Mon April 13, 2015 12:06 pm By R.G. Ratcliffe

A House committee later today will take up the fight for sales between Tesla and the auto dealers of Texas, a legislative battle over “free markets” that has the potential to ultimately create widespread social change in the state.

First, understand that this is not a fight over whether a car or truck can be sold over the Internet. That already happens through dealerships across the state. Go online, look at the dealer’s inventory and make a purchase.

Second, know this bill is not really about bringing free markets to Texas retail sales of new autos by busting the monopoly of licensed franchise dealers. House Bill 1653 would exempt manufacturers such as Tesla from having to sell through a state licensed franchise dealership, but the manufacturer would be limited to having a dozen or fewer sales locations in the state. Limiting the number of manufacturer dealerships just gives Tesla a competitive advantage over the giant motor companies of Detroit while trying to be unthreatening to the majority of Texas dealerships. Such a carve-out for Tesla is not exactly about bringing consumer choice to Texas, even if Tesla In Texas tries to claim otherwise.

SB 639 by Kelly Hancock and HB 1653 by Eddie Rodriguez, Charles “Doc” Anderson, Jodie Laubenberg, Tan Parker, and Ron Simmons will promote consumer choice, competition and innovation by limiting big-government mandates that deny Texans the ability to purchase certain new vehicles directly from the manufacturer.

This bill rightly makes the distinction between protecting consumers and defending the wishes of an incumbent protected class. It does not negatively impact dealers and takes great care to protect the relationships between existing manufacturers and their franchisees.   

If the Tesla carve-out is so limited, why is the Texas Automobile Dealers Association, TADA, fighting the legislation? It’s not like the soccer moms are going to suddenly abandon their minivan and local dealer to buy a luxury electric car that has a starting price almost $49,000 more than the median family income in Texas. However, if you are well to do, the appeal of the Tesla S is hard to deny.

A few high-end auto dealers may dislike the new competition. That competition would be there, though, if Tesla founder Elon Musk just paid for and set up a dozen franchise dealerships in Texas. The TADA is fighting because the auto dealers see the Tesla bill as one that could disrupt the entire market in the future. If Tesla breaks the monopoly franchise system now, other manufactures may want to in the future.

And that could have the biggest impact on the Texas economy, the funding of charities and politicians, and the survival of local newspapers since a certain big box store with its system of economy of scale moved into the state’s small towns forty years ago, wiping out the mom and pop pharmacies, groceries and general stores.

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Mon April 13, 2015 8:22 am By R.G. Ratcliffe

Although I’ve never been deer hunting – well, that isn’t exactly true. I once sat in a blind for hours watching an empty field – I found this weekend’s story by Tim Eaton as a fascinating look at the big bucks of Big Bucks.

In the world of trout fishing, which I do, there has been an ongoing debate for years over whether it is best to protect wild native species or stock rivers with farm-raised trout, also known as hatchery trout. Overall, it’s not much of an issue here, because most of the trout that are stocked do not survive our warm summer months. The trout debate is fought out in places like Colorado, Idaho and Montana or New England.

Here in Texas, the brawl is over deer. What Eaton discovered was a battle among high dollar trophy hunting operations. We’re not talking those little road-kill deer. This is about deer that have been bred to have horns so massive that they have trouble holding up their heads. But is it a trophy if it is raised in a pen, and what is the environmental impact in farm raised deer? I’ll let Eaton explain.

Now, some updates on boys acting badly.

 

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Thu April 9, 2015 12:19 pm By R.G. Ratcliffe

After Governor Price Daniel allowed the state sales tax to become law without his signature in 1961, cash register clerks across Texas  started ringing up purchases by entering the price and then adding the phrase, “Now, let’s have a penny for Price.”

Perhaps, if the the sales tax cut package unveiled by House Ways and Means Chairman Dennis Bonnen passes, the clerks will finish purchases by saying, “Now for some bucks from Bonnen.”

Ha! Unlikely. For one, the House tax cut package is far from resembling the one being pushed by the Senate.

The Senate’s homeowners property tax plan goes to the heart of campaign promises and fits with Governor Greg Abbott’s call for tax cuts. But the reality is very few Texans would see that tax cut, even among the homeowners. Everyone would get a tax cut under the House plan, but it is spread so thin that only some big steel businesses that make a lot of taxable purchases would see a significant savings.

