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Glenn Hegar

Precinct analysis: Inside and out of the city

Most years we don’t get the data to differentiate between votes cast by residents of Houston and votes cast by Harris County non-Houston residents. There needs to be a citywide referendum of the ballot in order to get at this data. Fortunately, we had that this year, so we can take a look at how the races of interest shaped up. The usual caveat applies here, which is that this data is not exact. There are multiple precincts that are partially in Houston and partially not in Houston. Many of them have a tiny number of Houston-specific votes in them, with a much larger contingent of non-Houston votes. Counting these as Houston precincts means you wind up with a lot more total votes in Houston than were cast in the referenda elections, and gives you a distorted picture of the candidate percentages. I filter out precincts with ten or fewer votes cast in the Houston proposition elections, which is arbitrary and still yields more total votes than in the prop races themselves, but it’s close enough for these purposes. So with all that preamble, here’s the data:


Candidates    Houston   Not Hou    Hou%    Not%
===============================================
Beto          317,736   277,917  63.43%  46.22%
Abbott        175,533   314,728  35.04%  52.34%

Collier       312,803   273,337  62.81%  45.64%
Patrick       171,319   312,803  34.40%  51.84%

Garza         312,022   272,513  62.83%  45.61%
Paxton        170,642   309,499  34.36%  51.80%

Dudding       294,958   255,993  59.69%  43.03%
Hegar         185,671   324,329  37.58%  54.52%

Kleberg       296,878   257,563  60.34%  43.45%
Buckingham    184,006   323,967  37.41%  54.65%

Hays          308,304   269,169  62.61%  45.36%
Miller        184,139   324,228  37.39%  54.64%

Warford       290,364   251,323  59.02%  42.41%
Christian     181,355   319,465  36.86%  53.91%

To be clear about what this data shows, Beto won the city of Houston by a margin of 317,736 to 175,533, or 63.43% to 35.04%, while Greg Abbott carried the non-Houston parts of the county 314,728 to 277,917. This is about 493K ballots cast for those two candidates, which doesn’t count third party and write-in candidates or undervotes; I didn’t tally them all up but we’d be at around 510K total ballots defined as being “Houston”. In actuality, there were 486K total ballots cast, including undervotes, in the city prop races. Like I said, this is plenty good enough for these purposes.

As noted, I don’t have a whole lot of data for this from previous elections, but what I do have can be found in these posts:

2008
2012
2018

There were city propositions in 2010, for red light cameras and ReNew Houston, but I didn’t do the same city-versus-not-city comparisons that year, almost certainly because 2010 was such a miserable year and I just didn’t want to spend any more time thinking about it than I had to.

Looking back at those earlier years, Beto fell short of the top performers in Houston, which in 2008 and 2012 was Adrian Garcia and which in 2018 was himself, but he did better in non-Houston Harris County. That’s consistent with what I’ve said before about how Democrats have overall grown their vote in the former strong Republican areas, while falling short on turnout – this year, at least – in the strong Democratic areas. Note how even the lowest scorers this year exceeded Obama’s performance in non-Houston by three or four points in 2008 and four or five points in 2012, while doing about as well in Houston. As I’ve said, Harris County is more Democratic now. This is another way of illustrating that.

Here’s the same breakdown for the countywide races:


Candidates    Houston   Not Hou    Hou%    Not%
===============================================
Hidalgo       294,968   257,935  59.79%  43.39%
Mealer        198,286   336,434  40.19%  56.59%

Burgess       290,267   255,860  60.14%  43.81%
Daniel        192,368   328,119  39.86%  56.19%

Hudspeth      293,030   256,624  60.84%  44.00%
Stanart       188,573   326,633  39.16%  56.00%

Wyatt         293,352   256,862  60.86%  44.00%
Scott         188,623   326,849  39.14%  56.00%

No third party candidates here, just a write-in who got a handful of votes for County Judge, so the percentages mostly add up to 100. More or less the same story here, with the distinction between Houston and not-Houston being smaller than in prior years. There won’t be any citywide propositions in 2024, not if we have them this coming November, but I’ll try to use the precinct data I have here to analyze that election. In what should be a stronger Democratic year, I’ll be very interested to see how things change. As always, let me know if you have any questions.

Precinct analysis: The not-as-good statewide races

PREVIOUSLY
Beto versus Abbott
Beto versus the spread
Hidalgo versus Mealer
Better statewide races

The difference between these statewide races and the ones we have already looked at, including the Governor’s race, is very simple: These Republican candidates did better than the ones we have seen, and the Democrats did less well. The Dems in the first four races we analyzed all topped 53% of the vote in Harris County. The high score with these three is Jay Kleberg’s 51.11%. Luke Warford, who had a Green opponent as well as a Libertarian opponent, fell short of a majority in Harris County, getting 49.95% for a plurality. Let’s see how this breaks down.

Comptroller


Dist    Hegar  Dudding     Lib
==============================
HD126  36,931   21,555   1,269
HD127  40,053   24,746   1,441
HD128  32,350   12,795   1,014
HD129  38,119   24,936   1,559
HD130  46,320   18,701   1,229
HD131   6,114   24,275     906
HD132  36,340   23,387   1,259
HD133  35,123   24,187   1,043
HD134  32,915   46,611   1,330
HD135  17,107   22,475   1,135
HD137   8,263   12,428     646
HD138  32,580   23,012   1,269
HD139  12,325   30,301   1,174
HD140   5,761   12,183   1,066
HD141   4,586   20,094     815
HD142   8,957   24,548     997
HD143   8,538   14,611   1,218
HD144  11,734   13,368   1,167
HD145  13,855   29,642   1,839
HD146   9,031   32,118     953
HD147   9,676   35,412   1,338
HD148  16,203   19,567   1,251
HD149  12,278   18,681     882
HD150  34,841   21,318   1,294
							
CC1    72,584  195,779   6,893
CC2    97,146   99,729   7,605
CC3   225,304  134,394   7,641
CC4   114,966  121,049   5,955
							
JP1    65,832  117,292   5,140
JP2    22,125   28,127   2,055
JP3    35,715   40,576   2,117
JP4   173,366  120,182   6,806
JP5   146,733  136,478   6,730
JP6     5,130   16,223   1,342
JP7    12,325   64,437   1,904
JP8    48,774   27,636   2,000

Dist   Hegar% Dudding%    Lib%
==============================
HD126  61.80%   36.07%   2.12%
HD127  60.47%   37.36%   2.18%
HD128  70.08%   27.72%   2.20%
HD129  58.99%   38.59%   2.41%
HD130  69.92%   28.23%   1.86%
HD131  19.54%   77.57%   2.90%
HD132  59.59%   38.35%   2.06%
HD133  58.20%   40.08%   1.73%
HD134  40.71%   57.65%   1.64%
HD135  42.01%   55.20%   2.79%
HD137  38.73%   58.25%   3.03%
HD138  57.30%   40.47%   2.23%
HD139  28.14%   69.18%   2.68%
HD140  30.31%   64.09%   5.61%
HD141  17.99%   78.82%   3.20%
HD142  25.96%   71.15%   2.89%
HD143  35.04%   59.96%   5.00%
HD144  44.67%   50.89%   4.44%
HD145  30.56%   65.38%   4.06%
HD146  21.45%   76.29%   2.26%
HD147  20.84%   76.28%   2.88%
HD148  43.77%   52.85%   3.38%
HD149  38.56%   58.67%   2.77%
HD150  60.64%   37.11%   2.25%
			
CC1    26.37%   71.13%   2.50%
CC2    47.51%   48.77%   3.72%
CC3    61.33%   36.59%   2.08%
CC4    47.51%   50.03%   2.46%
			
JP1    34.97%   62.30%   2.73%
JP2    42.30%   53.77%   3.93%
JP3    45.55%   51.75%   2.70%
JP4    57.72%   40.01%   2.27%
JP5    50.61%   47.07%   2.32%
JP6    22.60%   71.48%   5.91%
JP7    15.67%   81.91%   2.42%
JP8    62.20%   35.25%   2.55%

Land Commissioner


Dist     Buck  Kleberg     Grn   W-I
====================================
HD126  36,849   21,629   1,070     1
HD127  40,131   24,789   1,092     0
HD128  32,446   12,873     706     9
HD129  38,169   25,015   1,149     3
HD130  46,145   18,886     963     5
HD131   6,081   24,219     829     1
HD132  36,155   23,542   1,053     2
HD133  34,565   24,654     915     2
HD134  31,902   47,475   1,190     6
HD135  17,116   22,492     963     1
HD137   8,141   12,532     562     2
HD138  32,324   23,310     968     2
HD139  12,258   30,317   1,025     1
HD140   5,859   12,433     613     3
HD141   4,635   20,039     691     3
HD142   8,984   24,532     839     4
HD143   8,646   14,845     732     5
HD144  11,869   13,567     682     4
HD145  13,820   30,044   1,276     3
HD146   8,914   32,076     990     0
HD147   9,684   35,282   1,243     1
HD148  16,142   19,762     959     2
HD149  12,314   18,717     714     0
HD150  34,884   21,411   1,016     3
								
CC1    71,640  196,243   6,241    17
CC2    97,762  100,816   4,930    24
CC3   224,673  135,288   6,151    14
CC4   113,958  122,094   4,918     8
								
JP1    64,874  118,648   3,973    11
JP2    22,268   28,432   1,306     7
JP3    35,847   40,620   1,612     8
JP4   173,174  120,696   5,428    13
JP5   145,487  137,664   5,652    10
JP6     5,253   16,428     881     4
JP7    12,214   64,137   2,011     2
JP8    48,916   27,816   1,377     8

Dist    Buck% Kleberg%    Grn%  W-I%
====================================
HD126  61.88%   36.32%   1.80% 0.00%
HD127  60.79%   37.55%   1.65% 0.00%
HD128  70.48%   27.96%   1.53% 0.02%
HD129  59.33%   38.88%   1.79% 0.00%
HD130  69.92%   28.62%   1.46% 0.01%
HD131  19.53%   77.80%   2.66% 0.00%
HD132  59.51%   38.75%   1.73% 0.00%
HD133  57.48%   41.00%   1.52% 0.00%
HD134  39.59%   58.92%   1.48% 0.01%
HD135  42.19%   55.44%   2.37% 0.00%
HD137  38.33%   59.01%   2.65% 0.01%
HD138  57.11%   41.18%   1.71% 0.00%
HD139  28.11%   69.53%   2.35% 0.00%
HD140  30.99%   65.76%   3.24% 0.02%
HD141  18.27%   78.99%   2.72% 0.01%
HD142  26.15%   71.40%   2.44% 0.01%
HD143  35.69%   61.27%   3.02% 0.02%
HD144  45.44%   51.94%   2.61% 0.02%
HD145  30.61%   66.55%   2.83% 0.01%
HD146  21.23%   76.41%   2.36% 0.00%
HD147  20.96%   76.35%   2.69% 0.00%
HD148  43.79%   53.61%   2.60% 0.01%
HD149  38.79%   58.96%   2.25% 0.00%
HD150  60.86%   37.36%   1.77% 0.01%
				
CC1    26.13%   71.58%   2.28% 0.01%
CC2    48.03%   49.53%   2.42% 0.01%
CC3    61.36%   36.95%   1.68% 0.00%
CC4    47.29%   50.67%   2.04% 0.00%
				
JP1    34.60%   63.28%   2.12% 0.01%
JP2    42.81%   54.66%   2.51% 0.01%
JP3    45.91%   52.02%   2.06% 0.01%
JP4    57.86%   40.32%   1.81% 0.00%
JP5    50.37%   47.67%   1.96% 0.00%
JP6    23.28%   72.80%   3.90% 0.02%
JP7    15.59%   81.84%   2.57% 0.00%
JP8    62.62%   35.61%   1.76% 0.01%

Railroad Commissioner


Dist    Chris  Warford     Lib     Grn
======================================
HD126  36,287   21,192   1,384     648
HD127  39,533   24,297   1,535     651
HD128  32,057   12,551     995     399
HD129  37,473   24,455   1,607     766
HD130  45,640   18,396   1,369     597
HD131   5,986   23,853     942     400
HD132  35,684   22,981   1,395     627
HD133  34,391   23,900   1,215     616
HD134  31,677   46,420   1,533     844
HD135  16,804   21,988   1,227     559
HD137   8,017   12,261     612     350
HD138  31,928   22,708   1,350     641
HD139  12,044   29,784   1,169     555
HD140   5,685   11,976     991     277
HD141   4,527   19,765     784     332
HD142   8,851   24,073   1,025     411
HD143   8,457   14,290   1,159     373
HD144  11,679   13,015   1,125     328
HD145  13,535   29,065   1,855     677
HD146   8,716   31,720     927     581
HD147   9,406   34,678   1,363     730
HD148  15,938   19,168   1,217     514
HD149  12,101   18,269     925     429
HD150  34,404   20,882   1,366     623
								
CC1   70,449   192,875   7,107   3,563
CC2   95,951    97,604   7,402   2,627
CC3  221,887   132,181   8,202   3,726
CC4  112,533   119,027   6,359   3,012
								
JP1   63,938   115,819   5,264   2,359
JP2   21,846    27,531   2,021     648
JP3   35,348    39,739   2,132     865
JP4  170,806   118,025   7,219   3,145
JP5  143,838   134,221   7,231   3,484
JP6    5,019    15,850   1,277     447
JP7   11,907    63,400   1,926   1,109
JP8   48,118    27,102   2,000     871

Dist   Chris% Warford%    Lib%    Grn%
======================================
HD126  60.98%   35.61%   2.33%   1.09%
HD127  59.88%   36.80%   2.33%   0.99%
HD128  69.69%   27.28%   2.16%   0.87%
HD129  58.28%   38.03%   2.50%   1.19%
HD130  69.15%   27.87%   2.07%   0.90%
HD131  19.20%   76.50%   3.02%   1.28%
HD132  58.80%   37.87%   2.30%   1.03%
HD133  57.20%   39.75%   2.02%   1.02%
HD134  39.36%   57.68%   1.90%   1.05%
HD135  41.41%   54.19%   3.02%   1.38%
HD137  37.74%   57.73%   2.88%   1.65%
HD138  56.38%   40.10%   2.38%   1.13%
HD139  27.65%   68.39%   2.68%   1.27%
HD140  30.03%   63.27%   5.24%   1.46%
HD141  17.82%   77.79%   3.09%   1.31%
HD142  25.76%   70.06%   2.98%   1.20%
HD143  34.83%   58.86%   4.77%   1.54%
HD144  44.67%   49.78%   4.30%   1.25%
HD145  29.99%   64.40%   4.11%   1.50%
HD146  20.78%   75.62%   2.21%   1.39%
HD147  20.37%   75.10%   2.95%   1.58%
HD148  43.27%   52.03%   3.30%   1.40%
HD149  38.14%   57.59%   2.92%   1.35%
HD150  60.07%   36.46%   2.38%   1.09%
				
CC1    25.71%   70.39%   2.59%   1.30%
CC2    47.13%   47.94%   3.64%   1.29%
CC3    60.63%   36.12%   2.24%   1.02%
CC4    46.71%   49.40%   2.64%   1.25%
				
JP1    34.12%   61.81%   2.81%   1.26%
JP2    41.97%   52.90%   3.88%   1.25%
JP3    45.27%   50.89%   2.73%   1.11%
JP4    57.09%   39.45%   2.41%   1.05%
JP5    49.81%   46.48%   2.50%   1.21%
JP6    22.21%   70.15%   5.65%   1.98%
JP7    15.20%   80.93%   2.46%   1.42%
JP8    61.62%   34.71%   2.56%   1.12%

Not too surprisingly, what we see in all three of these races is…more votes for the Republican candidate and fewer votes for the Democrat across the precincts, with a couple of exceptions here and there. The effect was generally stronger in the Republican districts than in the Democratic ones, with HDs 133 and 134 being the most notable.

The total number of votes in these elections is comparable – the number declines gently as you go down the ballot, but more undervoting does not explain the shifts in percentages. In a few cases you can see a greater number of third-party votes, which can explain a part of a Democratic vote decline, but again the overall effect is too small to be generally explanatory. The only logical conclusion is that across the board, some number of people who votes for Beto and Collier and Garza and Hays also voted for Glenn Hegar and Dawn Buckingham and Wayne Christian.

The question then is why. To me, the most likely explanation is that the most visible Republicans, the ones most likely to loudly and visibly stake out unpopular and divisive positions – and yes, this means “unpopular”, or at least “less popular” with Republicans, with opposing marijuana reform and expanded gambling and rape/incest exceptions for abortion – are losing votes that their lower profile/less visibly extreme colleagues are not losing.

