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March 24th, 2011:

Voter ID passes the House

As expected. There was a long and often contentious debate, but when you have a 2/3 majority as the Republicans currently do, you usually get what you want.

Gov. Rick Perry declared the voter ID issue an emergency issue, which also ranks as a high priority for the Texas Republican Party. The House tentatively approved the measure, 101-48. Republicans control the chamber, 101-49.

Because Republicans defeated amendment after amendment intended to make it easier for voters to cast ballots, Democrats suggested Republicans were primarily interested in suppressing votes of minority Texans – who usually lean Democratic.

“We fear it’s about voter suppression,” said Rep. Rafael Anchia, D-Dallas.

“It’s all about shaping the voter pool to benefit the Republican Party,” Rep. Joaquin Castro said.

Legislators spent nearly 12 hours considering some 60 amendments.

Republicans defeated an amendment that would have allowed college and high school students to use their government-issued ID cards for voting. Democrats also lost their bid to extend photo identification to same-day registration, which would allow eligible voters to simultaneously register and cast a ballot if they produced proper identification.

So you can’t use your government-issued student ID card to vote, but you can use your government-issued concealed carry license to vote. Go figure.

This isn’t quite the end in the Lege for this. As with the sonogram bill, the House and Senate versions differ – among other things, the House stripped out the Senate’s exemption for voters over the age of 70 on an amendment by Republican Rep. Dennis Bonnen – so it will have to go to a conference committee to iron it all out. Unlike the sonogram bill, the resulting legislation doesn’t need to be acceptable to any Senate Democrats, as there is no two-thirds rule for voter ID bills. I don’t expect there to be any serious complications.

As I said before, this will all ultimately be decided in the courts. The Texas Independent notes that a current case may have an effect on that, and gives some general background.

Some observers, including an Indiana law expert, believe that Pres. Barack Obama’s DOJ might be inclined to act differently than Bush’s DOJ, especially given the strictness of Texas’ legislation. Read the Texas Independent for previous reporting.

If the voter ID bill becomes law, then Texas would also have the option of bypassing the DOJ in favor of a three-judge panel in D.C. Whether the judicial panel would be more favorable than the DOJ to Texas’ law is up for speculation.

Saying that the DOJ “really should have denied preclearance” to the Georgia law — considering that DOJ staffers’ recommendation to disapprove the law was overruled by White House appointees — election law professor Daniel P. Tokaji said, “I think there’s a very good chance Texas will be denied preclearance if [voter photo ID legislation] becomes law.”

Tokaji is a professor of law at The Ohio State University’s Moritz College of Law. He recently wrote a commentary opposing voter photo ID legislation being considered in Ohio.

The U.S. Supreme Court ruled in support of Indiana’s voter photo ID law largely because opponents were unable to produce sufficient proof of voter disenfranchisement. However, as Tokaji points out, those guidelines are different for a Section 5 preclearance decision.

“In a Section 5 challenge, the covered entity actually has the burden of proving the measure will not have a retrogressive impact on minorities,” he said.

“I think there’s a very strong argument that it would violate Section 5,” Tokaji said.

Clearly, there’s much about this that’s still up in the air, and we may not know the final outcome for months, if not years. Until then, ponder this:

Rep. Jose Menendez, D-San Antonio, wanted to give counties an exemption from complying with the legislation if it would cost them money to implement. Nearly 90 lawmakers have sponsored a resolution this session opposing unfunded mandates for local communities.

Menendez lost, 98-48.

Some unfunded mandates are better than others, obviously. Greg, EoW, and the Trib has more, and a statement from Democratic Caucus chair Rep. Jessica Farrar is beneath the fold.

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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.

It’s way past time to regulate payday lenders

From the Observer:

As an industry, when you’ve got Tom Craddick, consumer groups, the Midland County District Attorney and Bible-quoting Baptists arrayed against you, most likely you’re facing a serious come-to-Jesus moment. Today, a House committee heard hours of impassioned testimony in favor of legislation that would curb Texas’ Wild West payday and auto-title lending business. As Melissa del Bosque has documented, payday lenders in Texas are virtually unregulated and frequently lock consumers into a cycle of debt. Craddick’s bill, along with three other identical bills, would close a loopholethat allows payday lenders to register as consumer credit organizations (CSOs) and escape regulation.

It was rather incredible to watch former Speaker Tom Craddick, who doesn’t exactly have a reputation as an advocate for the working poor, take the payday lenders to the woodshed. “No longer do I think the Legislature can stand back and watch these businesses take advantage of people in need,” Craddick said today. The impact of rates that can amount to 500 percent APR is “overwhelming – actually it’s awful,” he said.

