The COVID-19 outbreak crippled the state’s high-flying economy, making for severe budget woes ahead.
A fight over what programs are cut when lawmakers convene in January will play out amid a bipartisan desire to maintain over the next two years the increased funding of public schools approved last year. Then, lawmakers enjoyed a big enough surplus and a sufficiently robust economy that they could boost schools' budget and pay to lower property taxes, at least temporarily, without raising state taxes.
With passions running high over mask requirements and COVID-19 closure orders, some GOP lawmakers are expected to try to spank local leaders in blue bastions they believe have overreached — by trimming their authority in emergencies. Gov. Greg Abbott has threatened to push through bills punishing cities such as Dallas and Austin that at least have flirted with lowering their police spending.
It’s unclear if the other major initiative passed in 2019 — “revenue caps,” which require local governments to get voter approval if they want to raise their annual haul from property tax more than 3.5 percent — will spark another high-drama debate.
Even some diehard conservatives acknowledge there probably won’t be enough bandwidth to consider a lot of hot-button issues, be it eliminating the requirement to have a license to carry a handgun in Texas or granting protections that social conservatives want so child placing and adoption agencies may exclude LGBTQ Texans on religious grounds.
That’s because, given uncertainty about safety during the pandemic, the Senate appears likely to press for a slimmed-down agenda.
“I’ve heard there’s going to be only two committee rooms where legislation will be heard on the Senate side,” said Austin lobbyist and consultant Bill Miller, a tall order for a chamber that has 16 committees.
Chairmen will have to reserve the two rooms in advance, he said. That will ratchet up pressure for senators to avoid requesting hearings on “outlier” bills, and focus only on priority measures that have broad support, Miller said.
Pink Dome Priority: Order
“It’ll be very orderly,” he said. Referring to the Senate’s presiding officer, Lt. Gov. Dan Patrick, Miller added, “Patrick’s in charge in the Senate. That will influence what the House does.”Neither Patrick nor Abbott granted requests to discuss the upcoming session with The Dallas Morning News.
In early September, Patrick spokeswoman Sherry Sylvester told The News that Patrick and senators “have always been clear that we must find a safe and efficient way to ensure that the public can come to the Capitol, as they have always done, and testify in-person on legislation.”
Miller, cofounder of the Austin lobbying firm Hillco Partners, said he understands that under the Senate’s tentative game plan, “they’ll do everything by Zoom. You’re not going to be able to get in the Capitol unless you’re a witness.” Members of the public presumably will be allowed to sign up to testify in advance, he said.
“Common sense is going to rule, and efficiency will rule and safety will rule,” Miller said. “Everything that follows will follow those guidelines.”
House Speaker Dennis Bonnen, the other Republican in the Capitol’s “Big 3,” is retiring after a political scandal last year in which he was caught making demeaning remarks about individual House members — and breaking his own rule about staying out of colleagues' re-election bids.
House Administration Committee Chairman Charlie Geren, R-Fort Worth, said few decisions about House operations amid the pandemic have been made.
The House is equipping 15 committee rooms with plexiglass dividers. But it abandoned the idea of installing such dividers on the House floor because they’d interfere with the ultraviolet light used by new sanitizing machines, Geren said.
In a joint statement, he and his Senate counterpart, Mineola GOP Sen. Bryan Hughes, said each chamber will use five mobile sanitizing machines made by San Antonio-based Xenex Disinfection Services Inc. in Capitol Complex buildings.
“These disinfection systems, combined with additional sanitization measures in all public spaces, will better protect the health and safety of all Capitol occupants and visitors through the remainder of this pandemic,” they said.
‘Show Me The Money Session’
On issues, experts agree that the 2021 session’s biggest focus will be writing a two-year state budget just months after millions of Texans lost their jobs during the COVID-19 lockdown last winter and spring.In July, near the midpoint of the current two-year budget written last session, Comptroller Glenn Hegar shrank his estimate of how much general-purpose revenue the state would have this cycle by $11.6 billion, or 9.5 percent. Offsets such as federal coronavirus aid, higher property values that shrink the state’s IOU for schools and improved collections of sales tax on e-commerce reduced the net hit to the budget to $7.5 billion.
