

If you’re thinking that the candidates for Governor are being a bit vague about how they’re going to deal with the looming budget shortfall, you’re not alone.

Texas expects a shortfall of at least $12 billion when lawmakers meet to write the next budget, but major candidates for governor have few specifics on how they would exert their leadership to close the gap.

“The silence is deafening,” said House Ways and Means Committee Chairman Rene Oliveira, D-Brownsville. “None of the candidates are really coming out with a plan or even an awareness of how bad the situation is.”

Asked how they would close the budget gap, the five major candidates suggest largely unspecified spending reductions.

[…]

The five’s suggestions leave more blanks than specifics as lawmakers prepare for a projected minimum budget gap of $12 billion to $13 billion, before accounting for expected population growth.

“You can’t just get there with a simple brush stroke. It’s going to require a fair amount of spending cuts, and probably they’re going to have to look at other things they can do to raise revenue as well,” said Dale Craymer, of the Texas Taxpayers and Research Association.

Yes, raising revenue has to be part of the solution, despite what the know-nothing types would like to make you believe. I’ll defend the lack of specificness to some degree, in that I’m sure everyone is hoping that the picture will improve a bit in the next few months, and no one wants to come across as too alarmist. In addition, it’s really the Legislature’s problem more than it is the Governor’s, since it’s the Lege that writes the budget. The Governor can effect some cost savings via the line-item veto, but he or she would be doing so to a budget that’s already been certified as being balanced. Mainly, the Governor can provide big picture guidance, plus the threat of vetoing a solution he or she deems unacceptable. As far as that goes, we really don’t know what’s truly off the table – Rick Perry, for example, has waffled quite a bit on the subject of the gas tax – which leaves us with this largely theoretical conversation.

Let’s also talk about casinos for a minute, since they were mentioned in the story. I’m at best ambivalent about an expansion of gambling in Texas, whether that means casinos or slot machines at racetracks or whatever. I probably would vote against any constitutional amendment authorizing an expansion of gambling, but I probably wouldn’t crusade against it, though I do reserve the right to change my mind about either of these. My point here is simply that whatever the merits of casinos – and as you know, I am skeptical that they will do much to benefit Texas’ bottom line – they will not be a part of the solution for the 2011-12 biennium. If the Lege manages to pass the joint resolutions to put an amendment on the November, 2011 ballot, and if that manages to get ratified by the voters, then casinos – if that’s what gets authorized – still have to be built. Slot machines at racetracks can happen more quickly, but it still won’t be instantaneous. I could imagine there being some revenue from expanded gambling for the 2013-14 budget, but that won’t help any next year. Again, gambling is not a fix for the next budget. Beyond that, maybe, but we still have to make it through the next two years.

One more thing:

Senate Finance Committee Chairman Steve Ogden, a Bryan Republican facing a primary challenge, said he was not too worried about whether the candidates have budget ideas. Although he said governors have significant powers, including the line-item veto, and their suggestions are welcome, he noted that lawmakers craft the budget.

“At the end of the day, governors don’t write the budget,” Ogden said. “If they can’t think of anything, it’s not essential.”

I note that mostly as a reason to link to this Trib story about Ogden’s primary race, in which he faces a challenge from the right from someone who doesn’t really have a firm grasp on what’s in the budget. This pretty much said it all to me:

In an apparent attempt to solidify his more-conservative-than-Ogden bona fides, Bius has made the elimination of “generational welfare” a centerpiece of his campaign. “If we begin requiring drug testing for those trying to get cash payments for welfare and require them to be citizens of the United States and Texas, it’ll go along way toward solving our social problems,” Bius says. “My momma told me, you get what you pay for. If you want drug addicts, give them money. If you want illegal immigrants, give them money.”

Ogden brushes off the idea as cynical stereotyping of the poor — and wholly unnecessary in a conservative state that already has among the nation’s stingiest public doles. “It bothers me, because it’s kind of a code word,” he says. “I’m not sure exactly what he means by it, but Texas is the least-generous state when it comes to welfare. The majority of people on it are children. Another large category is people in nursing homes. Neither of these groups fit into the category of ‘generational welfare.’ … We have not incentivized anti-social behavior, but when you’re dealing with unemployed mothers with children, you have to do something. You can’t just say, ‘It’s not our problem – good luck.’”

