Finance & Revenue

• Veteran Affairs and Military Installations Subcommittee on Border Security
  • Will examine sanctuary cities
• Senate State Affairs
  • Ethics laws: transparent and ethically principled government; public officials’ reporting requirements &  Texas Rangers are doing with their pubic integrity unit
  • ERS  member contributions &  proposed reforms TRS
• ​Senate Natural Resources
  • Economic Development: “​Effectiveness and necessity of programs and resources currently used to support economic development in Texas”
  • Monitor aerospace tax incentives
• ​Senate Inter-governmental Relations
  • ​Debt transparency at the ballot box
• Senate Finance
  • Appraisal Process (Select Subcommittee on Property Tax Reform & Relief)
  • Reduce tax burden on property owners (Select Subcommittee on Property Tax Reform & Relief)
  • Franchise Tax: eliminate, study dynamic effects, alternative to fund property tax relief
  • Sales tax holidays- is there an economic benefit?
  • Property tax relief
  • Reduce state pension liability
  • Monitor the gradual phase out of franchise tax
  • Monitor contracting reform
• Senate Business & Commerce
  • Property tax liens

LBB has new info on the state contract data base it is tasked with maintaining as a result of the 2015 session. 

LBB is adding new information including:

• Agency Approval Date
• Requisition Date

Consulting Contracts in higher education have new pre-award notifications to the LBB and the Governor’s Nudget and Planning Office. Notifications will be required if:

• a consulting contract valued at more than $15,000 for a junior college
• a consulting contract valued at more than $25,000 for any other institute of higher education

LBB Contract Oversight Team October 2015

Environmentalist mega-donor Tom Steyer is bankrolling a California proposition to a $2 a pack  health care-funding tobacco tax ballot initiative.

Sacramento Bee | Tom Steyer spending for California cigarette tax

CALPERS is set to be divested from any coal investments with Governor Brow’s signature on SB 185. 

The total divestment in all California pension plans will be $340 Million. 

Sacramento Bee | California bans microbeads, divests retirement funds from coal

Because your clients want to know what the competition is getting:

• Incentives
  • Sugar Land Development Corporation direct incentive of $2.5 million  over 10 years in annual payments.
  • 1 time construction-related sales tax reimbursement grant of $750,000 will be paid once the project is completed.
• Tax Abatement
  • The city of Sugar Land will give a 100% abatement to the company over 10 years on real improvements and personal property.
  • The estimated value of this is $5.3 million over 10 years.
• Road Widening
  •  The city of Sugar Land will widen Industrial Boulevard to a four-lane divided roadway by 2017 as part of the agreement.
  • Add drainage improvements such as storm sewers and channels.  
  • The city costs will be $4.2 million
  • Fort Bend County will provide up to 25%, with a maximum of $1 million.

Houston Chronicle | Sugar Land City Council approves incentive package for Schlumberger campus

What hotel, where? hotel developer Supreme Bright Amarillo II (Amarillo, TX)

Which TIRZ is involved? The Center City Tax Reinvestment Zone No. 1 (Amarillo, TX)

What actions did the TIRZ take? 

1. It unanimously agreed that Supreme Bright will “put its leases with Amarillo Local Government Corp. for the hotel to be owned by the city and for 150 spaces in the parking garage up for collateral.”
2. TIRZ granted tax rebates will be given to Supreme Bright “will actually go to lead lender Southwest Bank”

What tax incentives were awarded to the hotel?

• 90 percent property tax rebate for 20 years
• The TIRZ will contribute $2.7 million toward streetscaping around the hotel
•  It will receive a rebate of some sales taxes
• It will receive a rebate of hotel occupancy tax it generates

Amarillo Globe News | A done deal? City issues building permit for downtown hotel

Who: The Texas Organizing Project protested tax incentives given to Houston developments because:

Why are they protesting tax incentives? the developments did not create quality jobs hat pay livable wage

Which tax incentives did they openly protest? Westin Houston Downtown, owned by Landry’s & a Heights area  Walmart

Their goal: For Houston’s “next mayor can really make good jobs a priority for our neighborhoods”

Houston Public Media | Group Calls For Stricter Standards For Developers Receiving Tax Incentives In Houston

In Jeffrson County 3 more commercial property appraisals are being litigatged:

• Valero
• BASF
• Total

“In September, 13 lawsuits were filed in the 58th District Court against the Jefferson County Appraisal District.”

Beaumont Enterprise | Valero, BASF, Total protest in ‘ongoing’ property tax battle

• that  appraisals rise “7-to-9 percent annually while incomes only grow 2-to-3 percent “just doesn’t work.”

Does anyone see a recommendation brewing for an appraisal cap reform bill?

Corpus Christi Caller Times | Lt. Gov. Patrick urges support for propositions

• Prop 1 will help save people property tax money
• Prop 1 will prohibit transfer taxes when any property is sold
• Prop 7 will allow the state to put 2.5 billion dollars more to transportation without increasing taxes.
  •  He also stressed that there was “not adequate transportation funding to West Texas in the past”
  • “Now that I’m Lieutenant Governor, we want to be sure that West Texas gets their fair share,”

News West 9 | Texas Lt. Gov. Discusses State Propositions at Odessa Country Club

In an interview with Global Trade magazine, Texas Economic Development Corp. CEO Tracye McDaniel, highlights 5 reasons behind Texas economic development success:

• Talented workforce driven by 36 public universities and 50 community college districts
• Strong Infrastructure
  • fifth-largest cargo airport in the nation
  • highest concentration of public roads and freight railroads in the U.S
• World-class port infrastructure
• Strategic port location led Texas to be ranked as the nation’s top exporter since 2002
• Texas Enterprise Fund Reforms that
  • represent the largest deal-closing fund of its kind
  • cut approval time from 90 to 30 days

Global Trade | Texas Sized Opportunities

A representative from LCRA stressed to Bandera County Economic Development Partnership that successful economic development must consider 2 things:

1. the economy

2. the ecology translated to people that drive the economy

The economic development lesson: infrastructure drives economic development. Also known as, don’t be like Austin and don’t build roads so people won’t come. Plan and build infrastructure with reasonable and flexible codes and code enforcement.

