Thursday, April 27, 2017

McRaven resigns from UTIMCO Board

"Why is there in the hand of a fool the purchase price of wisdom,
Since he has no heart for it?"
Proverbs 17:16

This is interesting; from yesterday's Daily Texan:
UT System Chancellor William McRaven decided last Wednesday to give up his seat on the board of the University of Texas Investment Management Co. in order to have the position filled by a Texas A&M System representative instead.

The announcement came a day before the UTIMCO board meeting, where the board also approved a change in the name to the University of Texas/Texas A&M Investment Management Company, but will still be known as UTIMCO for short. The change reflects the inclusion of the Texas A&M System, which is also a part of the investment company.

“(McRaven) has appreciated the experience and the exposure to the process by which the investments of the various funds benefitting the UT and Texas A&M systems are governed and managed,” said Jenny LaCoste-Caputo, executive director of media relations and external communications for the UT System, in an email. “As conversations have unfolded between the two systems over the past several months about the opportunity to increase the A&M presence on the board, McRaven willingly volunteered to give up his role on the board.”

Texas A&M System Chancellor John Sharp said he approves of McRaven’s decision and the adjustment to the investment company’s name. According to the Austin American-Statesman, Sharp has wanted a stronger A&M presence since he became chancellor in 2011.


Under state law, the UT System Board of Regents will appoint an A&M System representative. UT System Regent Kevin Eltife told The Daily Texan that A&M deserves to have more representation in the investment company because the decisions made impact A&M’s System.

“The A&M System obviously has a vested interest in the investments that UTIMCO oversees, and I think it’s an effort to give the A&M System a little more oversight,” Eltife said. “I applaud Chairman (Jeffery) Hildebrand and Chancellor McRaven for going in this direction.”

McRaven’s decision to step down from UTIMCO comes shortly after he discontinued his plans for a data center in Houston, which caused controversy in the Texas Legislature. However, LaCoste-Caputo and Eltife said McRaven’s removal from UTIMCO’s board and the Houston land purchase are unrelated to one another.
Keep in mind, this comes on the heels of the UTIMCO CEO's sudden resignation on a holiday afternoon late last year.  While we have no specific knowledge, we've been suspicious of all subsequent news coming out of UTIMCO.  We made this exact point during our testimony in the last regental confirmation hearing.

That being said, it's also plausible in this cast that there's nothing more to this than the publicly stated reason of giving a bigger voice to A&M.

Bottom Line: It's impossible to know what this means, but it's a situation worth monitoring.

Wednesday, April 26, 2017

#TXLEGE: Bonnen hears (at least) 14 more special interest carve out bills (89 for session)....

"Dishonest scales are an abomination to the Lord,
But a just weight is His delight."
Proverbs 11:1

It's that time of week when we check on the latest from Dennis Bonnen and the Texas House Ways and Means committee:

  • HB 725        Bohac                   
    Relating to the exclusion from total revenue of certain payments received by health care providers for purposes of computing the franchise tax.
  • HB 1578       Sanford                
    Relating to the authority of certain municipalities to pledge revenue from the municipal hotel occupancy tax for the payment of obligations related to hotel projects.
  • HB 1614       Parker                 
    Relating to a franchise tax credit for enterprise projects for certain capital investments.
  • HB 1680       Frullo                 
    Relating to the authority of certain municipalities to pledge certain tax revenue for the payment of obligations related to hotel projects.
  • HB 1682       Bohac | et al.         
    Relating to the sales and use tax exemption for the repair, remodeling, or maintenance of aircraft.
  • HB 1721       Bonnen, Greg | et al.  
    Relating to an exemption from and a limitation on the sales tax imposed on certain boats and boat motors.
  • HB 2182       Reynolds | et al.      
    Relating to the authority of a county assistance district to impose a sales and use tax.
  • HB 2591       Herrero                
    Relating to the exemption from taxes and special assessments of property of a navigation district.
  • HB 2794       Giddings               
    Relating to the authority of certain municipalities to pledge certain tax revenue for the payment of obligations related to hotel projects.
  • HB 3045       Dale                   
    Relating to an election to reduce or increase the sales and use tax rate imposed by a municipality for the benefit of a Type B development corporation.
  • HB 3201       Darby                  
    Relating to the designation of a well as a two-year inactive well or three-year inactive well for purposes of the oil and gas severance tax exemption.
  • HB 3549       Wray                   
    Relating to a sales and use tax exemption for certain cleaning services performed for a health care facility.
  • HB 3843       Anderson, Rodney       
    Relating to a franchise or insurance premium tax credit for low-income housing developments.
  • HB 4187       Raney                  
    Relating to the use of revenue from municipal hotel occupancy taxes for a sports facility or field in certain municipalities.

