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stimulus

It’s really hard out there on the restaurants

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

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

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

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

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

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

There won’t be furloughs after all

A slightly confusing bit of good news.

Mayor Sylvester Turner

Houston will not need to furlough roughly 3,000 city employees nor cancel its police cadet classes in the upcoming budget year, Mayor Pro Tem Dave Martin announced during a city council budget committee meeting Tuesday.

Instead, the city will use federal coronavirus relief funds to help bridge its projected $169 million shortfall in the fiscal year that begins July 1.

“No employee in the (City of Houston) will be furloughed,” Martin said.

The administration has updated Mayor Sylvester Turner’s initial budget proposal, eliminating many of the most dire consequences attributed to the revenue gap. The revised budget plan eliminates furloughs and adds back five cadet classes for police, Martin said.

It also adds another fire department cadet class, giving that department four classes. The new proposal also adds $15 million back into the city’s rainy day fund as hurricane season gets underway; Turner’s original spending plan would have exhausted that fund entirely.

The changes comes as the city has weighed how it can spend $404 million in federal funds it received through the CARES Act, part of a stimulus package approved by Congress.

The administration plans to use roughly $19 million of those funds to cover expenses for redeploying city employees from their normal duties to address the coronavirus pandemic, freeing some budgetary space. It is not clear if the city plans to use additional federal funds to cover the remaining costs of the budget revisions.

See here, here, and here for some background. I’ve said all along that the city could avoid all of the issues for this year if it could use that federal money for previously budgeted items. Apparently, they have decided that they can, or at least that there’s enough of the money available to fill other needs to make the math work. I can’t tell from this story what may have changed to go from apocalyptic warnings about layoffs and furloughs to this – maybe the city got clarity from the feds, maybe they came to this conclusion on their own, maybe there was enough wiggle room to allow for budget items to get moved around, who knows? This is the outcome that should have been from the beginning. Remember, a large part of budgeting is determined by the calendar – if these federal dollars had been allocated earlier, there wouldn’t have been so many “previously budgeted items” to worry about. I’m a little worried that someone is going to come along and try to stop the city from doing this, maybe by lawsuit or some other decree, but until then, I’m glad they worked this out. There are plenty of things to worry about going forward, like sales tax revenues, but buying a year’s time before that reckoning allows for another CARES Act or other positive development to occur. Sometimes kicking the can down the road is all you need to do.

Sharing is CARES-ing

I’m still trying to understand this.

The state of Texas and its 12 largest counties are in a tug-of-war over who is responsible for handing out federal coronavirus relief funding for some small cities.

The Coronavirus Aid, Relief, and Economic Security Act signed into law by President Donald Trump in late March sent $11.24 billion in aid to the state. Of that, six Texas cities and 12 counties with a population more than 500,000 received more than $3.2 billion.

The other 242 counties and cities within those counties were allowed to apply for per capita funding allocations from the state out of the remaining $1.85 billion earmarked for local governments.

With an apparent gray area in the legislation, the CARES Act did not specify which entity — the state or the dozen large counties — should cover the small cities within the dozen counties that received direct funding. State leaders including Gov. Greg Abbott want the counties to pay; the counties want the state to share more of its cut.

The skirmish has meant that months after the major relief package was passed, funding for some Texas cities is in limbo, including for Houston-area suburbs such as Pasadena that have been hit with major outbreaks.

[…]

Abbott — as well as Lt. Gov. Dan Patrick, House Speaker Dennis Bonnen and the state Senate Finance Committee and House Appropriations committee chairs and vice-chairs — in a May 11 letter placed the responsibility on the counties.

Two days later, the counties wrote to state leadership to ask for their reconsideration. While the counties account for about 69 percent of all COVID-19 cases, they received just about 29 percent of the relief funds, they wrote in a letter shared with Hearst Newspapers.

“We ask you to address this shortfall,” they wrote. “Counties are your frontline partners in fighting the COVID-19 pandemic. Help us help Texans stay in their homes, keep their jobs, and have food on their table.”

I guess I need to know more about what the priorities are here. It seems clear to me that the funds should be distributed based primarily on need, with any other considerations coming after that. By “need” I mean testing and support for frontline responders and hospitals, food and housing for those in financial distress, buying supplies like hand sanitizer and PPEs, that sort of thing. Whether that should come from the money allocated to the state or the money allocated to the larger counties, I don’t care. It should come from both, depending on their capacity. Maybe there is a good objective case for it to come from one source or the other – I can’t tell from this story – but even if that’s so, I’d want the state and counties to be working together to maximize the return on these federal dollars. That’s what really matters, doesn’t it?

