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Tuesday
May282019

Texas lawmakers are done. Here are this session's winners and losers.

                    By Patrick Svitek

                    May 27, 2019

                    The 86th Texas Legislature gaveled out Monday after a 140-day session that saw a major breakthrough on two big issues that have long bedeviled lawmakers: school finance and property taxes. But there were other ups — and downs — during the session. Here are several winners and losers in the session's immediate aftermath.

Winner: The "Big Three"

The session's leaders — Gov. Greg Abbott, Lt. Gov. Dan Patrick and new state House Speaker Dennis Bonnen — were able to project an image of unity from the start of the session through the end. There were a few perceived slights and strains, but no major disagreements spilled into public view as they did during the last session, when tensions ran high among Abbott, Patrick and Bonnen's predecessor, Joe Straus. While their individual scorecards may vary, Bonnen probably had the best session of the three leaders, making a mostly drama-free debut as speaker whose honeymoon period never seemed to really end. Together, though, the Big Three get credit for maintaining a united front and keeping a bread-and-butter agenda on track through the finish line.

Loser: Supporters of the sales tax swap

In perhaps the only real low point for the Big Three, their proposal to raise the sales tax by 1 cent to buy down property taxes collapsed in a matter of days in early May. It quickly ran into stiff opposition from Democrats — whose support was necessary to pass the corresponding legislation — and prompted skepticism from some on the right, including from Patrick's top ally in the Senate, Houston Republican Paul Bettencourt. The Big Three held a last-ditch news conference to try to save the plan, but it only ran into further trouble hours later, when a devastating analysis came out that illustrated just how much the proposal would benefit those with higher incomes at the expense of those with lower incomes. While lawmakers ultimately found another way to provide property tax relief, the ghost of the sales tax swap will likely live on — in the 2020 election season.

Winner: The center right

If you were the kind of Republican hoping this session would be the opposite of the last one — when phrases like "bathroom bill" and "sanctuary cities" dominated headlines every week — you probably walked out of the Capitol on Monday a happy camper and feeling a little less stressed about your reelection. While the Legislature debated its fair share of controversial, red-meat bills this session, not nearly as many derailed the day-to-day legislative process as in 2017. Chalk it up to the Big Three's unified focus on school finance and property taxes, but also don't forget the November elections, when voters chose to replace two senators and 12 representatives with Democrats. It's hard not to see those results tempering Republicans' appetite for polarizing legislation even before the session began.

Loser: The far right

The voices that have successfully pushed the Legislature further to the right in previous sessions didn't seem to have as much to show for their efforts this time around. While they helped rally opposition to the sales tax swap, they nonetheless ended up unenthused with the final product on school finance and property taxes, questioning whether it was too little too late. A number of their other priorities fell short, such as a controversial elections bill that the House left for dead late in the session and a "taxpayer-funded lobbying" ban that the House voted down. And on a perennial cause of conservative activists, curtailing abortion access, activists watched as several other states passed sweeping restrictions this spring while the Texas Legislature settled for a couple of far less ambitious measures.

Winner: Police unions

After the House struggled to pass two measures abhorred by the top police unions in the state late in the session, the Combined Law Enforcement Associations of Texas and others went on the attack, ultimately getting their way. Their main target was a bipartisan bill to limit a police officer's ability to arrest an individual for low-level crimes, like traffic offenses, a key provision removed from the Sandra Bland Act passed by lawmakers in 2017. State Rep. Joe Moody, D-El Paso, repeatedly sought to advance that provision — as well as another one dealing with public records — but CLEAT fought it every step of the way. The Senate refused to agree to have those provisions added as amendments to its bills, and both measures were ultimately stripped from the original bills in end-of-session negotiations.

Loser: The business community

The session saw the unexpected death of a top priority for the business community: overturning local ordinances requiring private employers to provide paid sick leave. It looked like a slam dunk heading into the session, with Abbott vowing months before the session that lawmakers would invalidate such ordinances, which had been popping up in several left-leaning cities. But the legislation got bogged down in a debate over protecting nondiscrimination ordinances and missed a key late-session deadline, leaving the business community frustrated and looking to the courts as a last resort. The business community might've scored some smaller wins, but on its most visible priority, it left the Capitol on Monday empty-handed.

Winner: Veteran teachers

Experienced teachers are making out the best in the pay raises passed by the Legislature for teachers, librarians, nurses and counselors. School administrators are required to use part of their funding increase to prioritize raises and benefits for teachers with more than five years of experience — though without a specific mandate on exactly how. The actual number will vary widely district by district — in many, falling well short of the $5,000 across-the-board raise Patrick promised at the start of the session — but it is nonetheless a win for the most seasoned teachers in Texas.

