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July 31st, 2014:

One more week till vehicles for hire

You didn’t expect Council to vote on it so quickly, did you? They’ll get to it next week.

Uber

The proposed changes would place specific requirements on the independent drivers and the technology companies, which connect drivers willing to ferry people around with people looking for a ride. The companies must acquire permits to operate in the city and must carry $1 million in commercial liability insurance on its drivers. The drivers and the vehicles they use would face their own safety and inspection standards.

Local cab and limo companies have fought the proposed reforms and remain opposed.

If the council approves the changes, Uber officials have said the firm could operate its existing Uber X service, as well as Uber Black, a private car service that teams the company with existing local limo firms.

Lyft’s future in Houston is less certain. A spokeswoman said the company is unwilling to use the driver background check system proposed by the city, which includes fingerprinting, believing its own procedure is better.

Lyft

Lyft representatives circulated amendments to the proposal related to background checks this week, but no council member presented them on Wednesday. The amendments still could be put forth next week.

In discussing the measure before delaying the vote, council members focused largely on what have been key talking points for the cab industry throughout the debate: the new firms’ insurance coverage and their ability to accommodate those with disabilities, particularly those in wheelchairs.

“I’m not satisfied with what has been presented so far, and we need to make sure we have this covered properly with regard to people with disabilities,” said Councilman Robert Gallegos, who noted his brother is in a wheelchair.

Gallegos and Councilman Dave Martin both mentioned that the council last week passed an equal rights ordinance prohibiting discrimination against more than a dozen protected groups, including those with disabilities, and should be consistent.

Can’t say I’m surprised. I don’t want to read too much into the quotes from Council members in this story, since they can certainly get their questions answered and concerns addressed between now and next Wednesday, but I continue to wonder what the whip count is for this ordinance. We know CM Costello is in favor, and I daresay we can add Mayor Parker and CM Gonzalez to his side. After that, I have no idea. I don’t know that there are any clear-cut No votes either, but I’m sure there are a few. My point is that it’s rare for an issue to be both high-profile and contentious without really knowing much about who stands where. Everyone had a pretty good idea of how the vote on HERO was going to go, for example. Unless we see some public statements between now and next week, this one could go either way and I won’t be too surprised. Texas Leftist and PDiddie have more.

Repealing the revenue cap is only part of the answer

Repealing the dumb revenue cap charter amendment from 2004 won’t solve the impending fiscal problems by itself. It’s still a good idea to repeal it.

Mayor Annise Parker

Mayor Annise Parker

With an estimated $144 million budget shortfall looming next summer, the city’s finance director delivered a harsh message Tuesday: even lifting a voter-imposed revenue cap will not save the day.

Instead, city officials will have to cobble together a package of contentious reforms, including possible service cuts, layoffs and new revenue sources, to close a budget gap that could swell to more than $200 million by fiscal year 2018 if nothing is done. Though the city’s revenue cap is among the problems facing the budget, removing or reducing that cap would not solve the city’s spiking pension costs and debt obligations.

Surging property tax appraisals are expected to run the city into the voter-imposed revenue cap next summer, forcing a cut in the property tax rate. But projections put the revenue lost to the cap at just 12 percent, or $17 million, of the deficit next fiscal year, which begins July 1, 2015.

Changing or modifying the cap, which would require going to the voters, may be part of the city’s solution. But budget chief Kelly Dowe warned the budget and fiscal affairs committee that it can’t be the whole solution.

“There’s no silver bullet for bridging these gaps going into the future,” Dowe said.

So city officials are left with a long list of possible fixes, from service cuts to a garbage collection fee to a shift in health care costs to ambitious pension reforms.

See here, here, and here for the background. I never expected eliminating the revenue cap to eliminate the short-term fiscal problems the city faces, but the point is that having the cap in place makes the hole deeper than it needs to be. The last thing in the world anyone would suggest at a time like this would be to cut the property tax rate and thus reduce the funds available to the city to meet its obligations, but that’s exactly what the revenue cap would do. It forces a priority on the city at a time when there are many other things that should come before it. It’s stupid and short-sighted, and that’s why I have always opposed it.

Another look at Perry’s slush fund

Like everything with Rick Perry, there’s less to it than meets the eye.

Corndogs make bad news go down easier

Even corndogs don’t taste better than corporate subsidies

Texas Gov. Rick Perry has distributed $205 million in taxpayer money to scores of technology startups using a pet program designed to bring high-paying jobs and innovation to the nation’s second most-populous state.

But a closer look at the Texas Emerging Technology Fund, one of Perry’s signature initiatives in his 14 years as governor, reveals that some of the businesses that received money are not all they seem. One actually operates in California. Some have stagnated trying to find more capital. Others have listed out-of-state employees and short-term hires as being among the jobs they created.

A few have forfeited their right to do business in Texas by not filing tax reports.

An Associated Press review of the program found that some of the same companies credited with creating a share of the program’s 1,600 new jobs have actually stalled and in some cases blamed Perry’s office for their struggles.

[…]

The tech fund works like this: In exchange for money, startups give the state an equity position in their businesses. If the companies are successful, the state recoups its investment or even makes a profit. If they go bankrupt or shut down – and at least 16 have so far – the dollars are lost.

Those failures represent only a fraction of the fund’s full portfolio of more than 130 companies, some of which are clearly thriving. Venture capital funds are risky by nature and often endure losses. About 1 in 4 venture-backed startups fail, according to industry groups. Some studies put the rate of flops much higher.

But questionable job-creation figures and undisclosed business struggles in the fund’s annual report heap fresh doubts about transparency onto the fund, which has long been criticized as too opaque, including in a scathing 2011 report by state auditors.

Julia Sass Rubin, a venture capital expert at Rutgers University who studies economic development, said the lack of transparency runs counter to the private sector, where investors get more detailed information about performance.

“If this were a traditional venture capital fund, this would never fly,” Rubin said.

Funny how the private sector is so much better at doing everything, except giving money to the private sector. The lack of transparency with the Emerging Technology Fund, as well as the Texas Enterprise Fund, is a feature, not a bug.

Targazyme Inc. is one example of a problematic startup. On paper, the San Antonio-based startup is developing stem-cell breakthroughs with 14 employees and the help of $1.25 million in state funds. But the rural address listed for its Texas headquarters is actually a weedy horse pasture. During a recent visit by a reporter, the ex-husband of the CEO was warning his guest to watch for rattlesnakes.

Targazyme founder Lynnet Koh said her company is moving forward but that she left Texas because Perry’s office withheld additional funding, a complaint echoed by other recipients. She now lives in California and said many of the jobs created by the company were short-term hires outside Texas, none of which is mentioned in the fund’s 2013 annual report.

“If you ask me on a scale of 1-to-10 satisfaction with the state, I give it a zero,” Koh said. “Never, ever. Not for any money in the world would I do business with ETF.”

So I guess these are some jobs Rick Perry didn’t manage to steal from California, despite his best efforts. It’s like noting makes any sense anymore. Scott Braddock has more on a tangential subject.

Texas blog roundup for the week of July 28

The Texas Progressive Alliance prioritizes due process over expediency as it brings you this week’s roundup.

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