Yes, it is a code word, and not a particularly subtle one. It’s weird being put in the position of defending Steve Ogden, who’s far too conservative to be the guy I want writing the budget, but that’s the state of the GOP these days. The alternative to Steve Ogden is someone who lives in a fantasy world. The sad thing is that Ogden’s experience and understanding of reality won’t be an asset for him in his race.

Gattis drops out, Ogden to run for re-election

Well, this is a surprise.

State Rep. Dan Gattis, R-Georgetown, confirmed today that he is dropping out of the race to succeed Sen. Steve Ogden, R-Bryan. Ogden, who announced earlier this year that he was retiring from the Legislature, has changed course and decided to seek re-election.

Gattis was the heavy favorite to succeed Ogden in a GOP-friendly district that includes all of Williamson County and all of the Bryan-College Station area.

“With a young and growing family and a tough economic climate, my focus needs to be on them,” said Gattis, whose children are ages 6, 3 and 1. “That was a decision that my wife and I reached through a lot of prayer and consideration.”

Gattis will not seek re-election to his House seat, where at least three Republicans have been running to succeed him.

Didn’t see that one coming. Far as I can tell, Gattis didn’t have any serious competition for this seat as yet, and frankly once he was past the primary it would have been easy going, so I confess to being a little puzzled by this. Maybe he just didn’t have the fire in the belly for it. Wouldn’t be the first person this has happened to, and there’s certainly nothing wrong with it. Much better to realize it now and drop out before the election than go to the trouble of winning and then decide it wasn’t what you wanted. EoW and the Trib have more.

State sales tax revenues plummet

No surprise here.

Sales tax and natural gas tax collections fell more than $1 billion short of projections in the 2009 fiscal year, according to a state comptroller’s report, fueling questions about the financial heartburn that may be ahead for Texas.

“I think it tells us that the economy was softer than expected (when projections were outlined) in January, and tax revenues were lower than expected … and if it weren’t for the federal stimulus money, we would have been in a lot of trouble,” said Dick Lavine, of the Center for Public Policy Priorities, who analyzed state Comptroller Susan Combs’ projected revenue for the fiscal year that ended Aug. 31 and her recent annual cash report.

[…]

Senate Finance Committee Chairman Steve Ogden, R-Bryan, said he was examining the numbers but had yet to draw a conclusion.

“We’ve got some time to look at it” with the hope that the economy will begin to recover, he said. “Secondly, we’ve still got a fairly substantial rainy day fund that I’m glad we saved. The problem’s still manageable.”

That assumes that there will be the political will to spend from the rainy day fund, which you may recall requires a 60% majority in the House. What I recall is that outside of maybe some money for Hurricane Ike recovery, there was almost zero willingness to touch the rainy day fund this year. Then the stimulus package got approved and solved all our problems for this session, but I feel confident that the same reluctance to touch the fund, coupled with the desire of the Dan Patrick wing of the GOP to slash and burn, will make that an awful lot harder than Ogden glibly predicts. (Easy for him to say, too. It won’t be his problem.)

The unmentioned elephant in the room, of course, is the structural deficit we currently have thanks to the ginormous irresponsible property tax cut from the 2006 special session. Even if the Lege agrees to drain the rainy day fund to keep things afloat in 2011, we’ll face the exact same problem in 2013. Maybe it won’t be as severe if the economy has really recovered, but I wouldn’t count on it as tax revenues tend to lag behind. The point is that we don’t have the money to pay for that tax cut. The business margins tax and the increased cigarette tax don’t come close to covering the revenue lost to that property tax cut. We’ve paid for it with general revenues twice. What are we going to do in 2011 and beyond? That’s the question that needs to be asked.

Dewhurst fibs about the budget and the stimulus

What Lt. Gov. David Dewhurst says:

Given recent comments about our state’s budget, I feel it is time to separate fact from political fiction. The fact is, in stark contrast to the U. S. Congress, the Texas Constitution requires the Legislature to balance the state budget every two years, and that would have happened with or without any federal stimulus dollars.

In 2007, I led the effort to save $7 billion to balance the revenue shortfall we anticipated this year.

So it’s simply political fiction that stimulus dollars were necessary to balance our budget.

What actually happened:

“In order to balance the budget this biennium, which is $182 billion, we used $14 billion in federal stimulus money to balance it,” said Sen. Steve Ogden R-Bryan. “We’re not expecting a similar amount of similar money to be available in the next two years because the federal government just doesn’t have it. So, assuming that’s true, you go into the next session with a $14 billion hole.”