Loser: Cities

The GOP-led Legislature has always had a rocky relationship with local governments, though this session seemed to mark rock bottom in recent memory. Republicans pushed through property tax reform — featuring limits on local governments' ability to raise revenue without voter approval — over the fierce objections of groups like the Texas Municipal League, once one of the most influential legislatives forces in Austin. Lawmakers simultaneously took direct aim at that influence with a proposed ban on "taxpayer-funded lobbying." It ultimately failed to pass the House, but the fact that it made it that far underscored some lawmakers' long-building frustrations with local governments and their advocates.

Loser: David Whitley

This one is obvious. The Senate adjourned Monday without confirming David Whitley, Abbott's nominee for secretary of state, embattled since launching his botched voter citizenship review in late January. It generated ample political drama and led to several legal challenges, culminating in a late April settlement in which Whitley agreed to end the review. Abbott stuck by his former aide throughout the firestorm, apparently holding out hope as recently as Monday morning that the Senate could still confirm him. But with Democrats firmly opposed — and on high alert in the home stretch — Whitley never got confirmed, and now Abbott has to pick a new secretary of state.

 

                    "Texas lawmakers are done. Here are this session's winners and losers." was first published at  by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

Monday
May272019

Texas legislators had a successful session, but not a historic one

                  By Ross Ramsey

                  May 25, 2019

The buzzword state leaders attached to their school finance and property tax package — “transformative” — is more aspiration than information.

They’re hoping you’ll think highly of the legislation and that you’ll think highly of them for their work on it. But this one is going to have a hard time living up to the hype.

That’s not a crack about what lawmakers are trying to do in the deal they announced with a news conference at the Governor’s Mansion. It’s about whether they did something that will actually change the schools, or ease Texans’ ill will about property taxes, or both.

Is the product better? Is the pricing better? What did we really get?

Look at the results without consideration for the potential points of drama, like the winners and losers on the particulars of the legislation, who got along and who didn’t play nice, what factors deadlines played, and whose political star is brighter or dimmer than it was a couple of days ago.

Look at it without the personalities attached. The $11.6 billion legislation does some big things, particularly if you use dollar signs in your definition of big things:

 

  • Cuts property tax rates
  • Increases spending on pre-kindergarten
  • Cuts reliance on “Robin Hood” payments from wealthier to poorer school districts
  • Puts more state money into education generally, and specifically into the education of low-income kids
  • Gives teachers raises in both pay and benefits — some more than others
  • Increases the state’s share of public education costs.
  • But each of those bullets has a counterpoint.

 

Are the property tax cuts big enough to provide real relief — and if so, will that relief last more than one or two years?

  • The pre-K spending isn’t universal.
  • Despite cutting 47% of Robin Hood, it leaves much of it still in place.
  • The state isn’t obligated to keep up its new funding levels for schools in perpetuity, any more than it was when it cut public education dramatically in 2011.
  • The teacher pay raises fall short of the widely touted Senate promise of $5,000 per teacher and librarian.
  • The state’s share would still fall well short of paying for half the cost of public education in Texas.

State leaders celebrated making a deal on a tough piece of legislation. That’s great, like a banker and a developer having a party when they figure out how to finance and build a building. It was hard, but they wrote their chapter of Art of the Deal. The measure of their work, however, will come from the people who live or work in that building. Most of the time, most of the people affected don’t even know the names of the folks who were at the celebration. Their interest is simple: In the scheme of things, was the building an improvement?

Right now, the spending and the legal changes in the school finance and property tax package are worth a bottle of champagne or two; it really is difficult to find a trail through the dense thicket of politics and policy around these subjects.

But will the changes and the $11.6 billion be “transformative,” and will they be sustainable in future state budgets? Are Texas lawmakers actually putting a new and improved school system in place? A fairer property tax? A lower property tax?

Maybe it will turn out that they really have transformed this essential and expensive area of state government, and quelled rising voter concern about high property taxes in Texas.

Or — and honestly, this is usually the result in matters of public education and taxes — they just fixed it for a little while.

 

                    "Analysis: Texas legislators had a successful session, but not a historic one" was first published at  by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

 

Thursday
Mar282019

Analysis: Property tax relief — but not for all Texas taxpayers

                    By Ross Ramsey

                    March 27, 2019

 Cutting taxes is expensive.

And there are not many viable options for state leaders hoping to reduce Texans’ property tax bills. Raising sales taxes to cut property taxes ­— an approach proposed by the public education chairmen in the House and Senate — ­­isn’t the only way to get there.