This makes sense to me, but as it agrees with my priors, I’d like to check it. I’m pretty sure I’ve expressed this sentiment before, but if I had the power and the funds I’d order a study, to try to identify these voters and ask them why they did what they did. Not out of disbelief or derision but curiosity, to get a better understanding. Maybe other Democratic candidates could get them with the right message, and if they were the right candidates. Maybe they just didn’t know enough about the Dems in these races to be in a position to consider them. Maybe a strategy that attempts to maximize Democratic turnout overall – we have already discussed how Dems fell short in this election on that front – would make them less likely to cross over, even for Republicans they don’t approve of. We can speculate all week, but there’s only one way to find out. I really wish I could make that happen.

One more thing to note is that despite the lesser Democratic performance, these candidates all still carried the three Commissioner Court precincts that are now Democratic. I’ll be paying closer attention to these precincts, because this isn’t always the case going forward. In the meantime, let me know what you think.

Yes, we’re talking about Texas Senate 2024

Gromer Jeffers points out that Ted Cruz may run for both President and re-election to the Senate in 2024, which he can do under the law that was passed to allow LBJ to run for Vice President in 1960 (and Lloyd Bentsen in 1988). Among other things, that means the list of potential candidates to fill his seat is already pretty long.

Not Ted Cruz

After eight years of the current GOP statewide leadership, many Texas Republicans are anticipating a shift in the state’s power dynamic.

The moves Cruz makes in 2024 could trigger some of Texas’ most notable elected officials to run for the Senate seat he holds, as well as other offices created by a domino effect.

Democrats are also watching Cruz.

U.S. Rep. Colin Allred, D-Dallas, is a possible 2024 Senate contender whether or not Cruz seeks reelection.

So in any scenario, there could be political intrigue, which is frequently the case in situations involving Cruz.

[…]

If he changes course and doesn’t seek reelection, several Republicans have been mentioned as potential candidates to replace him. The list includes Paxton, who in November was elected to a third term, U.S. Reps. Dan Crenshaw of Houston, Pat Fallon of Sherman and Lance Gooden of Terrell. Other contenders are Texas Comptroller Glenn Hegar and Texas Sen. Dawn Buckingham of Lakeway.

Statewide leaders like Paxton and Hegar could run for Senate in 2024 without risking the seats they hold. Members of Congress are elected every two years and don’t have that luxury.

[…]

Presidential politics aside, Texas Democrats are hoping to deny Cruz another term in the Senate. In 2018 Cruz beat former U.S. Rep. Beto O’Rourke by only 2.6 percentage points. O’Rourke, who ran for president in 2020, lost a November governor’s race to Abbott.

With an O’Rourke vs. Cruz rematch unlikely, a potential candidacy by Allred, in his second term as a congressman representing North Dallas, is creating buzz among Democrats.

Allred, considered a pro-business moderate, has not sought any Democratic Party leadership post in the aftermath of House Speaker Nancy Pelosi’s decision to step down as leader. That gives him the flexibility to avoid ultra-partisan votes that would haunt him in a statewide campaign for Senate.

The question for Allred and others: Can a Democrat win a statewide race in Texas?

See here for some background, and prepare yourself to hear way too much about Ted Cruz over the next year or more. Note that Dawn Buckingham is the Land Commissioner-elect, so she’s in the same “doesn’t need to risk her seat” camp as the other statewides. As for Rep. Allred, I had recently heard some speculation about his potential candidacy in 2024. It would be a bold move, giving up a safe Congressional seat for an underdog run for Senate, but Allred is young enough that he could have a second act in politics with little difficulty. If he loses in a close race, he’d be in the same position in 2026 and 2028 as Beto was after 2018, the default frontrunner for a second bite at the apple. If it comes to that, I sure hope he has a better result on the retry. Anyway, at least now we have a possible Dem candidate, one who has already won a tough November race and who has established himself as a good fundraiser. We’ll see how it goes from there.

Endorsement watch: Dudding and Warford

The Chron endorses Janet Dudding for Comptroller.

Janet Dudding

In 2005, Janet Dudding found herself mucking out her home in Bay St. Louis-Waveland, Mississippi, after Hurricane Katrina sent a 32-foot storm surge across the town.

“The first time I cried was when the Red Cross truck came around,” she told the editorial board. “I’m supposed to be the one giving help. There I was going to get a hot meal because there is no electricity, no streetlights, no water.”

That experience — and the city’s struggle to get back on its feet financially — had a profound impact on Dudding and is among the reasons she is running for Texas comptroller as a Democrat against the Republican incumbent, Glenn Hegar.

Trained as a lawyer and formerly a state legislator known for pursuing abortion restrictions, Hegar was first elected as comptroller in 2014. In his 2018 re-election bid, this board endorsed Hegar, 51, for keeping “his head down and focused on his job” instead of pandering to primary voters. Sadly, we can’t say the same four years later. Now he appears more interested in attracting national headlines and preparing for the next stage of his political career.

We urge voters to elect Dudding, 63, an actual certified public accountant running to be the state’s accountant. She says her main objective would be holding government accountable to people, not special interests. That’s the job we want done, and she has 35 years experience running audits, administering teams and leading investigations to show she can do it.

I was thinking about that earlier endorsement as I read this. The 2018 version of Glenn Hegar had a good argument that he was a down-the-middle public servant doing his job in a normal way. The 2022 version of Hegar isn’t in the same ZIP code as that argument, and it’s not just for the more recent aggressions against Harris County, either. The Chron has some more examples of things I’d forgotten about or not been aware of in the editorial. Based on his behavior in the Legislature, none of this is surprising, but compared to Hegar’s first term as Comptroller, it really stands out. This is what happens when “doing a good job” is not an asset in your primary.

You can listen to my interview with Janet Dudding here. If you like the idea of a Comptroller who’s focused on the day-to-day Comptroller stuff and not looking for extracurricular activities to make their application for the next job more sparkly, Janet Dudding is your candidate.

The Chron also endorses Luke Warford for Railroad Commissioner.

Luke Warford

In a perfect world, the Railroad Commission’s mission statement of protecting Texas’ natural resources and promoting the oil and gas industry would not be contradictory. There’s an alternate reality in which the commission could be at the nexus of the global energy transition, laying the groundwork for emerging technologies such as hydrogen and geothermal energy while helping oil and gas producers become cleaner and safer.

That’s the vision that Democrat Luke Warford has for an agency that long has treated “regulation” of the state’s oil and gas sector as an afterthought. Warford, 33, a former Texas Democratic Party operative and energy consultant, is not running just to be another watchdog bureaucrat; he wants to fundamentally modernize an agency that is becoming as anachronistic as its name.

Warford isn’t your central-casting roughneck or wildcatter. He studied at the London School of Economics and worked at the World Bank before transitioning to consulting, where he worked with oil and gas majors as well as wind and solar clients seeking access to global energy markets. His knack for helping businesses adapt to a changing economy could be an asset on the commission. His solutions range from simple — he mentioned modernizing the agency’s antiquated website to make it more transparent and accessible to the public — to cutting edge, such as using methane leak detection technology pioneered by the Southwest Research Institute.

His desire to be an agent of change is rooted in watching his father, who owned a CD store, struggle to make ends meet once the internet changed the way we listened to music.

Warford told the editorial board that this personal experience has helped him forge connections with oil and gas workers who fear global decarbonization will render their jobs useless.

“Out in Midland, a couple of weeks ago, a geologist said to me, ‘Hey, you know, I’ve made my career in this industry, I’m sending my kids to college from work I do in this industry, but I’m sick of coming home and having my kid, my neighbors, think that I’m poisoning their air and their water,’” Warford said. “He was worried about what his job prospects are gonna look like in 10 and 20 years, even if oil and gas production continues, as automation happens. To be able to understand that on a personal level, I think, is effective.”

By contrast, the current commissioners, led by Chairman Wayne Christian, 72, the Republican incumbent, are more interested in raking in campaign cash from oil and gas producers and letting the industry police itself.

My interview with Warford is here. Christian was a lousy legislator, and unlike Hegar didn’t do anything in his first term in statewide office to try to change that narrative. He’s a toady and a waste of space, and Luke Warford would be a vast improvement even if he’s a lone voice for sanity on that Commission. That’s a question he addresses directly in the interview, by the way. Go give it a listen, and then vote for Luke Warford.

Republican Commissioners skip out again

Cowards.

Harris County’s two Republican commissioners skipped Tuesday’s Commissioners Court meeting, preventing county leaders from passing a property tax rate and proposed budget for the next fiscal year beginning on Oct. 1.

State law requires four members of the court be present to set the tax rate. With only the court’s three Democrats present, the county was forced to adopt what is known as the no new revenue rate, a levy that brings in the same amount of property tax revenue as last year.

[…]

County Judge Lina Hidalgo said the two Republican commissioners “don’t have a plan, they have a campaign ad.”

Hidalgo added that Ramsey and Cagle’s decision to skip the budget vote defunds law enforcement by millions of dollars.

[…]

With the adoption of the no new revenue rate instead of the proposed rate, the Harris County District Attorney’s Office will lose out on $5.3 million in proposed increases. The Sheriff’s Office will lose $16.6 million for patrol and administration, plus another $23.6 million for detention.

In response to that funding difference, Dane Schiller, spokesperson for the Harris County District Attorney’s Office, said in a statement: “It is crucial that our criminal-justice system be properly funded – the right number of deputies, courthouse staff and prosecutors – and it is up to our elected leaders to set funding priorities.”

Overall, the $2.1 billion budget will be $108 million less than the county had proposed.

The loss of the proposed increases for law enforcement comes after efforts by Texas Comptroller Glenn Hegar that briefly blocked the county from considering its $2.2 billion budget proposal.

The court had moved forward last week with the budgeting process after a lawyer for the state acknowledged in a Travis County courtroom that the comptroller had no authority to block the county from approving its budget. Hegar can take action only after the budget is approved and if it violates a new state law that bars local governments from reducing spending on law enforcement.

See here for the background. Yes, the Republican Commissioners have done this before. The Constitution allows for this form of minority rule. That doesn’t mean I have to respect it. The main thing I will say here is that I never want to hear any Republican whine about “defunding the police” again, not after the ridiculous bullshit we’ve had to endure from the Comptroller and now from these two clowns, who will be fully responsible for cutting the Sheriff and District Attorney’s budgets. Move on to something else, this has lost all meaning.

Comptroller caves on phony “defunding” claim

In the end, he folded like a lawn chair.

Harris County is moving through the process of passing a fiscal 2023 budget with a 1 percent dip in the property tax rate, after the specter of the state blocking its approval eased in a Travis County courtroom Tuesday.

Prospects for approval of that $2.2 billion budget and the new tax rate next week remain unknown, however, hinging on whether enough members of Commissioners Court show up.

Texas Comptroller Glenn Hegar, despite recently threatening to block Harris County’s proposed budget over its alleged defunding of law enforcement, has not formally determined that the county violated state law or otherwise taken action to prevent county leaders from adopting a budget for the upcoming fiscal year, a state attorney said in court Tuesday.

The acknowledgment came as part of a county lawsuit challenging Hegar’s claims, including those from a letter last month in which the Republican comptroller told county officials they would need voter approval to pass their budget for the fiscal year starting Oct. 1.

Commissioners Court moved ahead with its budgeting process in the meantime, meeting Tuesday to consider the county’s property tax rate — a procedural step before the court can vote on next year’s budget. Officials first must propose the tax rate, the step taken Tuesday, then hold a public hearing, scheduled for Sept. 13. At that meeting, provided enough commissioners show up, the court can approve the rate and the budget.

On a 3-2 vote, the court on Tuesday proposed the overall tax rate for the county — comprising four rates covering county operations, the Harris Health system, the flood control district and the Port of Houston — at 57.5 cents per $100 of assessed value. That represents about a 1 percent decrease from the current rate of 58.1 cents per $100.

[…]

In an emergency hearing before Travis County state District Judge Lora Livingston, attorney Will Thompson of the Texas Attorney General’s Office — which is representing Hegar and Gov. Greg Abbott in the lawsuit by the county — said the dispute “may be a situation where there’s much ado about nothing and the parties are in more agreement than they realize.”

“The comptroller just has not made a final determination,” Thompson said. “He has not done anything that binds Harris County at this stage. Harris County remains free to adopt a budget, in its normal process, following its normal rules for having public meetings and things like that.”

Instead of ruling on Harris County’s request for a temporary order preventing Hegar from blocking Harris County’s budget, Livingston told attorneys for the county and state to, essentially, put Thompson’s comments in writing in a formal court filing. She gave the two sides until Wednesday afternoon to submit the document.

The statement from Thompson came a week after Harris County Administrator David Berry sent Hegar a letter asking him to clarify whether he had “made or issued a determination that Harris County’s proposed budget violates the law” or prevented the county from adopting a budget.

Hegar responded by encouraging Berry to resolve the issue with the Harris County constables who initially complained about their funding.

“I understand that you want assurances from my office, but only Harris County can resolve this issue and clear the path to adopt its budget,” Hegar wrote.

See here and here for the background. It’s very clear from the state’s response to the lawsuit is that they were bluffing the whole time and they knew it. This is why the lawsuit was the right response, despite the whining from Constables Heap and Herman. You don’t concede when you’re right. Kudos to Judge Hidalgo, Commissioners Ellis and Garcia, and County Attorney Menefee for properly fighting this.

The rest of the story is about whether the two Republican members of the Court will break quorum again in order to prevent the budget and property tax rate from being passed. I don’t feel like deciphering their eleven-dimensional chess strategy this time around, so let’s just wait and see what happens. If we get the election results we want, we won’t have to worry about these shenanigans again.

Harris County approves the option of suing Comptroller over baloney “defunding” claim

Good.

Harris County Commissioners Court on Wednesday authorized a pair of private law firms to sue Texas Comptroller Glenn Hegar, who accused the county of defunding law enforcement last week, forcing a halt to consideration of its $2.2 billion budget.

The move, approved by a 3-1 vote, came a week after Hegar sent a letter to county officials saying the court could not approve its proposed fiscal 2023 budget without approval of voters because of a change in policy that he said would result in the county funding two constable offices at a lower level in violation of a new state law.

The constables — Precinct 4 Constable Mark Herman and Precinct 5 Constable Ted Heap — had complained to Gov. Greg Abbott last year after the county changed its policy to do away with “rollover” budgeting that had allowed departments to keep unspent funds and use them in future budget cycles. Hegar’s letter said the change would result in the county, under its proposed budget, cutting funding to the two constable offices by $3 million.

[…]

In a letter to Hegar on Tuesday, County Administrator David Berry asked the Comptroller’s Office to clarify its investigation and whether it prevents the county from adopting a tax rate and budget.

The comptroller responded Wednesday by modifying his claim, alleging the proposed budget would result in a cut in law enforcement spending for a different reason — by comparing the proposed spending plan to this year’s 2022 short fiscal year budget, when broken down by month.

In addition to eliminating rollover budgeting, the county is changing its fiscal year to begin Oct. 1 rather than March 1. To accomplish that, Commissioners Court planned to pass two budgets this year. The first, a shortened budget, was approved in February and runs through September. The second, beginning Oct. 1, will span a full year.

Berry criticized the comptroller for using “fuzzy math,” saying the short fiscal year budget covered 16 pay periods.

“There’s no other reasonable way to do it,” he said. “When you properly annualize the budget, it’s clearly higher in FY23 (the proposed budget).”

County Judge Lina Hidalgo said Hegar’s second letter suggests the Comptroller’s Office is walking back its original defunding claim.

“They’re beginning to realize that the allegations they made make little sense,” Hidalgo said. “They’re moving away from talking about the rollover. They know that that’s absolutely nonsensical and are trying to take a different tack that also doesn’t make sense.”

Berry also took issue with the comptroller’s assertion the county should work the issue out with the constables.

“We believe we’ve complied with the law,” Berry said. “If the comptroller doesn’t, they have to explain. All we’ve gotten so far is some fuzzy math.”

At Wednesday’s meeting, Commissioners Court hired two law firms to represent the county — Yetter Coleman LLP and Alexander Dubose & Jefferson LLP — in a split vote, with the court’s three Democrats in favor and Republican Precinct 4 Commissioner Jack Cagle opposed. Precinct 3 Commissioner Tom Ramsey was absent.

Hidalgo said she is willing to move forward through legal action or negotiation, but the county needs to be careful in how it responds to allegations of violating the new state law.

“I am pretty opposed to giving in to any kind of extortion,” Hidalgo said. “I don’t know what precedent that would set.”

See here for the background. This new explanation is even dumber and more insulting than the original one. Of course an eight-month budget is going to have less of pretty much everything in it than a 12-month budget. If the Comptroller had been at all serious about this, the matter could have been easily resolved. Instead, they charged ahead with this stupid allegation, which unfortunately comes with the power to prevent the county from passing a budget, a situation which as noted would result in an actual decrease in funding to the Sheriff and Constables. It’s like they looked around to make sure there was a rake in easy stepping distance before they moved forward.