According to the State Comptroller’s office, Texas requested and was allocated almost $20 billion in federal stimulus funds from the American Recovery and Reinvestment Act, and has so far been awarded about $13 billion. About $3.6 billion has been received, and nearly all of the received funds have been spent.

In Dewhurst’s defense, he was too busy doing other things and letting Sen. Kevin Eltife run the Senate to have had any idea about what was happening with the budget, so his confusion here is understandable. Thanks to BOR for the first two links. Burka has more.

UPDATE: Comptroller Susan Combs and Dewhurst himself also contradict his op-ed.

The DMN on the food stamp situation

It’s depressing reading these articles, but it’s important to do so, to really understand why we’re so screwed up. First and foremost, it’s an attitude problem. As in, the people who have the most power over it have the least concern about it.

Advocates for the poor and several Democratic state representatives say they welcome recent signs that President Barack Obama’s administration won’t tolerate the delays. Firmness will be needed to force Texas to finally fix the mess, they say.

Some state GOP leaders admit they were slow to see the onset of the eligibility-screening system’s latest crisis.

“It should not have been a surprise to me, but it was,” said Sen. Steve Ogden, R-Bryan, the Senate’s chief budget writer. “So I take responsibility for that.”

Last spring, lawmakers rejected the commission’s request for 822 additional workers to ease the backlog. Instead, they inserted a fall-back provision that would allow for that many new workers to be hired over two years, but only if Gov. Rick Perry and 10 key lawmakers who sit on the Legislative Budget Board grant permission.

In August, the commission asked to add 649 new workers. State leaders took seven weeks to act, approving only 250 new hires and stressing the commission should fill 400 vacancies first.

Eight House Democrats, including Dallas Rep. Rafael Anchía, called state leaders’ response “a disgrace.”

“It’s indicative of the governor’s unwillingness to address the serious performance issues” in the program, they wrote to federal food-stamp official William Ludwig.

Perry spokesman Chris Cutrone responded: “Our office is closely monitoring this issue, and we expect [the commission] to handle it in an efficient and timely manner.”

“Not that we’ll lift a finger to help them, of course. We’re too busy meddling in more profitable affairs to care about that,” he did not add.

Though federal program rules are complex, more than half of today’s 7,700 frontline workers have less than two years’ experience, compared with 8 percent five years ago. [William] Ludwig, Dallas-based regional administrator at the U.S. Department of Agriculture’s Food and Nutrition Service, said recent departures of the state system’s three top executives haven’t helped.

To speed things up, he asked Texas to suspend fingerprint imaging of new applicants. He also urged that the state stop checking the value of applicants’ vehicles and their bank-account balances. And Ludwig urged that more interviews be conducted over the phone, not in person.

[Stephanie] Goodman, the state spokeswoman, said phone interviews are common, but “you still have to collect so much information it hasn’t been a big time-saver.”

I’ll bet it is for the interviewees, especially those who don’t have cars. That inability to empathize with those who need the help is the problem in a nutshell.

Gattis to run for Ogden’s seat

As EoW says, this is a complete non-surprise.

State Rep. Dan Gattis, R-Georgetown, has just informed supporters he is running for the Texas Senate District 5 seat being vacated by Bryan GOP powerhouse Steve Ogden.

Via a Twitter message, Gattis said: “dangattisI am a candidate for the Texas Senate! Please get involved. http://dangattis.org/ Thank You!”

His Web site and Facebook page also say he is running.

Yeah, even people who don’t follow politics knew that was coming. Gattis is sure to be the favorite, and he appears to have Ogden’s support, at least tacitly, but I feel confident that the Dems will mount a serious challenge. As noted before, the district is red but not hopeless, and as open Senate seats don’t come along that often, the opportunity cannot be missed. If the DNC really is serious about helping to turn Texas blue, here would be a fine place to pitch in.

Gattis’ now-open HD20 seat, like SD05 red but potentially competitive given the right candidate and the lack of an incumbent, should also be a hot target next year. Along with the battle to defend freshman Rep. Diana Maldonaco, who is one of our awesome TexBlog PAC candidates, Williamson County and its resurgent Democratic Party will see a lot of action next year.

Ogden not running for re-election

This was expected, and now it’s official.

