Isn’t that special

This week, and as predicted, the legislature has gone into special session (a limited 30 day session called by the Governor).  At the conclusion of the regular 140 day regular biennial session (which meets only in odd-numbered years), the gavel came down in both chambers signaling the end, but within 10 minutes, the Governor invoked his state Constitutional powers.  Such authority allows the state’s chief executive to call the legislators into “extraordinary session…at any time and for any reason”.  The key is that the Governor must specify the issues or else face a runaway legislature (one where lawmakers focus on their own policy agenda rather than what the governor wants).

Several outstanding issues need resolution, but most salient is the need to adopt a redistricting map.  After the 2010 census required by the U.S. Constitution, the Texas legislature had to go through reapportionment of the Texas House and Senate, along with the U.S. House of Representatives.  Seats were reallocated into the different administrative or election districts, and then the state legislature had to redistrict (the process of drawing boundary lines for election districts in a state).  The new maps resulted in the filing of two federal court cases (one in San Antonio and the other in Washington, D.C. where Texas had to get approval from the federal government).  The San Antonio court found that the legislature had gerrymandered (illegally manipulated) district lines to favor one group over another.  The three-judge court then re-drew the maps to accurately represent racial minority interests—those maps were used in the 2012 election. The court in D.C. did the same thing about six months later.   

Now the state legislature has to vote on whether they want to approve the San Antonio map or try to draw up their own during the special session. 

Other hot issues that Governor Perry may press for during the special session include prohibiting abortions after 20 weeks, drug testing for welfare applicants, and allowing guns on campus. The Governor may have to call more than one session.  He can call an unlimited number, but each 30 day session costs about $1.3 million because of per diem costs—monies allocated to pay for funding, travel and staff during the session.  Perry hasn’t been shy about using his authority—he’s called 10 sessions during his 12 years in office.  

And in other census news, a new report highlights that Texas’ growth in the Hispanic population after the 2010 census means that immigrants have substantially contributed to the gross state product (total sum of all goods and services produced in the state in a given year).  According to the report, Texas’ immigrants produce about 69.3 billion in economic activity by spending in the state, contribute about $30.8 billion in gross state product, and account for approximately 403,174 of the state’s workforce.   The report comes at a time when the U.S. government is considering a major overhaul on immigration reform. 

Guess we’ll just have to wait and see whether the federal government thinks immigrant economic contributions are special enough to merit immigration reform.

Baby you can drive my car

Texas roads aren’t just known for their excessive speeds, they also seem to be a favorable testing ground for experimental automobiles because of our regulatory framework (the rules and regulations which govern the enforcement of our laws).   Last week Google tested a prototype car which needs no driver—although the manufacturer required that there be a person sitting in the driver side while someone else sat in the passenger seat.  This first ever vehicle—which navigates itself—operates in much the same way that airplanes behave when the instruments are set for automatic pilot.

The company brought the car out here from California and did a test drive from New Mexico to Texas and around Austin as part of Texas’ Department of Transportation Forum held to highlight transportation solutions for the future.  There’s still some question about whether the vehicle was “street legal” because neither Austin, nor the state have laws that regulate “self-driving” technology. Three states, California, Nevada and Florida all have laws in place to address such technological innovations, giving new meaning to “who’s in the driver’s seat.”

And if you need oil and gas to run those vehicles, Texas promises to be the place that can help with that too.  A recent survey of the oil and gas boom in Texas highlighted that the Lone Star state is responsible for over half of the rigs in the U.S. and more than 1 in 5 rigs in the world is operating out of Texas.

Who would have expected that in the early 1990s as the industry stalled and the Texas economy stagnated? Indeed back then, many political scientists and economists spoke of Joseph Schumpeter’s theory of “creative destruction”—the process of change that occurs within economic structures where old and outdated economic forces are destroyed and new ones are created.  While Schumpeter was a conservative largely critical of government intervention during the Great Depression and World War II, his economic principles—when old industries die they are replaced by newly emerging ones—became  vogue during the dotcom boom and bust in the early 2000s.

In Texas, the rise of information technology (IT) as the oil and gas industry struggled was critical for maintaining Texas’ fiscal health.  Now that the oil and gas industry seems to be undergoing a resurgence, it is now IT which may be in need of entrepreneurial re-vamping.   ”Fracking” (hydraulic fracturing) is the controversial technique which creates fractures in rock formations by injecting fluid into cracks to force them to open into larger fissures allowing oil and gas to flow out of the formation so it can be extracted. It has increasingly been used around Texas to take advantage of additional gas reserves that have not been fully tapped. Its economic impact is being touted as a way forward in economically difficult times and that it reduces our dependence on foreign oil.

