Aug. 11, 2017

This week's Capitol Roundup :
  • Legislature sends must-pass "sunset" bills to Gov. Abbott
  • Budget gimmicks put budget writers in $8 billion hole next session
  • Abbott takes meeting with big-city mayors who oppose his proposals over local government

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AGC Texas Chapters

Quote of the Week
"Dan Patrick has a history of trying to pit people against each other...It's a signal of national politics seeping into Texas. Divisive rhetoric like that doesn't solve problems."
-House Speaker Joe Straus
House Speaker Joe Straus made the comment in an interview Monday with Texas Monthly. Straus also said he thought the "odds are good" that the House's business will be done by Aug. 16 and that accomplishing every issue on Gov. Greg Abbott's 20-item agenda "has never been a consideration."
Straus confident special session will end on time as lawmakers act on key legislation

Today, lawmakers in Austin enter day 25 of Gov. Greg Abbott's special session with just one of the governor's 20 priorities passed by both sides of the Capitol. 

However, that one item - "sunset" legislation to keep several state agencies running - was, for all intents and purposes, the only must-pass legislation facing the 181 members of the Texas Legislature. 

The sunset bills tentatively passed the House Thursday night and are expected to receive final approval Friday. Speaker Joe Straus' House, despite moving on its own version of the sunset legislation, approved the Senate plan. Typically routine legislation passed every session, the sunset bills were held up in the Senate this year by Lt. Gov. Dan Patrick after the House refused to move on two of his top bills for the session - property tax reform and the so-called "bathroom" bill. 

The state agencies kept alive by the pair of sunset bills include the following: Texas Medical Board, Texas State Board of Social Worker Examiners, Texas State Board of Examiners of Marriage and Family Therapists, Texas State Board of Examiners of Psychologists and the Texas State Board of Examiners of Professional Counselors. The state's 150 agencies face review every 12 years. 

The House and Senate have failed to find common ground on any of the 19 other items on Abbott's special session wish list. Today, Senators will take up a House plan to retool school funding, and tomorrow, the House will debate a Senate plan to reform property tax law. But progress on the two items thus far indicate lawmakers may have a steep hill to climb to send these measures to Abbott's desk by next Wednesday. 

On property tax reform, which Abbott has dubbed his highest priority for the session, the two chambers disagree on how much discretion to give voters when their elected local officials decide to increase property tax rates.

Senate Bill 1, which senators passed weeks ago gave would larger cities, counties and taxing districts to have an election if the amount of property tax revenues they collect on existing property and buildings exceeds 4 percent of the amount they took in the year before. The House is set to debate that plan Friday.

The House Ways & Means Committee passed its own version of SB 1, however, the bill has not reached the House floor for a full vote. That version would set the trigger for property tax elections at 6 percent and create a notice to property owners showing the direct dollar impact on their tax bill. It would also create an appraisal review board to hear protests from certain business properties. 

Meanwhile, the legislature is also moving in different directions on overhauling school funding, which is primarily funded by state property tax revenue. The 140 days of regular session proved insufficient time for lawmakers to broker a compromise on what the state's top court has derided as a system in dire desperate of repair. 

Thus far, the 30-day special session hasn't produced a lockstep effort on the matter either. While the education leaders in the Senate prefer to create a commission to study the issue, a bill that passed the House would infuse $1.8 billion into public schools.  The Senate committee taking up the House  measure Friday faces added pressure as nearly 1,500 local school superintendents  and trustees petitioned Patrick and the Senate to pass the House plan. 

While the House this week gave approval to measures on ballot fraud, abortion, and municipal annexations - three of Abbot's agenda items - and the Senate has passed legislation on nearly all of the items on the governor's wish list, it doesn't seem likely the two chambers will reach consensus on all or even a majority of the items.