How ineffective is one of Texas' largest corporate welfare programs?!?

"Dishonest scales are an abomination to the Lord,
But a just weight is His delight."
Proverbs 11:1

We've previously discussed the "Chapter 313" incentive program whereby the state reimburses local school districts for property tax abatements.  We've also discussed UT professor Nathan Jensen's work on various 'economic development' programs.  This afternoon, at the UT Center for Politics and Governance's event "Economic Development in Texas: The Impact of Chapter 313" Professor Jensen gave an update on his research into the program.

The biggest top-line takeaway is that at least 85% of the projects where 313's were used would have happened anyway.  In other words, the subsidy did nothing to create new economic activity (Note: Duh).  It merely re-distributed resources from taxpayers to the politically connected without accomplishing anything.

Another interesting factoid is that a small group of consultants are putting together the overwhelming majority of 313 applications around the state.  One consultant, by himself, put together close to 200.  This is a classic case of concentrated costs and diffused benefits.

Furthermore, besides getting "made whole" by the state for the abatements, school districts are also frequently eligible for 'supplemental' payments outside of the school finance formula.  Thus, school districts make money on these deals.  That's why companies are almost never told no.

Some other notes:

  • Over 90% of companies get incentives from multiple programs.
  • Texas' property tax system is prohibitive for large capital investments.
  • 53% of 313 agreements go to 'renewable' energy (primarily wind with some solar).
    • ie. All those giant wind farms in West Texas and the Panhandle.
Bottom Line: The legislature needs to abolish this nonsense.

#TXLEGE: Senate hears bill protecting free speech on College Campuses....

"When they heard this, they were furious and plotted to kill them."
Acts 5:33

[Note: The hearing can be viewed here.  The consideration of the free speech bill begins at the 1:35 mark.  Our testimony can be found about ten minutes later.]

As national headlines can attest, the assault on free speech on college campuses has gotten significantly worse in recent years.  In response, several states have passed bills to protect speech on campus.  This morning, we attended a hearing for, and testified in favor of, Texas' equivalent attempt to do so.

SB 1511 (Buckingham) would prohibit "free speech zones" on campuses.  It would prohibit universities from punishing students based on political ideas.  It would also prohibit public universities from disinviting speakers based on the political content of their ideas.

TPPF's Tom Lindsay testified in favor of the bill and recited a litany of abuses against students holding views contrary to the bureaucracies that run these institution.  We largely echoed Dr. Lindsay's views, while also highlighting the mess that occurred with YCT's affirmative action bake sale at UT last year.  To be honest, we think the national headlines speak for themselves.

But there's one point we made in testimony about which we want to elaborate here: The biggest problem is that the Boards of Regents aren't doing their jobs to protect students.  If the legislature wants free speech on campus protected, they've got to stop rubber stamping Regent appointments, otherwise they're going to gut this law the same way they gutted campus carry.  It's not a coincidence that we made this exact point during our testimony for the last round of UT regents.