School districts set to get financial relief for coronavirus

Good.

Texas will distribute the vast majority of a $1.29 billion federal stimulus package to school districts this summer, using it to deliver on a promise that schools will remain fully funded this school year despite statewide closures due to the coronavirus pandemic, Texas Education Commissioner Mike Morath told school officials on a call Thursday.

State officials told school districts in March there would be no financial penalties for attendance declines, as COVID-19 fears spread and school districts were required to close their buildings. Now, Texas has decided to use its share of the federal stimulus package to fund that promise, distributing 90% directly to districts based on their student poverty rates, aiming to forestall layoffs and budget cuts.

Texas school districts can see how much they can expect to receive on the Texas Education Agency’s website. Houston Independent School District, the state’s most populous, will receive the highest award of $81.7 million.

On top of that stimulus package, Gov. Greg Abbott and state lawmakers agreed to reimburse all school districts for up to 75% of their pandemic-related expenses to date, using money from a federal grant awarded to Gov. Greg Abbott’s office. School districts have spent a state total of about $392 million on COVID-19 expenses.

School districts in Texas are funded based on student attendance, meaning the statewide school closures could have been a major financial hit. “With school closed to in-person attendance for nearly a third of the school year, generating the remainder of that entitlement would be impossible without us stepping in and making some changes,” Morath said Thursday.

States are allowed to use the federal stimulus funding to offset budget holes. “Federal guidance explicitly authorizes it as a way for states to sustain their school finance system, as long as net state funding remains above prior years,” Morath said.

From the description in the story, I don’t have any specific concerns. It sounds like the districts are going to have their COVID expenses mostly covered, which is what should happen in times like these. Now we just need the same thing for cities and states.

What the next CARES act could mean for Texas cities and counties

Short answer, a lot.

Cities and counties across Texas would get more than $29 billion from the $3 trillion coronavirus relief package House Democrats want to pass as soon as Friday.

That includes more than $1.7 billion to Houston and nearly $1 billion to San Antonio as both cities stare down massive budget holes caused by the outbreak. Harris County’s funding could top $2.6 billion and Bexar could be on tap for more than $1 billion, as well. Texas, meanwhile, could get nearly $35.5 billion from a separate pool of funding to aid states.

That’s all according to estimates compiled by the Congressional Research Service, Congress’ public policy institute. The estimates, which cover the rest of 2020 and 2021, are based on some factors not yet known, such as unemployment and infection rates, so they’re not exact.

[…]

At the top of the Democrats’ list is sending $875 billion to states, cities and counties to help plug huge budget deficits. Cities can’t use the aid that Congress has offered so far to close those budget holes and cities across the country, including Houston and San Antonio, are starting to lay off employees and cut programs.

The bill would also for the first time offer coronavirus relief aide to smaller cities, as past relief packages have only directed funding to cities with 500,000 or more residents, meaning suburbs could get tens of millions. New Braunfels, for instance, could get nearly $30 million. Sugar Land could get more than $58.5 million.

There’s a list of cities and counties in Texas and the amounts they would get here. As noted, it’s broken out over two years, so Houston would get $1.18 billion this year and $580 million next year, while Harris County would get $1.76 billion this year and $881 million next year. That’s way more than the current Houston budget gap, so I presume a lot of that money is intended for other purposes as well, such as perhaps rental assistance and maybe rebuilding public health infrastructure. The main point here is that this is a demonstration that someone has learned the lesson from 2009, which is that massive cuts and layoffs in city and state budgets is a huge drag on any economic recovery effort. (That someone is the Democrats, though for at least a few minutes the Republicans have decided that they need to take whatever steps they have to in order to keep the economy from completely collapsing on Trump.) I don’t know what a final version of this might look like – there are certainly things the Dems could concede on – but if something like this passes and cities and counties and states can “balance” their budgets without taking a chainsaw to them, it would be a bug freaking deal. Daily Kos has more.

Still trying to avoid total budget disaster

That federal money sure would help.

Mayor Sylvester Turner

As the prospect of mass furloughs and severe spending cuts looms over the city’s next budget, Houston officials are sitting on a pile of coronavirus stimulus money that amounts to more than double the shortfall projected by Mayor Sylvester Turner.