The response from Harris County – minus Commissioner Cagle, of course – and Judge Hidalgo was entirely appropriate. The county cannot take lightly an accusation that it is violating the law. The fact that the accusation itself is completely specious is almost beside the point, but given that it is there are only two acceptable resolutions: The Comptroller retracts its claim and absolves Harris County of any alleged wrongdoing, so that it can pass its budget as planned, or we go to court and let them try to prove their foolish claims. No concessions, because there’s nothing to concede.

Which brings me to this:

Herman and Heap said the court’s action on Wednesday took them by surprise. The two Republican constables said they had met with county officials late last week and Monday and thought they had come up with a solution.

The pair, Herman said, had agreed to write letters saying their concerns had been resolved. Hegar would have to write his own letter rescinding his previous communications with the county.

“Both sides were agreeing,” Herman said. “We agreed to put this thing to rest.”

Then, he said, he learned that Hidalgo had put an item on the agenda for Wednesday’s special meeting to pursue possible legal action against Hegar.

“It’s almost like a slap in the face,” he said. “We’re kind of disappointed. We’ll see what happens.”

Herman said if the county continues forward with a strategy of suing Hegar, he and Heap would request their own legal counsel to represent their interests in the broadening fight.

In a brief text message, Heap confirmed he had met with county officials in recent days and echoed Herman’s frustration.

“We have been in negotiations with the office of budget management for several days and I was very encouraged with the progress,” he texted. “However, the actions of Commissioners court today as well as some of their post on social media platforms disappoint me.”

You dudes started this fight. If you don’t like the way the Court is finishing it, that’s tough. Maybe don’t be such crybabies next time.

Harris County looks to sue over Comptroller’s BS “defunding” claim

Tell it to the judge.

Harris County Commissioners Court this week is expected to hire an outside law firm to take legal action against the state and Comptroller Glenn Hegar, who accused the county of defunding law enforcement in violation of state law.

The accusation by Hegar, delivered in a letter to county Judge Lina Hidalgo last week, blocks Harris County from approving its proposed $2.2 billion budget for the fiscal year that begins Oct. 1.

The court will hold a special meeting Wednesday to consider hiring the law firm of Alexander Dubose & Jefferson LLP to pursue legal action against Hegar and other state officials.

Hegar threw the curveball just before county officials presented their proposed spending plan last tuesday, saying the county should reconsider its budget plan or gain voter approval for it. The letter, however, was sent on Monday, the last day the county could get a measure onto the November ballot.

Senate Bill 23, passed by the Texas Legislature and signed by Gov. Greg Abbott last year, bars counties with a population of more than 1 million from cutting law enforcement spending without the approval of voters.

The defunding accusation was sparked by two Republican Harris County constables — Precinct 4 Constable Mark Herman and Precinct 5 Constable Ted Heap — who had complained to Gov. Greg Abbott after the county changed its policy last year to do away with “rollover” budgeting that had allowed departments to save unspent funds and use them in future budget cycles.

Herman and Heap did not respond to requests for comment.

In his letter, Hegar said doing away with the rollover funds resulted in a loss of $3 million previously dedicated to the constables office in fiscal 2021. However, by preventing the county from adopting its proposed budget, the letter could cost the sheriff, constables and district attorney’s office an additional $100 million in funding included in the new spending plan, county officials said.

On Wednesday, Commissioners Court could vote to authorize two outside law firms to file a lawsuit against the comptroller. If the county does pursue legal action, other state officials could be named, as well.

See here for the background on this completely ridiculous claim. The vote in Commissioners Court is today; I’ll be interested to see if it’s unanimous or not. I also have no idea what to expect from the courts, but I sure hope they get it right, because this is a terrible precedent to set otherwise. Finally, a special shoutout to Constables Herman and Heap for going radio silent after leaving this bag of poop on the Court’s front porch. Mighty courageous of you two there.

The Lege sure thinks a lot of companies need to be coddled

It’s kind of amazing, actually.

Texas banned 10 financial firms from doing business with the state after Comptroller Glenn Hegar said Wednesday that they did not support the oil and gas industry.

Hegar, a Republican running for reelection in November, banned BlackRock Inc., and other banks and investment firms — as well as some investment funds within large banks such as Goldman Sachs and JP Morgan — from entering into most contracts with state and local entities after Hegar’s office said the firms “boycott” the fossil fuel sector.

Hegar sent inquiries to hundreds of financial companies earlier this year requesting information about whether they were avoiding investments in the oil and gas industry in favor of renewable energy companies. The survey was a result of a new Texas law that went into effect in September and prohibits most state agencies, as well as local governments, from contracting with firms that have cut ties with carbon-emitting energy companies.

State pension funds and local governments issuing municipal bonds will have to divest from the companies on the list, though there are some exemptions, Hegar said.

“The environmental, social and corporate governance (ESG) movement has produced an opaque and perverse system in which some financial companies no longer make decisions in the best interest of their shareholders or their clients, but instead use their financial clout to push a social and political agenda shrouded in secrecy,” Hegar said in a written statement on Wednesday.

New York-based BlackRock, which has publicly embraced investing more in renewable energy, criticized Hegar’s decision.

“This is not a fact-based judgment,” a spokesperson for the company said in a written statement. “BlackRock does not boycott fossil fuels — investing over $100 billion in Texas energy companies on behalf of our clients proves that.

“Elected and appointed public officials have a duty to act in the best interests of the people they serve,” the spokesperson added. “Politicizing state pension funds, restricting access to investments, and impacting the financial returns of retirees, is not consistent with that duty.”

The other nine companies banned completely are: BNP Paribas SA, a French international banking group; Swiss-based Credit Suisse Group AG and UBS Group AG; Danske Bank A/S, a Danish multinational banking and financial services corporation; London-based Jupiter Fund Management PLC, a fund management group; Nordea Bank ABP, a European financial services group based in Finland; Schroders PLC, a British multinational asset management company; and Swedish banks Svenska Handelsbanken AB and Swedbank AB.

[…]

Texas energy experts said the intent of the law, and Wednesday’s announcement, was to punish financial firms that don’t want to invest in the backbone of Texas’ economy — oil and gas.

“But at the end of the day, it’s all about a rate of return,” said Ed Hirs, an energy economist at the University of Houston. “Quite honestly, fossil fuel companies, in particular oil and gas companies, have not been great performers in the (stock market) prior to this year.”

The Lone Star Chapter of the environmental group Sierra Club said Hegar’s “climate-denying publicity stunt will be costly for taxpayers.”

​​“Major financial institutions like the ones on this list are beginning to recognize that investments in fossil fuels bring significant risk in the face of an inevitable clean energy transition, and that addressing the financial risks of the climate crisis is essential to good business,” said Sierra Club Fossil-Free Finance Campaign Manager Ben Cushing. “The fact that the Texas Comptroller has arbitrarily picked a handful of companies that, despite their climate commitments, continue to have massive fossil fuel investments, shows that this is nothing more than a political stunt at Texas taxpayers’ expense.”

We’ve already determined that Comptroller Hegar is math-challenged, so this shouldn’t come as a surprise. We’ve also seen the Lege make similar laws to protect gun manufacturers and the country of Israel, about which more in a minute. I suppose one could make a protectionist case for this kind of legislative cherry-picking, and as someone old enough to remember the efforts to divest from South Africa in order to pressure it to abandon apartheid, there is certainly a moral case for this kind of law, if not for these specific ones. But if you’re going to go that route, you need to be clear about what you’re aiming at.

The firms on Hegar’s list are BlackRock, UBS Group, BNP Paribas, Credit Suisse Group, Danske Bank, Jupiter Fund Management, Nordea Bank, Schroders, Svenska Handelsbanken, Swedbank, and UBS Group.

Of the six firms that responded to the Houston Chronicle’s inquiries by press time, four deny that they are “boycotting” the oil and gas industry, even if they admittedly have some investments that reflect the growing influence of — and consumer and investor interest in — the environmental, social and governance (ESG) movement.

“As we noted in our response to the Texas Comptroller, Credit Suisse is not boycotting the energy sector as the bank has ongoing partnerships and strong client relationships in the energy sector,” said a spokesperson for Credit Suisse, based in Zurich. Spokespeople for BlackRock, UBS Group, and Schroders made similar points in disputing the comptroller’s “boycotting” label.

[…]

This is a different approach than the one taken by BlackRock, for example, which had $287 billion in assets invested in energy companies globally as of June, $108 billion of which is invested in Texas energy companies, a spokesperson said.

There are “many similarities” between BlackRock’s approach to investing in the fossil fuel industry and that of other major firms, such as JP Morgan, didn’t make the list, said Andrew Poreda, senior vice president and senior ESG Research Analyst at Sage Advisory Services, an investment firm based in Austin.

A “frequently asked questions” document prepared by Hegar’s office, raises questions itself about the state’s methodology, Poreda said. For example, the comptroller’s initial criteria included whether a firm had made public pledges to the Net Zero Banking Alliance or Net Zero Asset Managers Initiative, which call for net-zero greenhouse gas emissions by 2050, nearly three decades from now.

That’s not exactly radical territory. Oil and gas companies are openly talking about plans for the energy transition — including getting to net-zero emissions.

“Envisioning a different world in three decades hardly classifies as a boycott, and at this point is so far away that it is largely aspirational,” Poreda argues.

It doesn’t have to make sense, it just has to make the base think they’re owning the libs. That’s Republican policy in a nutshell these days.

To bring it back to the Israel example for a minute, that law has been mostly blocked by a federal judge, who ruled that an engineering firm that couldn’t get a contract with the city of Houston had its free speech rights violated by the Texas law. I Am Not A Lawyer, but it sure looks to me like the laws banning “boycotts” of fossil fuels and gun manufacturers are at least in the same neighborhood as the anti-Israel boycott law is. Credit Suisse and Blackrock probably don’t need the state of Texas’ business, but other red states are adopting similar laws, and at some point it does start to cost them real money. When that happens, the lawyers usually get involved. I don’t know what happens from there, but I won’t be surprised if that’s where it goes. The Chron has more.

The Constables’ and Comptroller’s ridiculous complaint

This is transparent bullshit.

Texas Comptroller Glenn Hegar this week accused Harris County commissioners of defunding local constables and threatened to prevent the county from implementing its proposed 2023 budget if the county does not reverse course.

In a letter sent late Monday, Hegar said the county’s move to do away with “rollover” budgeting led to more than $3 million dedicated to the constables last year being returned to the general fund.

“If the county proceeds with the Constable budget as proposed without obtaining voter approval, the county may not adopt an ad valorem tax rate that exceeds the county’s no-new-revenue tax rate,” Hegar wrote.

Harris County Administrator David Berry on Tuesday afternoon said Hegar’s position would prevent the county from adopting a budget that increases funding to Harris County Constables’ and Sheriff’s offices by “millions of dollars.”

“The Comptroller’s position would keep us from making these new investments,” he said, “which is contrary to the intent of SB 23. … I hope the Comptroller’s position does not prevent us from achieving our goal, and we look forward to working with the state to resolve this matter.

Berry said that in the past, county departments could “roll over” their unspent budget from one year to the next “with no questions asked.”

“This practice was unique to Harris County and is not the practice of other local governments,” he said. “Under the current policy, departments, including the Constable’s Offices, can request the use of unspent funds on vehicles, equipment, and other one-time expenses. The County has continued to support these investments.”

Paradoxically, by preventing Harris County from adopting the new tax rate, Hegar’s actions would prevent the county from implementing $96.7 million in increases to the sheriff and constable offices, and a proposed $10 million increase to the District Attorney’s Office.

Precinct 4 Constable Mark Herman — one of the two constables who first raised the issue with Abbott — said he was “thankful” to the governor and to Hegar for looking into the matter.

“We look forward to a resolution one way or another,” he said, explaining that he and other constables had used their rollover funds to purchase new patrol cars and safety equipment, and in some cases, to pay employees’ salaries.

“All that’s been taken away from us,” he said. “What it’s come to is an elected official has no say in his own department, basically, and it’s jeopardized public safety and officer safety.”

[…]

Hegar said his investigation began after Harris County Precinct 4 and Precinct 5 Constables Mark Herman and Ted Heap wrote to the governor complaining about losing their “rollover” funds last year. Prior to County Judge Lina Hidalgo’s election in 2018, county commissioners had allowed county agencies to keep unspent funds, which “rolled over” into the following year’s budget. Constables used the money for a variety of projects and other issues — including paying for some staff.

Eva DeLuna Castro, who oversees budget and fiscal policy analysis for Every Texan, said that within state agencies, rolling over unspent money from one budget cycle to the next was permitted only in a very limited number of circumstances, and generally required the specific approval of the legislature.

After Hidalgo’s election, the county did away with the unusual budgeting technique and adopted more traditional budgeting practices — similar to what the state requires of its own agencies and their funding.

Hegar sent the letter to commissioners late last night — the deadline for when the county would potentially be able to add any voter initiatives to the ballot.

County officials disputed Hegar’s claims, noting that the decision to do away with rollover funds took place before SB23 went into effect. They also disputed Hegar’s numbers.

A review of county records show that the county allocated $205,290,000 to its constables in 2020. This year, its proposed budget includes a 13 percent increase to the constables budget, for a total of $231,491,249.

The two constables who first complained to Gov. Greg Abbott about losing their rollover funds have also seen increases to their budget. In 2020, Precinct 4 received about $57 million in funding; Precinct 5 received $44 million. This year, county commissioners have proposed giving Pct. 4 $65 million, while Pct. 5 is slated to receive more than $48 million.

I mean, come on:

1. Harris County is increasing its spending on public safety across the board.

2. The two Constables in question are each getting more money in this budget than in the previous one. The Constables overall are getting more money.

3. “Rollover budget” means unspent funds from the previous cycle. These two Constables didn’t even spend all the money they had been allocated before!

4. The practice of not rolling over funds is exactly how the state does its own budgeting, including for DPS.

From every angle this is ridiculous, and clearly driven by partisan motives – the two Constables in question are Republicans. I don’t expect to get better arguments about public policy from these clowns, but I am insulted that they can’t come up with a better pretext for their crap than this. Shame on everyone involved. The Trib has more.

End the “tampon tax”

I approve.

Rep. Donna Howard

A coalition of menstrual health organizations is appealing a decision by the Texas Comptroller’s Office to deny its protest against the state sales tax, which they say unfairly and unconstitutionally does not exempt tampons, pads and other hygienic products.

If the dispute isn’t resolved on the administrative level, Meghan McElvy, partner at the Houston-based international law firm Baker Botts, said she plans to take the case all the way to the Texas Supreme Court if necessary. The law firm is taking up the case pro bono on behalf of the Texas Menstrual Equity Coalition.

“It’s just kind of a no-brainer issue to me,” McElvy said. “(Male) libido enhancers are tax-exempt, but medically necessary products for women are not.”

The group, which includes a large number of youth-led advocacy organizations, has asked for a re-determination hearing from the Comptroller’s Office. It comes after the agency denied their original request for a refund of sales tax on tampons, pads and panty liners bought by a Harris County woman.

This is just the latest effort in a national movement that kicked off in the 2010s aiming to end the so-called “tampon tax.”

As of now, a slim majority, or 26 states, tax menstrual products, while the rest do not, either because they have exempted them or because they’re one of the five states that don’t levy a sales tax, according to Period Law, an advocacy and legal organization.

States with exemptions include Illinois, Maryland, Massachusetts, Minnesota, New Jersey and Pennsylvania.

In Texas, state lawmakers in recent years have attempted to pass bills on the matter without success. Rep. Donna Howard, D-Austin, who chairs the Texas Women’s Health Caucus, has filed a bill every session since 2017. In 2021, House Bill 321 got out of committee but never made it to the House floor — the most progress any such bill has ever made.

Howard credited young women in high school and college, many of whom belong to groups that run donation drives to help low-income people access the products, with moving the needle last year by showing up in Austin to testify on the bill. She said she hopes to to build on their progress in the upcoming legislative session.

“We know there are a large number of Texas girls and women who do not have enough money to afford these products,” she said. “(A sales tax exemption is) not going to go a long way, but it’s a step in right direction.”

Howard said most of the pushback at the Legislature comes from members concerned about the budget. The Comptroller’s Office estimated in 2021 that the bill would have cost the state about $42 million in lost revenue in the next two-year budget cycle.

“In the grand scheme of things, this is a very small fiscal impact,” Howard said. “I keep going back to the discriminatory part of it because at some point, you make decisions because they’re the right decisions to make.”

I say they’re necessary health products, and on those grounds they should be exempted from the sales tax, as many other items are. The amount of revenue it would cost the state is pocket change in context of the budget. Legalizing marijuana, as Oklahoma has recently done, would generate far more than that to make up for it. Don’t even get me started on the various property tax loopholes and exceptions that could be fixed as well. This is a small thing we can do to make life a little easier for a lot of people. As Ms. McElvy says, it’s a no-brainer.