Bandera Courier | Bandera – to develop or not, Part 3

New leadership of Woodlands Economic Development Partnership:

• Terry Sellers of Gallagher Benefit Services (Chair)
• Debra Sukin of Houston Methodist The Woodlands Hospital (vice chairman)
• Heidi Carney of Prosperity Bank (secretary)
• Mike Shultz of Consolidated Communication (treasurer)
• Stuart Lapp of Stibbs & Co. PLLC (immediate past chair)

Woodlands Economic Development Partnership

Houston City Council this week approved changes to develop a spaceport at Ellington Field. City Council made these 5 moves:

1. Houston City Council approved the $6.9 million purchase of a 53,000-square-foot building on the grounds of the future spaceport
2. Only airport funds will be used for the purchase
3. Creating development for incubators that will house early-stage companies
4. A TIRZ, a Management District? No, its an innovation district 
5. Intent from anchor tenant-  Intuitive Machines

Houston Business Journal | Houston Airport System takes major step in developing spaceport facilities (Video)

In June The Texas Supreme Court issued an opinion about Open Records concerning a contract between Boeing & the Port Authority of San Antonio.

How did the TXSCT help keep private company information private? The Texas Supreme Court overturned the appellate court and said that the ability to withhold information under the Public Information Act applies to private companies & to governments alike.

What kind of information can be withheld?information that ” will benefit the private party’s competitors and thus “give advantage to a competitor.”

What was at the heart of this issue for the contract? A private company’s ability to protect its “

Boeing & Port Authority of San Antonio v. Paxton

Texas Tribune | Texas Supreme Court Ruling Shields Contract Details

Its not just ride share that is facing lawsuits of their sharing economy model. it’s also food delivery services like  GrubHub and DoorDash.

What’s the issue that takes this to courts and then to the legislatures?
Whether drivers are employees or independent contractors.

Why does this employee status matter?
An employee has certain legal rights and access to employment benefits that an independent contractor does not. 

The Recorder | More On-Demand Delivery Apps Hit With Driver Suits

The Economic talk: Do increasing local pension liabilities threaten to ruin bond holders?

Maybe. Probably yes. 

Why would local bonds be impacted by pensions? Looking at the bankruptcy fiings of San Bernardino, Stockton, Vallejo and Detroit shows that odds are highest that bankruptcy courts will fund pensions and will leave bond holders with $0.

Governing | Municipal Bondholders Beware

• Bill King and Ben Hall want TIRZ reform
• Bill King Says
  • TIRZs are not transparent
  • TIRZs issue debt with no voter approval
  • TIRZs should be for blight and they are used in Memorial, Uptown and Upper Kirby
  • Eliminate TIRZs
  • Deride the Uptown TIRZ are the #1 target
• Ben Hall Says
  • TIRZs are not doing what they’re designed to do
  • TIRZs divert general fund money to fund projects in Memorial and Bellaire
  • Asked Mayor Parker to delay votes on TIRZ budgets
  • Deride the Uptown TIRZ are the #1 target

Dolcefino | Hall calls on mayor to delay TIRZ votes

BigJolly Politics | Bill King follows Ben Hall’s lead on reforming TIRZ’s

What’s the governmental infighting in Alaska?  The Legislature passed a series of pension reforms that the retirement system agency won’t follow.

What pension reforms were passed to cause the brouhaha?  Use of real market values each year and not averages (AKA asset smoothing is bad)

Where is the governor in this?  His staff says the agency is acting pridently and suggested the Legislature didn’t know what they were doing.

Alaska Dispatch News | Alaska retirement board challenges Legislature on pension payments

A bill in North Carolina would have limited the authority of local governments to pass ordinances that :

• Create a “higher minimum wage or other regulations involving private employment practices.”
• Govern “housing and rental practices, likely including policies that mandate affordable housing.”
• “Mandate or prohibit the provision of goods, services, or accommodation to any member of the public by nongovernmental businesses.”

Hampton Inn in Port Arthur is challenging its property tax appraisal in Jefferson County. 

The court remedies Hampton Inn wants:

•  “the court determine the value and reduce the appraised value to the equal and uniform value”
• “to pay the greater of one-half of the tax due the value of the property as determined by the appraisal review board”
• court costs and attorney fees

If the TX legislature changes this practice in 2017, now is the time to reset commercial appraised values in court.

Southeast Texas Record | Hampton Inn challenges property appraisal for Port Arthur location

1. Alabama: 
   • ​30 years of tax breaks
   • for data centers investing $400 million
   • that create at least 20 jobs
   • with an average annual compensation of $40,000
2. Alaska NONE
3. Arkansas None specific to data centers, have used other tax incentives for data centers
4. California NONE
5. ColoradoNONE
   • in 2015 Colorado tried to pass a sales tax refund on equipment for data centers
6. Connecticut 
   • A state economic development ffice granted $6 million to a data center
7. Delaware NONE
8. Florida, none specific to data centers, have used other tax incentives for data centers
9. Georgia
   • ​sales tax exemption for equipment in data centers investing at least $15 million annually
10. Hawaii,  none specific to data centers, have used other job creation incentives for data centers
11. ​Idaho NONE
12. Illinois NONE
13. Indiana
    • data centers investing at least $10 million can receive local personal property tax exemptions on their equipment
    • Other tax incentives have also been awarded
14. Iowa
    • ​sales tax breaks to data centers investing as little as $1 million
    • larger incentives for projects topping $200 million
    • Iowa has no property tax on equipment
15. Kansas, none specific to data centers, but
    • Kansas imposes no property tax on new equipment
16. Kentucky
    • ​sales tax refund for computer system equipment for data centers investing at least $100 million
17. Louisianna NONE
18. Maine, None specific to data centers, have used general economic-development programs for data centers
19. Maryland, non specific to data centers, but did authorize a conditional loan for $300,000 to a data center
20. Massachusettes, None specific to data centers, but have awarded $25 million grant and $14.5 million in tax credits to data centers
21. Michigan, none specific to data centers, but does use other economic development programs for data centers to a tune of $7 mllion
22. Minnesota
    • ​data centers with 25,000 square feet
    • costing at least $30 million
    • qualify for 20-year sales tax exemption on equipment and energy
    • + a permanent property tax exemption on equipment
23. Mississippi
    • ​sales tax exemption on computer equipment for data centers
    • that invest at least $50 million
    • that create at least 50 jobs
    • these jobs must pay 150% of the average state wage
24. Missouri
    • ​New data centers can qualify for $25 million if
      • they employ at least 10 people in well-paying jobs.
    • Older data centers can qualify by:
      • investing at least $5 million and adding five well-paying jobs
25. Montana NONE
    • And, no state sales tax
26. Nebraska
    • ​Has a tiered system that allows  $3 million if the data center:
      • Employs at least 30 people, or
      • It invests at least $37 million while holding employment steady
27. Nevada
    • ​ Expanded sales and property tax exemptions for data centers
      • amounted to  $229 million of tax breaks for Switch
28. New Hampshire “No incentives for businesses”
29. New Jersey
    • “​authorized a projected $134 million in incentives to about a dozen businesses for data-center projects since 2000″
30. New Mexico NONE
31. New York 
    • sales tax exemption for equipment used by Internet data centers
32. North Carolina
    • ​sales tax exemption for equipment and electricity used by data centers that invest at least $150 million in poorer counties or $225 million in other counties.
33. North Dakota
    • ​sales tax exemption on computer equipment for data centers of at least 16,000 square feet.
34. Ohio
    • ​ sales tax break for data centers that invest at least $100 million &
    • have a required payroll threshold of  $1.5 million
35. Oklahoma
    • ​sales tax exemption for equipment bought by businesses engaged in computer services or data processing, as long as most of the revenue comes from out-of-state sales
36. Oregon None Specific to data centers, but
    • ​no sales tax & 
    • property tax exemptions through local enterprise zones
37. Pennsylvania None
    • Bills calling for a sales tax exemption for data centers are pending  in the current legislatie session
38. Rhode Island  NONE​
39. South Carolina 
    • ​sales tax exemption on computer equipment and electricity used in data centers
    • that invest at least $50 million
    • employ at least 25 people in well-paying jobs.
40. South Dakota None, but have used general economic development programs
41. Tennessee
    • ​sales tax breaks on computer equipment and electricity for data centers that invest at least $250 million
42. Texas
    • ​sales tax exemption on equipment and electricity for data centers
    • that contain at least 100,000 square feet
    • invest at least $200 million
    • employ at least 20 people at above-average wage
43. Utah ​None, but have used general economic development programs
44. Vermont  NONE
45. Virginia
    • ​sales tax exemptions for data centers
    • it is estimated Virginia authorized $48 million in incentives for data centers
46. Washington
    • ​sales tax exemption
47. West Virginia 
    • ​sales tax exemption and a property tax break on equipment
48. Wisconsin  None, but have used general economic development programs
49. Wyoming 
    • ​Data centers that invest at least $5 million, receive  a sales tax exemption on computer equipment.
    • Data centers that invest at least $50 million also can get a sales tax break on power supplies and cooling equipment.

