Legislators punt on transportation funding, appear headed for a special session

Posted by Henry, on Mon May 13 2013 at 05:41 PM

For the first time in six years, state legislators can afford to pay for the state’s major obligations, so naturally the emerging argument in the last two weeks has been an increasing emphasis on not trying to meet the education and infrastructure demands of this growing state.

The one pre-session item of significance that will get resolved, for now, is a sweeping change in public school curriculum, testing and graduation requirements. While not free – you don’t tinker the with the system every two years without some cost – it isn’t a major hit on the state’s budget, so the consensus on fixing the system isn’t muddied with a price tag that significantly increases state spending.

Which doesn’t mean it won’t cost somebody more, most likely individual school districts. The requirements for each high-school student to have an individual graduation plan in the 9th grade and the myriad of new course options are both unfunded mandates that so far have escaped proponents of the other changes.

And, while we’re at it, let’s note that the self-congratulations you will hear from legislators about putting money back into public education and the increases to local school districts will be a little bit hollow. A significant portion of the increased funding for school districts will come from local property taxpayers. Appraised values are up, meaning school districts will collect more in revenue at the local level, which leads to less from the state.

The House appointed conferees last week to work out the differences in their version of House Bill 5 – the accountability bill – with senators. The Senate should make its appointments today.

On the other major items, both funding for water projects and a revenue-starved transportation fund appear dead. House members last week spent 90 minutes debating the merits of House Bill 3664—an increase in vehicle registration fees for the first time since 1985, and a change going forward in how some of the revenue from taxes on motor vehicle sales would be allocated – before seeing the bill withdrawn without a vote.

House sponsor Drew Darby of San Angelo acknowledged he didn’t have the votes to pass the bill, which carried the threat of a gubernatorial veto because of the fee increase. An increase in a fee on his watch is something Governor Rick Perry zealously guards against, either for his legacy or for his next presidential campaign, or both.

The debate on the bill was instructive, with opponents bringing up an awful lot of four-years-ago talking points while ignoring the projects of future need and lack of revenue coming in to meet that need. The manipulation of numbers is always striking in this discussion, as when opponents pointed to increases in the Texas Department of Transportation’s budget during the year a lot of one-time, federal stimulus money flowed in, while ignoring the growth on the state’s transportation system over the last 10 years.

Since last Thursday was the deadline for house bills getting passed to third reading, nothing else is available in the House to put revenue into transportation. The only vehicle alive is Senate Joint Resolution 1, unanimously passed several weeks ago in the Senate and very unloved in the House.

SJR 1 would pull $5.7 billion from the economic stabilization fund for water, transportation and public education. It’s proposed as a constitutional amendment, meaning approval of two-thirds in both houses must be followed in November by approval from voters statewide. This way, as has been noted before, the voters would be spending the money, not legislators, even though there is a theory that they were elected to make decisions, not pass them on to others.

When it comes to giving money away, stingy as legislators are with spending money they actually have available, they find it quite easy to pass around tax breaks. The House spent about five hours last Tuesday working through House Bill 500, a laundry list of changes – most of them reducing tax obligations – to the much-reviled franchise tax.

Ever since the franchise tax was significantly altered in 2006 to bring more businesses into the system – meaning those who previously had avoided paying the tax, which was almost everybody – the program has been harshly criticized for its contradictions and its complexity. The Arlington Chamber of Commerce supports a comprehensive revision of the franchise tax to address those concerns – acknowledging that constitutional limits on how the tax can be structured are what led to its complexity in the first place. The Chamber doesn’t support the kind of special-interest feeding frenzy that house members participated in last week, an exercise that in the end cut about $600 million from projected state revenue.

Some of the tax beaks won’t affect this year’s budget, but they are land mines down the road. This is the kind of thing many legislators, mostly Republicans, bitterly denounce when it’s done by the federal government.

Word is that in its current form, HB 500 has tough sledding ahead in the Senate, though House members several times anticipated Senate passage of some kind when they acknowledged that problems created by their many amendments to the bill would be worked out in the conference committee.

The calendar is casting a longer shadow every day. Adjournment of the 83rd Legislature is two weeks away, and all substantive action needs to happen a couple of days before that. Local bill deadlines are this week, all legislation originating in the Senate
needs to make it through House committees by Saturday and clear the House floor by next Tuesday (May 21). There is no such deadline in the Senate, but the House has a hard deadline next week for considering any House bills amended by the Senate, and by then there will be no time left to appoint conference committees to work out the differences. Late passage by the Senate of a House bill, especially one with a Senate amendment, is a virtual death sentence.

And, just to keep everyone interested, the behind-the-scenes message is that if something on water, transportation and, oh yes, a $1.6 billion tax cut proposed by Governor Perry don’t get done by May 27, everyone gets to return for a special session, maybe the very next day.

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