Under the proposed legislation, payday and auto-title lenders could no longer operate as consumer credit organizations, but instead would be subject to the same laws and regulations as other lenders. A cap of 135 percent – still far above the 36 percent limit imposed by many states – would be imposed on the short-term loans offered by payday lenders.

Craddick’s bill is HB410, and it has a bipartisan plethora of co-authors. Other bills on the subject are HB 656 (Farias), HB 661 (Rodriguez), HB 1323 (Johnson), HB 2594 (Truitt), and HB 2592 (Truitt).

Among the consumer advocates and faith leaders, consensus seemed to be that the best approach would be imposing rate caps, closing the CSO loophole and imposing existing law on the lenders. That’s Craddick’s approach. However, the payday lender industry is basically telling legislators that they will go out of business if that happens and desperate consumers will have nowhere to go for easy credit.

The Craddick approach would “dramatically change the business model as we know it in a detrimental way,” said Rob Norcross, a lobbyist for the Consumer Service Alliance of Texas, an industry group.

Asked today if they could survive with ‘just’ 135 percent APR, Norcross said, “The answer is no. … Those rates aren’t sustainable.”

Cry me a river, dude. If your business isn’t sustainable at that APR level, you don’t have a viable business model and deserve to be made extinct. If that’s what happens, it’s a feature, not a bug.

Basically, payday lenders need to be treated like any other loan-making financial institution. As the group Texas Faith for Fair Lending notes, the problem is that’s not how they operate now.

payday and auto title lenders do not operate as lenders governed by the Texas Finance code as one might expect. Instead, they have found a loophole in a law called the Credit Services Organizations (CSO) Act that sets no limits on rates and fees they charge borrowers.

The CSO statute was enacted in 1997 and is designed to govern how credit repair services can help those repair bad credit. In this statute CSOs are given is the authority to “obtain an extension of consumer credit for a consumer.” The intent is clearly to enable CSOs to help Texans with bad credit build up a positive lending history in order to increase credit scores. Instead, over 98% of registered CSOs in this state are payday and auto title lenders that do anything but help people repair credit.

So, in practice, payday and auto title lenders are merely brokers, or arrangers of credit. They partner with banks or other large lenders who charge an interest rate of below the 10% APR constitutional limit, while the payday lender, registered as a CSO, charges an exorbitant fee. This diagram better illustrates the relationship –

The true lender, the financial institution, charges a small interest rate and makes a little money from the short loan. The CSO charges a high fee to arrange, collect and guarantee the loan. This is typically around $20 per $100 borrowed but there is no legal limit on these fees. The borrower never interacts with the actual lender.

They add nothing of value to the equation but reap huge profits by virtue of the loophole they squeeze through. That loophole needs to be closed. You can see videos of the TFFL press conference here, and more about TFFL, which is a Texas Impact project, here. If you’re a churchgoer, the odds are good that your denomination is involved in this effort. Please check it out and make your voice heard as well.

What about the jobs?

With all of the public sector job cuts coming, will the private sector pick up the slack? This Statesman story paints a picture that I think is a tad bit too optimistic.

Government employment, which includes local school districts and higher education, made up 22 percent of total nonagricultural jobs in the Austin area in 2010, according to the Texas Workforce Commission.

In the past five years, government employment has grown by 14 percent, helping offset losses in other areas such as manufacturing, which fell by 17 percent in the same period.

As the state capital, Austin has always had “this terrific stabilizing factor” of public sector employment, said Jon Hockenyos, president of TXP Inc., a consulting firm specializing in economic analysis and public policy.

But Texas’ projected state revenue shortfall of as much as $23 billion means deep cuts in public sector jobs.

Local school districts already are preparing to cut positions, including more than 1,000 in the Austin district, hundreds more in Round Rock and more than 140 in the Georgetown district.

The Texas Education Agency already has eliminated more than 100 jobs, and other agencies also have trimmed positions.

The University of Texas, one of the region’s largest employers, also has cut jobs.

Those losses mean that private-sector employers will have to pick up the slack to keep the area’s economy going.

It’s a tall order: Central Texas had 770,500 jobs in 2010, 1.5 percent more than in 2009. But the region still is short of its peak of 775,800 jobs in 2008.

And the unemployment rate hovered around 7 percent all of last year.

Last year, preliminary estimates from the Texas Workforce Commission indicated a higher job growth rate. The revised figures — part of the commission’s annual process, using more specific data — surprised some economists but didn’t alter their overall assessment of the Austin economy.