Wonder how long before the self-driving car learns how to fill up at the gas station?

Road trip

Governor Perry took a road trip this week to California to recruit businesses from the Golden State to think about re-locating to the Lone Star state.  Judging from some reactions, not everyone thought that the Governor gave a shining performance.  The Governor has made several expeditions to try to enhance Texas’ economic growth (an increase in the capacity of an economy to produce goods and services, compared from one period of time to another).   No doubt, the Texas economy has been a source of southern pride because our Gross State Product (GSP) has continued to expand even during economic downturns, and our unemployment rate has remained below the national average for 72 consecutive months.

GSP is a measure of the economic output of a state which is a sum of all value added by industries within the state for a specific period.  Its counterpart at the national level is the Gross Domestic Product (GDP) which measures the same thing for the entire country. In 2012, Texas’ GSP was about 1.3 trillion while the national GDP was approximately 15.7 trillion growing faster than the national average (about 23% compared to 16% for the national average).

So what’s not to love about Perry wanting California to have a piece of the action?

Seems California Governor Jerry Brown was not happy about Perry’s $24,000 radio ad which asked whether California businesses wanted lower taxes and less regulation. Calling the ad “barely a fart”, Brown blasted Perry for trying to poach jobs, while one journalist asked Governor Perry during a press conference whether Texas’ lax regulatory standards were related to worker deaths. Hoping that California businesses will beat a path to get here, Perry was quick to respond that higher rates were due to the hazardous energy industry, not poor regulation.

And speaking of pathways, Agricultural Commissioner Todd Staples is working with members of the Texas legislature to craft a resolution to challenge granting a pathway to citizenship as a policy solution for illegal immigration.  As head of the Texas Department of Agriculture,  Staples works to support private sector job creation and economic development, t0 improve consumer
protection, to promote agricultural products, and to expand trade.  Staples’ concern is about the shadow economy—unofficial, untaxed economic activity that is not declared for tax purposes and is usually carried out in exchange for cash.   His comments come as President Obama highlighted concerns in his State of the Union address about the 11-12 million undocumented persons in the U.S.  Staples would prefer to see border law enforcement efforts increased, and he intends to continue to push that message as he goes on his book tour to promote his new book and gear up for a run at the Lieutenant Governor job in 2014.

Happy travels.

Pandering and porn

Pandering and porn

Texas was the recent subject of a New York Times investigative report questioning whether the Lone Star state is giving too much in tax subsidies and incentives to businesses to encourage them to relocate or expand certain enterprise sectors. The concern is that Texas is losing potential income at a time when of a record budget deficit (the annual amount when expenditures exceed tax income). The deficit caused the 2011 legislature to cut $15 billion in state spending (about $5.4 billion in school funding and $4.7 billion in health programs alone), and the 2013 Texas legislature will have to cover the shortfall for Medicaid (about $7 billion) by March and to come up with $15 billion for Medicaid by 2015.

Critics argue that the tax breaks for businesses are corporate welfare (financial assistance for businesses that may not be justified), while supporters argue that the monies have contributed to Texas’ number one status in job creation (adding 1.4 million in jobs over the past 10 years-over 3 times more than any other state).  Texas lawmakers countered that the expose’ (investigative report which questions government behavior) doesn’t highlight that Texas’ has been below the national average for 70 consecutive months. They are concerned that it unfairly represents what Texas has done and points out that we may be victims of our own transparency.  Indeed most states don’t provide the kind of detailed reporting mechanisms that Texas provides, and so comparable data on other states is just not possible.  This isn’t pandering to businesses, supporters say, this is making sure that Texas is open for business.

There’s one group that government is trying to stop from being in business—child pornographers.  Last week President Obama signed legislation which increases sentences for persons who traffic in child porn.  The Child Protection Act of 2012  backed by two Texas lawmakers (U.S. Senator John Cornyn and U.S. House Representative Lamar Smith) authorizes courts to issue protective orders (court decrees to stop harassment of victims), increases funding for internet criminal investigations, and makes it easier to obtain subpoenas.  The tough law comes at a time when internet child pornography is becoming one of the fasting growing areas of criminal activity. One criticism about the new law’s “lock-the-door-and-throw-away-the-key-approach” is that it does not do enough for supervision, rehabilitation, and treatment.  A 2010 survey by federal judges highlighted that about 70 percent of the sentences were too high for child pornographers because what is needed is supervision and treatment.

No wonder the origins of the word “pander” refer to a “go-between whose motives don’t seem entirely pure.”

Pander away.