The rub, at least for now, is that the strings attached to the $404 million Houston received from the so-called Coronavirus Relief Fund — a $150 billion trove sent to states and local governments as part of the roughly $2 trillion Coronavirus Aid, Relief and Economic Security Act — bar officials from spending the aid on expenses they already had budgeted.

Mayors, governors from both parties, congressional Democrats and even some Senate Republicans have pushed for looser restrictions that would allow sales tax-deprived governments to use the money to plug budget holes, instead of limiting them to expenses tied directly to the pandemic.

Meanwhile, as Congress weighs a second stimulus package for local and state governments that may earmark funds for lost revenue after all, Turner is under pressure to squeeze as much money as possible out of the initial round of CARES Act aid.

Prompting the tension was the Treasury Department’s April 22 guidance that eligible spending includes payroll expenses for public safety, public health, health care and other employees “whose services are substantially dedicated to mitigating or responding” to the pandemic.

Last week, City Controller Chris Brown penned a letter to Finance Director Tantri Emo and Turner-appointed COVID-19 recovery czar Marvin Odum in which he urged the administration to craft a spending plan for the funds. He told city council members last week that officials in other Texas cities have begun determining how much of their public safety expenses are directly related to COVID-19.

“The potential exists for these costs to be offset by CARES Act funds, which could help alleviate added pressure placed on the General Fund,” Brown wrote, referring to the city’s $2.5 billion tax-supported fund that pays for most day-to-day core operations, including public safety, trash pickup, parks and libraries.

See here for some background. Let’s be clear, it’s more than just Houston facing this kind of problem. Every city, every county, every state has been affected. Federal funds, and a lot of them, are going to be needed. All this caterwauling you hear from haircut-freedom-fighters and grandma-sacrificers about getting the economy going again, none of it means anything if they aren’t willing to save local and state governments from making devastating cuts, which among other things will cause loads of people to lose their jobs and act as a huge drag on any economic recovery. If we could be sure we’d get this in the next round of stimulus then fine, use this money for whatever other purposes it’s intended for. But really, why wait? Let’s get a bit of certainty to bolster confidence.

Turner to ask feds for some relief

Can’t hurt to ask.

Mayor Sylvester Turner

Mayor Sylvester Turner is asking the federal government to let Houston use an estimated $400 million in aid to help close its ballooning budget gap and reduce the number of expected furloughs in the fiscal year that begins in July.

Turner said the CARES Act, part of the $2 trillion stimulus passed by Congress last month, will give the city much-needed resources, but the rules accompanying those funds prevent the city from using the dollars where they are most needed: the budget.

“You don’t have to appropriate us more dollars, just allow us to have flexibility with regard to those dollars that have already been awarded,” Turner said he told lawmakers. The mayor said the request was made in a letter to Congress signed by 110 other Texas mayors.

There are three rules for the federal aid, according to Turner: expenditures must be directly related to COVID-19, it cannot previously have been budgeted, and it must be spent by the end of this year.

That helps, Turner said, but it would help more to use the funds as a budget stopgap. Southwestern cities like Houston have incurred fewer direct pandemic expenses than northeast cities because they took earlier social distancing actions, Turner said. The real brunt for governments here is the projected drop in sales taxes, which is expected to punch a massive hole in the Houston’s already cash-strapped budget. Sales taxes are the city’s second largest revenue stream, after property taxes.

It’s that or budget catastrophe, and there’s no good reason why we should have to have the latter. Which doesn’t actually matter, since I’m sure the Trump administration will say No, and even if somehow they say Yes or the Turner administration tries to find some clever way around the obstacles in their path, state Republicans will turn fire and fury our way. Because, obviously, being able to stave off massive cuts from a budget shortfall that was unforeseen and no one’s fault is totally irresponsible. That’s just math. Anyway, this is the process before us. May as well see where it leads.

Metro will get some stimulus money

Good.

Transit agencies in southeastern Texas are set to receive more than $300 million to stem revenue losses linked to COVID-19, federal officials announced Thursday, most of it coming to Houston.

As part of the first round of Congress-approved stimulus funding, $25 billion will go to transit agencies nationwide, doled out by the Federal Transit Administration. The money “will ensure our nation’s public transportation systems can continue to provide services to the millions of Americans who depend on them,” U.S. Transportation Secretary Elaine L. Chao said in a release.

Money will be distributed by urban areas, with most of Houston’s $258.6 million going to the Metropolitan Transit Authority, which has seen ridership to drop to less than half its normal workday use. Bus and rail ridership Wednesday was 129,000, a 55 percent decline from the same day last year, Metro spokesman Jerome Gray said.