• NY Times | via AP | State-By-State Look at Incentives for Computer Data Centers

A developer, a univeristy, and a TIRZ walk into a bar…

Who is involved in this land deal?

• A developer
• The city of McAllen, which recently annexed the developers land
• County of Hidalgo
• A newly formed Tax Increment Reinvestment Zone
• Texas A&M

What tax revenue is involved?

• Texas A&M, via a letter between the City & the County, gets:
  • 100 acres of land donated
  • $10 million for the construction of the facility
  • $6.8 million to cover part of the investment in infrastructure
• The developer, via the City and County, gets:
  • to enter into a TIRZ with the city & county to assist with the initial $24.5 million investment in infrastructure
    • “city will use 80 percent of the maintenance and operations tax levied by that area alone”
    • ” the county will contribute 77 percent of its maintenance and operations tax, as well”

McAllen Monitor | Tres Lagos developer talks plans after Texas A&M announcement

3 Big tax issues coming:

1. Prop # 7 dedicates sales tax revenue to transportation funding   KGBT 4
2. Prop # 1 homestead exemption raised to $25,000 (it’s your “big property tax cut”)  KUT
3. The TX Supreme Court’s  school finance ruling in early 2016 which could spark another tax overhaul like in 2006.

What’s going on? a loose coalition wants natural gas comapnies to be able to explore on university lands. Specifically, fracking on UT & A&M lands.

Who wants this? North Texans for Natural Gas (Devon Energy, EnerVest, EOG Resources and XTO Energy)

What is North Texans for Natural Gas Doing to Gin up Support? A petition urging UT Chancellor William McRaven and Texas A&M Chancellor John Sharp to support hydraulic fracturing and the extraction of oil and gas on University Lands.

Where do they want to explore for natural gas? On 2.1 million acres in West Texas  constitutionally set aside  as an endowment for the state’s two leading university systems.

What’s in it for Universities? Revenue to the Permanent University Fund

Who is opposed? Environmental groups like Environment Texas Research and Policy Center and the California-based Frontier Group

Fuel FIX | Pro-industry group throws support behind drilling on Texas university land

Paxton Steps Aside in Opinion:

Attorney General Opinion KP- 00037 has an interesting start- a cover letter in which General Paxton delegates repsonsibility to his first assistant attornery general.  Why? “I [Paxton] may have an actual or perceived conflict of interest or in which my involvement gives even the appearance of impropriety.”

What is KP-00037 about?

Whether a county official, who is found not guilty on criminal charges, can have attorney fees reimbursed.

Does KP-00037 allow for attorney fee reimbursement for these elected officials?

Yes, but there’s a 2 part test to get there:

1. there must be legitimate interests of the [political subdivisions]-and not just the personal interests of the officers or employees-require the assertion of a vigorous legal defense on behalf of the public interest. [A political subdivision] may not use public funds when the principal interest to be defended is a purely private one. 

2. It must be determined that the “officer or employee committed the alleged act or omission that was the basis of the lawsuit while acting in good faith and within the scope of official duties. 

#13 isn’t only unlucky, but its also not good enough for Texas Policy Policy Foundation. It has 3 recommendations to improve Texas government transperancy:

1. Move from a strategic planning and budgeting system to a program-based budgeting system.
2. Adopt zero-based budgeting to ensure taxpayers get the most value of the programs and departments they fund.
3. Provide budget information online in near real-time throughout the legislative process.

The public share of the new Sacramento Kings stadium is $272.9 million in bond financing. 

Why the bonds? The stadium had received a short term cash influx from the City of Sacramento when the project hit a snag. The bond financing replaces the city’s bridge loan.

Details on the debt financing:

• annual debt service will come to $18 million
  • 2/3 s will come from the Kings & lease payments and property taxes generated by the new Golden 1 Center

Sacramento Bee: Sacramento completes Kings arena financing with $272.9 million bond sale​
 

Mayor Emanual is proposing the following tax increases on Chicagoans:

• A property-tax hike reaching $543 million over four years
• $45 million in property taxes to pay for capital projects at Chicago Public Schools, or CPS
• $62 million from a new garbage-collection fee
• $60 million from new fees on taxis and ridesharing services, such as Uber and Lyft
• $13 million from higher building-permit fees
• $1 million from a tax on e-cigarettes

Americans for Tax Reform call it the largest tax increase in the city’s history.