State Sen. Steve Ogden, a Bryan Republican and one of the Senate’s most powerful members as its chief budget writer, announced Thursday that he will not run for re-election next year.

The decision had been widely rumored for months.

Ogden’s departure promises an open seat that could attract several candidates, and could be a target for Democrats who would like to gain Senate seats, although the district is considered GOP territory. State Rep. Dan Gattis, R-Georgetown, has been mentioned repeatedly as a likely candidate. He did not return phone calls Thursday.

Gattis is generally considered to be the heir apparent for this seat. He doesn’t start out with a huge financial advantage – he had $81K on hand as of July. He would be a strong favorite to win if he’s the nominee, as would any decent Republican candidate – it’s a fairly red district, though not a hopeless one. A good Democrat with enough resources could make a race of it, and as open Senate seats are precious things, I feel confident that whoever does run will have the opportunity to get those resources. BOR and EoW have more.

The biennial budget shuffle

In addition to billions of stimulus dollars, the budget this year relied on some old tricks to get certified as balanced.

Nearly $3.7 billion in levies collected for everything from fighting air pollution to helping low-income people with their electric bills to funding trauma care will instead help balance the state’s upcoming two-year budget.

The money, for the most part, is collected through fees and fines that legally are dedicated for a particular purpose. If lawmakers do not spend the money on the dedicated purposes, however, the balances become available to spend on other programs.

“It’s kind of like having your (household) budget laid out and spending part of your food money on entertainment, or vice versa,” said Dale Craymer, chief economist of the Texas Taxpayers and Research Association, who has worked for a state comptroller, two governors and as the Texas House fiscal analyst. “It’s a backdoor way to undedicate the money.”

It’s pretty much the same thing every two years. We have a bunch of dedicated funds, which levy fees on certain things that are supposed to pay for certain specific items, then for a variety of reasons we decide to use some of that money for other things. It would be more honest to dedicate the money to general revenue, and it would be fairer to admit that we do this sort of thing because we refuse to adequately fund the things we want to pay for via the taxes we already collect and to deal with that, but we don’t. And so the shell game keeps getting played.

In some cases, unspent balances in dedicated accounts have grown to hundreds of millions of dollars over years.

For example, the System Benefit Fund has accrued more than $670 million. The program imposes a fee on electricity customers in competitive retail markets, including Houston, Dallas-Fort Worth and most of the Rio Grande Valley, to provide a May-September discount for low-income customers.

[…]

“We’re generating funds for a good purpose. We’re diverting the funds, without telling people, for general purposes. And then we say we’re not taxing. Well, government is lying,” said Rep. Sylvester Turner, D-Houston, who called such levies amount to “a tax by misrepresentation.”

Turner is a big advocate of the System Benefit Fund, which he tried but failed to restore full funding to in 2007. Especially in a summer like this one, it would have been nice for there to be help available for folks who can’t afford their utility bills, but as has often been the case, it wasn’t a priority.

Senate Finance Committee Chairman Steve Ogden, R-Bryan, said he understands the argument, but “if you are going to criticize that, then go tell me what other parts of the budget I’m supposed to cut. … The choice to complain about it is just hot air.”

Alternatives, he said, would be raising general taxes or dipping into the state savings account known as the rainy day fund, which budget-writers expect to need in the future.

“The long and short of it is, we have to do this in order to balance the budget,” Ogden said. “I guess this was the least objectionable of the four alternatives.”

The situation points up a major public policy issue, he said.

“Our tax and revenue system is pretty messed up, and a case can certainly be made for a major overhaul of our tax structure,” Ogden said.

I would have argued that the rainy day fund was the right way to go, as I was arguing for the budget in general before the stimulus funds saved the day. But Sen. Ogden is correct that our system is broken and needs fixing. He’s not the guy I want fixing it, mind you, but he’s right about the problem. As with many other things, that isn’t going to happen until we get a change not just in leadership but in our philosophy of governing. I can’t say I see that happening any time soon.

Two out of three ain’t bad

So of the three items on the call for this special session, two of them are sailing along. SB2, the Senate bill to keep state agencies like TxDOT alive, has already passed the full Senate by unanimous vote and will be taken up by the House tomorrow, where HB2 passed out of committee. HB1, which issues a bunch of transportation bonds that had been approved by voters in 2007, also passed out of committee. SB1 was still in committee as I blog this, but it should pass easily enough.

