Houston City Council adopts stricter flood plain development rules

By Rebecca Elliott

Houston City Council agreed Wednesday to require new homes built in the flood plain be elevated higher off the ground, the Bayou City’s first major regulatory response to the widespread flooding Hurricane Harvey unleashed last August.

The vote marks a shift away from Houston’s longtime aversion to constraining development, and means all new construction in the city’s flood plains will have to be built two feet above the projected water level in a 500-year storm.

More than three hours of contentious debate preceded the unusually tight 9-7 vote, which largely fell along party lines.

“This is a defining moment,” Mayor Sylvester Turner said in his final pitch to council. “Can we undo what was done with Harvey? No. But can we build looking forward? Yes. Does it mean it may cost more financially? Yes. But if it has the probability of saving lives, and if it has the probability of letting people know in our city and those who are looking to come to our city that we are taking measures to be stronger to be more resilient, then that’s positive for the city of Houston.”

Council members Karla Cisneros, David Robinson, Dwight Boykins, Ellen Cohen, Jerry Davis, Robert Gallegos, Amanda Edwards and Dave Martin joined Turner in backing the changes. Council members Mike Knox, Jack Christie, Brenda Stardig, Michael Kubosh, Steve Le, Greg Travis and Mike Laster opposed the regulations.

The new rules take effect Sept. 1 and apply to all new buildings within the 500-year flood plain, which is deemed to have a 0.2 percent chance of being inundated in any given year.

Current regulation mandates that buildings be constructed one foot above the flood level in a less severe 100-year storm and apply only within the 100-year flood plain, where properties are considered to have a 1 percent annual chance of being inundated. This will be the first time Houston is imposing minimum elevation requirements within the 500-year flood plain.

 

 

 

 

 

Texas voter registration policy violates federal law, judge says

By Gregg Re | Fox News

Texas' online driver's license registration system violates federal voting rights laws, a judge ruled in an order released Tuesday.  (AP)

Voter registration policies in Texas violate federal law, a U.S. District Court judge ruled in an order unveiled Tuesday, marking another voting-rights legal setback for the state's government.

Under the so-called "Motor Voter" provisions of the 1993 National Voter Registration Act, voters who apply for or renew their driver's license must be provided an opportunity to register to vote as well.

But Texans who went online to update their driver's license information ran into roadblocks that in-person applicants did not, according to the Texas Civil Rights Project, which brought the suit against Texas in 2016.

For example, the plaintiffs alleged, users who clicked “I want to register to vote" while updating their driver's license information were directed to a form that they had to print and mail. They also received a notification stating that clicking "yes" did not complete the voter registration process.

That allegedly confounded some plaintiffs and led to "widespread confusion," according to the lawsuit. The online process amounted to an illegal stumbling block, given that the in-person process was smoother, the plaintiffs charged.

The plaintiffs specifically alleged that the unequal treatment of in-person voters, as compared to online ones, violated both the Constitution's Equal Protection Clause and federal law.

"“Everybody – all of our plaintiffs and many other people we have spoken to – once they get their driver’s license, they assume that their voter registration information has been updated, too,” Texas Civil Rights Project President Mimi Marziani told NPR. “And then they show up at the polls thinking they are going to be able to cast a ballot and they are not able to."

U.S. District Judge Orlando Garcia said a written opinion explaining the reasoning behind his ruling will be released within 14 days.

Texas does not currently permit online voter registration, according to the Texas Tribune, and may be forced to as a result of the ruling.

“For too long, the state of Texas has ignored federal voting rights laws intended to ensure that all eligible voters have an opportunity to register to vote,” Beth Stevens, voting rights director at the Texas Civil Rights Project, told the Texas Tribune. “We look forward to seeing deep changes in [the Texas Department of Public Safety’s] voter registration practices in the coming months, affecting well over a million Texans every year.”

The ruling is the latest in a string of voting-rights cases involving Texas. The state has spent years fighting to preserve both its voter ID law -- which was among the strictest in the U.S. -- and voting maps that were both passed by GOP-controlled Legislature in 2011.