[…]

Fewer riders means less money coming in from fares, but that pales in comparison to the expected drop in sales tax collections Metro relies on for most of its funding. With various businesses closed and most of the Houston area hunkered down, collections from Metro’s 1 percent sales tax are expected to nosedive.

We’ve talked about the effect of the sales tax revenue decline before. This should help a bit, and there may be more coming. Having a fully functional transit system for when everyone gets to go back to work is going to be a big deal, so this is very encouraging.

The digital divide

Online learning is great, if you can get online.

The lack of access to technology among students — commonly referred to as the “digital divide” — has come into sharper focus in recent weeks as school districts across Houston transition to online-based learning amid widespread school shutdowns.

Districts throughout the region are scrambling to equip tens of thousands of children with computers and internet access, jockeying with each other to secure coveted devices in high demand during the pandemic. In the meantime, many districts are providing those students with rudimentary paper materials, asking families to return completed coursework to their schools or take pictures of completed worksheets and send them to teachers.

“This has been on the education docket for, gosh, probably at least 20 years,” said Alice Owen, executive director of the Texas K-12 CTO Council, an association that supports school district chief technology officers. “It’s been a struggle for people to realize that this is an important piece of learning for students if we want to keep them competitive on a global scale.”

Educators and advocates long have warned about the digital divide facing American children, with the nation’s most impoverished children suffering most. The ubiquity and declining cost of computers and internet access has helped shrink the gap, but stark disparities remain.

In the Houston area’s 10 largest school districts, about 9 percent of households — nearly 142,650 — do not have a computer, according to the most recent U.S. Census estimates. Nearly twice that number — about 267,250 households — lack broadband internet access.

Three of the region’s largest and most impoverished districts — Alief, Aldine and Houston ISDs — face the greatest shortages, according to Census data and estimates from district leaders.

[…]

Despite extensive warnings about the digital divide, state and federal legislators have not allocated nearly enough funding to schools to cover costs associated with providing laptops, wireless internet devices and broadband services to all students at home.

Districts can obtain some technology and internet access at steep discounts through a federal program known as E-Rate, but the benefit does not extend to take-home computers or wireless hotspots for students.

“If we want our kids to be competitive and stay up-to-date with tech, we need to be investing in our students for the future,” Owen said. “We’ve got to get over the way school used to be run, and we need to think about the ways that schools are run in the future.”

In a letter sent last week to the top four ranking members of Congress, 35 Democratic senators called for providing $2 billion in E-Rate funds that would allow schools and libraries to deliver wireless internet devices to students without connectivity at home.

“Children without connectivity are at risk of not only being unable to complete their homework during this pandemic, but being unable to continue their overall education,” the senators wrote. “Congress must address this issue by providing financial support specifically dedicated to expanding home Internet access in the next emergency relief package so that no child falls behind in their education.”

Maybe addressing this could be part of Infrastructure Week, or maybe it can be its own item. As the story notes, HISD and some other districts issue laptops to high school students – my daughter has one – which helps with those students, but obviously only goes so far. Charters are not exempt – KIPP reports a similar issue with its students. This is, plain and simple, an issue of poverty. If fixing the underlying issue is too hard, then maybe we can agree that all students need to have the equipment required for an education, and provide them all with laptops and Internet access. The choice is ours – are we going to learn from this crisis, or are we going to face the same problems the next time, without the excuse that we didn’t know any better?

Is it finally going to be Infrastructure Week?

I have three things to say about this:

Lawmakers have been talking about striking a deal to rebuild the nation’s infrastructure for years. It might take a pandemic to finally get them to do it, and Texas officials are already working on their wish lists, with ports, highways, high-speed internet and more potentially on the line.

There’s growing talk of tackling infrastructure as the next step in Congress to stave off economic collapse from the coronavirus outbreak, following the $2 trillion stimulus package that passed last month.

House Speaker Nancy Pelosi said on Wednesday that House Democrats are beginning work now on the next package, including “bold action to renew America’s infrastructure.”

President Donald Trump appears to be on board.

“With interest rates for the United States being at ZERO, this is the time to do our decades long awaited Infrastructure Bill,” Trump tweeted. “It should be VERY BIG & BOLD, Two Trillion Dollars, and be focused solely on jobs and rebuilding the once great infrastructure of our Country!”

In Texas that could mean a massive injection of federal funding to rebuild highways and bridges, expand ports and brace waterways for future floods. The federal push could also expand much-needed broadband — which 2 million Texans don’t have — with many Americans now stuck at home, relying on the internet for work, school, telemedicine and more.