During dais discussion, Chairman Seliger tried to claim that the first amendment renders this bill superfluous.  Kirk Watson came up with a serious of cute lawyer distinctions designed to show that the bill was unnecessary. Seliger and Watson both chimed in to claim that the bill is toothless and thus unnecessary.

Unfortunately, according to a Senate source, Senator Buckingham had to remove most of the teeth from the bill to get it a hearing in the first place; thus Seliger is talking out of both sides of his mouth on this issue.

Bottom Line: This bill won't get to the Governor's desk this session, but we commend the Senate for starting the conversation because we have a feeling political correctness in public universities is going to get a lot worse.

Tuesday, April 25, 2017

#TXLEGE: Senate further restricts rogue local governments while House creates new occupational license....

"Therefore by their fruits you will know them."
Matthew 7:20

While the "Senate good/House bad" narrative can be a bit of an oversimplification, the product of yesterday's respective floor sessions speak for themselves.

On the Senate side, the passed SB 715 (Campbell):
Relating to municipal annexation.
Campbell's bill would abolish involuntary annexation at the municipal level.  Involuntary annexation is a bad idea that has grown increasingly abusive in recent years.   This continues the Senate's trend this session of cracking down on municipal nonsense.

TPPF released this statement on Campbell's bill:
“Forced annexation is undemocratic and un-Texan,” said James Quintero, director of the Center for Local Governance. “Letting cities annex people without their consent robs those Texans of the right to decide what kind of government they want. Today’s passage of SB 715 by the Senate helps to right this terrible wrong.”
Meanwhile, on the other side of the building, the House passed HB 1260 (Phelan):
Relating to the regulation of commercial shrimp unloading; requiring an occupational license; authorizing a fee.

[Author's Note: Emphasis added.]
Jonathan Stickland explains why this is an awful bill in a recent "Bad Bill of the week" segment:

  • Bill creates new authority for unaccountable taxation from unelected bureaucrats.
  • Occupational licensing is a barrier to entry.
  • Violates RPT platform; we should be repealing occupational licensing not creating new ones.
Stickland offered three amendments that would have solved the problem Phelan's claimed his bill was attempting to address in a free market manner.  Unfortunately, all three were overwhelmingly voted down.  Thus did the House put itself on record supporting fewer jobs and higher cost of living.

Bottom Line: Honestly, the difference between these two bills speaks for itself.

Monday, April 24, 2017

#TXLEGE: Statewide grassroots leadership invites Warren Buffett to join Free Market auto sales coalition!!!

"Dishonest scales are an abomination to the Lord,
But a just weight is His delight."
Proverbs 11:1

With the Senate risking its credibility over this absurd "Buffet Bill," we were honored to join statewide grassroots leadership in signing this letter:

Bottom Line: One of two things needs to happen.  If this bill can be amended to include direct sales for everyone, that would be fine.  Otherwise, this bill needs to die.


We encourage readers to tweet this letter to Warren Buffett: @WarrenBuffett

#TXLEGE: New York Times praises Joe Straus....

Do not be deceived: “Evil company corrupts good habits.”
1 Corinthians 15:33

Late last week, the New York Times published an op-ed from the Center for Public Policy Priorities, an intellectually underwhelming local left wing think tank that has nevertheless emerged as a key cog in House leadership's machine.  Mostly, the piece sells hysteria about the Senate's relatively modest (albeit postitive and productive) agenda.  But the following bit is choice:
As a veteran local lobbyist joked recently, the only thing standing between Texas and the Middle Ages is the House, ably presided over by Speaker Joe Straus, Republican of San Antonio. In contrast to the Senate’s far-right agenda, the House’s common-sense priorities include remodeling our outdated school finance system and advancing mental health reforms. It remains to be seen whether moderates in the House have the votes to stop all the bad bills coming their way from the Senate.

[Author's Note: Emphasis added.]
Read the whole thing here.

Bottom Line: While the "Senate good/House bad" narrative can be a bit of an oversimplification at times...Joe Straus is the only person at the Capitol being praised in the New York Times.