The story is filled with mostly anecdotal evidence of growth in small businesses. Which I’m sure is happening, and which I hope is going to exceed everyone’s expectations. But this story focuses exclusively on the Central Texas region, which will have a lot more of those opportunities than, say, rural areas, where job losses in school districts are unlikely to be offset. It also doesn’t take into account losses in county and municipal employment, which will surely add a lot more to the total. It’s for all those reasons that I thought the initial projections of job growth by the TWC were too blue-sky. I’d love to be wrong about this, but I’m still feeling pretty bearish overall.

Should we do away with school police forces?

Grits makes the case.

If public school budgets will be radically cut in Texas, a prospect which for the moment appears all but inevitable, which employees should be eliminated first? Judging from the ongoing debate, maybe campus cops. Jason Embry at the Austin Statesman describes some of the debates surrounding school budgets thusly:

One of the most important dividing lines in the discussion about the state’s budget crisis separates those who think Texas schools need more money and those who think schools just need to make better spending decisions.

Those in the second group have some powerful numbers on their side. In a December report, Comptroller Susan Combs found that per-student spending increased 63 percent over the previous decade. That growth rate was nearly twice as fast as inflation, as measured by the Consumer Price Index, and it points to a Texas school system that isn’t starving for cash.

Another statistic in wide circulation these days says Texas school districts employ about as many nonteachers as teachers. This has led many to suggest that, even as lawmakers consider billions of dollars’ worth of funding cuts to schools, local education officials can balance the books without shedding teachers.

I’ve not seen hard data, but based on anecdotal accounts I’d suggest that the growing number and size of school-based police forces likely account for a big chunk of growth among nonteacher school employees in the last decade. Shouldn’t they be among the first to get the budget axe? They’re the only sizable class of school employees we know for sure they can do without because schools did so for most of their history in Texas and elsewhere. The phenomenon of campus-based police departments is something that’s really only arisen en masse in the last 20 or so years in Texas public schools.

He notes that Sen. John Whitmire has advocated greatly reducing the amount of tickets that school cops write, which would fit well with this idea. For what it’s worth, I don’t think there’s a whole lot of savings in this – as I reported before, according the HISD Trustee Anna Eastman, HISD budgets $13.5 million for its police force, of which 95% is personnel costs. That ain’t nothing – it’s 270 teachers, assuming $50K per year in salaries – but it’s less than eight percent of the optimistic-case $171 million projected shortfall. Maybe it would be more in some other ISDs, I don’t know. I think there’s merit to the idea, and not just for budgetary reasons, I’m just trying to keep perspective on it. What do you think?

On a side note, I can’t leave this subject without pointing you to Martha’s posts about why schools need more support staff, not less, and why gutting educational service centers are a bad idea. That Jason Embry article linked by Grits also gets down to it:

In 2000, 49 percent of Texas students were considered economically disadvantaged. In 2010, that number reached 59 percent. These students often need extra attention as they move through the system.

As the student population has changed, Texas has continued to pile more demands on schools, and it costs money to meet those demands. Schools began giving the Texas Assessment of Knowledge and Skills, a much tougher exam than its predecessor, in 2003, and began that year to require students in the third grade to pass the reading section of the test to advance to fourth grade. Today the test is tied to promotion in grades five and eight. In addition, students who used to graduate from Texas high schools with three credits in math and three in science now must have four credits in each. To meet these demands, schools have spent more on student remediation, teacher training and the renovation of science labs.

Schools are preparing to give a new test next year, the State of Texas Assessment of Academic Readiness, which the Texas Education Agency has promised “will be significantly more rigorous than previous tests.” And let’s not forget that, led by our last governor, the federal government created an additional set of accountability measures for schools to meet during the past 10 years.

The increasing demands on students have put more demands on teachers and principals, particularly considering the state’s heavy emphasis on standardized testing to judge schools.

Districts across the state have therefore decided to hire instructional coordinators, curriculum specialists and others to give students extra attention and to help teachers make sure their lessons help students meet the escalating expectations.

In other words, yes, schools spend more than they used to. But the people of Texas also ask their schools to do more than they used to.

Funny how that latter part always seems to get overlooked by the “schools have too many administrators” crowd. In addition, as BOR notes, the cost of administering TAKS tests in Texas increased tenfold from 1999 to 2009. There’s been way too much talk in this debate about what schools do or don’t need by people who probably haven’t stepped foot in a public school in forty years, and it’s drowning out those who are there every day trying their best to make it all work. Martha’s a fine example of the latter, so please go see what she has to say.

Texas blog roundup for the week of March 21

The Texas Progressive Alliance’s brackets are still in good shape as it brings you this week’s blog roundup.

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