A gold-plated dud

Just a dumb story all around.

When state lawmakers decided in 2015 that Texas needed to be the only state to have its own precious metals depository, supporters said there were plenty of reasons the project would be a gold mine.

The University of Texas/Texas A&M Investment Management Co., which handles the schools’ endowment, owned hundreds of millions of dollars-worth of gold as an investment, stored for a fee in a New York City vault. A state-owned depository “will repatriate $1 billion of gold bullion from the Federal Reserve in New York to Texas,” Gov. Greg Abbott said.

Citizens, too, were clamoring for an independent-minded location they could trust with their valuables. “When I first presented this, to be honest with you, we got hundreds and hundreds of people from all over the world, really, who wanted to be able to put their gold in something that has the Texas banner above it,” said Rep. Giovanni Capriglione, R-Southlake, the bill’s author. “This doesn’t work in Wisconsin, it doesn’t work in Idaho.”

Best of all, because the state would find a private partner to build and own the physical depository, it would cost taxpayers nothing. The enterprise would even reap a big profit for Texas. “We estimate that we could raise tens of millions of dollars in fees,” Capriglione testified.

More than three years after the depository opened, none of those things has happened. Yet earlier this year state lawmakers quietly voted to let the state borrow millions of dollars to bail out a project created to fix a problem that didn’t exist, and which they had vowed would cost nothing.

“It’s ridiculous,” said Sen. Kel Seliger, R-Amarillo, one of only two senators to oppose the bill. “I don’t think the State of Texas should be in the commercial real estate business, or the gold bullion business.”

The UT/A&M investment company liquidated its gold more than a year ago without moving any bullion back to Texas. A spokeswoman said the agency currently owns no precious metals and so has no need for storage. No other state entity has metal at the Texas depository.

In the time since state leaders created the Texas facility, two large private competing depositories have also opened, in Shiner and Dallas. Officials said Texas Bullion Depository is currently less than 10 percent full. Taxpayers, meanwhile, have yet to see a penny from the enterprise.

Worse, the state’s partner, Lone Star Tangible Assets, recently revealed it is looking to sell the new facility, placing the state at risk of losing control of the entire enterprise. In response, two months ago legislators gave Comptroller Glenn Hegar permission to borrow up to $20 million to buy it.

How a project touted as a golden opportunity for taxpayers devolved into a bait-and-switch that could instead cost millions is a classic tale of government mission creep. It also raises new questions about the odd-couple partnership between the State of Texas and the high-volume precious metals sales industry, a sector that has inspired numerous warnings and enforcement actions from federal and state regulators, including the Texas attorney general.

“When I saw this, I thought, ‘This is going to be embarrassing for the State of Texas,’” said Paul Montgomery, a precious metals dealer and appraiser who has worked with regulators to bring cases against coin dealers who scam investors.

I don’t think you can claim that people were “clamoring” for this without citing some evidence of said clamor. There are enough gold bugs in the state that I can believe some people wanted this, but in the big picture that would be little more than a murmur. Be that as it may, here we are. I remember this as it was happening, and I definitely remember thinking it was deeply dumb, but I figured it was the mostly harmless kind of dumb. I never bothered to blog about it because once you link to the story and say “this is dumb”, there’s really nowhere else to go.

This will cost us a few million bucks, but in the grand scheme of things that’s a rounding error in the budget. Compared to Greg Abbott’s border wall extravaganza, this is peanuts. Everyone should mock Rep. Capriglione for the rest of his life because of this, but beyond that it’s not worth the effort. Honestly, in some ways this is almost charming, like the kind of old-school dumbassery that powered a million Molly Ivins bon mots. We’d be in a much better place if this were the biggest outrage of the 87th legislative session.

Day 9 quorum busting post: See you in August

Here’s your endgame, more or less.

Texas House Democrats will not return to the state until after the special session of the Legislature is over, one of the leaders of their walkout confirmed Tuesday.

State Rep. Trey Martinez Fischer, D-San Antonio, said they expect to return to Texas on Aug. 7 — when the 30-day special session aimed at passing new voting restrictions is required to end.

“It will be our plan on that day — on or about — to return back to Texas,” Martinez Fischer told advocates of a group Center for American Progress Action Fund, that is led by former White House Chief of Staff John Podesta, a Democrat. “Then we will evaluate our next option.”

[…]

He said Democrats want to soften some of the “sharp edges” of the voting restrictions Republicans are proposing — specifically, how the GOP bill enables felony charges against election officials who violate its provisions, as well as for people who help voters fill out their ballots without the proper documentation, even for inadvertent offenses.

“There really has been no attempt to negotiate in good faith,” he said. “We are all putting our hopes in a federal standard.”

Other Texas Democrats have said their plan right now is to keep their caucus unified and focused on spurring national action. State Rep. Ann Johnson, D-Houston, said Abbott’s threats to have them arrested or to call more special sessions don’t mean much to her.

“Our presence here together ensures that those Texans who are not being heard by Gov. Greg Abbott continue to be stood up for,” Johnson said.

Democrats on Tuesday said while in Washington, they are pushing for a meeting with President Joe Biden and were continuing to meet with key leaders. That included a strategy session with U.S. Rep. James Clyburn, a top leader in the House from South Carolina.

But if the Texans are counting on Congress acting, they don’t have much time. The U.S. House goes on its annual August recess starting July 30 and the U.S. Senate leaves a week later. Neither returns to Washington until after Labor Day.

When Texas Democrats do finally return, Abbott has made clear he’ll call them back into special session again to pass an elections bill and other key priorities of Republicans who control the agenda in state politics. The Texas Constitution allows the governor to call as many special sessions as he wants, but each cannot last for more than 30 days.

It’s the Senate that matters, and their recess (assuming Majority Leader Chuck Schumer allows it in full) corresponds to the end of Special Session #1. The House is not the problem for the Dems. Same story, different day.

Timing may be a problem for Greg Abbott, as Harvey Kronberg suggests.

HK: Article X Veto may have compromised full Republican control of redistricting

In theory at least, Democrats may have leverage they should not otherwise have; Article X cannot be revived without a special and with a hard August 20 deadline looming, the Legislature is on the edge of mutually assured destruction

“The Democrats’ claims about the governor’s veto ‘cancelling’ the legislative branch are misleading and misguided. The Constitution protects the legislative branch, and as the Democrats well know, their positions, their powers and their salaries are protected by the Constitution. They can continue to legislate despite the veto” – Gov. Greg Abbott, responding to the Democrats’ Texas Supreme Court request to overturn his Article X veto.

Let’s be clear up front.

The conventional wisdom is that although there is a threat of arrest upon arrival, the House Democrats will come back at some point and watch Republicans pass some version of their election bill. A substantive question is whether the bill becomes more punitive due to Republican anger over the quorum break.

Let’s not bury the lede here. The House is boiling and Governor Abbott’s veto of legislative funding could conceivably lead to Republican loss of control in redistricting. While there is much chest beating and both feigned and real anger over the quorum bust, it camouflages a much bigger issue.

The rest is paywalled, but I was able to get a look at it. The basic idea is that per Comptroller Glenn Hegar, the state has until August 20 to reinstate legislative funding for the software to be updated in time to write checks for the next fiscal year beginning September 1. If that hasn’t happened by then, the Texas Legislative Council, which does all of the data crunching for redistricting, goes offline. No TLC, no ability to draw new maps. Pretty simple, as far as that goes.

What happens next is unclear. If the Lege can’t draw maps, that task falls to a federal court for the Congressional map. They wouldn’t have the needed data, and they wouldn’t have a default map to use as a basis, since the existing map is two Congressional districts short. The Legislative Redistricting Board draws the House, Senate, and SBOE maps if the Lege doesn’t, but they wouldn’t have data either, and per Kronberg “the LRB cannot constitutionally convene until after the first regular session in which census numbers have been received. (Article 3, Section 28).” Which is to say, not until 2023. You begin to see the problem.

Now maybe funding could be restored quickly, if Abbott were to call everyone back on August 8 or so. But maybe some TLC staffers decide they don’t need this kind of uncertainty and they move on to other gigs. Maybe Abbott declares another emergency and funds the TLC himself, though that may open several cans of worms when the litigation begins. Maybe the Supreme Court gets off its ass and rules on the line item veto mandamus, which could settle this now. Indeed, as Kronberg points out, the amicus brief filed by the League of Women Voters is expressly about the failure of the Lege to do its constitutional duty in the absence of funding for the TLC.

There are a lot of things that could happen here, and Kronberg is just positing one scenario. His topline point is that any outcome that includes a court drawing maps is a big loss for Republicans, for obvious reasons. Does that provide some incentive for “good faith negotiation”, if only as a risk mitigation for the Republicans? I have no idea.

One more thing:

When Texas Democrats staged a walkout at the end of the regular legislative session in late May, they successfully killed Republicans’ prized bill: a slew of restrictions on voting statewide. Or that’s how it seemed at the time, at least.

Less than three weeks later, Gov. Greg Abbott announced a special legislative session specifically aimed at passing an equivalent version of the so-called election integrity bill alongside other conservative legislative priorities.

The same day Abbott announced his plan for the special session, AT&T, whose CEO has said the company supports expanding voting rights nationwide, gave Abbott $100,000 to fund his reelection campaign.

[…]

In April, AT&T CEO John Stankey told The Hill that the company believes “the right to vote is sacred and we support voting laws that make it easier for more Americans to vote in free, fair and secure elections.”

In an email, an AT&T spokesperson said, “Our employee PACs contribute to policymakers in both major parties, and it will not agree with every PAC dollar recipient on every issue. It is likely our employee PACs have contributed to policymakers in support of and opposed to any given issue.”

How could the left hand possibly know what the right hand is doing? It’s a mystery, I tell you.

How many times will we fail to fix our power grid?

By “we”, I mean our Legislature, and the PUC, and the Governor, and the Railroad Commission, and pretty much everyone else in charge of this state.

Ten years ago, Texas power plants froze during a fast-moving winter storm, causing rolling electricity blackouts across the state. Outraged Texas regulators and lawmakers, vowing to crack down, debated requiring energy companies to protect their equipment against extreme weather to ensure reliability.

But they didn’t.

Nine years ago, two state agencies that regulate utilities and the oil and gas industry warned that natural gas facilities that lost power during outages couldn’t feed electricity generation plants, creating a spiral of power loss. The agencies jointly recommended that lawmakers compel gas suppliers and power plants to fix the problem.

But they didn’t.

Eight years ago, economists warned that the state’s free-market grid left companies with little incentive to build enough plants to provide backup power during emergencies. With the support of then-Gov. Rick Perry, legislators and regulators considered increasing power rates to encourage the construction of more power plants, so that Texas, like other states, would have sufficient reserves.

But they didn’t.

In the wake of each power failure, or near-failure, over the past decade, Texas lawmakers have repeatedly stood at a fork in the road. In one direction lay government-mandated solutions that experts said would strengthen the state’s power system by making it less fragile under stress. The other direction continued Texas’ hands-off regulatory approach, leaving it to the for-profit energy companies to decide how to protect the power grid.

In each instance, lawmakers left the state’s lightly regulated energy markets alone, choosing cheap electricity over a more stable system. As a result, experts say, the power grid that Texans depend on to heat and cool their homes and run their businesses has become less and less reliable — and more susceptible to weather-related emergencies.

“Everyone has been in denial,” said Alison Silverstein, a consultant who works with the U.S. Department of Energy and formerly served as a senior adviser at the Federal Energy Regulatory Commission. “They treat each individual extreme event as a one-off, a high-impact, low-frequency event, which means, ‘I hope it doesn’t happen again.’”

With each passing year, the grid has steadily become less reliable. In 1989, Texas suffered a cold snap considered worse if not equal to the winter storm earlier this year yet managed to keep the grid functioning, with only a few hours of rotating outages.

By comparison, February’s Winter Storm Uri brought the Texas power grid to within five minutes of complete collapse, officials acknowledged. Millions of residents were left without power for days in subfreezing temperatures; nearly 200 died.

“Our system now is more vulnerable than it was 30 years ago,” said Woody Rickerson, vice president of grid planning and operations at the Electric Reliability Council of Texas. “With the generation mix we have now, the weather has the ability to affect wind and solar and (the gas supply). Those are things we can’t anticipate.”

It’s the first of a three-part series, and it’s a long read that will make you mad. The simple fact is that the system we have now works very well for some wealthy interests, and they are very good at defending their turf. Throw in an unwavering belief in the invisible hand of the free market and the general incentive towards doing nothing, and voila. Even the incremental steps forward have turned out to be meaningless:

As a result, the only legislation to come out of the 2011 storm was a minor bill from then-state Sen. Glenn Hegar, a Katy Republican, which required power companies to file weatherization plans with the PUC each year.

Two months after that bill was signed into law, the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation put out a report of more than 350 pages, urging Texas to enact stricter weatherization standards for power plants and natural gas operators.

And they did to a degree, with ERCOT putting out best practices, conducting annual workshops and inspecting plants every three to four years.

But there were two problems. First, despite FERC’s recommendation, the state Legislature never gave the PUC authority to penalize power plants that did not comply, making weatherization voluntary. While progress was made, some companies opted not to bring their plants up to code, said Rickerson, the ERCOT vice president.

“Ultimately those were financial decisions that had to be made,” he said. “How much is someone willing to invest in a power plant that’s 50 years old and going to retire in a few years?”

More significantly, the best practices ERCOT was sharing were designed for a cold snap like that seen in 2011. While cold, with temperatures in Dallas dropping as low as 14 degrees, it was nothing compared to the 1989 winter storm, when temperatures dropped to 7 degrees in Houston and minus-7 in Abilene, let alone 1899, when the state’s all-time low temperature of minus-23 degrees was set in the Panhandle town of Tulia.

So when temperatures dipped into the single digits for days on end this February, most Texas power plants were simply not prepared. Exterior control equipment and fuel lines froze, not to mention coal piles and wind turbine blades.

“One power plant under freezing for 200-plus hours. That’s not a thing, right?” said Chris Moser, executive vice president of operations for NRG Energy, of expectations going into the winter. “If you look at the math ERCOT did prior to the seasonal assessment, it looked like (there was plenty of power). But then you have 80 to 85 plants not showing up. It was a failure of imagination.”

As for Hegar’s legislation, it has proved even more toothless than it appeared at the time.

According to a recent report from ERCOT, the agency was never given authority to judge the weatherization plans but only to check that they were being implemented. And a requirement in Hegar’s bill that the PUC produce a one-time Weather Emergency Preparedness Report, which was quietly published in 2012 and found that many power companies were still doing a poor job implementing reforms, drew little attention from state officials.

“When you’re on the commission, you’re dealing with what’s immediately in front of you,” said Ken Anderson, a former public utility commissioner. “I’m not sure how much follow-up occurred.”

Seems like this is a pretty good campaign issue for next year, especially given what is being prioritized over making the grid more robust. I’m just saying.

Here’s the official budget forecast

“Could be worse” remains the watchword.

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

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

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

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

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

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

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

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

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

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

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

State budget situation not quite as awful as feared

Still bad, but could be worse.

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

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

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

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

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

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

A few points:

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

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

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

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

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

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

The state deficit is quantified

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

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

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

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

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

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

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

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

How low can sales tax collections go?

If we’re lucky, no lower than this.

Texas collected about $2.6 billion in state sales tax revenue in May, leading to the steepest year-over-year decline in over a decade, Comptroller Glenn Hegar announced Monday.

The amount is 13.2% less than the roughly $3 billion the state collected in the same month last year.

A majority of the revenue collected last month was from purchases made in April and reflect the state’s first full-month look at how the novel coronavirus impacted businesses. That is when Texans lived under a statewide stay-at-home order and Gov. Greg Abbott, like leaders across the globe, ordered businesses across several sectors to close to combat the spread of the virus.

“Significant declines in sales tax receipts were evident in all major economic sectors, with the exception of telecommunications services,” Hegar said in a news release. “The steepest decline was in collections from oil and gas mining, as energy companies cut well drilling and completion spending following the crash in oil prices.”

[…]

Monday’s numbers are also reflective of the lag in data as revenues are collected and then reported by the state. Last month, for example, Hegar announced that the sales tax revenue collections for purchases in March dropped roughly 9% — which at the time was the steepest decline since January 2010.

Other major tax collections were also down in May, Hegar said Monday. Motor fuel taxes, for example, were down 30% from May 2019, marking the steepest drop since 1989. And the hotel occupancy tax was down 86% from May 2019, marking the steepest drop on record in data since 1982.

See here for the background. The presentation here is a little confusing, so let me clarify by quoting from the Chron:

Though the revenue totals are for May, they mostly represent transactions in April, when a statewide lockdown was in place to slow the spread of the virus. March sales were down 9.3 percent, state records show.