And then there’s SB3 and HB3, the bills to authorize comprehensive development agreements for toll roads. Those two aren’t doing so well.

Legislation that would allow state transportation officials to continue contracting for privately built toll roads derailed this afternoon in the Senate, amid an angry backlash over plans to toll a Dallas-area expressway that is being built with taxpayer money.

At the end of a sometimes-heated hearing, Finance Committee Chairman Steve Ogden, R-Bryan, acknowledged that Senate Bill 3 — which would extend the authority of the Texas Department of Transportation to continue entering into comprehensive development agreements (CDAs) — cannot pass.

“This issue is controversial and right now, we don’t have the votes,” Ogden said.

“I think we pass the bills that are essential — SB 1 and 2. SB 3 is optional … and right now, I don’t see it getting out of this committee.”

The controversy over SB 3 had started earlier in the day as nearly a dozen senators told Senate leaders they intended to “tag” the bill — meaning it would not get a public hearing as planned.

But Ogden said he prevailed on senators to allow the hearing to proceed. Tempers quickly flared after North Texas senators learned that of three CDAs that are in the pipeline now, one project is being built with federal stimulus money — and drivers on a restricted lane will still pay tolls.

A similar fate befell HB3 in the House committee. Both sides noted that very little would be affected by waiting until the 2011 session, and there’s plenty of opposition and uncertainty around them to think that passage any time this week could happen. While Lt. Gov. Dewhurst says that a deal is in the works for a minimalist version of the bill, I think Sen. Ogden’s view that this is optional and can be dropped is likely to carry the day. That just leaves the question about whether Governor Perry will go to the mat for it, or if he’ll just let it go and claim victory for the things that do pass. We’ll see. EoW has more.

Special session speculation

We all know that the Lege adjourned without finishing all its business. A lot of people are speculating there will need to be a special session to deal with it. At this time, Governor Perry is not one of those people.

Gov. Rick Perry said today he didn’t rule out calling a special session to address the fallout from last night’s legislative meltdown that put the future of five state agencies in jeopardy.

[…]

Perry stressed that the Texas Department of Transportation and four other agencies are in no danger of shutting down in the near future and promised he would find a way to keep them going unimpeded.

Sen. Steve Ogden and others last night said the resolution the House hastily passed yesterday afternoon was “hokey,” “preposterous” and “extreme.” Ogden also questioned whether the resolution was legal.

Perry said he worked with House leaders on the resolution and said lawyers had told him it would have worked.

House Speaker Joe Straus said this morning he did not believe a special session was necessary.

Sen. Glenn Hegar had said last night that Perry could address part of the problem by issuing executive orders. Perry made very clear that that was not true.

“Whoever dreamed that up might want to find something different to do in their life than give advice to senators,” Perry said.

Well, I don’t know what Perry has in mind, but I hope he’s right that it’ll all work out in the end without any need to reconvene. For what it’s worth, the AusChron was speculating the legislators would be back next month, while the Observer put its marker on next April, after the primaries. I say keep watching what Perry says – if there’s going to be a special, it likely won’t come as a surprise. He’ll give some indication beforehand. Elise and Trail Blazers have more.

Budget heads to the Governor

In the end, thanks in large part to the stimulus package and its infusion of funds that prevented the need to dip into the Rainy Day Fund, the budget process was relatively uncontroversial. Yesterday, it was passed by the House, and is now on its way to Governor Perry’s desk.

With just three days left in the 81st Texas Legislature, the only thing certain was the state’s $182.3 billion budget, which, among other things, increases spending for the mentally disabled, correctional officer salaries, college financial aid and pre-kindergarten programs. Most of the money, which includes $12.1 billion in federal economic stimulus dollars, is dedicated to education and health care.

The vote in the House was 142-2, after unanimous passage in the Senate. Perry is certain to do some line-item vetoing, if only to remind us that he can. Odds are he’ll pick something that no one will see coming. We’ll know soon enough.

Of greater interest at this time is the handful of bills that are still struggling to stay alive.

The House kept the debate on windstorm insurance reform alive by agreeing to seek a compromise on the bill in a joint conference committee. Perry has told lawmakers he will call a special session if the windstorm insurance reform does not pass.

At issue is how to keep solvent the Texas Windstorm Insurance Association, which provides insurance for homeowners who cannot find private coverage — without pushing insurance rates up. Hurricanes Ike and Dolly busted the association with an unexpected $2 billion in payouts.

