An Exclusive Report
The Texas Miracle The Texas Legislature is generally considered to be sensitive to business issues. State leaders are quick to reference the Texas Miracle, referring to Meet Some of the booming business economy, including the quick recovery from the Great Recession. In fact, as a stand-alone state, Texas is the 10th largest the Legislators economy in the world. State leaders credit sensible regulation and low taxes for the relocation of businesses from other states into Texas. But this Who are session, the Michael Best Strategies Texas team noticed a growing alliance between libertarian-leaning Republicans and environmentalists fighting Preserving the against infrastructure investment and promoting policies that are adverse to continued economic growth. We, at Michael Best Strategies, were Texas Miracle engaged in many of these fights to keep Texas the economic engine that it is today.
BETH CUBRIEL Here is a recap of those in the legislature who worked to keep the Texas Michael Best Strategies Miracle alive by fighting for investment in education and infrastructure and Principal by recognizing that Texas only does well when businesses are given the freedom to thrive. Q4, 2019
Representative John Zerwas District 28 (R—Richmond) (retired)
Senator Jane Nelson District 12 (R—Flower Mound)
Rep. Zerwas, Chairman of House Appropriations and Sen. Nelson, Chairwoman of Senate Finance, for their work on authoring the state budget. The Legislature is required by the state Constitution to pass a balanced biennial budget. This budget passed this session spends $257 billion. New spending in the bill includes teacher and school staff pay raises and some property tax relief, two priorities championed by Governor Abbott. Lt. Governor Patrick and Speaker Bonnen. Speaking about the budget, Chairwoman Nelson said, “This is a responsible, forward-looking budget that addresses many long-standing challenges. It “This is a responsible, accomplishes the three major goals we identified early on this session—property tax relief, teacher pay and forward-looking budget additional support for our schools. With this budget, that addresses many we will keep Texas strong and prosperous for years to come.” long-standing challenges.”
Unfortunately, Chairman Zerwas announced an early retirement from the Texas House, effective September 30th. Upon the announcement of Zerwas’s departure, Speaker Dennis Bonnen said, “In his 12 years of public service, John Zerwas has developed a distinguished record of serving his constituents and our state with principle, poise, and an unwavering commitment to statesmanship. His skilled leadership as Chair of Appropriations has played no small role in making Texas the beacon of growth and opportunity that it is today, and his incredible contributions will not soon be forgotten.”
Representative Dan Huberty District 127 (R—Humble)
Rep. Dan Huberty, Chairman of House Education, for his work to pass education funding reform. The Texas business community has been long asking for adequate funding for public schools, and this legislative session took a giant step in that direction. Specifically, HB 3 spends an additional $11.6 billion on school finance, including new public education spending and lowering property taxes.
Passage of the bill was a significant legislative victory for Governor Abbott, who bragged on the legislature’s efforts, “In my inaugural address, I said that this will be the session we enact historical school finance reform by putting more money into the classroom, paying our teachers more, reducing recapture and cutting property taxes.” Abbott said in a statement after the bill passed both chambers, “Tonight, without a court order, the legislature did just that by passing one of the most transformative educational bills in recent Texas history.”
Representative Tom Craddick District 82 (R—Midland)
Rep. Tom Craddick, Chairman of House Land and Resource Management Committee. The House Land and Resource Management Committee was assigned all of the bills relating to eminent domain reform, an important tool used by utilities, railroad and pipeline companies. An aggressive effort was made by landowners to strip common carriers with eminent domain authority the right to use that authority. This would have significantly tied the hands of common carriers and would have prevented the oil and gas industry from being able to build additional pipelines used for moving product. Ironically, as the legislature was spending from the Economic Stabilization Fund (the state’s savings account made up of revenue generated by oil and gas sales), they almost passed a bill that would have restricted further growth of the industry. Chairman Craddick passed a bill out of his committee that included language that was workable to industry and provided landowners some of the protections they requested. Ultimately, the bill failed.
3 $251 Billion Texas Biennium Budget 2020–2021
$6.5 billion $342 million $139 million for education and for early childhood for community teacher pay intervention attendant pay raises and enhancement $5 billion $256 million program in property tax cuts to judicial salaries $8.1 billion $66.5 billion $84 million for higher education in Medicaid for prison guard and parole ocers’ $800 million $4.4 billion pay raises for border security for mental health
Source: Texas Tribune
Once it was clear that no bill would pass, Texas Oil and Gas Association President Todd Staples issued a letter to lawmakers stating his regrets “that a balanced and functional” eminent domain bill didn’t pass this session, but held the firm industry position that no bill is better than a bad bill, which could have the potential of shutting down the oil and gas industry in Texas. Little did we know at the time, that just months later, Texas production would prove to be a vital resource for the world following attacks on Saudi oil fields.
Representative Chris Paddie Senator Brian Birdwell District 9 (R—Mashall) District 22 (R—Granbury)
Rep. Chris Paddie, Chairman of House Energy Resources, and Senator Brian Birdwell, Chairman of Senate Natural Resources and Economic Development, for their work to pass HB 1550. The Critical Infrastructure Protection Act, HB 1550, increases fines and prescribes jail time for those who trespass on and created damage to critical infrastructure. With the increased frequency across the country of protestors causing damage to utility and pipelines, some states have passed legislation that would increase penalties from a “slap on the wrist” to jail time for those causing damage and organizing protests that cause damage to critical infrastructure. Mischaracterized by activists as an “anti-first amendment” bill, this legislation had trouble getting passed.
In laying out the bill in the committee and on the Senate floor, Birdwell clarified who exactly is penalized in this bill, which explains why it eventually passed with bipartisan support: “What this does is similar to what Oklahoma 4 and Louisiana have done, is provide a disincentive to act beyond your First Amendment protest rights and begin damaging [infrastructure]. If you go past the peaceful protest, then this act is operative.” Rep. Paddie and Sen. Birdwell worked diligently to meet with the bill’s detractors and make amendments to ensure that this does not add penalties for a protestor exercising his or her freedom of speech. Ultimately, the bill passed and was signed by the Governor.
Representative JM Lozano Senator Brian Birdwell District 43 (R—Kingsville) District 22 (R—Granbury)
Rep. JM Lozano and again, Sen. Brian Birdwell, for their work to find common ground between landowners and the aggregate industry. With the state’s booming economy demanding more roads, houses, shopping malls, hospitals, schools, etc., the concrete industry is also booming. Given that concrete mines are not the most attractive of businesses, landowners approached the legislature to limit where and when these mines can operate. Chairman Lozano and Sen. Birdwell fortunately recognize that concrete needs to be produced as close to the location that the material is needed and were able to find common ground for increasing penalties for those operators who do violate their permits and cause a public nuisance, without limiting where and when the operators and do business. This common sense approach addresses landowners’ concerns without increasing the cost of production and therefore increasing the cost of construction.
Overall, the session ended very well for Texas businesses, but not without some work. The Texas economy is “safe” for another two years, as the legislature does not convene again until January 2021. They will consider interim charges, assignments given to members by leadership to explore legislative solutions prior to the start of the next session. As expected, eminent domain reform was recently announced as an interim charge in the Senate, guaranteeing that lawmakers will continue to work on this issue in advance of the 2021 legislative session. We will update our subscribers as those talks move forward.
5 Where Business and Government Meet
michaelbeststrategies.com
CONNECT WITH BETH:
6