“Getting the infrastructure bill done makes a lot of sense,” said U.S. Rep. Lizzie Fletcher, a Houston Democrat on the House Transportation and Infrastructure Committee. “It will be a really important driver to get our country up and running and back to work once we’re on the other side of COVID-19.”

[…]

In the Houston area, planned widening of Interstate 10 in Fort Bend and Waller counties could be at the top of a priority list of projects, along with expanding Texas 146 from two to three lanes in each direction to relieve a well-known truck bottleneck.

Metropolitan Transit Authority has a long list of projects, but also is still drafting much of its $7.5 billion plan, making it unclear whether Houston’s costliest train and bus projects are ready to reap federal dollars.

Then there are the ports and the Intercoastal Waterway, which will likely be at the top of the list for any major federal infrastructure package, said Ed Emmett, the former Harris County Judge who is now a senior fellow at Rice University.

The Houston Ship Channel needs to be deepened and widened, for one thing. Officials with the Port of Houston have been lobbying for federal help for the $1 billion project that would allow the nation’s busiest waterway to accommodate two-way traffic.

[…]

Emmett said he’ll believe there’s federal infrastructure money coming when he sees it.

“I’m a total cynic when it comes to this,” he said. “Anytime there’s a crisis Congress always says infrastructure — ‘we’re going to go spend on infrastructure’ — and it never happens.”

1. What Ed Emmett says. Past attempts at Infrastructure Week have failed because Donald Trump has the attention span of a toddler who’s been guzzling Red Bull. Show me a bill that at least one chamber has on track for hearings and a vote, and get back to me.

2. If we do get as far as writing a bill, then please let’s limit the amount of money we throw at TxDOT for the purpose of widening highways even more. Fund all of Metro’s projects. Get Lone Star Rail, hell even the distant dream of a high speed rail line from Monterrey to Oklahoma City, off the ground. Build overpasses or underpasses at as many freight rail traffic crossings as possible. Make broadband internet truly universal – hell, make it a public utility and break up the local monopolies on broadband. You get the idea.

3. Ike Dike. Ike Dike, Ike Dike, Ike Dike, Ike Dike. Seriously, any gazillion-dollar infrastructure plan that doesn’t fully fund some kind of Gulf Coast flood mitigation scheme is not worth the paper it’s printed on. Ike Dike or GTFO.

The federal stimulus package includes money for elections

What we’ll do with it remains unknown at this time.

Be like Hank, except inside

The $2 trillion coronavirus stimulus package Congress is working to pass this week includes $400 million for election costs states face in wrestling with how to hold high-profile 2020 elections in a time of social distancing.

Advocates estimate the that could mean as much as $20 million for Texas, where state officials have so far opted to delay election dates — including pushing back a runoff to pick the Democratic challenger to U.S. Sen. John Cornyn until mid-July — rather than expand vote-by-mail options or offer up online voter registration.

It’s unclear how the state would use the funding — which still has to clear Congress and get signed by President Donald Trump — but advocates were already pushing for state leaders to consider expanding mail-in voting and offering online registration, something 39 states do now.

“Every Texan needs should be able to safely register to vote and cast their ballot whether by mail or in person,” Anthony Gutierrez, Executive Director of Common Cause Texas, said in a statement. “The way we make that happen is to use these funds to implement online voter registration, expand vote by mail, extend early voting, recruit more election workers, and ensure all poll sites meets public health safety standards.”

I don’t know if $20 million is enough to accomplish that, but then I also don’t know what if any conditions there are on this money. I hope there are some and that they are clear, because I have no doubt that our state leadership would use the money in some way that they could claim was about supporting the 2020 elections but really wasn’t. I have no idea what that may be, but I have faith in their ability to conjure something.

The Republican death wish

It would be one thing if they were just putting their own lives at risk, but that’s not how viruses work.

After Dallas County Judge Clay Jenkins became the first to announce a mandatory stay-at-home rule, conservative groups including Empower Texans began ringing alarms in opposition to Jenkins and to Republican Gov. Greg Abbott, who they say paved the way for the move.

Abbott had said he would applaud local leaders who felt they should issue stay-at-home orders for their communities.

“I’m extremely concerned about what Dallas Co just did, and Abbott’s apparent sanctioning of it,” Empower Texans president Ross Kecseg wrote on Twitter.

So far, Lt. Gov. Dan Patrick is the highest-ranking state official to echo those concerns.