The chambers have also not passed each other's bills to address Abbott's goal of prohibiting local governments from restricting tree removal on private property. However, it appears that measure could go to the governor's desk before the Aug. 16 deadline.
Abbott could call on lawmakers to come back to Austin for another round after this 30-day special session adjourns Aug. 16, however, legislators are not obligated by law to return. Typically, the legislature has bent to governors' requests for additional sessions to work through a governor's goals.

Straus said he was confident the House would finish its business by the Wednesday deadline, but would not predict Abbott's actions thereafter. "We'll be done on Aug. 16," he told Texas Monthly. "Beyond that is a question I cannot answer."

Asked if he'd convince the governor that his members' efforts were sufficient, Straus said, "The House is going to work through this agenda in a good-faith way. Again, we're making good progress. The twenty-for-twenty thing has never been a consideration for us." 
Tax and Spend: Lawmakers face $8 billion budget hole with property tax debate to come

While the Texas Legislature managed to pass a budget during the 140-day regular session, the maneuvering done on both sides of the Capitol to get it across the goal line has created a "structural gap" in the next budget to the tune of $8 billion.

While the so-called budget "tricks" were reported during the passage of the budget, their effect on the subsequent two-year budget cycle was not fully realized until the Texas Taxpayers and Research Association (TTARA) released its budget review this week. 

"The bottom line is that all of these tricks, all of these methods, have been used before," Dale Craymer, president of TTARA, told the Texas Tribune. "It's just that we're using them to greater amounts than what we've done before."

"In balancing the state budget, lawmakers were able to rely on a projected 7 percent increase in school property taxes over each of the next two years," according to the TTARA report. "This allowed the state to reduce its state aid payments to schools-ironically allowing the state to book local tax increases as a state spending cut."

"The continual shift of school finance onto local property taxpayers is a trend lawmakers seek to reverse; however, the lack of money for the foreseeable future means that any future "buy down" of local property taxes would likely have to come from some alternative revenue source."  

Lawmakers made a similar attempt in 2006 when they expanded the franchise tax and increased tobacco taxes to pay down the school property tax. TTARA predicts that the current tightness on the budget would make any attempts to repeal the franchise tax unlikely for the next several years. 

The House has proposed borrowing from the next budget by delaying $1.9 billion in payments to public education, allowing lawmakers to increase the state's share of public education spending by $1.8 billion and reducing pressure on local property taxes. This measure is being taken up in the Senate on Friday. And meanwhile, the House will debate a retooled version of the Senate's property tax reform bill as well.

In its report, TTARA also indicated property values in Texas are still rising. In the next two years, they're expected to increase by nearly $8 billion. However, the TTARA report also said that the budget passed this year "actually cut state aid to schools by $1 billion - a net budget savings of $5 billion that is to be shifted onto local taxpayers." 
Abbott meets mayors opposed to local control measures

Mayors of Dallas, Fort Worth and San Antonio were invited this week to meet with Gov. Greg Abbott to discuss how the state legislature is handling Abbott's several pieces of local-control legislation.

After initially snubbing mayors of the state's largest cities, Abbott extended invitations to Mayor Mike Rawlings of Dallas, Mayor Betsy Price of Fort Worth, and Mayor Ron Nirenberg of San Antonio. 

Eighteen mayors had originally petitioned a letter to Abbott, expressing their concerns over what they viewed as attempts by state lawmakers to undermine local government control. The letter expressed opposition to the  state's proposed bathroom bill, property tax reforms and caps on municipal spending.

"What we want is to make sure that we have the ability to grow our community in terms of its services and infrastructure," Nirenberg said.

Dallas Mayor Mike Rawlings
Rawlings especially disagreed with the governor's property tax plan being touted in the Senate by Lt. Gov. Dan Patrick, and said the legislature should focus on school finance reform.

"[Abbott] wants to do tax reform, but we need to deal with public school tax reform and financing," Rawlings said. "That's the big issue here and we're playing around the edges from a perceptual standpoint, from a symbolic standpoint.

"The Dallas miracle is amazing," Rawlings added. "We do not want to slow that up. We've got to be very careful."

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