 

Mayor’s comments suggest city could play role in turning around struggling HISD campuses

By Jacob Carpenter and Rebecca Elliott

Houston Mayor Sylvester Turner said he has been asked to get "very, very, very involved" in Houston ISD as it faces potentially severe state sanctions, but he stopped short Wednesday of suggesting the city could take control of the district's chronically under-performing campuses.

Asked whether the city could become a "partner" with the district, giving the city significant authority over operations at campuses, Turner said: “Let's just say I've been asked to be very, very involved by multiple individuals, and then I am deciding to what degree and to how far I am going to get involved in the day-to-day operation of any of the schools.”

Turner’s comments add to growing speculation that the city of Houston could play a role in HISD’s attempt to stave off a potential takeover of the district’s locally elected school board — a result of HISD’s failure to raise academic performance at 10 chronically low-achieving schools.

Under a law known as HB 1842, which was passed in 2015, the Texas Education Agency must replace HISD's board or close campuses if any one of the 10 schools fails to meet state academic standards in August.

It is unlikely all 10 HISD schools will meet standards this year, so district administrators have recommended employing another law, commonly referred to as SB 1882, to avoid sanctions. Under SB 1882, the district can get a two-year reprieve from punishment if it temporarily surrenders control over hiring, governance, academics and other operations to an outside organization. The arrangement commonly has been referred to as a “partnership,” though it more closely resembles the framework of a charter school.

In recent weeks, HISD administrators have said the district could form partnerships with a nonprofit, higher education institution or charter school network. In recent days, though, they have added “governmental entities” to the list of possible partners, leading to questions about whether the city of Houston could get involved in SB 1882 plans.

District officials have not publicly identified any potential partners under current consideration. HISD Interim Superintendent Grenita Lathan has said she hopes to name proposed partners at an April 2 board meeting, with trustees potentially voting on partnership contracts on April 12. HISD must submit contracts to the Texas Education Agency by April 30. Any partners would take control of campuses ahead of the 2018-19 school year.

It is unclear how seriously HISD administrators are considering a district-city partnership. HISD spokesman Tracy Clemons said Wednesday that the district is “still exploring partnership options.” He declined to answer whether HISD leaders have discussed a potential partnership with the city.

It also is unclear who, ultimately, would be responsible for governing schools under a district-city partnership.

“I think everything is on the table right now, and the mayor told me that he was going to pray on this,” said District H Councilwoman Karla Cisneros, a former teacher and HISD school board member. “We're clearly in a position that it's a very important issue to our entire city, and I'm grateful that the mayor is so open to considering exactly how the city can best help. But within that, there's a lot of possibilities of what that help is."

Cisneros said she has not been approached about council members governing HISD schools.

“I think it needs to be people that really know education,” Cisneros said. “It’s got to be more than people with good intentions.”

Since his inauguration in 2016, Turner frequently has touted the importance of education to Houston’s economic future. Although City Hall has no direct control over HISD’s governance nor a traditional role in education, Turner has sought greater collaboration between the two entities. A month into his tenure, Turner formed the Office of Education Initiatives, headed by former HISD board president Juliet Stipeche.

A district-city partnership would have several potential benefits. City leaders are deeply invested in the success of Houston schools, and they could tap countless local contacts to aid the rebuild of HISD’s long-struggling campuses.

At the same time, city officials have virtually no experience running campuses, its Office of Education Initiatives has two employees and HISD administrators have said they are seeking partners with backgrounds in education.

"They have to be an established organization, an organization that has a proven track record of turning schools around or have the capacity to do that," Lathan said last week at a school board meeting.

HISD Trustee Anne Sung said Wednesday that she has not received any names of potential partners from the district’s administration. Sung said Turner “has a good understanding of community partnerships with schools,” which could serve as a good foundation for any arrangements under SB 1882, but she could not comment further on any city involvement without additional details.

“I need to be confident that any partner we would entrust our students to has experience, a proven track record and a credible plan for improvement,” Sung said.

HISD administrators initially floated a potential partner in February, Baltimore-based Talent Development Secondary, but that proposal was nixed because the group did not want to take responsibility for hiring overnance at campuses.