“What I’m living in fear of is what is happening to this country,” Patrick said in a Fox News interview. “I don’t want the whole country to be sacrificed.”

Patrick, who turns 70 next week, went on to say he’d be willing to risk his own life and well-being to help preserve the way of life for other Americans — a statement that drew harsh rebukes on social media and inspired hashtags such as #DieForTheDow.

[…]

Critics of the stay-at-home orders are contradicting the advice of public health authorities at every level of government, from the World Health Organization to the national Centers for Disease Control and Prevention to local health officials. Epidemiologists have stressed that keeping people apart is the best way to fight back against a new virus for which there is no vaccine, and that aggressive early steps are the only way to get ahead of COVID-19.

The discord in Texas mirrors what’s going on at the national level with Republican governors showing more reluctance than Democratic ones, like Cuomo, to shutting down their states, said Timothy Callaghan, assistant professor of health policy and politics at the Texas A&M School of Public Health.

“On the one hand, they certainly want to protect the public health, but they are also afraid about hindering the freedoms of their citizens and they’re also concerned about the economic impact of having society in many ways shut down,” Callaghan said. “It’s a tricky balancing act for many politicians on the conservative side.”

Not only does that send Texans a mixed message but Callaghan said it could also reduce the effectiveness of the orders.

“If you want to see a true impact of flattening the curve throughout the state of Texas, it’s important for it to be a statewide policy,” Callaghan said. “Certainly in those areas that choose to enact some sort of shelter in place policy, you’re going to see some effect, but we don’t know if it’s going to be a smaller effect than if the entire state had chosen to do something.”

See here for the background. It’s not actually clear that they want to protect public health, since everyone who knows anything about public health and epidemiology is practically shouting from the rooftops that these shutdowns are necessary and we risk having literally millions of people die without them. Indeed, rightwing magazines are touting the virtues of deliberately spreading coronavirus, in a ridiculous and dangerous belief that it’s preferable to social distancing. I suspect there’s a certain amount of cognitive dissonance going on, since the one thing that can mitigate the economic impact of the stay-at-home orders is massive government action to put money in people’s pockets to replace the income they’d be losing, and that would seem to be the thing that Dan Patrick fears more than his own death. It’s clear that they’re taking their direction from Donald Trump, because that’s what they do these days and Trump is getting tired of the whole pandemic thing. It will be interesting to see if actual elected Republicans turn on Greg Abbott if he however reluctantly orders a statewide shutdown. In the meantime, I don’t know what there is to say other than there’s one way to get through this without a lot of people dying, and what these Republicans are agitating about is not it.

B-Cycle’s future

There’s some trouble in San Antonio.

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

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

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

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

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

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

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

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

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

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

The plan would also add 600 bikes.

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

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

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

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

Fixing pipes needs to be part of the state water plan

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

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

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

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

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

[…]

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

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

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

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

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

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

It’s not so easy being green

For cities, anyway, at this time.

Easy for him, at least

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

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

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

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

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

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

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

Texas’ unemployment rate spikes

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

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

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

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

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

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

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

Subsidies for jobs

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

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

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

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

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

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

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

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

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

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

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

Federal education funds officially on their way

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

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

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

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

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

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

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

Doggett Amendment repealed as part of budget-shutdown deal

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

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

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

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

San Antonio bike share

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

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

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

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

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

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

[…]

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

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

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

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

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

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

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

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

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

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

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

House repeals Doggett Amendment

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

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

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

[…]

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

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

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

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

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

The balanced budget fantasy

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

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

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

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

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

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

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

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

The national folks notice Texas’ budget situation

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

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

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

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

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

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

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

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

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

Krugman on the Texas budget deficit

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

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

[…]

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

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

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

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

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

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

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

You’re gonna miss it when it’s gone

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

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

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

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

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

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

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

Branch makes the case for stimulus spending

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

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

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

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

[…]

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

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

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

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

The deficit debacle

Think things are bad now? Just you wait.

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

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

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

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

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

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

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

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

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

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

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

Privately funded high speed rail?

From Houston Tomorrow:

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

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

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

Rick Perry loves the stimulus

He just hates to admit it.

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

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

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

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

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

Sometimes the headline tells you all you need to know

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

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

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

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

Congress wants education money spent on education

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

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

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

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

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

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

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

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

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

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

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

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

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Texas 20/20 on the budget

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

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

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

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

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

How to really put the unemployed to work

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

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

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

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

[…]

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

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

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

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

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

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

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

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

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

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

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

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