Rep. Larry Taylor, R-Friendswood said they hope to reach a settlement so as “not to have a special session.”

Here’s the conference committee information. They have till midnight tonight to work it out, get a bill printed, and distribute it to members. Tall order, but doable.

Also Friday, Sen. Kip Averitt, R-Waco, said he was still trying to revive the Children’s Health Insurance Program. An effort earlier this week to piggyback CHIP on a bill for newborn disease screening did not comply with House rules that subjects be “germane.”

Although a coalition representing 70 groups called on legislative leaders to “take all necessary means” to pass the bill, the prospect is dim.

Apparently, the measure to which the CHIP bill had been attached as an amendment, which had originally been sent back by the House because author Paula Pierson didn’t think it would concur, has now been approved for a conference committee, but that’s to remove the CHIP amendment so the original bill, having to do with newborn screening, can pass. There’s still the original House CHIP bill by Rep. Garnet Coleman, which hasn’t been approved by the Senate but still could if they agree to suspend the rules to bring it up. I’m not holding my breath on that one. The Chron editorializes today in favor of taking action, while Rick Casey took Lt. Gov. Dewhurst and Sen. Steve Ogden to task for not getting this right the first time.

Disputes also were holding up a bill to renew the life of the Texas Department of Transportation for another two years. Portions of the bill call for a local option gas tax, supported by business leaders and elected officials from North Texas and San Antonio.

In Harris County, officials are keeping an eye on a provision that could limit or ban new cameras being placed at intersections to catch red-light runners.

That one could get ugly. Rep. Joe Pickett has called out lobbyists who are agitating over the local-option tax, which has both strong support and strong opposition. More from McBlogger and EoW, both of whom are in the latter camp. On a tangential note, the Chron rails against the attempt by the state to meddle in local affairs regarding red light cameras.

Finally, one bit of bad news.

At the stroke of midnight on Friday, House Bill 1243 turned into a pumpkin and a fairy godmother was nowhere to be found to save it or the electric cooperative measure attached to it.

Provisions to improve accountability in the electric cooperatives, including Pedernales Electric Cooperative, had been tacked on to the bill in the Senate. And Rep. Sylvester Turner, D-Houston, challenged whether that amendment and others belonged on the bill.

A lengthy confab at the dais followed by a postponement delayed a vote on whether to send the bill to a conference committee, called for by Turner, until shortly before midnight. That vote failed 48 to 90.

But by the time Rep. Pete Gallego, D-Alpine, stepped to the microphone to save the bill, it was too late.

Another half-hour of parliamentary hand-wringing ensued. But, in the end, the glass slipper didn’t fit.

That unfortunately means that SB545, the solar bill, is dead as well. Major bummer about that.

The zombie nominee

As we know, the Senate confirmation of Don McLeroy as Chair of the State Board of Education, which we all thought had been scuttled back in April, got new life earlier this week when Senate Nominations Committee chair Mike Jackson, who had originally said he wouldn’t bring the issue up if the votes weren’t there to confirm McLeroy, brought it up and got committee approval. The full Senate will take it up next week, and the question is what if anything has changed. Elise Hu games it out.

So the Dems think they can effectively block with commitments of twelve senators to vote no. Meanwhile, TEA sources say they’ve heard something different.

“I’ve heard two or three Democrats [would vote for McLeroy],” said TEA Commissioner Robert Scott. “I’ve also heard one Republican is a hard ‘no’, so no one really knows for sure.”

The timing is everything, considering the number of votes to confirm McLeroy depend on how many members are present at the time of the vote. Assuming all the Republican members will vote in favor, it would take at least three Democratic senators to leave the floor and not cast a vote in order for McLeroy to make it through.

Scott and TEA General Counsel David Anderson reminded us that this might be one of those “devil you know is better than the devil you don’t” situations, saying it’s unclear who McLeroy would be replaced with as chairman, and it’s unknown whether that would be more or less satisfying to McLeroy’s detractors.

The Dems could survive one defection, as eleven votes are sufficient to derail the nomination. Muse and Lisa Falkenberg consider what might happen if McLeroy does get sunk. Muse:

What happens if McLeroy is not confirmed? Governor Perry gets to appoint someone else from the SBOE as Chair. He could certainly appoint someone who is equally as bad – Dunbar, Cargill, Mercer, Leo or Bradley. Or he could appoint a moderate Republican like Bob Craig, who has the best interests of Texas school children top of mind instead of a far religious right agenda.