 


Let's Turn HISD over to the Management Geniuses at City Hall

This article is a satire on the folly it would be to have the City take over the Houston Independent School District. It high lights the trouble the city is in.

By Bill King
 
Everyone knows that HISD is struggling these days. With a number of chronically failing schools and a huge budget gap, it appears that the State is on the verge of a take-over. Recently, the idea has been floated to turn HISD over to the City of Houston to manage, as has been done in some other large cities. This is a truly brilliant idea.
  
Now I know there are some of you that will be skeptical about turning over our schools to city officials that have no experience or profession credentials in education. But look at what they have accomplished with little apparent technical competence at much of anything.
  
Just think about the financial acumen the gurus at City Hall can bring to bear on HISD's problems. The City just staved off bankruptcy by reneging on pension promises made over decades and deferring the payment on the balance owed on the pensions until after the current crop of city officials are safely out of office. Now that is the kind of courageous fiscal leadership we need at HISD.
  
And the City recently issued $1.5 billion in bonds to catch up on pension payments it missed, purchase vehicles and do deferred maintenance on its buildings. HISD's last bonds were squandered on rebuilding all of its dilapidated high schools. What a waste of money!
  
HISD has a paltry cost per employee of only about $70,000 while the City of Houston's is nearly $100,000. I am sure the City can get that cost up in no time. Just think of the economic development that will spur.
  
The City could use HPD to guarantee school safety. A department that is able to catch 6% of the burglars and 14% of robbers will bring a completely new level of security to HISD's campuses.
  
Since the City has fixed all of the potholes and repairs all of Houston's streets, it could use the excess road repair capacity to resurface all of HISD's parking lots.
  
Maybe the City could get the TIRZs and management districts involved with running HISD. The Uptown TIRZ could tear up all the streets in front of the HISD schools and build dedicated bus lanes. And the City could use 380 agreements to have large campaign contributors build schools we don't need and lease them back to HISD.
  
The City could bring back its former press secretary to supervise HISD's Open Records request and its former Public Works Director for ethics compliance, especially as it relates to how contractors can make loans to HISD officials that they know will never be paid back and not get indicted.
  
During hurricanes we would no longer have to worry about HISD buses being flooded because we know the City would never allow something like that happen. Technicians from the City's crime lab could give lectures on laboratory procedures. And we can get the City to synchronize HISD's class schedules like they do the lights downtown.
  
There is almost no end to the benefits of having the City of Houston run HISD.
  
Of course, we could just skip having the City run HISD and instead turn it over the teachers' union and the HISD contractors and vendors, so it would be run like the City. No sense in having those pesky taxpayers and parents sticking their noses in where they don't belong!
  
Truly, I think we are really on to something here. Just imagine if HISD were run as effectively and efficiently as the City . . .  
Happy Belated April Fool's Day!

 

City report backs flood plan
Council to weigh building rules sought by Turner
 

No decision was made as to Building Codes last week at the meeting. Supposedly they will make a decision this week. Decisions need to be made and be made soon or all construction in the city will come to a halt.


By Mike Morris

Mayor Sylvester Turner says thousands of homes would have been spared flooding during Harvey under his new proposed building rules. Builders say those changes would be too costly.

More than 80 percent of the homes in Houston’s flood plains that were damaged by Hurricane Harvey would have been spared if they were at the higher elevation that Mayor Sylvester Turner has proposed for future development in those flood-prone areas.

That figure was among the data contained in a new Houston Public Works analysis of Harvey’s wreckage as council members weigh a rewrite of the ordinance governing the city’s flood plains. City Council is expected to consider the new rules next week and to discuss them at a committee hearing Wednesday.

The 73-page report’s release to council members and the public comes seven weeks after Turner first outlined his proposal and more than a week after the end of the city’s announced period for public feedback.

Among the report’s key findings:

•Of the 31,822 flooded single-family homes Public Works examined in city flood plains, about half would not have flooded during Harvey if they had been built to the city’s current elevation standard, which requires new or redeveloped homes to sit at least 1 foot above the projected water level in a 100-year storm. Placing the homes 2 feet above the projected 500-year flood level — the standard Turner is proposing — would have spared 84 percent of the homes.