OK, so basically retail and other activity that leads to sales tax collection was down 13.4% in April after being down 9.3% in March. March was when the shutdowns began, though people had already slowed their activity before the official orders started happening later in the month. Pretty much all of April was in lockdown, while May is when things have begun to reopen. The hope would be that while May will be down compared to last year, it will be a lesser drop from 2019 than April and March were. That’s the hope, anyway. Maybe motor fuel taxes will inch up somewhat, but I wouldn’t hold my breath on hotel occupancy taxes. Check back in a month and we’ll see.

Down go the sales tax receipts

It’s bad. Expected, but bad.

Texas collected $2.58 billion in state sales tax revenue in April — a roughly 9% drop from what the state collected the same month last year, Comptroller Glenn Hegar announced Friday. That drop, from $2.8 to $2.58 billion, marked the steepest decline since January 2010, Hegar said.

April’s revenue, which the state collected from purchases made in March, is among the first official glimpses at the dramatic blows state and local budgets will take from widespread social distancing measures first taken last month to stop the spread of the new coronavirus. And Hegar warned that the state’s largest single source of funding will continue to “show steeper declines” in the coming months compared with a year ago as the economy continues what will likely be a slow crawl out of a weekslong virtual shutdown due to the pandemic.

“The steepest declines in tax remittances were from businesses most quickly and dramatically affected by social distancing,” Hegar said in a statement. “However, those losses were, to a degree, offset by increases from big-box retailers, grocery stores and online vendors. Remittances from oil and gas-related sectors also fell significantly as oil and gas exploration and production companies slashed capital spending in response to the crash in oil price.”

Hegar’s been sounding the alarm for awhile, it was just a matter of what the exact number was. If we’re lucky, April will be no worse. Whether things get better in May and beyond, which is the intent of the reopening scheme, won’t be known for a couple of months. How the population as a whole acts, and whether or not the virus comes roaring back, will be the keys to that.

The rough fiscal road for school districts

It’s gonna be bad. How bad remains the question.

Coronavirus already has wreaked havoc on school districts — closing campuses for the remainder of the school year, shifting learning online, and exposing a wide digital divide between students who have ready access to the internet and those who do not. And that is only this year.

Next year, even if the restrictions are lifted, the coronavirus still could spark a budget crisis for traditional and charter school districts across Texas.

School finance officials and state leaders already are warning that the economic disruption caused by the pandemic, coupled with the ongoing oil slump, could result in a plunge in state revenues as sales taxes drop and commercial property values slip. Texas Comptroller Glenn Hagar already has said the state is in a recession.

As districts work to finish their 2020-2021 budgets for approval this summer, Rep. Dan Huberty, R-Humble, said it would be prudent for them to squirrel away some money, even if it is too early to tell how much of an impact the pandemic will have on funding next year.

“Talking to superintendents, my message to everybody is, let’s get through this year, let’s get to summer time, and next session we’ll need to watch things very closely,” Huberty said.

[…]

[2019 school finance reform bill HB3] requires districts to base their upcoming budget on current year property values, instead of the previous year’s values. Districts receive a larger infusion of state money too, but the rate at which they can tax local property owners effectively will be capped by the state, said Catherine Knepp, an associate at the Moak, Casey & Associates school finance consulting group. How much local tax rates have to be lowered depends on the rate local property values rise and several other factors.

“Districts were still figuring out how to do that,” Knepp said, “Then enter coronavirus.”

For local revenues, Knepp said districts most likely to be impacted by the coronavirus closures will be those in which a larger share of their tax bases are commercial or industrial property rather than residential. About 60 percent of Deer Park ISD’s tax base, for example, comes from industrial properties that could suffer if the oil slump continues or if businesses there shut down entirely.

[…]

Huberty said the Legislature plans to save $1 billion of federal stimulus money for the next session to help fund schools and other parts of the state’s budget. Although it is too early to tell how much damage could be done as businesses and much of public life remains closed, he said money could be tight next session and said superintendents should begin looking where they could trim their budgets.

“The bones of what we put together with HB 3 remain intact, and we got some stimulus money from the feds to help us out with next year,” Huberty said. “But we’re going to have to look at everything.”

It’s a whammy from multiple fronts, as state revenue as well as local property tax revenues will be down, and the deep drop in oil prices will mean the Rainy Day Fund isn’t as topped up as it has been lately. On top of all that, when local revenues do start to recover, they will have to deal with the cap imposed by HB3. Which, as I understand it, does have an exception for things like epidemics, though who knows how that will play out. Even if everyone agrees to waive the restricting revenue cap, even the previously existing one could force tax cuts at a time when the districts are starved for funds. This will be an issue for multiple Legislatures, not just the 2021 Lege. It’ll also be a fine how-do-you-do for the TEA-appointed Board of Managers in HISD, whose first task (assuming they eventually get seated) will be dealing with the expected ginormous budget hole. Bet all those people who applied for the position a couple of months ago are having second thoughts now.

Coronavirus and the state budget

Ain’t gonna be great. How bad, we don’t yet know.

Comptroller Glenn Hegar briefed Texas House members on the state’s economy and budget Sunday night, saying that while it was too soon for specific forecasts, both are expected to take potentially massive hits in the wake of the new coronavirus pandemic, according to multiple people who were on the conference call.

The members-only call, led by House Speaker Dennis Bonnen, R-Angleton, was one of state lawmakers’ first glimpses of the impact the virus is expected to have on multiple industries, state finances and Texas’ largely oil-fed savings account, known as the Economic Stabilization Fund or the rainy day fund.

Hegar, who referred to the state of the economy as “the current recession,” according to multiple people on the roughly hourlong call, predicted both the general revenue for the state budget and the savings account balance will be drastically lower — possibly by billions of dollars — when he makes a revised fiscal forecast. He said that update could happen in July.

Later Sunday, the comptroller’s office said that unless the Legislature spent money out of the savings account before July, the balance for the fund would be revised down, but not by more than $1 billion.

In October 2019, Hegar estimated that the state budget would have a nearly $3 billion balance for the fiscal 2020-21 biennium. The balance of the Economic Stabilization Fund, Hegar announced at the time, would be around $9.3 billion by the end of the 2021 fiscal year in August of that year.

[…]

Abbott, for his part, noted last week that he and the Legislature can tap into the state’s disaster relief fund immediately to help respond to the virus. He also said that the Economic Stabilization Fund could be used “at the appropriate time,” which he said would happen when state leaders “know the full extent of the challenge we’re dealing with.”

Before the stabilization fund could be used, Abbott would need to summon state lawmakers back to Austin for a special session before the Legislature reconvenes in January 2021. When asked at a town hall about the possibility for calling such a session, Abbott said “every option remains on the table,” while noting that there would not be any need for such an action if every Texan followed guidance to help curb the virus.

Obviously, the crash in oil prices doesn’t help the state’s financial picture, either. It’s sales tax collection that will really suffer, and that pain will be spread to the cities and counties as well. As always, the big picture here is “how long will this take” and “how many businesses and jobs will be lost in the interim”, and right now we don’t know.

I will say, situations like this are among the reasons why balanced budget requirements are such a bad idea. Let the state – and the cities – run a deficit for a year or two, rather than cut a bunch of programs and lay off a bunch of employees, both of which will exacerbate the effect of the overall downturn. I assure you, society will not crumble around us if we do that. We will see plenty of shenanigans pulled by legislators to worm their way around the balanced budget requirement, as we have always done. So why not be honest about it and just admit that the whole thing is a sham and we should just not worry about it, at least for this cycle? We can always get back to it next time. Much easier said than done of course – constitutions and charters can’t be so easily cast aside, which again goes to my point about why these things are stupid – but in a world where everything has been thrown into chaos, this just makes sense. Same for revenue caps as well – if the revenue for the state, or the city of Houston, falls ten percent this year, it will take three years under the existing 3.5% revenue cap just to get revenue back to existing levels, while forcing needless cuts in the meantime. It’s all a sham, we should seize the moment to recognize it for the sham that it is, and free ourselves once and for all from its ridiculous shackles. Won’t happen happen, but I’ll never stop pointing it out.

Worrying about the restaurants

Alison Cook laments the potential fate for her favorite part of Houston.

Depending on local or state strictures, to help stem the spread of Covid-19 restaurants in most major markets would be able to provide takeout, drive-thru or delivery rations only. Dine-in was done, for the present and — according to some epidemiologists and public health experts — very possibly in rolling closures for the next 18 months. That’s the time it will take for a vaccine to be tested, manufactured and made available.

If we’re lucky.

Even though I’ve suspected this was coming since the calamitous February business drop experienced by restaurants in Bellaire Boulevard’s Asiatown — a preview of what lay ahead for the whole market as Covid-19 spread, I feared — the reality of the closures has hit me hard.

I gasped when I saw an Open Table graph that showed restaurant bookings, already down 45 to 65% last week, plunging off the cliff to zero on Tuesday in Boston, L.A., New York, San Francisco, Seattle, Toronto and Washington, D.C. It looked like the highway to hell.

I’m in mourning daily as I read the anguished tweets from Houston chefs and restaurant owners I admire. I’m sick with worry for the servers and bartenders and bussers and line cooks whose livelihoods are in peril.

[…]

My greatest sorrow is that I see a great winnowing ahead. On the other side of this public health crisis, it seems likely that Houston’s dining landscape will be substantially altered. Restaurant profit margins are slim in the best of times, and without serious public investment at the state or federal level, we are likely to see many bankruptcies.

It’s not the big chain restaurants I’m worried about — it’s the mom-and-pops and the small independent operators who help to define the city. Those are a cultural legacy well worth saving.

Ian Froeb, the restaurant critic at the St. Louis Post-Dispatch, told a radio interviewer the following: “I have a top 100 restaurant list and somebody that’s in the industry said, ‘You could be looking at 80 of the 100 might not come back.’ I didn’t push back. That seems like a real possibility.”

I’m not quite that pessimistic, yet, but the fallout is going to be bad.

Obviously, we can all do more ordering takeout in the interim, in the hope that these places we love can weather the storm, which we also hope will be measured in weeks and not months. But let’s be clear, the state of Texas could also help.

Up against a Friday deadline, the broad base of workers in the Texas restaurant industry have asked Gov. Greg Abbott and other officials to waive monthly sales taxes due by the end of the day.

Bobby Heugel, owner of several popular bars and restaurants in Houston, said many businesses could ride out the new coronavirus’ social slowdown for months if the state waived, delayed or deferred the monthly taxes.

“We have been crushing the governor’s office for requests of deferrals,” Heugel said Thursday. “Their voicemail actually stopped working late last night.”

Comptroller Glenn Hegar said the state won’t push back Friday’s deadline, though it has done so after hurricanes and other disasters. Hegar and aides cited a couple of reasons: Hurricanes and similar disasters, unlike pandemics, can knock out the infrastructure used to calculate and pay taxes. More importantly, the state and local governments that depend on those taxes to keep hospitals and emergency services going need the money as they prepare for the number of Texans testing positive for the new coronavirus to skyrocket within weeks.

“It would be irresponsible, but more popular, to delay collections,” said Karey Barton, associate deputy comptroller for tax. “The people who paid those taxes need that money to be available to keep operating hospitals and other services.”

I understand the concern, but the state has a rainy day fund it can tap into to bridge the gap in the interim. Maybe Greg Abbott needs to use his emergency powers to make that happen, maybe he needs to call a special session to enable it, or maybe he just needs to order it and let someone file a lawsuit to stop him, I don’t know. But the effect of losing a significant portion of the hospitality industry will last a lot longer than this crisis. We need to think outside the box here, and take action as needed before it’s too late.

Chron overview of HD134

Is this the year Sarah Davis loses? That’s the question.

Rep. Sarah Davis

The March primaries are weeks away, but the first question at a recent forum for the three Democrats running to unseat state Rep. Sarah Davis centered on November: “How do you plan to win this race if you are the nominee?”

The answer has evaded Democrats since the 2010 tea party wave, when Davis flipped the highly affluent and educated House District 134. Widely viewed as the most moderate Republican in the Texas House, she comfortably has retained the seat in four subsequent elections, despite strong headwinds atop the ballot the last two cycles.

Those electoral results are on the minds of voters, and the candidates themselves, in the sleepy Democratic primary between educator Lanny Bose and attorneys Ann Johnson and Ruby Powers. With little evidence of public rancor between them, they instead are directing their attacks toward Davis’ record, each trying to convince voters of their ability to beat her in November.

“My attitude is, we’ve got three folks who are applying to be team captain. I’m going to be a part of this race in the general whether or not my name is on the ballot,” Bose said. “This primary is about talking about our shared vision for what this seat and what Houston should look like.”

[…]

Republicans are skeptical Democrats will be able to wield the Abbott endorsement against Davis, or that she will lose under even the most unfavorable conditions.

“I don’t think the voters really — other than the inside baseball participants — care about political endorsements,” said Chris Beavers, a Republican strategist who is not involved in the race. “They care about service, and there is nobody who serves their district more passionately and fully than Sarah Davis does.”

Last cycle, Davis accurately predicted that some statewide Republicans could lose her district — which encompasses the Texas Medical Center, Southside Place, Bellaire, Rice University and West University Place, where she lives — amid a “blue wave” of Democratic voters. The results varied wildly: Democratic Senate candidate Beto O’Rourke won 60 percent of the House District 134 vote, while Republican Railroad Commissioner Christi Craddick narrowly beat her Democratic opponent there.

Davis captured 53 percent, winning by about 5,600 votes out of nearly 89,000.

That, Davis said, shows the district’s voters “cross the ballot to vote for people, not for parties.”

“My opponents who refer to the district as ‘flippable’ just don’t get it,” Davis said. “It isn’t about the party label, it’s about representing the priorities of this unique district regardless of party.”

Here’s the sum total of Republicans who carried HD134 in 2018:
Ed Emmett (56.31%) beat Lina Hidalgo (41.46%).
Glenn Hegar (48.60%) beat Joi Chavalier (48.52%).
Christi Craddick (49.00%) beat Roman McAllen (48.60%).
Seven Republican judicial candidates out of 74 total judicial races.

That’s it. Every other Republican, running for every other office, lost in HD134. Some by a hair, others by a landslide, they all lost. You can hang your hat on Christi Craddick and Glenn Hegar if you want, those are some strong headwinds.

It’s also the key reason why HD134 looks so much more winnable than in the past. Far fewer Democrats won HD134 in 2016, including judicial candidates. The district wasn’t just blue at the tippy top in 2018, it was blue pretty much all the way through.

There are plenty of antecedents for this race. Former Congressman Chet Edwards won three races in a very Republican, DeLay-redrawn district, until 2010 when a bunch of people who used to vote for him decided they were better represented by a Republican. Former State Rep. Ellen Cohen won two terms in this same HD134, which was about as Republican downballot then as it is Democratic now, until 2010 when a bunch of voters who had once supported her decided they were better represented by someone like Sarah Davis. I’m not saying that’s how this election, under very similar circumstances, will go. I’m just saying we’ve seen elections like it before. The voters there may still decide that she represents them well, regardless of her party. Or they may decide that even if she is the best that the Republican Party has to offer these days, the fact that it’s the Republican Party that’s making the offering is enough for them to change their minds.

That’s the point that the three Dems running for the nomination, all of whom are running actual, active, engaged campaigns unlike Davis’ opponent in 2018, would like to make with the voters. You may say that boiling this down to red versus blue is a disservice to the voters, and that making up their own independent non-partisan minds is more valuable. I say the difference between re-electing Sarah Davis and ousting her in favor of one of those three fine Dems is at least possibly the difference between a State House that spends 2021 passing a bunch of anti-trans bills and anti-abortion bills and anti-immigrant bills (Sarah Davis co-sponsored SB4, the “show me your papers” bill, and voted for the sonogram bill in 2011, in case you’ve forgotten) and new maps that heavily favor Republicans, and a State House that doesn’t do those things. The voters can decide for themselves which of those outcomes they prefer.

In case you need a reminder, my interviews with the HD134 candidates are here:

Ann Johnson
Ruby Powers
Lanny Bose

Texas versus AirBnB update

From last week:

The Texas Comptroller’s office said Tuesday it’s reviewing the inclusion of Airbnb on a list of companies that boycott Israel and are banned from doing business with the state after the company announced a change to its policy for listings in the West Bank.

The home-sharing company said in a statement that it’s reversing a plan announced this November to remove about 200 rental listings from the territory, whose ownership is disputed by Palestinians. The company said it will donate the profits to humanitarian aid groups.

“Airbnb has never boycotted Israel, Israeli businesses, or the more than 20,000 Israeli hosts who are active on the Airbnb platform,” the company said in the statement. “We have always sought to bring people together and will continue to work with our community to achieve this goal.”