You can always increase the size of homestead exemptions, giving homeowners a path to lower taxes without giving the benefit of that tax loophole to renters or to business property owners — one option the Texas Senate is working on.

But it looks like a dinky tax cut.

This one would add $10,000 to the state’s mandatory homestead exemption — meaning a total of $35,000 would be deducted from the value of your home for taxable purposes instead of the current $25,000.

That works out to be a tax reduction of just about $230 per year, given the state comptroller’s estimated average property tax rates for school districts, cities and counties in Texas. That’s under $20 a month; it’s not nothing, but it’s not the kind of property tax break some voters have demanded.

They’d get the money by diverting some of the oil and gas severance taxes that now go into the economic stabilization fund — the fancy-pants name for the state’s savings account. That diversion, over the first two years, would total $1.49 billion, according to the fiscal note on Senate Bill 5.

Even if you think it’s good policy to divert rainy day money that’s generated from a tax on business to give a minimal tax break to homeowners, it’s a questionable political move.

The recipients might never even spot the windfall, spread over a year’s mortgage escrow payments and maybe consumed quickly by tax increases and rising property values. It could anger some, particularly if lawmakers leave Austin crowing about tax cuts, creating expectations that taxpayers are in for something really good.

This is the problem with property tax relief. It’s expensive.

This particular plan is not only smaller than some others, but it has a smaller impact on a much smaller group of property owners.

Another idea, floated in the House by state Rep. Dan Huberty, R-Houston, and in the Senate by state Sen. Larry Taylor, R-Friendswood, would cut school property tax rates by about 20 cents, which would cut the taxes on $250,000 in taxable property by $500. That’s great, but it would cost around $5 billion, and the money would come from a one-penny increase in the state’s already high sales tax.

When it comes time to vote in 2020, the danger of a big tax swap is that taxpayers won’t remember the property tax that was cut but will remember the sales tax that went up. The danger in the homestead exemption is that it’s small; that it ignores renters, commercial and industrial property taxpayers; and that it redirects money that now goes into the state’s savings — even as lawmakers are using that account to cover costs from Hurricane Harvey, catch up on teacher pensions and handle other one-time “emergency” expenses.

Business groups want an across-the-board tax cut, if there is a tax cut. Some are also pushing an idea — “compression” — that’s in the House’s school finance package and was also in the report from the governor’s commission on school finance. It doesn’t cut taxes, but it adjusts school finance formulas so that increases in property value benefit local school districts instead of the state’s budget. Right now, when property values increase faster than enrollment, state funding drops. If those value increases were used to “compress” or lower tax rates, with the state making up the lost funding, it would lessen pressure to raise local property taxes.

“Property taxes are still too damn high,” said Dale Craymer, president of the Texas Taxpayers and Research Association, which represents businesses on fiscal policy. “But at least they wouldn’t be getting higher as fast.”

So far, limits on property tax increases have dominated lawmakers’ attention more than cuts. A Senate committee approved a bill that would require voter approval of property tax revenue increases of more than 2.5 percent, but that’s languishing on the Senate calendar, for now, for lack of support. A House committee could act as early as today on a related bill.

But note the caveat above: “It doesn’t cut taxes.”

Limiting future increases might help make future property tax increases less onerous, but a lot of Texas lawmakers are scratching around for ways to give taxpayers a noticeable cut in the price of government. They’ve proposed other ideas, like raising sales taxes on gasoline — on top of the gas tax already in place — to letting local voters swap out property taxes for local sales tax increases. Some proposals get more attention than others, but it would be a leap to say anything has really caught on. And there is significant support in the Legislature for using any available money not for tax cuts but for public education.

It’s hard to sort out, Craymer acknowledges. “Some people call it crazy,” he said. “I call it March.”

 

                    "Analysis: Property tax relief — but not for all Texas taxpayers" was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

Tuesday
Mar122019

Analysis: In step with Texas voters on some things, and out of step on some others

                    By Ross Ramsey

                    March 8, 2019

It’s clear that Texas leaders have either been looking at polls or have some other way to get a good sense of what their voters want.

On lots of issues — school finance, property taxes and teacher pay raises — they’re in sync with the people of Texas. It’s there in the details of the latest University of Texas/Texas Tribune Poll, which serves on many issues as a demonstration of representative lawmakers actually representing the residents of the state.

But not all of them. On some issues — like “red flag” laws, vaccinations and sick leave — voters are going one way and the Texas Legislature seems to be going another.

For instance, without the aid of a list of things lawmakers are working on, voters put immigration and border security atop their ranking of most important problems. Education was second, though, and property taxes were third.