Although more than 47,000 single-family houses located in the city’s flood plains took on water during Harvey, the city left about a third of them out of that analysis because it did not have complete data on water or elevation levels for those properties.

A 100-year storm is one that has a 1 percent chance of occurring in any given year; a 500-year storm has a 0.02 percent chance in any year.

•Of the more than 101,000 structures in the 100-year flood plain, 30 percent were damaged during Harvey, as were a third of the more than 86,000 buildings in the 500-year flood plain. Of the roughly 469,600 structures outside of a mapped flood plain, 19 percent were damaged.

•More than 13,000 homes meet the current elevation standard, which applies only within the 100-year flood plain. About a third of them flooded during Harvey.

•About 8,500 of the 38,000 new home permits in Houston in the past decade were for homes in flood plains. Those properties, on average, are valued at $388,144, about a tenth less than the citywide average for homes built at that period.

Builders, developers, civic leaders and council members said the study provided helpful context, but few said its findings swayed their views. In general, industry groups said the data did not address their concerns that the city’s proposal is too strict, while neighborhood groups questioned why the city is not moving more quickly to bolster all of its flooding regulations, not just those in risky areas.

Councilman David Robinson, who chairs the infrastructure committee, said the data made him more comfortable with the proposed changes, particularly the elevation requirement.

“No one at all that I know is questioning that things have to be adjusted. That’s easy. The challenge is figuring out what is the right threshold,” Robinson said. The report, he said, shows that anything over the proposed elevation of 2 feet above the 500-year flood plain “emerges as the point at which there’s a significant diminishing return, and for that reason I find it quite satisfying that we are apparently paying attention to our numbers.”

Greater Houston Builders Association CEO Casey Morgan said the changes essentially would mandate pier-and-beam foundations in flood plains, adding $32,000 to the cost of a home, according to GHBA estimates.

That price jump would price out thousands of families, Morgan said, and preclude builders from producing cheaper housing in transitional areas.

Houston Real Estate Council representative Suzy Hartgrove said the changes also would complicate commercial developers’ decisions on whether to rebuild “obsolete” retail centers. Rather than paying to rebuild higher and risk steeper rents driving away tenants, she said, owners simply will repaint or replace the facade.

“We’re trying to find a balance between more stringent regulations — because we agree homes need to be built higher — but so it’s not sort of this one-size-fits-all standard across the flood plain, and maybe even across the city,” Morgan said.

City officials countered with estimates showing a pier-and-beam foundation would cost $11,000 more than a slab-on-grade.

Ed Wolff, a Houston Association of Realtors leader, said council should force homes in the 100-year flood plain to be built an additional 1 foot higher immediately, then further study what to do within the 500-year flood plain.

“It’s easy to say, ‘We want to make a change.’ It’s hard to understand what that impact would be in each individual location,” he said. “Our goal is just not to have to revisit the ordinance 18 months from now because we’ve completely put a stop to development in the flood plains and have properties being built at 15 feet high.”

One fix, industry groups said, would be for the city to alter its proposal to force builders to remove a shovel of dirt for every shovel of dirt they bring to a site. This “no net fill” rule already applies within the 100-year flood plain, and the proposal would extend it to the 500-year flood plain.

Allowing builders to add a limited amount of dirt to properties in the 500-year flood plain, builders said, would increase the portion of homes that could be built on elevated slabs instead of piers.

The local American Council of Engineering Companies, in a letter to council members, said fill dirt should be allowed in the 500-year flood plain because the stormwater it would displace would be “very small in relation to the overall storage volume” within that area.

Turner, at a west side community meeting Monday, touched on elevation and fill in defending the proposal to some skeptical residents. “For future construction, I think it’s critically important that we use the 500-year flood plain as our guide and we go (2 feet above that)” he said. “It’s important to build higher and to do it in such a way that you do not flood your neighbor, and that’s why we do not allow fill.”

Neighborhood leaders also disagree with industry groups on the issue of fill.