And last session, lawmakers didn’t spend everything. Hegar estimated they left $2.9 billion on the table, which means the shortfall in discretionary dollars for the current cycle, which ends next August, is only $4.6 billion.
But absent vaccines or effective treatments, the recession could linger. That could force Hegar to dramatically cut his revenue estimate for 2021-2022, which would force spending cuts. Some say the revenue shortfall for the next cycle could be almost as big as the $27 billion lawmakers faced in 2011 during the Great Recession.
“This is a ‘show me the money’ session,” said Sherri Greenberg, professor of practice at the University of Texas' Lyndon B. Johnson School of Public Affairs.
Greenberg, who held a Travis County House seat as a Democrat in the 1990s, said during recessions, domestic violence and abuse and neglect of children increase. This time, demands on the treasury have multiplied, with school children needing internet access and many state-funded institutions needing personal protective equipment, she said.
“When revenues are declining, people need services the most,” Greenberg said.
There’s little appetite among Republicans, however, for raising taxes. The last time the Legislature significantly raised taxes for anything beside lowering existing taxes, was the early 1990s.
Last year, the House Democratic Caucus created a special committee to look at outdated tax loopholes, exclusions from the sales tax and other tax breaks.
Caucus Chairman Chris Turner, D-Grand Prairie, said Texas “cannot go backwards on the progress we made last session on school funding.” New revenue to forestall deep cuts to health care and social programs will be needed, he said.
“The time has come to look at those exemptions,” he said.
Almost every exempted product or service has a powerful lobby that will seek to preserve it, though.
And while some expect a more serious debate of revenue enhancing moves — such as allowing casino gambling, legalizing marijuana or increasing excise taxes on alcohol and tobacco — Bettencourt said they’ll probably not advance.
“They just don’t generate lots of money,” he said.
Lobbyist Miller agreed that GOP leaders are unlikely to risk possibly big political fallout for small sums.
Medicaid Expansion, Schools To Be Debated
Bettencourt, though a staunch conservative, acknowledged there’s a possibility Texas might seek a waiver to pull down federal Affordable Care Act money for adding low-income working adults without children to Medicaid. That assumes the law, after the death of Justice Ruth Bader Ginsburg, survives a Texas-led challenge to be argued before the Supreme Court in November.“My back of the napkin analysis shows that’s a $1.6 billion item, like that — boom,” he said. “I’m pretty sure we don’t have that falling out of trees. … You can put Medicaid expansion up at the top of the list. There will be a debate.”
Placating suburban voters who have been trending Democratic by keeping the Legislature’s 2019 commitment to better-funded public schools will be another tough assignment next session, said Robert Lowry, a political scientist at UT-Dallas.
For the previous decade, the state let its share of the school tab decline as districts' haul from the property tax increased with ever-creeping appraisals, he noted.
“They allegedly, sort of fixed that by increasing the state share last time but there was no actual revenue source,” Lowry said. “They just took advantage of the fact the budget was in good shape. So next time, the budget’s going to be in really bad shape, and the state’s contribution will probably go way down, which means we’re back to relying mostly on local property taxes.”
If Democrats seize control of the House, which they can do by gaining nine seats in the 150-member chamber, the budget fight will be even more intense, legislative veterans agreed. Democrats' priorities will be different, especially on social welfare programs.
Local Control Fights
Many expect spirited debates of whether mayors and county judges should have their powers in a public-health emergency pared back; whether to loosen or keep the property tax limits passed in 2019; and whether to ban taxpayer-funded lobbying by school districts and local governments.“We’re of course all about local control and … maintaining that and I think it’s going to be under fire this next session,” said the North Texas Commission’s Wallace.
His group, which represents 102 chambers of commerce, opposes the prohibition of lobbying by localities and favors loosening the 3.5 percent revenue cap to allow cities and counties to raise at least 6 percent more from the property tax each year.