North Carolina legislature passed economic incentive package reforms. Here’s what it does:

• Extends North Carolina Competes Program to 2018
• Increases by $5 million the annual value of authorized Job Development Investment Grants
  • That’s up to $35 million if there is a “high-yield project,” like a major manufacturing plant with 2,000 jobs and making a capital investment of at least $750 million
• Focus on helping economically distressed counties more.
• Sales tax exemptions expanded for computer data centers
• Extended sales tax exemptions on aviation fuel to all interstate airlines on sales and use tax paid on fuel in excess of $1.25 million

WXII:Reinvigorated incentives get final OK from NC legislature

Winston-Salem Journal: House gives final approval to NC Competes 

North Carolina’s HB 117

The wealthiest households claim 90% of the $7500 federal tax credit for electric cars. 

This trend follows for other green energy purchases and tax credits:

• residential energy-efficiency improvements
• solar panel installation 

Tax “susidies” are not popular among populist minded Tea Party types & a repeal of the electric car tax credit occured in Georgia this year.

WSJ| Real Time Economics Blog | The Wealthiest Households Claim 90% of Tax Credits for Buying Electric Cars

Ecomento: Georgia electric car tax credit ends

WHO:  Lincoln Clean Energy’S $183 million solar power project

WHAT: The first commercial-grade solar project in the Panhandle will produce 100 megawatts or more

ECONOMIC INCENTIVES:

• Tulia Independent School District is  capping the taxable value of the project at $20 million a year for 10 years
• Comptroller estimates this to be a $9 million dollar savings in maintenance and operations taxes for the solar project.

Amarillo Globe News:  $183M solar project heats up 

Or, so says United Against Nuclear Iran. 

Pension Divestment to hit a State Constitution near you.  Defund Iran wants state constitutional amendments in 2016 to mandate divestment.

What’s the divestment band wagon? Does it mean private companies that do business in Iran too?  YES. Yes, it does. In Florida,  more than $1.1 billion has been withdrawn since 2007 from companies involved with Iran. We’re talking about divestment from:

• Royal Dutch Shell Plc
• Cnooc Ltd.
• Daelim Industrial Co.

Campaign Issue in the Making. 15 Governors sent a letter to President Obama calling for Iran divestment. Including:Bobby Jindal of Louisiana, New Jersey’s Chris Christie, John Kasich of Ohio and Wisconsin’s Scott Walker.

Governing: Republican Governors Use Pensions to Oppose Iran Deal

1. Highest Tax Supported Debt: Dallas ISD $2.6 Billion
2. Highest Proposed Bond: Dallas ISD $1.6 Billion
3. 3 Bond proposals belong to ISDs with $0 tax supported debt
4. 31 ISD bond proposals
5. 34 City bond proposals
6. Largest City Bond Proposal: $125 million in Mequite
7. Largest County Bond Proposal: $848 million in Harris County

Texas Transparency: Upcoming Bond Election Roundup

Republican-controlled Alabama Legislature increased cigarette taxes by 25 cents per pack. 

AP: Alabama Legislature approves cigarette tax increase

In the Pro Corner, a Plaintiff, Austin Mayor Adler:

• Current system is unfair to residential homeowners
• We should have a fair property tax system
• This is about transparency & being able to challenge a system that is unfair

In the Con Corner, the “Tax Man”, Senator Bettencourt:

• Lawsuit is abuse of property tax code
• He has asked Lt. Gov. Patrick for an interim charge on this issue
• This lawsuit is about 1 thing and 1 thing only– mandatory sales price disclosure

TribTalk Bettencourt

TribTalk Adler

What’s the BiNational Economic Development Zone? Both sides of the South Texas border have joined forces in the name of expanded economic development – to the manufacturing prowess that this region has developed through its maquiladora sector

Why does the Binational Economic Development Zone matter? McAllen Monitor Editorial points to the recent visit to Mexico by Governor Abbott & the $100 Billion in economic prowess of the U.S.-Mexico relationship. 

McAllen Monitor Editorial sums it up: It is economic reality (loads of revenue) + (smart) immigration policies= beneficial relations between the US & Mexico.

McAllen Monitor

The Tax Foundation puts Texas at #11 for state and local debt per capita.

How much debt per capita for #11? $10,473

Any big states above Texas? NY, CA, IL

Which state tops the charts? NY at $17,405 per capita for state and local debt

What about California? $11,094

Which state has the lowest debt per capita? ID $3,930

Contracting for solar power on top of the new Sacramento King stadium is a benefit bonaza. Solar Power will:

• Power 15% of the stadium
• the solar company is putting in a significant capital investment “to help the Kings fund the arena”
• Offers the stadium LEED Gold certification

The solar project is estimated to cost $507 million investment by SPI Solar. SPI is committed to solar stadiums in California as it also has a solar installation at the Staples Center sports arena.

Sacramento Bee: Sacramento Kings show off solar array plans for arena rooftop

This year Georgia tinkered with its gas tax to address a transportation funding deficit.

Georgia’s Gas Tax Reform looks like this: “Drivers pay 26 cents for every gallon of unleaded gasoline and 29 cents per gallon for diesel fuel. The new single fuel tax replaced a system of excise and prepaid local and state taxes.”

Georgia threw in some other tax reforms too:

• A new $5 nightly fee on hotel and motel overnight stays generated $14.9 million in revenues last month. 
• A new highway impact fee generated $844,000 last month

Revenues Went up in year to year comparison: 13.6% increase

Gwinette Daily Post: Deal: State revenues up 13.6 percent in August

Luc Besson threatened to move production from France to Hungary for his new film ‘Valerian.’ Hungary lured hin with higher incentives until France produced incentives that kept him in France. Hollywood Reporter

Kurt Sutter cites incentives as determining how he bagan his decision making for his new series, the Bastard Executioner. “Because we’re shooting in England, there’s a UK tax incentive and that’s where our search began.”  Deadline Hollywood

Alabama is proposing a 40% excise tax on porn to cover a $250 Million spending deficit. Cut services? No, thank you. Tax Sin? Yes, please. 

What’s being taxed: any book, magazine, newspaper, printed or written matter, writing, description, picture, drawing, animation, photograph, motion picture, film, video tape, pictorial presentation, depiction, image, electrical or electronic reproduction, broadcast, transmission, video download, telephone communication, sound recording, article, device, equipment, matter, oral communication, depicting breast or genital nudity or sexual conduct.

Tax Rate: All other taxes like sales tax + 40% tax rate for being porn.

Success rate according to lawyers: Low. 1st Amendment free speech applies to things you don’t like too. 

Findlaw  AL.com

• Property Tax Relief. The ISD homestead exemption is up to 25K. The state has to pay school districts the difference. LBB says it’ll cost $1.2B in the next to years, more thereafter.
• Franchise Tax Cut. Businesses will save $1.3 billion in 2016 taxes.
• 8 Taxes Repealed. 
• Pre-K Grant Program. Funded only for 2016-2017.
• Contracting Reforms. The fiscal angle: the “sheer number of state contracts” makes it impossible to estimate how much it will cost the state. But, look for:
  • lawsuits
  • protests
• Transportation. The Highway Fund will be creditted up to $2.5 billion annually, but this reduces GR.