The Super Neighborhood Alliance, a coalition of civic clubs, supports the decision to extend regulations from the 100-year to the 500-year flood plain, but said the city should explicitly mandate pier-and-beam construction because the city will not effectively enforce the “no net fill” rule.

The alliance, in a statement its members adopted last week, also said the rules should be changed in concert with other sections of the code related to drainage.

Jim Blackburn, founder of the Bayou City Initiative, a collection of civic groups focused on flooding and drainage issues, echoed that point. Blackburn said the response he has heard from his members is that the mayor’s proposal is not broad enough.

“I’ve had email after email complaining about the fact that this is really such a low bar for the city to start with,” he said. “It’s absolutely crystal clear our 100-year flood plain is obsolete. It’s important for them to do it, but I think they could have gone much further, and should have.”

Half of all Harvey damage occurred outside mapped flood plains, he noted, which the proposed changes do not address. City officials have said they plan to advance regulatory updates on that issue and others to council in the coming months.

“It’s time for the industry groups to get on board with what it’s going to take to make Houston resilient in the 21st century,” Blackburn said.

“If the industry groups end up being the impediment to progress, that’s no way to go forward.”

In addition to not being swayed by the report’s findings, however, some industry representatives questioned the validity of the data.

The release of the data two months after the proposal was announced also bred suspicion.

“The mayor started with 500-plus-2 and he said, ‘Y’all go figure out how we make that make sense,’” Wolff said.

The report states that data analysis began in September and preliminary conclusions were reached in December. Additional data “continued to be collected and analyzed through early March,” the report states.

Turner has said city leaders “suspected” their chosen standard was the right one based on preliminary work, an assumption that was “confirmed by the data. And as we continue to crunch the numbers, we’ll continue to make that data available.”

The city identified almost 59,000 buildings in some way damaged by Harvey in city flood plains, homebuilder Mike Dish-berger said, but studied the depth of flooding in just 31,822 single-family homes to estimate what effect the proposed elevation rules would have had.

“You can manipulate the data any way you want,” he said. “If you know the outcome needs to be this, I’ll pick 31,000 homes and not 35,000 homes to investigate.”

Public Works officials pushed back on that characterization.

A third of the 47,745 single-family homes flooded in city flood plains were not studied, they said, because there was no recorded water line showing the depth of flooding, the Harris County Flood Control District did not have data on the elevation of the home’s first floor, or both.

“No homes were excluded that had both recorded high-water marks and finished floor elevation data,” said Public Works spokeswoman Alanna Reed. 

 

 

Though Democratic early vote totals appeared promising, they fell short of Republicans

The early vote among Democrats in Texas' 10 counties with the largest number of registered voters looked promising, but Democrats fell short when the early vote totals from all counties were counted. Here's how turnout compares to prior midterm primaries.

Four years earlier, Republicans out voted Democrats in early voting so going into Tuesday night, it seemed like the Democrats might be on track to hustle more people to the polls. Election night returns told a different story. Republicans turned out in droves.

So as history tells us At no point in a nonpresidential election year has one party cast more primary votes and the other party won more House seats. Republicans cast 500,000 more votes in the Primariesthen the DEMS.

The Blue Wave never hit shore.

Texas is a solidly red state, and voting totals confirmed that again. 

 

Lawsuit claims Houston misled voters on $1B pension bonds
Ex-housing official claims Nov. 7 ballot omitted key facts


By Mike Morris
December 18, 2017 Updated: December 18, 2017 7:18pm

Mayor Sylvester Turner misled voters into approving a $1 billion pension bond referendum last month, a new lawsuit alleges, claiming that city officials plan to use the bonds' passage to sidestep a voter-approved limit on the property tax revenue Houston can collect.

Turner's office flatly denied that reading of the Proposition A ballot language, calling the wording "boilerplate" and saying the city has not and will not sidestep the revenue cap as a result of the vote on the mayor's landmark pension reform package or any of the prior bond issuances that included the same phrasing.

A local businessman and former Houston housing department director, James Noteware, sued the city Friday in state district court, contesting the Nov. 7 election on the grounds that the ballot language was "materially misleading."

