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texas public policy foundation

R.G.’s Take: No budget joy in Mudville

Apr 28, 2011 By R.G. Ratcliffe

Senate Finance Chairman Steve Ogden stands like Casey at the Bat, fully wanting to score. And nothing but a base hit, or a walk, perhaps, will get him to the floor. As this week ended with the scoreboard showing naught, Ogden admitted he lacked the stroke to bring his budget up for Senate debate. He described his position in baseball terms: The right foul line is the conservatives who want no additional money taken from the rainy day fund to balance the next two-year budget. The left foul line is the liberals who want to increase taxes to avoid deep cuts in public education. Neither side has the votes to prevail, Ogden said today. “I don’t have a bill between the foul lines yet, but we’re working on it.” The dilemma for senators on both sides is they hold the most power now because the vote to debate requires two thirds vote of those present, while a House-Senate conference committee report requires a simple majority to pass. But to pay for the Senate plan, 21 votes also are required to spend money from the rainy day fund. So both votes require a combination of Republican and Democratic senators. Ogden said those holding out for more spending should give up because the Senate bill is as good as it is going to get. And as bad as his proposed two-year budget would be for Texas, politically, it probably is the best that can be passed by the current Legislature. Other than a redistricting bill, there is nothing more political than the state budget. Deciding how to spend the taxpayers’ dollars may seem like a noble task of stewardship. But it is really about chasing campaign dollars and votes. And that is what derailed the Senate budget plan this week. First, look first at the inside fight of what senators called “twosies versus threesies,” Article II Medicaid versus Article III education. Senate Republicans decided to fund nursing homes and doctor’s reimbursements ahead of higher and public education. That erased the specter of nursing homes closing across Texas. It also cooled opposition from the health care industry, which pours about $7 million into legislative campaigns every cycle. But that meant less money for education, important to Democrats.

Help! Help! There’s a pig in this room! Quick, get the lipstick!

Mar 24, 2011 By Paul Burka

You have to feel sorry for the Legislative Budget Board. The LBB came out with a required report titled "Dynamic Economic Impact Statement" on the effect of the House budget, and you have never heard such squealing in the pink building. Among those seeking to apply the Maybelline were David Dewhurst and the Texas Public Policy Foundation. But it will take more than a whole tube of "red revolution" or "warm and cozy" to pretty up this swine. You see, the LBB made a big mistake: It told the truth. It didn't say, as the governor likes to boast, "We have gotten through hard times before," or, "We are confident that the state will be able to meet its obligations." Instead, it delivered the bad news. How bad is bad? All of the numbers in parenthesis are negative. Total employment [Jobs lost] 2012 (271,746.1) 2013 (335,244.1)

Meeting today could clarify speaker’s race

Nov 9, 2010 By Paul Burka

A meeting is scheduled this afternoon at the building occupied by the Texas Public Policy Foundation. It is probably taking place as I write. My information is that representatives of Straus and some of his adversaries, including Michael Quinn Sullivan, are having discussions that could result in the shaping of…

The transportation debate and the state spending cap

Apr 22, 2009 By Paul Burka

The Texas Public Policy Foundation testified before the House Transportation committee this week concerning the mammoth local option transportation funding bill that has passed the Senate. TPPF's Justin Keener expressed alarm about the rising cost of government (to no one's surprise): Between 2000 and 2008, the state’s total budget grew by 73.1 percent from $49.5 billion to $85.7 billion, while the sum of population plus inflation only increased by 41.3 percent over the same period. That means the cost of government per person has gone up during this decade. The discrepancy between spending and the population plus inflation measure is even more distinct at the local level. Keener's point is that government at all levels is growing faster than the index of population growth plus inflation. This index represents what TPPF, and conservatives generally, believe the state spending cap ought to be. The question I have is whether TPPF's measure of population growth plus inflation is the best gauge of how much spending the state can afford. I believe that the answer is no. Texas already has a spending cap on general revenue. This is Article 8, Section 22 of the state constitution, adopted in 1978: RESTRICTION ON APPROPRIATIONS. (a) In no biennium shall the rate of growth of appropriations from state tax revenues not dedicated by this constitution exceed the estimated rate of growth of the state's economy. The legislature shall provide by general law procedures to implement this subsection. [Section (b) authorizes the Legislature to suspend the cap by majority vote if it declares an emergency.] Economic growth is determined by the Legislative Budget Board--not the staff, but the elected officials who comprise the board. The LBB provides five scenarios for estimated economic growth, ranging from the most optimistic to the least, and the Board chooses one. In 2007, for example, it chose the least optimistic. I believe that using the measure of economic growth has served Texas well. It is a a realistic spending cap, whereas inflation plus population growth is an ideological one, designed to achieve a predetermined outcome of less spending. Economic growth measures the ability of the state to pay for state services: greater in good times, lesser in bad times.