Bettencourt, author of the revenue cap legislation, said he’ll “vigorously oppose” any loosening.
“It’s just not needed, mathematically,” with appraised values still slightly increasing, he said. “I don’t think that’s going to fly with the public.”
In the last two years, Bettencourt said, “there’s been continuing rate reductions on the school side. Quite frankly, why should we let the other side run everybody’s tax bills up?”
On the powers that state law confers to county judges to issue local edicts during a pandemic, Bettencourt said “it was never designed to last six months.” Some have abused the authority, and lawmakers should narrow it, he said.
“That debate’s going to happen,” he said.
Certain staunch conservatives, such as Dallas hair salon owner Shelley Luther, who’ll have a vote if she wins an open Senate seat in a special election Tuesday, have grumbled that Abbott has exceeded his authority with back-to-back disaster declarations and more than 20 pandemic-related executive orders.
As many as a half-dozen GOP senators, and even more House members, are working on bills to rein in a governor’s emergency powers, said Bettencourt, who declined to identify the lawmakers.
Miller, the lobbyist, said there will be “noise,” but predicts no actions. “They’ll trim the powers of local governments, but not Abbott’s, not at all,” he said.
Several lobbyists for business and local governments said they expect a renewed slugfest over Edgewood GOP Sen. Bob Hall’s bill to ban use of taxpayer money to hire lobbyists. Last session, it passed the Senate but died in the House -- and then figured in the Bonnen scandal, when the speaker promised next year’s session will be miserable for mayors and county judges.
Adam Haynes, policy director for the Texas Conference of Urban Counties, which strongly opposes the ban, said many of his 35 counties have budgets and operations comparable to those of Fortune 500 companies.
“Do you want the CEO of Fortune 500 company not to have a governmental affairs office,” he said. “No, you don’t. … That’s called good leadership.”
Mum’s The Word On COVID Precautions
In next year’s session, which begins Jan. 12, lawmakers could pass a lot fewer bills than the average number passed in recent sessions — about 1,400.Wallace, the North Texas Commission official, said he’s assuming the Legislature will make an even more plodding start than usual, with a faster-than-normal pace in April and May, the final two months of the 140-day session.
“It may be treated like it’s a series of special sessions,” he said. “That would be my guess.”
Redistricting could be delayed until a summer special session, because of COVID-driven delays in the Census Bureau’s completion of household surveys.
Turner, the Democratic House leader, though, said members need to press for a broader agenda for the regular session than some contemplate — to include gun safety, a state response to white supremacist terror and broader access to health care by low-income Texans.
Lawmakers must realize their power to get things done for their home districts is at its peak in a regular session, Turner said.
“In a special session, the governor has the leverage because he can limit the agenda,” he said. “In a regular, all 181 members are empowered.”
After the killing of George Floyd by Minneapolis police in late May, Democrats are pushing for comprehensive overhauls of criminal justice. Abbott has said he could envision passing more limited fixes, such as changes to police training. Miller, the lobbyist, said that he can see action on overhauling bail procedures, as the topic was vetted last session, but little else.
Business groups are seeking reauthorization of Texas' single biggest economic development incentive program, “Chapter 313” abatements of school property taxes for corporations. Land condemnation powers for a proposed Dallas-to-Houston high-speed train, managed toll lanes and expanded broadband service for both rural and inner-city Texas also are North Texas businesses' priorities, Wallace said.
How the public will be allowed to engage during the session remains unclear.
Already, Abbott, Patrick and Bonnen have sidelined the advice of some public health experts and pushed for the earliest possible reopening of Texas, including a resumption of school. But the Capitol in Austin and the surrounding grounds are still closed, off limits to all but a skeleton crew of state workers.
Miller predicted “a brouhaha” after COVID operating rules for the session get publicized.
“Teachers are going to go ape if kids are being forced down their throat but legislators won’t let the public in the Capitol,” he said. “They’re going to flip, and they do flip. They know how to do gymnastics.”
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