The full language, rather than the summary listed for voters on the ballot, stated that the taxes levied to repay the bonds would not be "limited by any provision of the city home rule charter limiting or otherwise restricting the city's combined ad valorem tax rates or combined revenues from all city operations."

The suit claims that phrasing means the taxes levied to pay for the bonds will be exempted from the 13-year-old revenue cap, which limits the annual growth of property tax revenue to the combined rates of inflation and population growth, or 4.5 percent, whichever is lower.

"Omitting the fact that the proposition created a billion-dollar exception to default limits on the city's taxing authority renders the proposition materially misleading and void," the suit states.

"If the intent is to have more flexibility to raise property tax revenues, they should have just come right out and asked for it," Noteware said Monday.

Turner's spokesman, Alan Bernstein, said that is not the city's intent. Moreover, he said, the city charter requires Houston to pay its debts first before allocating any funds to operations.

'Baseless bombs'

"The suit is factually and legally baseless and from a taxpayer policy viewpoint completely illogical, as disrupting the pension reform will cost taxpayers more money," Bernstein said. "There was never any intent to avoid the revenue cap nor are there any facts indicating that we would. It is easy to throw baseless bombs. The price of doing so for the plaintiff and his lawyer is far less than the harm he is trying to inflict on taxpayers."

The language in question simply is intended to assure potential bondholders that the city will meet its obligations, Bernstein said.

Benefit cuts at stake

Regardless of whether Turner intends to step outside the revenue cap, Noteware's attorney, Jerad Najvar, said, the phrasing of the ballot language would let a future mayor do so.

If this is true as Mr. Najar said above Turner may not intend to raise Property Taxes although he has tried to do it twice already the next Mayor might. We need to let the courts rule on this stop the sale of Bonds until we are sure this is not true.

"I see why the mayor is saying, 'Don't worry, we're never going to use this,' but nonetheless it's there," Najvar said Monday. "If this election was valid, then this builds in the authority that the city did not have before to go around that revenue limitation. If the election is going to be challenged, it has to be done right now."

Noteware said he views the pension reform package as inadequate and would not be concerned if his lawsuit winds up scuttling the deal.

The legislation that enacted the reforms requires the city to send the bond proceeds to the police and municipal pension funds this spring. If it does not, up to $1.8 billion of the $2.8 billion in benefit cuts in the reform package will be rescinded, adding tens of millions of dollars in costs to the city budget overnight.

The pension bonds are scheduled to be sold this week in New York; Bernstein said as of Monday it did not appear that process would be disrupted by the lawsuit.

Najvar said selling the bonds when a judge may decide Houston lacks the authority to do so would be "the height of irresponsibility."

Voters tweaked the revenue limitation in 2006, allowing the city to raise an additional $90 million for public safety spending, but Houston exhausted that breathing room in 2014. With property values continuing to rise, the city has trimmed its tax rate each fall since then to avoid collecting more revenue than allowed.

City officials tweaked the cap in 2015 and 2016, invoking flooding disaster declarations to collect a combined $22 million in those two years on top of what the revenue limit otherwise would have dictated, in keeping with an exception clause in the cap's wording. City Council voted down Turner's attempt to do so again this fall after Hurricane Harvey.

Meant as incentive

The bonds are part of Turner's landmark pension reform plan, which recalculates the city's payments to erase a debt of more than $8 billion debt over three decades, cuts benefits by $2.8 billion and includes a mechanism to cap Houston's future pension costs.

Turner offered to issue the $1 billion in bonds as an incentive to get the police and municipal pension systems to agree to another round of benefit cuts and to bolster both plans' funding levels. The police plan would get $750 million of the bonds and the municipal fund would get $250 million.

Courts twice ruled the city had used misleading ballot language under Turner's predecessor, Annise Parker, in connection with elections in 2010 and 2015..