The TPPF unemployment insurance debate

Mar 31, 2009 By Paul Burka

The Texas Public Policy Foundation hosted a debate last week on the subject of whether Texas should accept the stimulus funds for unemployment insurance. The audio is available on the TPPF web site here. The participants were Republicans Kelly Hancock and Dan Gattis and Democrat Mark Strama. Craig Eiland, who was originally scheduled to participate, had a conflict. I am going to summarize the arguments below: Hancock I heard people saying that the way to fix this is to add more people to our system, because we're paying out faster than we're bringing in [money]. This didn't sound right, that we need to add people to our rolls while we're paying out money in a fund that is not keeping up with the payments that we're paying out today, because we'll get a lump sum of money up front. I look at this as what's best for Texas long-term instead of a short-term kind of mentality. If you look in a very short-term perspective, these funds are extremely beneficial to us. My wife and I started a new business, a farm and ranch store, it's been successful. Our business is up significantly. With our business, I had to borrow money up front so I could make more money in the end. The unemployment insurance money actually does the opposite. Rather than increase the revenue side long-term, it increases the expense side long-term. It does increase the revenue side short-term. The impact of business is insignificant except when you draw the lines [Hancock and Strama both used slides that were provided by the Workforce Commission, although they did not have the same data] out to infinity and beyond.

The Week in Review

Mar 8, 2009 By Paul Burka

This post has been revised since its initial publication. 1. The Tom Schieffer candidacy. Patricia Kilday Hart and I interviewed Tom Schieffer about his race for the Democratic nomination governor. Interestingly, Schieffer asked to go off the record before the interview to discuss the events that led to his being named one of the Ten Worst legislators in 1975. That was my first year to participate in the writing of the story, along with my then-colleague, Griffin Smith. The writeup was one of the toughest that we have ever written. It was full of anonymous quotes, which we seldom use today. Nowadays, the writeups are largely based on the public record. Schieffer was involved in one of the session's biggest fights, an effort to authorize Texas's first presidential primary in order to aid U.S. Senator Lloyd Bentsen's bid for the Democratic nomination for president in 1976. The Texas Democratic party in that era was split into liberal and conservative wings, and Schieffer was a conservative Democrat. The liberals were fighting him hard all the way, including my former mentor, Babe Schwartz, and I am sure that that influenced the writeup. The ink was hardly dry on the issue before I began to have second thoughts about whether Schieffer really deserved being on the Worst list. The bill did pass, and Texas did have its first primary--not that it helped Bentsen, who was overwhelmed in his home state by Jimmy Carter. Schieffer has gone on to have a successful career as an oil and gas operator, as president of the Texas Rangers baseball team, and as ambassador to Australia and Japan in the George W. Bush administration. He should be considered a legitimate candidate for governor. The Ten Worst article was 34 years ago. There are lot of obstacles in the path of a Schieffer candidacy, but that article shouldn't be one of them. The main obstacles, of course, are Schieffer's association with Bush and his well motivated, but ultimately self-defeating, unwillingness to distance himself from his friend and former Rangers' business partner; his reluctance as a candidate, including the question of whether he will put his own money into the campaign; and--how do I put this?--a question of whether he has a feel for contemporary Texas politics. I had the feeling, talking to him, that he has one foot in the present and one foot in the seventies, when conservative Democrats ran the state. He still talks about Lloyd Bentsen and John Connally. Connally and Bentsen and Hobby were giants in their day, and they ran things a heck of a lot better than the Republicans have, but Schieffer so far seems like he is just putting his toes in the water. He needs to jump in. 2. The transportation stimulus package. Transportation is one area where the stimulus package can produce real jobs and have real economic benefits. So why is the amount so small--just $2.5 billion overall, and $1.2 billion in the first installment? One of the reasons is that Obama wants to invest in high-speed rail rather than roads. I think this is a mistake. I'd like to see more of the money go to highways and less to high-speed rail. High-speed rail requires total grade separation. For rural Texas, it will make the Trans-Texas Corridor battle look like a walk in the park. I ran some numbers back in the early nineties, when the idea of a bullet train was first floated, and to break even on the project's then $6 billion cost, trains had to run 97% full between Houston and Dallas 24 hours a day. Like it or not, the most efficient method of getting people from point A to point B is one lane of freeway. In an hour, it carries six times the number of people as rail, and the cost is approximately the same. Politically, the most important aspect of the transportation funding battle was the continuing hostility between TxDOT and the Legislature. TxDOT froze lawmakers out of the discussion of which projects should be funded, with the result that 70% of the money will go to toll roads. Legislators did not cover themselves with glory either, as some took the opportunity to lobby for projects in their districts. The level of mistrust of TxDOT is as high as it has ever been--thanks to Commissioner Ted Houghton, who decided to do a little bomb-throwing of his own at the March 5 meeting of the Texas Highway Commission, calling one of the witnesses and the organization he represents "idiots." Senator Hegar fired off a letter to Houghton, which included the following observations:

So predictable

Jan 21, 2009 By Paul Burka

A statement from Talmadge Heflin (who else?) at the Texas Public Policy Foundation: “The first draft of the 2010-11 Texas state budget reinforces the message from Comptroller Susan Combs’ revenue estimate last week. The Texas Legislature needs to get to work on pruning the next state budget back within the…