And perhaps that’s the real play here. Big industry is completely left out of the Senate tax cuts to property taxes and franchise taxes. The House gives something to everyone, but the real winner is big industry. So the two sides go to conference committee with a means of negotiating. If the Senate wants its property tax cut, big petrochemical will have to get a share as well.

The total House tax cut plan would cost $4.87 billion, with a key element being the reduction of the state sales tax rate from 6.25 percent to 5.95 percent. According to Bonnen, the cut would result in a savings of $172 a year for the average family of four and “substantial savings” for business. (Sale taxes may be higher in some areas because of local sales taxes.) The Bonnen bill will save about 35 cents on each $100 of taxable purchases.

 “This is tangible tax relief that will benefit families and businesses of all sizes every time they buy something,” said Bonnen. “Texans won’t have to take our word for it that we cut their taxes. They will see it on every receipt.”

In the meantime and in reality, the House and Senate tax cut bills are looking like relief that only the politicians will feel when they tell voters they cut taxes. The Texas Tribune’s Ross Ramsey took out his calculator to discover neither the House sales tax cut nor the Senate property tax cut will mean much for the average family.

Neither set of tax cutters is exactly remaking the average family budget here. Many of the lawmakers who will vote on this will probably hit lobbyists up during the legislative session for at least one meal costing more than the tax cuts that have been proposed.

Hearst Bureau’s Peggy Fikac found similar problems with the House sales tax package. 

“It’s going to be meaningful when you are talking about a multibillion-dollar tax cut,” said budget expert Dale Craymer of the business-based Texas Taxpayers and Research Association. “The challenge is, is it going to be visible? And that’s a tougher nut to crack.”

If there’s an issue that is most likely to create a special session, at the moment, I’d say tax cuts.

Thu April 9, 2015 11:00 am By R.G. Ratcliffe

The San Antonio Express-News is calling on Texas Department of Public Safety Director Steve McCraw to come clean on what exactly DPS is accomplishing in border security.

As I noted last month, McCraw tends to blend statistics from local and federal law enforcement into his reports on border security accomplishments, a form of resume fluffing. The El Paso Times and a local legislator also have taken note of this trend. As reporter Marty Schladen wrote last weekend: Texas border operation takes credit for feds’ work.

Now the San Antonio Express-News editorial board is pushing McCraw to tell the world honestly what he is accomplishing with the Texas taxpayers’ money. DPS must be accountable at border. 

Without this information, legislators cannot make a reasoned decision on whether to continue funding DPS efforts at the border, a “surge” started by Gov. Rick Perry but which Gov. Greg Abbott has pledged to continue — and increase.

DPS either can’t or won’t divulge its own numbers, preferring to release overall figures lumping in efforts of all agencies — federal and state — participating.

We’ve asked for the DPS-only figures a couple of times. Rep. César Blanco, D-El Paso, has as well. And, frankly, all any of us has gotten is evasion.

 

Thu April 9, 2015 10:29 am By R.G. Ratcliffe

With the Collin County district attorney refusing to look into the securities case involving Texas Attorney General Ken Paxton, the local grand jury has gone rogue and started an investigation of its own.

I’m not sure this is the kind of investigation that Senator Joan Huffman was looking for yesterday with her bill to take the Public Integrity Unit out of the Travis County district attorneys office and put it into the Texas Rangers. Huffman also wants any prosecutions to occur in the alleged public offender’s hometown. In fact, her bill raises questions in my mind, if it was law, could a local district attorney shut down an investigation by a runaway grand jury because the case had not first been investigated by the Rangers.

The Houston Chronicle’s Lauren McGaughy got the break on reporting that the Collin County grand jury had asked the Travis County district attorney for its files in the Paxton securities case. District Attorney Rosemary Lehmberg had previously decided the proper venue for the case was Collin County and referred it to Collin District Attorney Greg Willis. Paxton is from Collin County and any possible crimes occurred there. Willis, who is a Paxton friend and former business partner,  has refused to act. 

“Collin County appears to be the venue where this evidence needs to be heard,” says the letter from the grand jury vice foreman. “Therefore, we are requesting the documents be sent to us as soon as possible.”

The letter, obtained by the Austin Bureau on Wednesday, comes a week after the Collin County District Attorney’s office indicated it had not and would not take up the case unless it receives a criminal complaint from a law enforcement agency.

Texans for Public Justice, the public watchdog group that filed the criminal complaint against Paxton in Travis County, since has asked Collin County District Attorney Greg Willis to recuse himself and appoint a special prosecutor to look into the case.

 

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