So the UT/TT Poll had another question, asking voters to rank six items that were actually on the Legislature’s list of things to do. Immigration and border security isn’t one of those; lawmakers have $800 million in the budget for border security and passed a strict “sanctuary cities” ban in 2017. The governor, lieutenant governor and speaker have different plates on the menu this time, topped by school finance, property taxes and teacher pay raises.

That matches the voters’ order of business: 23 percent picked property taxes, 21 percent picked public school funding and 13 percent chose teacher pay. All told, 54 percent of voters had one of those three items in their top spot.

They matched up pretty well with lawmakers when asked about the three biggest problems in public education, too: Low teacher pay, “not enough funding for the public school system as a whole,” and “unequal resources among schools and school districts” were the top choices, overall.

They even agree on some things they can all hate together. Ask a Texas lawmaker whether a personal income tax is a good idea, and you might get laughed at. Voters might do the same thing: 71 percent said the state should not consider creation of an income tax if money is needed to raise money for schools. They’d much rather — this is a true story — legalize pot and tax it. A solid 60 percent said so.

And although local governments think it’s a terrible idea, voters like the idea of requiring voter approval before local property tax revenue can grow more than a set amount, voters are with state leaders on that proposition. Not only do 72 percent like it, it’s popular with Republicans (84 percent), Democrats (62 percent) and independents (66 percent).

It’s fair to say that those voters aren’t necessarily clear on what that means, though — 52 percent believe that the slow-growth legislation would actually cut their current property taxes. It won’t, at least in its current form.

But it’s not all peace and harmony between the elected and those who elected them.

Red flag laws — where courts have the power to take guns away from people deemed a danger to themselves or others — are more popular with Texas voters than with state leaders. After shootings last year at Santa Fe High School and Sutherland Springs Baptist, Gov. Greg Abbott held a series of roundtables to talk about how the state should respond to and to try to prevent future shootings. They talked about everything from mental health to armed educators to stricter gun laws to metal detectors at schools.

Red flag laws were part of the discussion, too, but there’s no evident consensus of state leaders to pass them. There might be if the state’s voters were in charge, however: 72 percent would support giving judges that power, including 88 percent of Democrats, 60 percent of Republicans and 65 percent of independents.

Sometimes, it pays to pay attention to minority viewpoints. Take vaccinations: 78 percent of Texans believe government should require parents to vaccinate their kids against diseases like measles and mumps and whooping cough. That majority includes majorities of each subgroup. But the minority votes are big enough to raise an eyebrow: 14 percent of all voters — including 6 percent of Democrats, 18 percent of Republicans and 23 percent of independents — don’t think vaccines should be required. Some of those people are represented in the Legislature, too.

Several Texas cities have passed local laws requiring businesses to offer paid sick leave to their employees. Texas leaders have said they want to strike down those requirements. And on this one, they can say they don’t care what the polls say. Here’s what the polls say: 71 percent of voters think paid sick leave should be required, including majorities of Democrats, Republicans and independents.

Maybe they didn’t take a poll on that one.

 

                    "Analysis: In step with Texas voters on some things, and out of step on some others" was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

Tuesday
Mar122019

In the Texas House, property tax legislation is being handled with a different speed — and tone

                  By Shannon Najmabadi

                  February 28, 2019

 

                  City mayors extended an olive branch. Witnesses spoke uninterrupted. A House Democrat said he appreciated the “frame and tone” set by a GOP chair.

When the Legislature’s priority property tax reform bill was rolled out by a House committee Wednesday, it was met with a tenor and pace that differed markedly from the more contentious proceedings in the Senate.

Absent the quick tempo and heated exchanges that marked the upper chamber’s committee hearings on the legislation, a panel of state representatives deliberated its bill for nearly 12 hours, taking expert and public comments without proposing amendments. The proceedings were the latest sign of the lower chamber’s approach to the priority property tax package — which the chair of the tax-writing Ways and Means Committee said they would “fully understand before we get into the debate and discussion.”

That, he said, “is how we have discussions in the Texas House.”

During the Senate committee’s proceedings, public testimony was largely limited to two minutes — a strategy designed to allow everyone who wished to testify the opportunity to do so, according to the office of state Sen. Paul Bettencourt, R-Houston, chair of the committee.

As the Ways and Means Committee meeting wore on Wednesday, some witnesses complained that homeowners hadn’t been called until well into the evening and that many had departed before their turn came.

But the thorough approach was set early in the day by Rep. Dustin Burrows, R-Lubbock, the committee chair who began proceedings on the reform bill by saying he hoped the 11-member panel would hear comments and “talk about ideas that can make the bill better in either direction.”