The company’s decision to delist the properties had prompted the state last month to blacklist it in keeping with a 2017 law that bans state agencies from contracting with or investing in companies that boycott Israel. The law was touted by Republicans, including Gov. Greg Abbott, as a way to show solidarity with Israel.

See here for the background. As I’ve said before, governments base policy decisions on who they do and don’t want to do business with all the time, so this policy is in and of itself not remarkable. It’s dumb and misguided, but not unusual. It’s also led to some other consequences.

Texas state agencies are beginning to divest nearly $72 million worth of stock in a company said to be boycotting Israel — the first financial move after a year-old law that bars Texas agencies from investing in such companies.

Two major state pension funds — the Employees Retirement System of Texas and Texas Permanent School Fund —own $68 million and about $4 million, respectively, worth of stock in DNB ASA, a Norwegian financial services company, officials said, though the company has denied it boycotts Israel.

[…]

The Comptroller’s office, upon the advice of two contracted consulting groups, identified four companies as having boycotted Israel, though all of them deny that they engage in any punitive ban.

Employees Retirement System spokeswoman Mary Jane Wardlow said the fund began divesting March 1, 2018, when it had about $68 million invested in DNB, and as of early April had divested about half that amount. Divestment should be complete by June, Wardlow said.

The Texas Permanent School Fund did not respond to a request for information on its divestment.

The state has no direct holdings in any of the other three companies on its divestment list, according to notifications to the state obtained by Hearst Newspapers.

Two of the six state agencies affected by the law —Texas County and District Retirement System and Texas Municipal Retirement System — had indirect investments in DNB, records show.

And three of the six state agencies affected by the law — the Employees Retirement System of Texas, Texas Municipal Retirement System and Teacher Retirement System of Texas — had indirect investments in Airbnb. (The only agency to disclose how much, ERS, had about $460,000-worth.)

But the law doesn’t require state governmental entities to divest from indirect holdings. It only requires them to send letters to the managers of the investment fund in question and request that they remove blacklisted companies from the fund or create a similar fund without those companies.

If the manager can’t come up with a fund with “substantially the same management fees and same level of investment risk and anticipated return,” the law requires no further action.

I mean, I don’t think this was a good idea, but if you do, then this is what you signed up for.

Texas versus AirBnB

This is one to watch.

Texas is adding short-term-rental site Airbnb to a list of companies that cannot receive state investments because it disallows Israeli-owned rentals in the disputed West Bank.

Airbnb is the only American-based company on Texas’ anti-Israel boycott list, which includes a Norwegian financial services group, a British wholesale co-op and a Norwegian insurance company.

Texas is making it “very clear that our state stands with Israel and its people against those wishing to undermine Israel’s economy and the wellbeing of its people,” said a statement from state Comptroller Glenn Hegar’s office.

In November, Airbnb said it would remove about 200 listings in Israeli settlements in the West Bank. It cited a variety of factors for its decision, including whether listings inside an occupied territory had a direct connection to a larger regional dispute.

“We unequivocally reject and oppose the BDS movement and are disappointed by the decision,” Airbnb said in a statement. “There are over 20,000 Airbnb hosts in Israel who open their doors and showcase the best of Israeli hospitality to guests from around the world.”

In addition to the West Bank, Airbnb also said it has removed listings in the disputed territories of South Ossetia and Abkhazia.

Airbnb has about 20,000 Israeli hosts who’ve welcomed more than 1 million visitors, including 4,700 Texans in 2018, the company said.

Texas’ move was praised by Christians United For Israel, the public policy arm of the nation’s largest pro-Israel organization. It likened the so-called Boycott, Divestment and Sanctions movement, which seeks to “end international support for Israel’s suppression of Palestinians,” to “terrorists” and “hostile nations.”

[…]

Democratic critics of laws cracking down on the Boycott, Divestment and Sanctions movement are increasingly skeptical of Israel’s policies and see such laws as an infringement on free speech. In January, Florida added Airbnb to a list of companies that it defines as boycotting Israel. The same month, a bill to crack down on the BDS movement was blocked by Democrats in the Senate.

The backlash against Airbnb comes as the company is reportedly preparing for an IPO sometime in 2019.

I don’t want to get too deep into the weeds here, so let me sum up: The Lege passed a law in 2017 that created this policy and led to AirBnB’s blacklisting. The push for this has largely come from the Christian far-right fringe, with radical clerics like John Hagee in San Antonio as the main cheerleaders. The author of that bill, Rep. Phil King, has filed another bill that intends to clarify that the law applies to companies and not individuals. One possible reason for that is that there has already been a lawsuit filed, by a speech pathologist in Pflugerville who lost her job with Pflugerville ISD over her support for BDS. The current law is broad enough that it may well be vulnerable to litigation on free speech grounds. AirBnB has 90 days to respond to the Comptroller’s actions, so if a lawsuit is to come of this, it’ll happen after that. Got it? Good.

Our pretty decent revenue estimate

We’ve seen much worse.

At a time when legislators are vowing to spend more money on public schools and slow the growth of Texans’ property tax bills, the state should have enough money at its disposal to do just that.

That is, if its newest predictions hold true.

Texas Comptroller Glenn Hegar on Monday offered a cautiously optimistic outlook for the Texas economy, telling lawmakers they will have about 8.1 percent more state funds available to budget for public programs — primarily schools, highways and health care — in 2020 and 2021. Hegar projected there would be about $119.1 billion in state funds available for the next two-year budget, up from $110.2 in the last two-year budget.

But falling oil prices in the last month, along with heightened uncertainty in the U.S. economy and international financial markets, led Hegar to deliver a “cloudy” forecast with some trepidation.

“We remain cautiously optimistic but recognize we’re unlikely to see continued revenue growth at the unusually strong rates we’ve seen in recent months,” he said.

[…]

Meanwhile, the state’s savings account, known as the rainy day fund, is projected to reach a record high balance of $15 billion. Lawmakers will debate whether to dip into that Economic Stabilization Fund to pay for bills coming due from the last two-year budget period, including Hurricane Harvey recovery, and in the upcoming two-year budget.

Advocates for greater investment in public schools reacted positively to the revenue estimate, saying lawmakers now have no excuse not to increase spending, given a growing budget and unprecedentedly large savings account balance.

“This is good news,” said Eva DeLuna Castro, a state budget analyst at the left-leaning Center for Public Policy Priorities. “This is enough to not cut state services.”

It is good news, but as always it comes with a warning label.

[T]he Republican-controlled Legislature has excelled at finding new ways to squander available funds on everything from inefficient property tax relief, piecemeal school finance fixes and heaps of corporate subsidies and tax cuts. Dan Patrick and the tea party faction are also intent on keeping the overflowing Rainy Day Fund under lock and key, despite the continued urgency of Hurricane Harvey relief. That could be a big wild card — given that Governor Greg Abbott never called a special session after Harvey, the Legislature has yet to allocate any state relief money. Leaders in the affected Gulf Coast region, from Rockport to Port Arthur, are sure to call on legislators to step up.

Of course, the devil will be in the details — GOP lawmakers are experienced at promising to tackle weighty, complicated issues like property tax relief and school finance reform while pushing policy that doesn’t really fix anything, or makes things worse. Abbott is intent on settling the property tax dilemma by handcuffing local governments’ ability to levy property tax increases, all while ignoring the larger problem at hand: the state needs to dedicate a lot more money for schools.

The state school finance system is in desperate need of an overhaul. Texas’ spending per student is around $10,000 a year, about $2,300 below the national average. Funding has remained relatively stagnant over the past decade and the state has plummeted to 36th in the nation in terms of per pupil spending. Meanwhile, as the state’s population has grown rapidly, the Legislature has forced local governments to pick up a larger share of the education tab through property tax revenues (thus fueling the current property tax crisis). In 2008, the state and local funding shares were split evenly, but the state’s contribution has since fallen to its current rate of 38 percent, according to the Center for Public Policy Priorities. Without a fix, that number is projected to fall even further. This has created a perpetual underfunding of the school system and has worsened the inequities between rich and poor districts.

But Hegar’s estimate is a heartening sign for advocates hoping for a substantial injection of state funding for public education — as much as $5 billion, which is what [outgoing Speaker Joe] Straus has said the state can afford. Perhaps an emboldened caucus of House and Senate Democrats, in tandem with Republicans who saw the writing on the wall in November, will be able to succeed in pushing for a more comprehensive solution.

The need is great, but the temptation to splurge on wasteful tax cuts that they call “school finance reform” is greater still. Even if there’s a zombie bathroom bill, that’s going to be the fight of the session. Texas Monthly has more.

Precinct analysis: The two types of statewide candidates

When we look at the precinct data in Harris County, we can separate the statewide candidates into two groups. Here’s the first group:


Dist   Abbott   Valdez   Tipp  Abbott% Valdez%  Trump% Clinton%
===============================================================
CD02  146,399  112,272  4,345   55.66%  43.40%  52.38%   43.05%
CD07  127,414  111,248  4,285   52.45%  46.61%  47.11%   48.47%
CD08   18,751    9,906    390   64.55%  34.57%		
CD09   27,929   90,968  1,450   23.21%  76.51%  17.56%   79.70%
CD10   75,353   37,952  1,530   65.62%  33.50%  63.61%   32.36%
CD18   46,703  135,085  2,924   25.28%  74.31%  19.95%   76.46%
CD22   16,713   14,587    450   52.64%  46.60%		
CD29   35,234   81,191  1,209   29.95%  69.74%  25.46%   71.09%
CD36   64,462   34,237  1,486   64.34%  34.69%		
							
SBOE6 311,568  259,847  9,961   53.59%  45.47%  48.92%   46.59%
							
HD126  31,307   23,705    756   56.14%  43.09%  52.96%   42.99%
HD127  44,013   23,782    918   64.05%  35.08%  61.23%   34.90%
HD128  36,496   15,196    657   69.72%  29.40%  68.17%   28.75%
HD129  38,653   25,449  1,079   59.30%  39.70%  55.33%   40.06%
HD130  53,877   21,741  1,037   70.29%  28.75%  68.08%   27.94%
HD131   7,736   33,845    479   18.39%  81.39%  13.33%   84.31%
HD132  35,033   30,977    924   52.34%  46.93%  50.04%   45.68%
HD133  44,317   26,343  1,278   61.60%  37.28%  54.54%   41.11%
HD134  42,650   45,268  1,967   47.45%  51.49%  39.58%   55.12%
HD135  28,819   26,636    853   51.18%  48.03%  48.91%   46.80%
HD137   8,239   15,723    398   33.82%  65.62%  28.95%   66.96%
HD138  25,204   22,706    839   51.70%  47.39%  47.80%   47.83%
HD139  12,409   34,289    665   26.20%  73.43%  20.60%   76.12%
HD140   6,188   17,271    207   26.15%  73.62%  21.89%   75.07%
HD141   5,126   26,059    327   16.27%  83.56%  12.58%   85.20%
HD142  10,236   29,142    476   25.68%  74.01%  20.97%   76.20%
HD143   8,772   19,764    263   30.46%  69.26%  26.02%   71.03%
HD144   9,806   13,427    255   41.75%  57.79%  38.41%   57.72%
HD145  10,959   21,631    495   33.12%  66.37%  28.73%   66.91%
HD146   9,927   33,073    645   22.74%  76.91%  17.31%   79.44%
HD147  12,239   42,282  1,017   22.04%  77.55%  16.76%   79.00%
HD148  17,912   29,255  1,070   37.13%  62.02%  30.49%   63.83%
HD149  15,348   23,283    513   39.21%  60.27%  32.51%   64.25%
HD150  43,692   26,599    951   61.33%  37.84%  59.18%   36.62%
							
CC1    73,833  212,930  4,401   25.36%  74.25%  19.74%   76.83%
CC2   115,327  111,134  3,044   50.25%  49.07%  46.79%   49.48%
CC3   178,630  151,009  5,301   53.33%  45.81%  48.22%   47.63%
CC4   191,168  152,373  5,323   54.80%  44.35%  51.22%   44.42%


Dist    Hegar   Cheval Sander   Hegar% Cheval%  Trump% Clinton%
===============================================================
CD02  141,744  111,763  7,347   54.34%  42.85%  52.38%   43.05%
CD07  124,558  109,747  6,674   51.69%  45.54%  47.11%   48.47%
CD08   18,139    9,973    744   62.86%  34.56%	
CD09   24,211   92,612  3,102   20.19%  77.22%  17.56%   79.70%
CD10   73,125   38,247  2,784   64.06%  33.50%  63.61%   32.36%
CD18   41,793  136,421  5,291   22.77%  74.34%  19.95%   76.46%
CD22   15,699   14,868    917   49.86%  47.22%		
CD29   31,025   82,379  3,547   26.53%  70.44%  25.46%   71.09%
CD36   61,944   34,609  2,847   62.32%  34.82%		
							
SBOE6 303,287  257,168 16,226   52.59%  44.59%  48.92%   46.59%
		
HD126  30,142   23,892  1,398   54.38%  43.10%  52.96%   42.99%
HD127  42,379   24,118  1,729   62.12%  35.35%  61.23%   34.90%
HD128  35,212   15,517  1,260   67.73%  29.85%  68.17%   28.75%
HD129  36,953   25,598  2,034   57.22%  39.63%  55.33%   40.06%
HD130  52,413   21,902  1,867   68.80%  28.75%  68.08%   27.94%
HD131   6,299   34,617  1,050   15.01%  82.49%  13.33%   84.31%
HD132  33,520   31,387  1,765   50.28%  47.08%  50.04%   45.68%
HD133  43,710   25,739  1,843   61.31%  36.10%  54.54%   41.11%
HD134  43,113   43,043  2,548   48.60%  48.52%  39.58%   55.12%
HD135  27,400   26,976  1,576   48.97%  48.21%  48.91%   46.80%
HD137   7,616   15,855    774   31.41%  65.39%  28.95%   66.96%
HD138  24,206   22,771  1,438   50.00%  47.03%  47.80%   47.83%
HD139  11,085   34,800  1,223   23.53%  73.87%  20.60%   76.12%
HD140   5,335   17,585    638   22.65%  74.65%  21.89%   75.07%
HD141   4,010   26,763    682   12.75%  85.08%  12.58%   85.20%
HD142   8,720   30,011    976   21.96%  75.58%  20.97%   76.20%
HD143   7,578   20,159    879   26.48%  70.45%  26.02%   71.03%
HD144   9,069   13,595    738   38.75%  58.09%  38.41%   57.72%
HD145  10,071   21,588  1,157   30.69%  65.78%  28.73%   66.91%
HD146   8,749   33,458  1,166   20.17%  77.14%  17.31%   79.44%
HD147  11,030   42,308  1,741   20.03%  76.81%  16.76%   79.00%
HD148  17,117   28,580  1,885   35.97%  60.06%  30.49%   63.83%
HD149  14,471   23,550	1,002   37.08%  60.35%  32.51%   64.25%
HD150  42,040   26,807	1,884	59.44%  37.90%  59.18%   36.62%
							
CC1    66,298  215,259  7,805   22.91%  74.39%  19.74%   76.83%
CC2   108,715  112,237  6,847   47.72%  49.27%  46.79%   49.48%
CC3   173,303  150,515  8,863   52.09%  45.24%  48.22%   47.63%
CC4   183,922  152,608  9,738   53.12%  44.07%  51.22%   44.42%

Dist     Bush    Suazo   Pina    Bush%  Suazo%  Trump% Clinton%
==============================================================
CD02  139,352  114,931  7,003   53.33%  43.99%  52.38%   43.05%
CD07  121,500  114,267  5,747   50.31%  47.31%  47.11%   48.47%
CD08   17,965   10,096    794   62.26%  34.99%		
CD09   24,634   93,291  1,961   20.55%  77.82%  17.56%   79.70%
CD10   72,059   39,108  3,029   63.10%  34.25%  63.61%   32.36%
CD18   42,340  137,629  3,572   23.07%  74.99%  19.95%   76.46%
CD22   15,614   15,120    804   49.51%  47.94%		
CD29   32,067   83,045  1,983   27.39%  70.92%  25.46%   71.09%
CD36   61,471   35,448  2,621   61.76%  35.61%		
							