That’s a nice thought, but I fear Falkenberg is correct:

But another question is whether McLeroy’s defeat will really save the state of Texas any further embarrassment?

Maybe not. According to another bit of scuttlebutt from a lawmaker and few e-mailers today, it could actually make things worse. I always thought if McLeroy were ousted, Perry would pick one of thoughtful, sensible Republicans who serve on the board. There are several good choices: Bob Craig of Lubbock, Geraldine “Tincy” Miller of Dallas and Patricia Hardy of Weatherford.

But the name I heard mentioned today was none of those. It was Cynthia Dunbar of Richmond.

Yes, that Cynthia Dunbar.

It’s certainly makes me wonder if, under at least one scenario, McLeroy’s miracle could actually save us from a curse far worse.

What’s an enlightened Texan to do?

My answer to that question is to work one’s enlightened keester off in 2010 to ensure that we have a Governor who won’t view such embarrassments as good politics. Working to unelect Dunbar, whose SBOE district is a nice shade of purple, wouldn’t hurt either. Not the sexiest answer in the world, I know, but that’s the way it goes.

As far as McLeroy himself is concerned, if I thought there was a reasonable chance that Perry would take this failure as a lesson in the need to moderate, I’d go all in on torpedoing him. But when has Perry ever done that? I believe he’ll just double down on the crazy, since that’s clearly his electoral strategy and this would present him with another opportunity to stroke the aggrieved paranoia of his base while giving KBH another opportunity to not address a hot button issue because she’s too damn wishy-washy. Given that, I say the Dem Senators can do whatever they think is best. Draw the line in the sand, curry favor with Finance Chair Steve Ogden (who happens to be McLeroy’s Senator), come down with a newly-evolved 24-hour virus and miss the whole sorry spectacle, I’m giving a free pass. Just put us all out of our misery and get it over with.

UPDATE: Muse notes that Republicans are calling Democratic senators to implore them to vote to confirm McLeroy. She also has a list of Dem senators whose position on McLeroy’s confirmation are unknown.

UPDATE: And more from Muse, who clearly disagrees with me on this.

Budget yes, UI not yet

The conference committee on the budget finished its work yesterday.

While final details are still emerging, the 10 conferees worked out a last minute plan for spending $700 million of federal stimulus money for state fiscal stabilization. They hope that it will avert a special session, even if Perry vetoes some or all of the money. It appeared to go to school textbooks in part. And there were other things funded that are near and dear to the Perry family, such as preservation of a couple more county courthouses ($7 million) and restoring the fire-gutted Governor’s Mansion.

Burkablog and Floor Pass, which notes that the committee will vote out the budget on Tuesday, fill in a few more details. The first obstacle is making sure Governor Perry will sign it, but so far there’s no evidence that he wants to force a do-over. Not dipping into the Rainy Day Fund, for which we can all thank President Obama and the stimulus package, likely helps out there.

Unclear at this time is the fate of the Davis/Walle amendment, which would drain money from the Texas Enterprise Fund in the event that SB1569 gets vetoed. And speaking of SB1569, it took a few steps forward in the House, but ultimately was not brought to a vote. The best writeup I’ve seen about what went on during this comes from Ed Sills’ TxAFLCIOENews; I’ve reproduced it beneath the fold.

According to Brandi Grissom on Twitter, the House has recessed for the night due to its computers being down, without having passed any bills today. They’re scheduled to work Saturday and Sunday, and according to Gardner Selby, voter ID is supposedly atop the calendar for Saturday. That’s assuming they actually get to it – as we’ve seen multiple times this session, being on the calendar is no guarantee of anything. The Democrats will surely do what they can to run out the clock if they feel they must. We’ll see how far down the agenda the House gets tomorrow.

(more…)

Ogden stem cell rider removed from budget

Good.

Sen. Steve Ogden just announced that his rider banning use of state funds for embryonic stem cell research will not appear in the new state budget.

“We really couldn’t come to a consensus” so the bill will be silent on the stem cell issue, Ogden announced in this morning’s conference committee meeting on the budget bill. “I continue to be concerned about us continuing to be silent” on what he called “a profound issue.”