After, “the committee can collaborate and can work and try to come up with a bill that is right,” he said. “[We’re] not just trying to get something across the finish line as quick as we can.”

The Senate tax committee passed its version of the property tax reform bill, with amendments, earlier this month. It has not yet been debated by the full upper chamber. As drafted, both versions of the legislation would require that cities, counties and special taxing districts receive voter approval before increasing property tax revenues 2.5 percent more than the previous year. Revenue from new developments would not count toward the 2.5 percent threshold.

Burrows seemed open to other rates Wednesday, but he explained why he filed the bill at 2.5 percent. An election trigger could be tied to a price or wage index — or based on “simple math,” Burrows said.

“If property taxes continue to go up year after year at 8 percent, they will double in nine years,” he said. “At 4 percent, it takes now 17 years to double, and 35 years to quadruple. And at 2.5 percent, it takes 28 years for somebody's property taxes to double, and 56 years for them to quadruple.”

Currently, voters can petition to have an election if revenue growth surpasses 8 percent, a figure supporters of the legislation say was set during a period of high inflation in the 1980s.

The reforms are a big-ticket item for state leaders. Though they are unlikely to reduce individual tax bills — a concern for residents who say their incomes have not kept pace with rising property values — they could tamp down the rate of a jurisdiction's property tax revenue growth.

The legislation also proposes a battery of modifications to how properties are appraised, with an aim of making the process more transparent and less subjective.

Still, as Burrows noted Wednesday, the 2.5 percent election trigger has “captured most of the headlines,” and several witnesses were asked Wednesday to help identify a more palatable number.

“Do you think 8 percent is where it ought to be, or do you think it should be lower?” Burrows asked Amarillo Mayor Ginger Nelson.

“I think we’re engaging in that conversation with you guys,” she responded, listing a number of factors she thought should be taken into account.

Two dozen big-city mayors proposed using a formula to tailor the trigger to each jurisdiction, in a letter to the committee chair dated Feb. 26. Six mayors testified on behalf of the group, stressing they were remarking “on” the bill — a neutral position — not against it.

Bettencourt noted a new attitude coming from mayors Thursday.

“The Mayors came in with solutions this time because they just said NO last time," he said. "That’s progress."

Despite the generally placid tone Wednesday, the hearing exposed some of the party-line fissures that have animated the property tax reform effort so far. Mayors were questioned by GOP lawmakers about why having an election trigger would force them to cut their budgets. Municipal leaders said population growth and unfunded mandates were tying their hands. And many homeowners, who supported a trigger at 2.5 percent, spoke of their difficulty paying rising tax bills on top of other expenses.

Near 11 p.m., the Speaker of the House, Dennis Bonnen, R-Angleton, walked through the hearing room to greet lawmakers and watch the proceedings.

In 2017, property tax proposals left the House and Senate at an impasse during both the regular and special sessions. The lower chamber proposed that an election be triggered at 6 percent revenue growth, while the upper chamber pushed for 4 percent.

In a move Bettencourt has jokingly called a “compromise,” Gov. Greg Abbott pitched a 2.5 percent rate in advance of the 2019 session. A poll from Quinnipiac University, released this week, found voters largely supported the idea of requiring local governments to get voter approval before “increasing property taxes” more than 2.5 percent.

Still, lawmakers’ public support for the 2.5 percent threshold has appeared to wane. Republicans have cast the figure as a starting point. Prominent Democrats on the committee — state Reps. Trey Martinez Fischer, D-San Antonio, and Rep. Eddie Rodriguez, D-Austin — have said the figure is a non-starter.

“For the number now to shift downward by a point and a half to 2.5,” Martinez Fischer said, “my natural reaction and response to that is, ‘Well, my 6 becomes 7.5.’”

And a major component of the reform package has yet to be unveiled. The bulk of property taxes statewide are levied by school districts, with state dollars flowing in after local revenue has been accounted for. The property tax reform proposal has inserted placeholder language for schools, as lawmakers’ wait on sprawling public education bills to be filed.

Martinez Fischer, who sits on the Ways and Means Committee, said of the lower chamber's approach: “we don't care about getting it done first; we care about getting it done right.”

“Everybody seems to want to live this policy through the lens of 2017,” he said. “I take the mayors at their word that they're going to work hard, they're going to come up with a collective solution. I take the chairman at his word that he wants our input and is hoping to make this bill better.”

 

                 "In the Texas House, property tax legislation is being handled with a different speed — and tone" was first published at  The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.