SBOE6 297,321  265,718 14,551   51.48%  46.00%  48.92%   46.59%
							
HD126  29,781   24,312  1,386   53.68%  43.82%  52.96%   42.99%
HD127  41,767   24,635  1,922   61.13%  36.06%  61.23%   34.90%
HD128  35,019   15,710  1,327   67.27%  30.18%  68.17%   28.75%
HD129  36,480   26,417  1,800   56.39%  40.83%  55.33%   40.06%
HD130  51,579   22,543  2,081   67.69%  29.58%  68.08%   27.94%
HD131   6,567   34,764    600   15.66%  82.91%  13.33%   84.31%
HD132  33,218   31,761  1,697   49.82%  47.63%  50.04%   45.68%
HD133  42,447   27,278  1,761   59.38%  38.16%  54.54%   41.11%
HD134  41,172   45,935  1,991   46.21%  51.56%  39.58%   55.12%
HD135  27,294   27,394  1,327   48.73%  48.90%  48.91%   46.80%
HD137   7,570   16,080    586   31.23%  66.35%  28.95%   66.96%
HD138  23,878   23,298  1,236   49.32%  48.12%  47.80%   47.83%
HD139  11,284   35,000    805   23.96%  74.33%  20.60%   76.12%
HD140   5,582   17,665    333   23.67%  74.92%  21.89%   75.07%
HD141   4,200   26,800    425   13.37%  85.28%  12.58%   85.20%
HD142   9,075   29,961    663   22.86%  75.47%  20.97%   76.20%
HD143   7,907   20,265    472   27.60%  70.75%  26.02%   71.03%
HD144   9,202   13,759    454   39.30%  58.76%  38.41%   57.72%
HD145  10,172   21,989    737   30.92%  66.84%  28.73%   66.91%
HD146   8,700   33,902    789   20.05%  78.13%  17.31%   79.44%
HD147  11,071   42,903  1,162   20.08%  77.81%  16.76%   79.00%
HD148  16,967   29,451  1,362   35.51%  61.64%  30.49%   63.83%
HD149  14,405   23,854    753   36.92%  61.15%  32.51%   64.25%
HD150  41,665   27,259  1,845   58.87%  38.52%  59.18%   36.62%
							
CC1    66,399  217,832  5,280   22.93%  75.24%  19.74%   76.83%
CC2   108,715  114,022  5,408   47.65%  49.98%  46.79%   49.48%
CC3   170,023  155,106  7,985   51.04%  46.56%  48.22%   47.63%
CC4   181,865  155,975  8,841   52.46%  44.99%  51.22%   44.42%

Dist    Cradd  McAllen Wright   Cradd% McAlln%  Trump% Clinton%
===============================================================
CD02  142,254  112,407  5,821   54.61%	43.15%  52.38%   43.05%
CD07  124,873  110,377  5,224   51.93%	45.90%  47.11%   48.47%
CD08   18,184   10,028    604   63.10%	34.80%		
CD09   24,262   93,623  1,880   20.26%	78.17%  17.56%   79.70%
CD10   72,996   38,698  2,336   64.01%	33.94%	63.61%   32.36%
CD18   42,236  137,094  3,852   23.06%	74.84%  19.95%   76.46%
CD22   15,798   14,978    685   50.21%	47.61%		
CD29   31,169   83,638  2,009   26.68%	71.60%  25.46%   71.09%
CD36   62,167   35,017  2,135   62.59%	35.26%		
							
SBOE6 304,098  258,654 12,833   52.83%  44.94%  48.92%   46.59%
							
HD126  30,251   24,086  1,030   54.64%  43.50%  52.96%   42.99%
HD127  42,508   24,260  1,399   62.36%  35.59%  61.23%   34.90%
HD128  35,341   15,690    935   68.01%  30.19%  68.17%   28.75%
HD129  37,121   25,810  1,593   57.53%  40.00%  55.33%   40.06%
HD130  52,323   22,196  1,573   68.76%  29.17%  68.08%   27.94%
HD131   6,309   34,963    620   15.06%  83.46%  13.33%   84.31%
HD132  33,485   31,713  1,390   50.29%  47.63%  50.04%   45.68%
HD133  43,854   25,773  1,499   61.66%  36.24%  54.54%   41.11%
HD134  43,326   42,975  2,125   49.00%  48.60%  39.58%   55.12%
HD135  27,450   27,296  1,167   49.09%  48.82%  48.91%   46.80%
HD137   7,649   16,001    542   31.62%  66.14%  28.95%   66.96%
HD138  24,239   22,956  1,126   50.16%  47.51%  47.80%   47.83%
HD139  11,169   35,002    865   23.75%  74.42%  20.60%   76.12%
HD140   5,367   17,822    347   22.80%  75.72%  21.89%   75.07%
HD141   4,009   27,021    417   12.75%  85.93%  12.58%   85.20%
HD142   8,785   30,256    626   22.15%  76.27%  20.97%   76.20%
HD143   7,582   20,499    483   26.54%  71.77%  26.02%   71.03%
HD144   9,100   13,835    444   38.92%  59.18%  38.41%   57.72%
HD145  10,152   21,880    733   30.98%  66.78%  28.73%   66.91%
HD146   8,760   33,730    801   20.24%  77.91%  17.31%   79.44%
HD147  11,235   42,469  1,283   20.43%  77.23%  16.76%   79.00%
HD148  17,266   28,762  1,437   36.38%  60.60%  30.49%   63.83%
HD149  14,470   23,827    675   37.13%  61.14%  32.51%   64.25%
HD150  42,188   27,038  1,436   59.70%  38.26%  59.18%   36.62%
							
CC1    66,771  216,622  5,478   23.11%  74.99%  19.74%   76.83%
CC2   109,186  113,684  4,717   47.98%  49.95%  46.79%   49.48%
CC3   173,478  151,759  6,871   52.24%  45.70%  48.22%   47.63%
CC4   184,504  153,795  7,480   53.36%  44.48%  51.22%   44.42%

These candidates, all of whom won by at least ten points statewide, carried CD07 and SBOE6, carried or narrowly lost HDs 132, 135, and 138, and did as well as Trump or better pretty much everywhere. Unlike Ted Cruz, these candidates held the base Republican vote and won back the Gary Johnson and Evan McMullen Republicans. These were the Republicans who had the least amount of controversy dogging them, the ones who for the most part could claim to be about doing their jobs and not licking Donald Trump’s boots. Yes, George P. Bush had Alamo issues, and Harvey recovery money issues (as did Greg Abbott to a lesser extent), but they weren’t enough to dent him. The most notable result in here is Abbott losing HD134. I’m guessing Sarah Davis will not be fearing another primary challenge in 2020.

And then there’s the other group:


Dist  Patrick  Collier McKenn Patrick%   Coll%  Trump% Clinton%
===============================================================
CD02  134,530  123,364  4,744   51.22%  47.84%  52.38%   43.05%
CD07  113,520  124,555  4,659   46.77%  52.32%  47.11%   48.47%
CD08   17,737   10,768    482   61.19%  37.78%		
CD09   24,176   94,548  1,535   20.10%  79.64%  17.56%   79.70%
CD10   70,715   42,023  1,959   61.65%  37.27%  63.61%   32.36%
CD18   39,805  141,631  3,053   21.58%  78.06%  19.95%   76.46%
CD22   15,438   15,694    554   48.72%  50.41%		
CD29   31,998   83,846  1,559   27.25%  72.38%  25.46%   71.09%
CD36   60,359   37,854  1,812   60.34%  38.54%		
							
SBOE6 282,567  287,230 10,933   48.66%  50.41%  48.92%   46.59%
							
HD126  29,104   25,673    917   52.26%  46.87%  52.96%   42.99%
HD127  41,357   26,160  1,106   60.27%  38.75%  61.23%   34.90%
HD128  34,655   16,787    832   66.29%  32.63%  68.17%   28.75%
HD129  35,547   28,216  1,308   54.63%  44.25%  55.33%   40.06%
HD130  50,658   24,612  1,309   66.15%  32.70%  68.08%   27.94%
HD131   6,413   35,123    485   15.26%  84.56%  13.33%   84.31%
HD132  32,599   33,062  1,174   48.78%  50.35%  50.04%   45.68%
HD133  39,252   31,191  1,400   54.64%  44.28%  54.54%   41.11%
HD134  36,006   52,016  1,881   40.05%  59.09%  39.58%   55.12%
HD135  26,706   28,541    976   47.50%  51.66%  48.91%   46.80%
HD137   7,279   16,593    460   29.92%  69.51%  28.95%   66.96%
HD138  23,146   24,601    914   47.57%  51.52%  47.80%   47.83%
HD139  10,774   35,909    643   22.77%  76.92%  20.60%   76.12%
HD140   5,635   17,734    267   23.84%  75.89%  21.89%   75.07%
HD141   4,259   26,894    339   13.52%  86.33%  12.58%   85.20%
HD142   8,914   30,427    475   22.39%  77.34%  20.97%   76.20%
HD143   7,979   20,410    356   27.76%  71.89%  26.02%   71.03%
HD144   9,204   13,892    340   39.27%  60.15%  38.41%   57.72%
HD145   9,874   22,500    624   29.92%  69.50%  28.73%   66.91%
HD146   8,240   34,720    661   18.89%  80.82%  17.31%   79.44%
HD147  10,055   44,357  1,005   18.14%  81.52%  16.76%   79.00%
HD148  15,427   31,591  1,139   32.03%  67.19%  30.49%   63.83%
HD149  14,187   24,362    560   36.28%  63.20%  32.51%   64.25%
HD150  41,008   28,912  1,186   57.67%  41.35%  59.18%   36.62%
							
CC1    62,356  224,149  4,325   21.44%  78.24%  19.74%   76.83%
CC2   107,321  117,954  3,820   46.85%  52.36%  46.79%   49.48%
CC3   162,085  166,470  6,044   48.44%  50.67%  48.22%   47.63%
CC4   176,516  165,710  6,168   50.67%  48.42%  51.22%   44.42%


Dist   Paxton   Nelson Harris  Paxton% Nelson%  Trump% Clinton%
===============================================================
CD02  131,374  125,193  5,584   50.11%  47.76%  52.38%   43.05%
CD07  110,526  126,567  5,145   45.63%  52.25%  47.11%   48.47%
CD08   17,461   10,905    580   60.32%  37.67%		
CD09   22,756   95,621  1,776   18.94%  79.58%  17.56%   79.70%
CD10   69,879   42,292  2,315   61.04%  36.94%  63.61%   32.36%
CD18   37,644  143,124  3,522   20.43%  77.66%  19.95%   76.46%
CD22   14,945   16,014    661   47.26%  50.65%		
CD29   30,107   85,124  2,006   25.68%  72.61%  25.46%   71.09%
CD36   59,422   38,390  2,064   59.50%  38.44%		
							
SBOE6 276,028  291,144 12,389   47.63%  50.24%  48.92%   46.59%
							
HD126  28,595   25,962  1,059   51.42%  46.68%  52.96%   42.99%
HD127  40,368   26,724  1,388   58.95%  39.02%  61.23%   34.90%
HD128  34,331   16,926    953   65.76%  32.42%  68.17%   28.75%
HD129  34,659   28,775  1,503   53.37%  44.31%  55.33%   40.06%
HD130  50,144   24,667  1,597   65.63%  32.28%  68.08%   27.94%
HD131   5,962   35,453    594   14.19%  84.39%  13.33%   84.31%
HD132  31,919   33,536  1,333   47.79%  50.21%  50.04%   45.68%
HD133  38,500   31,627  1,519   53.74%  44.14%  54.54%   41.11%
HD134  34,670   53,010  1,988   38.66%  59.12%  39.58%   55.12%
HD135  26,040   28,961  1,137   46.39%  51.59%  48.91%   46.80%
HD137   6,947   16,823    508   28.61%  69.29%  28.95%   66.96%
HD138  22,512   24,996  1,056   46.36%  51.47%  47.80%   47.83%
HD139  10,181   36,255    806   21.55%  76.74%  20.60%   76.12%
HD140   5,278   17,999    326   22.36%  76.26%  21.89%   75.07%
HD141   3,945   27,091    461   12.53%  86.01%  12.58%   85.20%
HD142   8,433   30,706    636   21.20%  77.20%  20.97%   76.20%
HD143   7,497   20,734    470   26.12%  72.24%  26.02%   71.03%
HD144   8,863   14,133    440   37.82%  60.30%  38.41%   57.72%
HD145   9,363   22,898    704   28.40%  69.46%  28.73%   66.91%
HD146   7,745   35,131    702   17.77%  80.62%  17.31%   79.44%
HD147   9,489   44,762  1,125   17.14%  80.83%  16.76%   79.00%
HD148  14,665   32,054  1,298   30.54%  66.76%  30.49%   63.83%
HD149  13,639   24,788    628   34.92%  63.47%  32.51%   64.25%
HD150  40,369   29,219  1,422   56.85%  41.15%  59.18%   36.62%
							
CC1    59,111  226,367  5,082   20.34%  77.91%  19.74%   76.83%
CC2   104,324  119,859  4,573   45.60%  52.40%  46.79%   49.48%
CC3   158,349  168,865  6,731   47.42%  50.57%  48.22%   47.63%
CC4   172,330  168,139  7,267   49.56%  48.35%  51.22%   44.42%


Dist   Miller    Olson   Carp  Miller%  Olson%  Trump% Clinton%
===============================================================
CD02  133,022  122,897  4,709   51.04%  47.15%  52.38%   43.05%
CD07  112,853  123,473  4,148   46.93%  51.35%  47.11%   48.47%
CD08   17,596   10,756    460   61.07%  37.33%		
CD09   22,400   95,979  1,478   18.69%  80.08%  17.56%   79.70%
CD10   70,489   41,589  1,954   61.82%  36.47%  63.61%   32.36%
CD18   37,934  142,586  2,937   20.68%  77.72%  19.95%   76.46%
CD22   14,922   16,056    539   47.35%  50.94%		
CD29   29,391   85,809  1,720   25.14%  73.39%  25.46%   71.09%
CD36   59,684   38,022  1,678   60.05%  38.26%		
							
SBOE6 280,395  285,147 10,318   48.69%  49.52%  48.92%   46.59%
							
HD126  28,820   25,649    901   52.05%  46.32%  52.96%   42.99%
HD127  40,782   26,205  1,164   59.84%  38.45%  61.23%   34.90%
HD128  34,432   16,815    751   66.22%  32.34%  68.17%   28.75%
HD129  34,853   28,512  1,234   53.95%  44.14%  55.33%   40.06%
HD130  50,592   24,186  1,322   66.48%  31.78%  68.08%   27.94%
HD131   5,817   35,639    466   13.88%  85.01%  13.33%   84.31%
HD132  32,187   33,275  1,119   48.34%  49.98%  50.04%   45.68%
HD133  39,476   30,381  1,235   55.53%  42.73%  54.54%   41.11%
HD134  36,062   50,855  1,612   40.73%  57.44%  39.58%	 55.12%
HD135  26,173   28,770    954   46.82%  51.47%  48.91%   46.80%
HD137   7,027   16,723    444   29.04%  69.12%  28.95%   66.96%
HD138  22,745   24,700    896   47.05%  51.10%  47.80%   47.83%
HD139  10,210   36,245    632   21.68%  76.97%  20.60%   76.12%
HD140   5,137   18,147    295   21.79%  76.96%  21.89%   75.07%
HD141   3,844   27,252    347   12.23%  86.67%  12.58%   85.20%
HD142   8,357   30,855    466   21.06%  77.76%  20.97%   76.20%
HD143   7,196   20,967    432   25.17%  73.32%  26.02%   71.03%
HD144   8,757   14,258    391   37.41%  60.92%  38.41%   57.72%
HD145   9,296   22,924    597   28.33%  69.85%  28.73%   66.91%
HD146   7,705   35,073    583   17.77%  80.89%  17.31%   79.44%
HD147   9,614   44,494    987   17.45%  80.76%  16.76%   79.00%
HD148  14,974   31,507  1,108   31.47%  66.21%  30.49%   63.83%
HD149  13,659   24,763    558   35.04%  63.53%  32.51%   64.25%
HD150  40,576   28,972  1,129   57.41%  40.99%  59.18%   36.62%
							
CC1    59,268  225,889  4,130   20.49%  78.08%  19.74%   76.83%
CC2   104,218  119,731  3,843   45.75%  52.56%  46.79%   49.48%
CC3   160,755  165,766  5,607   48.40%  49.91%  48.22%   47.63%
CC4   174,050  165,781  6,043   50.32%  47.93%  51.22%   44.42%

Basically, these three are the exact opposite of the first group: Controversy, Trump-humping, ineffectiveness at what they’re supposed to be doing for the state, and underperformance relative to 2016. Not only did they all lose CD07, they lost SBOE6 and all three competitive State Rep districts. I mean, Justin Nelson won HD134 by over 20 points; Mike Collier just missed that mark. Except in the strongest Democratic districts, they all failed to achieve Trump’s numbers. (This suggests the possibility that Dem performance in 2018, as good as it was, could have been even better, and that there remains room to grow in 2020.) This is the degradation of the Republican brand in a nutshell. This isn’t just strong Democratic performance. It’s people who used to vote Republican not voting for these Republicans. Seems to me there’s a lesson to be learned here. What do you think are the odds it will be heeded?

New frontiers in strip club tax collections

A new-ish development in a decade-long battle.