See a trend? Except for the obscure taxes that were repealed, every other item stresses how much it will cost Texas financially.

Hedging a bet on the revenue estimate or how much available money there is in 2017?

Comptroller Fiscal Notes Spetember 2015

Big legal week for commercial appraisals for 2 reasons:

• Travis County residential property taxpayers supporters speak
  • The Real Estate Council of Austin​ says the “my fair share” argument doesn’t hold up for commercial appraisals & thats why there is a lawsuit. Statesman
• 6 Austin homeowners interveed in the City’s lawsuit.
  • They say the City of Austinlawsuit will create ” “higher and unequal appraisals for everyone.” Statesman
• Premcor Pipeline Co., the Premcor Refining Group Inc., Port Arthur Coker Company, Valero Refining (Premcor), and Valero Energy Corp. sued the Jefferson County Appraisal District
  • Jefferson County District Court case number E-197511
  • ​Southeast Texas Record

This translates to a big interim for property taxes and appraisals:

• 2 commerical appraisal lawsuits and counting
• 1 impending Texas Supreme Court school finance ruling
• 1 State Senator Bettencourt who calls the City of Austin lawsuit, a “revenue grab” & asks for an interim charge.

• Jacquie Baly
  • Sugar Land
  • President and chief executive officer for BalyProject
  • Former SugarLand City Council member
•  Cindy Conroy
  • El Paso
  •  first executive assistant and charitable giving coordinator at WestStar Bank
  • academic background: associate dean of research and the director of the Graduate School of Biomedical Sciences at Texas Tech University Health Sciences Center El Paso
• Antonio Falcon
  • Rio Grande City
  • medical director of Family Health Center, L.L.P
  •  former member of the Parks and Wildlife Commission
• John Goodman
  • Frisco
  • founder and executive chairman of Family ER + Urgent Care Centers, and is a board member, co-founder, former executive chairman, and former chief executive officer of Goodman Networks
  • held leadership positions at Bell Atlantic, GTE, and Verizon.
• Wendy Gramm
  • Helotes
  • chairman of the Texas Public Policy Foundation Board of Directors
  • Bio stresses federal leadership roles at FTC, OBM
• James Huffines
  • Dallas
  • president and chief operations officer of PlainsCapital Corporation
  • served as chairman of The University of Texas System Board of Regents
• J. Michael Lewis
  • Dallas
  • private investor and the general partner of Coronado Resources, Olympia Royalty, and Wellspring Royalties
  • On the Board of Texas Tech Foundation
• Michael Plank
  • Houston
  • chairman and chief executive officer of The Plank Companies, Inc
  • serves on the President’s Leadership Council for Houston’s Methodist Hospital, and the Texas A&M University Engineering Advisory Council.
• Sam Susser
  • Corpus Christi
  • president of Susser Holdings II, L.P.
  • previously served as chairman of Sunoco, L.P. and Stripes, L.L.C

Interesting Fact:

• 3  appointees have ties to Texas Tech

Governor Abbott Press Release

How the new GED tax credit for businesses works in Georgia 

• Georgia businesses pay for employees to take the GED test
• Businesses earn a $400 credit for each person who passes.
• Businesses can receive a $1,200 credit for each worker who successfully completes a GED class and test if the employer pays for both. 

WABE Atlanta’s NPR: Ga. Businesses Can Get Tax Credits If Employees Earn GEDs

Bloomberg: The Tiny Town that Hates Elon Musk

Background: Boca Chica, with its 26 residents, is home to Space X launch site. Space X has a safety plan for launch days:

• The Safety Plan limits the town residents movements on launch days.
  • Texans don’t love being told what to do, when to do it. They’re an independent lot.
• SpaceX’ will be sweeping the beach with drones and video surveillance.
  • Texans love private property rights and don’t love drones spying on them.

What the residents are saying:

• “I’m like, ‘Are you out of your mind?’” said Cheryl Stevens, 55, who settled in Boca Chica Village a decade ago in search of quiet, rustic beauty. “It’s like Nazi Germany.”
• Seizures of Private Land is on their mind: “When we first moved here, I just felt closer to the Lord,” said Bonnie Heaton, a retired hairdresser, who worries that one day SpaceX will somehow seize her beloved home on Weems Street. “Well, that peace has kind of gone out the window.”

Governor John Kasich is asking Ohio Pension funds to divest from Iran.

The OH Pension response: Thank you, No, Thank you.

“No matter how worthwhile the purpose, such actions set a dangerous precedent of using the system’s money to achieve political or social agendas,” said Julie Graham-Price, the fund’s communications manager.  Governing

The State Auditor today released its report on the Texas Major Event Trust Fund.

Background: During the Audit the Fund was at the Comptroller’s Office. Today the Fund is under the guise of the Governor’s Office.

4 Legislative/Policy Changes You’ll see because of the Audit:

• More Documentation on Estimates. The SAO found that there wasn’t rational/documentation for the rational on some estimate the incremental tax receipt increases for major events. Most likely targets for this change:
  • the estimated number of out-of-state attendees
  • the estimated out of state attendees’ expected spending
• Smaller Reimbursements to Events. Why? The SAO says the CPA modeling software included increases in taxes which are not reimburseable by statute. Hence, Fund reimbursments may have been too big before. 
  • What level of reduction? Probably about 20%
    • The SAO found that the modeling software, that included tax receipts it should not have, added 22% to reimbursments.
• Greater Scrutiny for Documents from Events. The SAO found that the Comptroller’s Office did not “review and approve the methodology for calculating out-of-state attendance, and it does not review supporting documentation for out-of-state attendance.” 
  • This will change. Expect to provide more documents with more supporting evidence.
• Fewer reimbuseable costs. Expect these costs to be excluded from reimbursements: 
  •  sanctioning fees
  • large monitors and scoreboards for sporting events
  • and costs associated with ancillary events

State Audit of Major Event Trust Fund

California Senate healthcare special session committee is considering these taxes to fund healthcare and welfare programs:

• $2 per pack tobacco tax increases
  • raise an estimated $1.2 billion
• Raise E-Cig taxes to generate $100million
• revamp an existing tax on managed-care organizations
  • Health plans would face a net tax hit of an estimated $300 million
  • The increase is less than 1/2 what plans faced under a tax proposal put forward in January by Gov. Brown​

Sacramento Bee 

Alabama has a $200 million shortfall in its general revenue and its forced the legislature into special session, twice. $200 million? In Texas, that could be a rounding error, to the rest of the world- its “kinda a big deal.”

