Buckle-Up, The Texas Legislature’s Back in Session

There’s an old Texas saying that “no person’s life, liberty or money are safe while the Texas Legislature is in Session,” and there’s a lot of truth to that statement.

According to the Texas Constitution, the Texas Legislature must meet every two years for 140 days. In today’s lingo, however, we say that they meet every other year for about five months. Texas has a “citizen’s” Legislature, which means we pay legislators a mere $7,200 a year, plus per diem during the Session. We have 150 state representatives in the Texas House and 31 members in the Texas Senate. These diverse “citizens” from all over the state have just a few months to agree on leading and funding a state with a population of approximately 28 million people.

Top of this year’s agenda will be social issues that require attention due to federal court orders and/or potential lawsuits. They don’t directly affect business, but will ultimately require increased funding somewhere along the way.

State Comptroller Glen Hegar informed the Legislature that they have an estimated $104.87 billion for this year’s budget. Dedicated funds for the Rainy Day Fund, infrastructure and public university funds have already been removed from the $104.87 billion working budget number.

So what specifically is in store for the Texas Legislature this Session? Below are the issues that will likely rise to the top of the docket.

Education & Foster Care

A growing Texas population continues to place more and more demand on our systems. A top priority for leadership this Session is to include school choice in education reform. This will allocate money to those who want to attend private schools and deduct the funds from independent school districts (ISDs). Further, the schools across Texas are funded through the “Robin Hood” act, which takes money from well-funded districts and allocates it to poorer districts. The program has been controversial since its onset but will be highly debated this year.

In the education space, the less the Legislature allocates to the ISDs, the more likely they are to seek property tax increases at home. Watch your wallet.

Another major social area that Texas is under includes a federal court order to improve is foster care. The foster care system has been underfunded for years and caseworkers are overworked and undertrained. It has been so underfunded that it will take millions to meet the demands of the court order. This likely means cuts to other programs that we will all end up paying for along the way.

The Bathroom Bill

Lt. Governor Dan Patrick has made SB6, better known as the “bathroom bill,” a high priority. The Texas Association of Business has presented an economic study that Texas could lose up to $8.5 billion in revenue loss due to ramifications from this law. Thus, business leaders are urging the usually business-friendly legislature not to pass the bill. It is creating conflict and there may be implementation costs for businesses if it is passed, as well as potential losses in revenue to the state. Frankly, this bill is getting the most attention from media and the public than other issues.

Healthcare

Healthcare will remain an issue during the Session, just like two years ago and two years before that and…well, you get the picture. Texas already has the highest uninsured rate in the United States. With rapid changes to the Affordable Care Act (ACA), a.k.a ObamaCare, in Washington D.C., the rate will increase significantly. Texas has never participated in available waivers that would allow expanded coverage, but now even citizens who have privately enrolled in ACA could lose their benefits. The interesting perspective on healthcare financing in Texas is that the bill still has to be paid. Local hospital districts absorb much of the cost of providing care to the uninsured. The money to run these hospital districts comes from your property taxes, so expect an increase there as well.

Property Taxes

Taxation is a hot topic this Session as well. Legislators are constantly bombarded with calls about continuously increasing property taxes, which is an issue across the state. A number of property tax reform bills have already been filed. Some of the approaches include putting caps on increases in property taxes and others look at the way assessments are made. It will be one of the most debated topics of the Session. Everyone from business to property owners will be affected by the outcome.

Eminent Domain

Eminent domain allows both public and private businesses to access private party for the purpose of conveyance. Think pipelines, utilities, railroads, etc. This issue affects multiple industries that are vital to the Texas economy, including energy and transportation. In Texas, you must be offered a fair market value for use of your land. Due to the ever-expanding oil and gas business and infrastructure projects and the importance of landownership and property rights in Texas history, attention around the issue continues to grow every year. Expect a lot of discussion on this topic.

Infrastructure

With news coming out of the new federal administration that infrastructure funding will be a top priority, you can be certain that Texas will try to maximize the opportunity. The state lags in funding roads and building bridges, and any opportunity to capture additional funding for infrastructure projects will be sought after vigorously.

Ride Sharing (or, State vs. Local Control)

Ride sharing is an issue that will keep lobbyists very busy this Session as well as the conflict between local and state regulation. For example, last May Austin voters banned ride sharing companies Lyft and Uber from operating within the city, while cities, such as Houston and Dallas, have struggled with regulating them. The Legislature has decided to address the issue and possibly pass statewide legislation that keeps the regulations consistent across Texas. Local governments are taking the stance that they should have the right to regulate business in their own municipalities. Expect this one to be one of the most talked about issues of the Session. The decision to go statewide rather than local may affect businesses in a plethora of ways.

Water

Finally, another dominant issue will be water management. Some areas of the state have too much water, while other regions in the state have none (e.g., West Texas). There will be much discussion on how to manage water resources. Some believe this issue has been resolved in previous sessions, but unfortunately that just isn’t true. So you can expect some rainstorms and droughts during the Session.

Fasten Your Seat Belts

While these issues are complex and with that comes uncertainty, one thing we can all be sure of is that changes are coming. So it’s critical we all stay aware while the Texas Legislature is in Session. And of course, hang on to those wallets and purses.