Glenn Hegar

Dozens of “bikini bars” from Houston to San Antonio are suing the state after the Texas Comptroller accused them of skirting the so-called pole tax on nude entertainment and slapped them with seven-figure fees, according to the lawsuits.

The fight focuses on the state definition of nude, which includes any part of the buttocks or a woman’s breast below the top of the areola.

And in federal court, the clubs are questioning why they are taxed for bikini-clad performers, but not concert halls or sports venues that host cheerleaders and musicians wearing thongs or cleavage-baring tops.

“If they aren’t doing it to them, they shouldn’t be able to do it to a topless club or a bikini bar,” said attorney Casey Wallace, who is representing the Texas Entertainment Association, which brought the federal lawsuit in 2017.

The Comptroller’s office said it follows the law and determines which clubs should be taxed by looking at their social media posts and marketing. The office also sends inspectors inside to see what dancers are wearing.

“The agency is just trying to apply this in a common sense way,” said Ray Langenberg, Special Counsel for Tax Litigation for the Texas Comptroller of Public Accounts. “If they are called topless clubs, the claim they are not wears a little thin.”

The fees are being contested in a state appeals process by 34 clubs across Texas, including a dozen in the Houston area. At least 27 more clubs have filed lawsuits, including 14 clubs based in Houston, according to the Comptroller’s Office.

The lawsuits referenced in this story were filed last year; I’m not really sure why this is a story now, though perhaps there’s a court date about to happen. Be that as it may, it was back in 2014 that the State Supreme Court upheld the $5-per-customer fee, for which the original bill was passed in 2007. I’m not qualified to parse the legalities of what constitutes “nudity” in this context, but I do think that trying to apply it retroactively for a decade’s worth of collections is excessive. I mean, when the state reached a deal with Amazon in 2012 to start collecting sales taxes, part of the deal was that the state would quit trying to collect back taxes. Why does Amazon deserve a better deal than bikini bars? Assuming that the Comptroller is properly interpreting the law in the first place, which is not a sure thing, surely there would be room for a compromise.

From the “Grab that cash with both hands and make a stash” files

Same song, second verse.

If budget writers don’t come up with money to address a state employee pension shortfall and mounting needs for public schools, health care and transportation, credit agencies are likely to downgrade Texas’ AAA rating in the near future.

That was the warning Comptroller Glenn Hegar gave lawmakers at a Tuesday hearing of the Senate Finance Committee in Austin. Though the Texas economy is growing at a healthy pace, Hegar said, the state’s budget is riddled with enough unfunded liabilities to worry credit rating agencies such as Moody’s and Standard and Poor’s.

“We’re not at a crisis,” Hegar said, but “we’re going in the wrong direction.”

A downgrading of Texas’ credit rating would make it more expensive for the state to borrow money — and perhaps damage state leaders’ credibility when advertising Texas as “open for business.”

“I want to avoid that, because I think that’s a black eye on the state of Texas,” Hegar said.

Rebounding oil prices, natural growth and migration to Texas have led to an increase in tax collections, according to the comptroller’s office. But much of that new revenue is already dedicated to historically underfunded programs such as the state highway fund, meaning that Texas lawmakers likely won’t have more money at their disposal in 2019 when crafting the next two-year budget.

At the same time, lawmakers will need to plug holes in the pension system for state employees, and they’ll face pressure to make solvent a health insurance program for retired teachers. On top of that, big bills coming due for Medicaid, the federal-state health insurance program for the poor and disabled that is perennially underfunded by the Legislature, could put the state budget $2.5 billion in the red before lawmakers even convene in 2019. (The state’s current two-year budget is about $217 billion.)

In addition, state leaders will have to tackle the bills from Hurricane Harvey recovery.

I’ll just say again here what I said in January: The vast majority of these issues are the result of deliberate choices made by our Governor, our Lieutenant Governor, and our Republican-controlled Legislature. Instead of seriously addressing the needs of the state, current and future, our Republican leaders have been obsessed with trivia, from bathrooms to plastic bags to trees. We have gotten by and done all right because times have been good, but we are in a far more precarious position for when the economy goes south than we should be. In the meantime, we are squandering this opportunity to ensure a better future for all of us by making such cavalier and ill-advised fiscal choices. Every Democratic candidate running for state office needs to internalize and articulate that message going forward.

From the “Nothin’ but good times ahead” department

Given the good economic conditions in Texas right now, you’d think the budget outlook would be better than it is.

The Texas economy is growing healthily, but that doesn’t mean state budget writers will have more money at their disposal next year, state officials said Tuesday.

In fact, though unemployment is low and tax revenue is on the rise, big bills coming due for the state’s highways and health care programs are giving Texas lawmakers reason for concern.

“I would like to offer a few words of caution for reading too much into the positive recent economic numbers,” Texas Comptroller Glenn Hegar told lawmakers at a Senate Finance Committee hearing.

As they often do, state budget writers last year underfunded Medicaid, the federal-state insurance program for the poor and disabled, which, alongside public education, makes up one of the largest shares of the state’s $217 billion two-year budget.

Then, during a special session called by Gov. Greg Abbott over the summer, state lawmakers shifted another $500 million away from the Texas Health and Human Services Commission to pay for public education programs.

As a result, lawmakers could face a $2.5 billion Medicaid bill shortly after they reconvene in Austin in 2019. Then there are the additional drains on Texas coffers from Hurricane Harvey recovery efforts, Hegar said.

That’s bad news for lawmakers given the comptroller’s prediction that the state will only have a $94 million “beginning balance” when lawmakers convene in 2019. By comparison, lawmakers had an $880 million beginning balance in 2017, which was ultimately a tight year for the state budget. Two years before that, lawmakers enjoyed a $7.3 billion beginning balance.

[…]

Another source of heartburn for budget writers is the ravenous state highway fund. In 2015, amid complaints of a highway system in disrepair, Texans voted to amend the state Constitution to require that up to $2.5 billion in sales tax revenue be dedicated to the highway fund.

That means that even as Texas collects more money from sales taxes — Hegar testified that sales tax revenue grew by an average of 10.3 percent over the last three months — the rest of the state budget will not benefit from that revenue since it is earmarked for the highway fund.

That was also an issue for budget writers in 2017. Last year, in order to free up some of that money for other purposes, Senate lawmakers pushed for an accounting trick that delayed a payment to the state highway fund into the next two-year budget cycle. That freed up about $1.6 billion for lawmakers last year, but it means there will be another bill to pay in 2019.

“In short, despite a strong economy and positive outlook for revenue growth in this biennium, it seems likely the next budget will be much like the one crafted in 2017, having to contend with restricted revenue relative to the spending trends of the state,” Hegar said.

Just a reminder: Underfunding Medicaid was a choice. Shifting money away from HHSC was a choice. The amendment to require all that highway spending was ratified by the voters, but it was there to be ratified because the Lege chose to put it there. Deferring that payment to the highway fund was a choice. And though the story doesn’t include it in its litany, spending nearly a billion dollars on boondoggle “border security” stunts was a choice, too.

We’ll probably be fine in the 2019 session, though the potential for shenanigans is always high. But remember, winter is coming, because it always does. When it does, we’re going to have a mess to clean up, one that was caused by the Republicans in charge of our state, one that could have been mitigated in many ways. I hope we’re ready for it.

(Note: This is the inspiration for the post title.)

Who loves budget gimmicks?

The Senate Budget Committee, that’s who.

Texas Senate budget writers on Wednesday unanimously approved their two-year budget, which avoided some steep cuts by using an accounting trick to free up $2.5 billion state dollars that were originally slated to go to the state highway fund.

By delaying a diversion of sales tax money from August 2019 to September 2019, and therefore moving the funding from the 2019 fiscal year’s budget to the first month of fiscal year 2020, Nelson said her two-year budget had an additional $2.5 billion to spend on needs such as health care and schools.

The accounting maneuver “solved a lot of our problems,” Nelson told reporters shortly after her Senate Finance Committee approved the budget unanimously. She said the move would not affect the Texas Department of Transportation’s ability to pay for highway projects in 2019.

But House Speaker Joe Straus called the move “gimmickry” and likened it to “cooking the books.”

“Counting money twice in order to balance a budget is not a good idea,” Straus told reporters Wednesday morning. “This is the Texas Legislature. We are not Enron.” He was referring to a Houston-based energy company that collapsed in spectacular fashion because of fraudulent accounting practices.

[…]

Nelson said her proposed budget “meets our responsibilities” and “keeps Texas on the path to success and prosperity.” The proposal now moves on to the full Senate, where a full chamber vote is expected on Tuesday.

Nelson told reporters the Senate had no appetite to use the state’s Rainy Day Fund, a $10.2 billion savings account lawmakers have available to address budget shortfalls or emergencies.

See here for some background. Let’s be clear about two things. One, this is far from the first time this particular accounting trick has been used. Indeed, accounting tricks of all kinds are baked in our legislative DNA. They are a natural and totally expected outgrowth of the many artificial budget constraints that our Legislature is subject to. I wouldn’t claim that there’s anything honorable about any of this, but given that the constraints aren’t going away, I’d greatly prefer a bit of financial prestidigitation to slashing critical services.

That said, it seems crazy to me to resort to this sort of trickery when there’s more than enough money in the Rainy Day fund to actually pay for the things that need to be paid for. There was a time when the general consensus was that this is what the Rainy Day fund is there for. The diversion tactic doesn’t make that $2.5 billion in obligations go away, it just shoves them into the next budget cycle. Which is fine of the state’s finances wind up being better than the Comptroller projects them to be for the next two years, not so fine if not. Remember, the House wants to use the Rainy Day fund to plug a gap in the budget from the last session, which resulted in part because expenses were higher than we thought they would be. We have the wherewithal to take care of this problem now. Why wouldn’t we do that? The Chron has more.

Here’s your 2018-19 revenue estimate

It’s pretty mediocre.

Facing sluggish economic forecasts amid low oil prices along with billions in tax revenue already dedicated to the state highway fund, Comptroller Glenn Hegarannounced Monday that lawmakers will have $104.87 billion in state funds at their disposal in crafting the next two-year budget, a 2.7 percent decrease from his estimate ahead of the legislative session two years ago.

Hegar told state lawmakers he expected a “slow to moderate” expansion of the Texas economy. Still, he said, the amount of revenue they will be able to negotiate over has fallen. That’s largely because lawmakers in 2015 moved to dedicate up to $5 billion in sales tax revenue every two years to the state’s highway fund, rather than being spent on other priorities such as schools, health care or reforms to the embattled Texas foster care system.

“We are projecting overall revenue growth,” Hegar said. “Such growth, however, is more than offset” by the demands of the state highway fund and other dedicated funds.

The revenue estimate does not determine the scope of the entire Texas budget. Rather, it sets a limit on the state’s general fund, the portion of the budget that lawmakers have the most control over. The general fund typically makes up about half of the state’s total budget.

Two years ago, Hegar estimated that the Legislature would have $113 billion in state funds, also known as general revenue. Adding in federal funds and other revenue sources, lawmakers would have $221 billion in total for its budget, as well as $11.1 billion in the state’s Rainy Day Fund, he said at the time. Lawmakers ultimately passed a $209.4 billion budget, which included billions in tax cuts.

On Monday, Hegar estimated lawmakers would have $104.87 billion in general revenue, and $224.8 billion in total revenue to write a budget for the 2018-19 biennium which begins in September.

See here for more on Hegar’s 2015 estimate, which would up being a tad bit optimistic, but not too far off. It won’t be surprising if this one is off a bit one way or the other – this is why 2014 Comptroller candidate Mike Collier called for more frequent revenue estimates during his campaign, so the course can be corrected as needed more often – but again I expect this to at least be in the ballpark. Assuming the economy doesn’t crash and burn and/or we don’t have ten percent annual growth under Dear Leader Trump, of course.

There are a lot of ingredients that go into making the budget sausage, and there are various things that can and will be done to avoid doing anything too painful. We could of course just assume this was a temporary dip and take a few bucks out of the Rainy Day Fund to smooth out the curve – that was its original purpose, after all; now it serves as a hole in the back yard into which we bury sacks of cash for no clear reason – but that isn’t going to happen. We do have your local property taxes bolstering the state’s bottom line, so be sure to send a thank you note to the State Supreme Court for that. And as always, remember that the biggest boost to spending in 2015 was tax cuts, but that’s never what the leadership has in mind when it says we need to “cut back” on expenses. We do things one way in this state, and will continue to do them that way until there are different people running the state. The Chron and BurkaBlog have more.

MUDs and debt

Another story about the least-understood form of debt and taxation in Texas.

BagOfMoney

In Houston’s conservative suburbs, where local governments are loath to raise taxes, the thankless task of hiking revenues has fallen to hundreds of so-called municipal utility districts created for developers to finance water and sewage systems, roads and other amenities.

These MUDs, as they’re called, have virtually unlimited power in bright red, anti-tax Texas to sell bonds and levy property taxes.

The state’s leading tea party conservatives, Comptroller Glenn Hegar and Lt. Gov. Dan Patrick, have championed their creation in what ethics reformers say is a clear example of special interest influence in Austin.

All told, lawmakers who carry bills creating MUDs and other water districts have collected $3.5 million in campaign contributions since 2001 from law firms that specialize in creating those districts on behalf of developers or do bond work on their multimillion-dollar deals, a Houston Chronicle investigation has found. The Chronicle used a state database to pinpoint which law firms work for water districts. The data doesn’t include developers, who also contribute large sums to legislators.

Both Hegar and Patrick say MUDs and other water districts have played a critical role in developing infrastructure and creating jobs. They deny campaign contributions have anything to do with the bills they’ve carried. But both also say they are concerned about surging property tax burdens levied by school districts, towns, cities, counties – and MUDs, their less accountable, largely anonymous first cousins.

MUDs and other water districts have to date issued more than $60  billion in outstanding debt and face almost no government oversight of their spending. While most voters know the names of their mayors and city council members, many have no idea who runs their local MUD – or even what a MUD is.

James Quintero, director of the Center for Local Governance for the Texas Public Policy Foundation, a conservative think tank based in Austin, wants the legislature to protect taxpayers by preventing local officeholders from “off-loading” the delivery of public services to MUDs and other “special purpose districts” that contribute to the property tax burden and often lack transparency.

See here for past blogging on this topic, and be sure to read the whole story. Anyone who is surprised by the connection between MUD law firms and the politicians who push MUDs should probably go lie down in a quiet room for awhile. I know one should never read the comments, but I was struck by the number of commenters on that story who basically accused the Chronicle of being “anti-development” for having written this. I don’t doubt that MUDs are an effective mechanism for spurring development in currently undeveloped placed. The question I have is whether this is the best way to spur development in currently undeveloped places (*) or if perhaps a better mechanism may exist. To put it another way, if we could emulate Metro’s bus system redesign and start with a blank map of Harris County and its governmental entities and undertake the task of reimagining them all from the ground up, would we want to design something that looks like what we have now, or would we go a different direction? Call me crazy, but I think we’d gravitate towards the latter. That doesn’t mean that we can easily or pragmatically move in a different direction from where we are now, but it is worth reminding ourselves that what we have now, with its heavy reliance on this unhealthily symbiotic relationship of officeholders and niche law firms, not to mention millions of dollars in debt being ratified by elections in which literally two people vote, is not the only possible option. The Chron’s Chris Tomlinson has more.

(*) There is of course the completely separate question about whether it is a good idea to spur development in undeveloped places at all, or whether it would be better to spur it in already-developed places, with more investment in transit and other non-car modes of travel. That is a conversation that is very much worth having, but it would make Dan Patrick’s head explode, and so it is unfortunately beyond the scope of this blog post.

Our tax system isn’t quite as stupid as it could be

Good news!

BagOfMoney

A Texas Supreme Court ruling has spared the state from having to issue billions of dollars in tax refunds to oil and gas drillers — a prospect that had had threatened to shake up the next legislative session.

The justices on Friday sided with Texas Comptroller Glenn Hegar in an arcane tax dispute that the Republican feared could have far-reaching consequences for the state’s budget outlook.

Denying Midland-based driller Southwest Royalties’ request for a refund, the court ruled that state law did not exempt metal pipes, tubing and other equipment used in oil and gas extraction exempt from sales taxes.

“Southwest did not prove that the equipment for which it sought a tax exemption was used in “actual manufacturing, processing, or fabricating” of hydrocarbons within the meaning” of the tax code, Justice Phil Johnson wrote for the majority in an opinion that affirmed decisions in lower courts. “Thus, Southwest is not entitled to an exemption from paying sales taxes on purchases of the equipment.”

See here, here, and here for the background. As noted in the story, some $4 billion or more would have had to be refunded to various businesses if the Supremes had ruled for the plaintiffs. Needless to say, that would have been bad news for the state, as well as for cities and counties who get their share of sales tax revenue, too. Thankfully, there is a bottom to the stupidity in our tax code. Good to know.