A Republican Governor, who signed the Grover Norquist Pledge, is proposing to generate revenue. Surprise! The Governor wants to cover a revenue shortfall with new revenue. Here’s the proposed tax sources:

• 25-cent-per-pack cigarette tax, and new taxes on vapes and e-cigs.
• raise the car rental tax from 1.5 to 2 percent
• raise the car title fee from $15 to $28
• raise the business privilege tax
• eliminate the state deduction for FICA taxes
• eliminate the deduction, relied on by small business, for the federal payroll tax paid
• increase taxes on nursing homes

​Americans for Tax Reform: AL Gov. Bently Proposes More Tax Hikes in 2nd Special Session

• Local governments save an estimated $714 billion in extra interest payments from 2000 to 2014
• The savings to local govenrments is “the equivalent of building a state-of-the-art stadium, ballpark and arena for every professional sports city in the U.S. and Canada 6 times over.”
• “savings can range from $80 to $210 in additional interest expenses per $1,000 of borrowed money.”
• “hospitals see some of the biggest savings on interest payments. The average hospital today saves more than $100 per $1,000 borrowed — 1 percent less in interest — than it would if the bonds were taxable.”

Municipal Bonds & Infrastructure Development: Past Present and Future

Governing

Taxing alcohol, tobacco and gaming as a revenue source is en vogue. Its also a revenue source that accounts for $32 Billion in taxes nationally. Texas doesn’t even make the Top 10 for taxing sin, but Rhode Island & Nevada lead the Top 10 with roughly 15% of their revenue coming from sin taxes.

The cons in taxing sin:

• not a reliable revenue source
• don’t generate the revenue expected over the long term
• casino revenue is often a revenue shift between state borders

The pros:

• states keep their revenues in light of over border casino gaming
• its politically feasible
• raise revenue and curb consumption of an item deemed evil

Governing: The States Most Dependent on Sin

Part revenue trend, for the City of Odessa, part business trend, part legislative/regulatory trend: contracts with local governments to access sewage water to use for fracking.

Odessa, TX signed a an 11-year, $117 million deal with Pioneer to re-use sewer water.

Oil Price.com

According to updated data from the Census Bureau, states and local governmental entities, which collectively spent an estimated $252 billion last year, are also investing more in public infrastructure this year.

• Road and transportation construction claim $30 billion of state and local spending.
• Stadiums and sports areas claim under $2 billion. 

Governing

In California school districts have  Rainy Day Funds, at the district level, with the goal of encouraging prudent spending. 

California’s Senate Bill 858 put a cap on revenues in local school rainy day funds. The cap limits school districts to reserving “no more than 6 percent of their budgets in reserve accounts to prepare for economic downturns. “

That cap puts some districts, like Salinas, in jeopardy of not only losing their reserve funds, but also their good credit rating.  The cap sparked this comment from San Diego Public School District, ““This makes a mockery of good fiscal behavior — and local control,” said McAllister, who is chairman of the San Diego Unified School District audit and finance committee.

The Californian    San Diego Union Tribune     

10 years ago, divesting public funds from DARFUR was all the rage. This week’s divestment target is coal. 

The California legislature is moving a bill to diverst CALPERS and other state investment funds from any coal investments.

Considering that the California investment funds total  $476 billion in assets, it could be no small potatoes for the state “to liquidate holdings in companies that generate at least half of their revenue from coal mining by July 2017.”

Investing from the statehouse is the new legislating from the bench and is certain to return to Texas. 

Reuters

California increased thier film incentives for 2015, and as a result has seen 4 television shows move to the Golden State.  The details:

• 5 year incentive program
• Triple the size of the original incentive program at $330 million
• expanded qualifying priductions to include high-budget feature films and TV series
• An August 2015 report on the program shows it will yierld an economic impact of:​
  • ​$5.93 Billion in total aggregate direct spending
  • $2.09 billion in below the line wages

Sacramento Bee

Information Intelligence August 27, 2015: Other States Increase Film Incentives. Texas Slashes Film Incentives.

The Port of Houston Authority has created an Office of Economic Development.

Who leads the new department? Shane Williams, Foreign Trade Zone and Economic Development Manager

What are its economic development goals? work with partner organizations to attract new businesses to the port.

GlobeNewsWire  Port of Houston Authority

The events trust fund and major events trust fund have officially set up shop in the office of the governor. 

Any email notifications you have set up will not transfer. Here’s your lifeline:  EventsFund@gov.texas.gov .

Check out the open appointments for Lt. Gov. Patrick while enjoying your morning coffee. 

Know a client that might fit the bill for an appointment, get a one up, and fill out the application too. 

HB 1 required LBB to get a contract database up and running. Today, the LBB unveiled their data masterpiece. The databases allow for:

• searching all reportable contracts
• running reports about all reportable contracts
• details on which contracts are reportable

Data is the future. 

LBB

Why does Denton County care that Austin is suing the Travis County Appraisal District, among others?

Because Denton County’s Chief Appraiser is on the Executive Board of Texas Association of Appraisal Districts, and he too sees the impact of commercial property owners legally challenging appraisals.

The appraisal challengers by commercial property owners is said to shift the property tax burden onto residential property tax payers.

Denton Record Chronicle

Texas cut 66% of the film incentive fund. Those rationalizing the cuts think it is a result of:

• infighting between film and video game companies that each receive the incentives
• The Tea Party’s low spending mantra
• The departure of Gov. Rick Perry, an advocate for economic incentives

KGSN   TexasTribune

Loyal Information Intelligence Subscribers will recall recent note of increasing incentives in Louisiana, California, and Georgia.

Who doesn’t love an audit? Anyone being audited. In November 2014, the State Auditor Office identified problems and made recommendations. Fast forward to August 2015, and the private auditors hired by school districts to review 313s found the same problems.

Here’s what will be addressed in 2017, now that we have 2 audits that point to the same deficiencies:

• School districts need to verify information, not just take some entity’s word
• The 313 agreements need more specificity.
  • Detail the jobs are being created
  • Detail the tax breaks are being given
  • Detail when, if ever, the tax breaks can be transferred
• Consistency on the issurance of tax credits. 
  • Are the tax credits future credits?
  • Are the tax credits directly awarded to the business?
• Concistency in Conflicts of Interest disclosures
• If multiple 313 agreements exist for the same project, ensure that the jobs created are not double counted.
• Consistency in records retention

SAO

Effective 9/1/15 the 2% fireworks tax is repealed. Kids spending their allowance on colorful sparklers are rejoicing. 