City's Sales Taxes Continue to Stagnate

 

City's Sales Taxes Continue to Stagnate

by Bill King

The Texas Comptroller reported yesterday that the City's sales tax receipts for November (which reflect September sales) were up by 2.3%.  This followed a decline of 3.9% in October.  The October decline was to be anticipated because of Harvey.  However, I had expected to see more of a rebound in November from storm repair purchases.  Perhaps delays from receiving insurance payments have pushed some of those sales out a bit further.

 The City had a bump in sales tax receipts early this year from the Super Bowl, with month-over-month increases in March and April of 6.5% and 5.3%, respectively.  But longer term trend appears to be that precipitous decline when oil prices fell has leveled out.

 

 

The current City budget projects a 1% increase in sales taxes and it is running only slightly behind that through the first four months of the fiscal year.  

Houston continues to  be significantly outperformed by its suburban neighbors.  I have been tracking six cities nearby cities.  Their sales tax receipts were up 9% this month.  I am working on a longer term comparison which I will be sharing with you soon.

 

 

 

State of Texas Debt Has Nearly Doubled in the Last Seven Years

 

By Bill King

Want a killer Trivial Pursuit question?  How about this?

 While Barack Obama was President, did the debt of the Federal government or the State of Texas increase more on a percentage basis?

 Republicans quick to point out that while Obama was president the federal debt increased far more than under any other president.  But what they rarely share is that during that same period, the debt of the State of Texas rose even faster, at least, on a percentage basis.

 At the end of 2009, the Federal government was just under $12 trillion in debt.  By the end of 2016, the number had grown to $19.5 trillion, a 64% increase.  For the same period, the State's debt went from $62 billion to $121 billion, a 92% increase.*

You may be tempted to explain this unfavorable comparison away by noting that Texas is growing faster than the rest of the country and, therefore, a larger increase is to be expected.  There is some validity to these argument, but even if we look at the growth of the debt on a per capita basis, Texas still comes out ahead, 70% versus 54%.  And these numbers do not count the billions in debt incurred by local governments.  We'll be looking at that in the coming weeks.

To be fair, the State was starting at a much lower base.  Its per capita debt as of 2016 was about $4,300 compared to over $39,000 for the Federal government.  And as a percentage of GDP, the State's debt is also much lower, although I am not sure the comparison of that metric means much in this context.

The lion's share of the increase in the State debt has come from an explosion of its unfunded pension liability.**  I will be writing more on this issue soon, but the State's pension debt, based on its own accounting, has gone from zero in 2000, to over $60 billion at the end of 2016.  In other words, according to the State Comptroller's numbers, the Legislature has "borrowed" over $60 billion from the State's pension plans by not contributing enough to fund the benefits they have promised.

 It is important to note that both the Federal government and the State dramatically understate their liabilities associated with future retirement payments.  A recent Moody's report has calculated that the State's true pension liability is over $100 billion and, of course, the Federal government has never included a realistic estimate of the future cost of Social Security or Medicare in its accounting.

 Please do not misunderstand.  I am not a debt-phobe.  Every businessperson knows that there is a time and place to use debt.  Some of you will recall that during the 2015 mayoral campaign I was the only candidate who advocated using pension bonds as tool in solving the pension crisis. 

 But the reality is that government at every level and both of our political parties are drunk on debt.  The Democrats gorge on debt to increase expenses; the Republicans to cut taxes, or to keep from increasing them.  Neither want to have an adult conversation with their constituents about what services do we really want government to provide and what does it costs to provide those services.  Instead, one party demagogues social issues and the other engages in class warfare and identity politics to distract the public from the fact that both are bankrupting future generations.

 

 *  This graph begins with the increase in debt from 2009 to 2010.  Those who argue the Federal debt doubled during the Obama administration begin from the time he was sworn into office.  However, since the federal budget fiscal year ends in September, the incoming administration has a limited impact on the financial results for its first year.  It would probably be fairer to included FY2017, but those numbers are not yet available.  It is interesting to note that the rate of increase did not slow down when the Republicans took control of the House of Representatives in 2010 or the Senate in 2014.

 **   Much of the increase in the pension debt was realized when the accounting rules changed in 2015 forcing governmental entities to more realistically report their pension liabilities.

 

 

 

 

 

 

 

 

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