While the federal government has guidelines and regulations concerning use of federal money in such research, “in Texas there are none. I hope even though we adopt this rider (the House version, which was silent on stem cell research), it is not the last word on this subject,” Ogden said.

That’s fine by me. I strongly disagree with Sen. Ogden’s position on this issue, but I’d be happy to have the fight in the House and in the Senate, through the committee process and on the floor, out in the open for all to see. What we got instead was a sneak attack, which gave no one the chance to argue against it. Given that the House did not concur, it was only right to not force the issue via the conference committee, so kudos to Sen. Ogden for not going to the mat over this. Bring it up in 2011 and we can try to settle it then.

Now, if the Davis/Walle amendment on unemployment insurance and the Texas Enterprise Fund survives, then I’ll be even happier. The House is supposed to take up SB1569 tomorrow, which likely doesn’t leave enough time to pass it and override a veto, so the best bet to make sure Texas gets the unemployment funds it needs is to make it painful for Rick Perry to reject them. Let’s hope it happens. The CPPP has more.

Challenging Chet

Via Eye on Williamson, I see the national GOP is once again looking to try to beat Rep. Chet Edwards in CD17.

There’s little question Republicans are looking to target Rep. Chet Edwards (D-Texas), who could face yet another tough re-election in his solidly conservative Waco-based seat. The question is who his opponent will be.

Both experienced and inexperienced Republicans are preparing their Federal Election Commission forms in Texas’ 17th district, encouraged by a strong showing by poorly funded 2008 nominee Rob Curnock.

Curnock held Edwards to 53 percent of the vote, despite receiving almost no support from the national party. Curnock, a small-business owner from Waco, plans to run again and hopes this time he’ll receive more support from national and local party leaders.

I think the key here is to compare Edwards’ 2004 performance with his 2008 performance, since I believe the non-Presidential year will be more favorable to him as it was in 2006. Here’s a Google spreadsheet that compares Edwards’ performance in each of CD17’s counties to John Kerry in 2004 and to Barack Obama in 2008. What I did in each was compare Edwards’ performance to that of the Democratic presidential candidate, and then compared the ratio from 2004 to that of 2008.

I think the story of these two elections is in the three biggest counties: Brazos, Johnson, and McClennan. In 2004, Edwards barely eked out a plurality in Brazos, got clobbered in Johnson, and won big in McClennan. In 2008, Edwards won a solid majority in Brazos, improved noticeably in Johnson, and won a smaller majority in McClennan.

His improvement in Brazos, I believe, can be largely attributed to an overall improvement in Democratic performance there. John McCain got almost exactly as many votes as George Bush did, while Barack Obama added over 4000 votes to John Kerry’s tally; meanwhile, Curnock did almost as well as Arlene Wohlgemuth while Edwards increased his total by 5000 votes. While there were probably a few Wohlgemuth voters who switched to Edwards in 2008, for the most part there were just a lot more people voting Democratic.

By contrast, Edwards’ improvement in Johnson is all him. McCain gained 1800 votes over Bush, and Obama added 600 to Kerry’s total, leaving their percentage almost identical to 2004, while Curnock lost 1500 votes and Edwards added 4200. Clearly, Curnock was a weaker candidate than Wohlgemuth, who was also from Johnson County and surely benefited from being a hometown girl, but Edwards did more than just take advantage of that difference.

Finally, McClennan presents an interesting case. Edwards won it by 23,000 votes in 2004, and was in net negative territory everywhere else. In 2008, he would have won even if all of McClennan’s votes were thrown out, but he only carried McClennan by 16,000 votes, and that was with Obama getting 37% to Kerry’s 33%. Here, Curnock’s residency in Waco likely helped him. Similarly, a local issue having to do with water rights that Edwards tied around Wohlgemuth’s neck back in 2004 was not on the table this time around. Unlike Johnson County, not being Arlene Wohlgemuth, especially not being Arlene Wohlgemuth in 2004, worked to the GOP’s advantage.

Based on all this, I’d venture that Edwards will likely do fine in 2010, barring any national headwinds against the Dems. If the NRCC dream candidate of State Sen. Steve Ogden jumps in, that would make for a hell of a race, but Ogden is up for re-election himself in 2010, so he’d have to give up his Senate seat and his powerful spot as chair of the Finance Committee to do that. I don’t know that a chance to maybe be in the House minority is worth that, but we’ll see.