Fireworks lovers everywhere can thank Senate Bill 761.

Comptroller Hegar

Is a decline in DVD and CD sales to blame for state governments that seek to tax cloud computing and storage? Are streaming services the root of this taxation push? Did we get bamboozled by the people who watch House fo Cards, and who doesn’t?

The easy answer: sales taxes fail to equitably tax the modern economy.

What cloud taxes have been implemented?

• “Tennessee extended its 7% sales tax to software and digital games that are accessed remotely”
• “Chicago is one of the first cities to wade into taxing digital goods, requiring in the coming months local taxes on cloud computing and streaming entertainment.”
• Alabama legislators voted down a “Netflix” tax
• Vermont halted its plan to tax the cloud when it realized the cloud is more of a service than a good
• “Idaho has moved cautiously on taxing cloud computing and streaming video. Two years ago, the state decided to exempt most cloud-based software from sales taxes, viewing it as a service. The following year, it exempted downloadable software, while taxing digital music, video, books and games, according to the state tax commission.”

Wallstreet Journal

67% of California voters favor raising the tax on cigarettes by an additional $2. 

The legislative proposal is backed by health and labor groups in California, including:

•  Health Access California
• SEIU California State Council
• the California Medical Association
• California Dental Association
• American Cancer Society

• it  is 87cents per pack
• it was last raised in 1998
• In 2012 voters defeated a $1 per pack ballot initiative
• In 2006, tobacco companies stopped an additional $2.60-a-pack tax, Proposition 86, by a margin of 52% to 48%

California is limiting the rebate it gives for electric cars. If you earn more than $500,000 per year, kiss your rebate good-bye.  Tax groups want to do away with all the rebats, which in this case they call  “welfare for the rich.”

How does California fund the electric car subsidies? A surcharge on vehicle registration fees and a portion of the smog fee 

California’s Policy Goal: Rapidly increase the percentage of zero-emission vehicles in the state

What’s the program cost so far? $242 million in rebates awarded to 114,702 Californians, mostly in the L.A. area

What percentage of Teslas are in the mix? 15% of rebates go to Tesla owners

Los Angeles Times

This week the City of Austin filed a lawsuit concerning the inequity in the appraisal system.  We might remember this from commercial appraisal issues in 2014 in Bexar, Harris, Montgomer, and Galveston counties. Its been on the legislative radar for more than a decade.

Who is the City Suing? Travis Central Appraisal District (TCAD), commercial and vacant property owners, and Comptroller Hegar. Its working with TCAD, a big clue being TCAD officals appearing at the press conference.

The City’s Goal: Change state policy prohibiting the use of commercial real estate sale prices in appraisals.

Why do we need disclosure of commercial real estate sale prices? Without it, the tax burden is shifted to residential property owner (AKA voters).

KUT Texas Tribune

This Monday NRA and other gun rights organizations sued Seattle for implementing its ammo tax.  

The legal and opposition arguments:

• the ammo tax is  “a ‘poll tax’ on the Second Amendment”
• the ammo tax is” an effort to drive Seattle’s firearms retailers out of business.”
• The ammo tax violates Washington state law that prohibits cities from implementing these taxes locally.

Reuters

Previously on Information Intelligence:

Lege Trend: Taxing Ammo

Seattle passed an ammo & gun tax this year. Seattle slapped a $25 tax on gun sales and 2-5 cent tax on rounds of ammo within its city limits. Seattle’s goal: fund gun violence prevention programs.

KTRH examines whether Houston might do the same. The answer- not likely. State law prevents local regulation of firearm purchasing.

California is considering expanding legalized marijuana. It estimates an expanded marijuana market would represent a $1.2 Billion industry.

The regulatory structure will resemble that of the alcohol market.

Where are parties aligning?

• California Teamsters advocate the multitier model to regulate marijuana
• Police CHief Association also calls for multi layer regulation so as to “…separate the cultivation, the processing, the distribution or sales for the accountability piece.” 
• Farmers and others support multi tier to prevent “large-scale operations from monopolizing the market”
• California Cannabis Industry Association is concerned that a multi tier system will allow distributors to monolpoize the system in the same way they do for alcohol
• Emerald Growers Association support giving distributors a greater role would minimize the possibility that “a retailer can fill their shelves with only their product (and) can push anyone else out of the market
   

Assembly Bill 266

Sacramento Bee

The Attorney General was asked for an opinion on: 

The Answer:

Not likely. 

The Legislative Fix:

Redefine “person” in Transportation Code Section 681.0101 to include a private business.

KP-0033

Sharing Economy is the phrase of the year. Its ride sharing programs, home sharing programs (short term rentals), shipping sharing… the list of economic sharing grows daily. But, how do legislatures and regulators handle it?

A case study from Los Angeles:

• Mayor Eric Garcetti applauds new technologies like ride sharing apps and the tokens of the sharing economy. He’s a man promoting the future, who is running into a brick wall named City Council.
• L.A.’s City Council sees things differently. They are more sensitive to the pressure of a wide array of local dissenters, including the taxi industry, hotel workers and housing activists.
  • City Council has hit the breaks on ride share ordinances
  • City Council paused a tax agreement with AirBnB
  • A City Council member called the sharing economy- the cheating economy.

L.A.Times: At L.A. City Hall, it’s the visionary vs. the lawmakers

• “In Texas, if you have a million dollars or more in gross revenue, you have to pay this tax. We were able to cut the rate by 25 percent. That is a significant cut. That is $2.6 billion revenue cut in the state of Texas.”
• “We also view that as a first step in repealing the tax,”
• “The tax is generally viewed as a barrier to businesses that want to relocate to Texas or new businesses starting and the growth of businesses.”
• “I believe, and some of the others in the legislative believe, that by cutting this tax we will actually help businesses create jobs and attract businesses to the state of Texas.”

Waxahachie Daily Light

The moment has come…Thumbtack’s annual Small Business Friendliness Survey is here. Texas is #1 for small businesses.

• Tax equity–the actual rate at which business owners pay taxes--mattered far less than any measure of regulatory compliance.
• Labor rules were 88 percent more important in driving state friendliness scores when compared to tax rates.
• When evaluating cities, small businesses said the ease of compliance with licensing rules mattered far more than tax rates.
• In cities, training was 78 percent more important than the number two factor, and on the state level, small businesses that  had a positive training experience were 1.5 times more likely to rate their states as being very supportive.

eWeek

• Every $1 dollar of collected sales tax for economic development over the past 25 years has returned nearly $10.84 in annual economic activity (real gross product).
• Every dollar of sales tax collected for economic development is significantly exceeded by the ongoing cumulative benefits of the project supported by the program. Every dollar represents an annual impact of $277.67 in expenditures.
• Every dollar represents an annual impact of $140.92 in gross product
• Every dollar represents an annual impact of  $89.72 in personal income
• Every dollar represents an annual impact of $3.57 in gross city tax revenue each year.

New Braunfels Herald Zeitung

The Editorial Baord at the Lubbock Avalanche Journal believes that education reform is imperative to economic vitality, quality job growth, and recruiting industries that can raise the wages of Texas. 

• More Texans need higher education degrees. Texas Higher Education Board wants to reach 60% by 2030.
• Texas is 25th in the world for post secondary education for Texans 25-34
  • But, 5th in the world for Texans 55-64
• Young Texans should be “prepared to leave high school and receive additional vocational/technical training is also very much needed to strengthen our workforce”

Lubbock Avalanche Journal

Pennsylvania’s Office of Open Records ruled this week that a person requesting open records, who uses a smart phone to take pictures of the record cannot be assessed a fee.

“The Office of Open Records ruled “prohibiting the photographing of documents would be contrary to the purpose of the [Right to Know Law], which is to ‘maximize access to government records.’

Free government records, get your free government records…in Pennsylvania.

Governing

Office of Management and Budget  is setting forth data breach standards for federal contractors. The requirements include:

• Required improved data security controls
• Timely contractor reporting of all cyber incidents
• Contractors will be required to undergo Security assessments
• Contractors may face continuous monitoring by the government agency
• Increased business due diligence before entering into a contract

Details about the OMB workgroup and proposals for contract reform are available at the Improving Cybersecurity Protections in Federal Acquisitions wesbite.

Seattle passed an ammo & gun tax this year. Seattle slapped a $25 tax on gun sales and 2-5 cent tax on rounds of ammo within its city limits. Seattle’s goal: fund gun violence prevention programs.

KTRH examines whether Houston might do the same. The answer- not likely. State law prevents local regulation of firearm purchasing.

Pension Forefeiture Reform was front and center in New York. Here’s the background:

• The year, 2011. Governor Cuomo calls for & passes pension forefeiture for ” public officials to lose pensions if they were convicted of a felony related to their office.”
• During legislative discussions, it was discussed that pension forefeiture reform should apply to all government officials and employees.
• The 2011 pension reform only applies to elected government officials.
• The year, 2015, questions emerge as to why prison guards that facilitated the NY prison escape should receive their pensions. Can these prison guards receive their pensions? Yes. The guards are not public officials and can receive their full pensions.

Editorial | Niagra Gazette

North Carolina Legislature passed a tax break for home builders– No property taxes for homes that have not sold. Builders caught a break and lowered their tax burden. 

The promoted goals for the tax break:

• the tax break lower builders’ overall costs
• the tax break will increase construction

WXII12 North Carolina

WHO:   Bob Westbrook

BACKGROUND: 

• Successful restaurant franchisee for CiCi’s Pizza
• Past Preseident of Texas Restaurant Assoc.
• Past President of the East Texas Food Bank
• Two-term Chairman of the Northeast Texas Public Health District,
• One term as Area Development Council Chairman
• Two terms as Government Affairs Committee Chairman for the Tyler Chamber.
• Member of the Board of Directors for the Tyler Economic Development Corporation.
• Serves on the Executive Committee of Catalyst 100, a mentor program to develop Leaders for Tyler for the next 100 years. 
• Rotarian, A “Paul Harris Fellow”, & past president of the Tyler Sunrise Rotary Club.
• Currently a member of the South Tyler Rotary Club. 

GOALS: Focus on transportation

Google opened a facility in New Mexico. The state’s eco devo system allowed the state to upgrade sewer and water into a certain airport to help Google. 

Google is moving this facility back to California, leaving New Mexico having expended $995,000 for the Moriarty Municipal Airport without the tax base to support the improvement.

New Mexico can recoup the eco devo investment because the state doesn’t offer economic development reimbursements, but rather offers economic incentives at the outset like Texas. New Mexico’s neighbors, Arizona and Utah offer economic development reimbursements that are given to a company once benchmarks are reached. 

Albequerque Business First

The following states raised cigarette taxes this year:

• Kansas
  •  tax hike of 50 cents
• Louisianna 
  •  $1.6 billion budget shortfall filled with 50 cent tax hike
• Ohio
  • 35-cent increase
  • Gov. Kasich proposed $1 tax
• Nevada
  • $1 tax increase
• Also increasing cigarette taxes: Connecticut, Rhode Island and Vermont

Governing

Scott Walker & the Bucks have an economic development deal for the new Bucks stadium. That’s generated these campaign triggering statements:

• Walker “commits Wisconsin taxpayers to pay $400 million for a new basketball arena.”
• “…$200,000 that the co-owners of the NBA’s Milwaukee Bucks donated to a group backing his  [Walker’s] campaign”
• The reaction in new Hampshire: “I don’t think taxpayer money should be used for things like that,”

Walker says:

• The state will lose $299 million if the Bucks leave which the team has threatened
• The Bucks will foot 1/2 the cost of the $600 M arena

Governing

Talking to the Sealy Chamber, Senator Kolkhorst said her goal is:

• no income tax
• no business tax

Her words:…”“ That brought us that much closer to our goal of having no income tax and no business tax in Texas. ” 

The Sealy News

Questioning TPPF’s Math skills, TEXPERS points to the following issues with TPPF’s pension critique:

• Fuzzy math
• Stop lumping all the pensions together in your analysis
  • “80% of the TPPF’s headline number is attributable to four statewide plans with nearly 2.5 million participants. The remaining $11.4 billion gap is spread among roughly 90 local pensions across Texas, and almost half of that amount is due to four pensions in Houston, Dallas and Fort worth, Patterson said in response to the TPPF op-ed.”
• Stop ” robbing dedicated school employees of a benefit they have paid into their entire career”

TEXPERS

Wyoming, a state with policies epitomizing western individualism, has taken a new step to add privacy protections to the state constitution.

Wyoming’s Legislative Task Force on Digital Information Privacy unanimously voted last week for language concerning open-government protections. 

The constitutional language looks like this:

Individual privacy is essential to the well-being of a free society and shall not be infringed without the showing of a compelling state interest, and the state will not deprive a person of any right provided by law to examine document[s] or to observe the deliberations of any agency or political subdivision of the state, except in cases in which the demand of individual privacy clearly exceeds the merits of public disclosure.

Transparency Meets the Constitution. Libertarians and Tea Party folks rejoice.

Courthouse News Service

Proposition 1

“The constitutional amendment increasing the amount of the residence homestead exemption from ad valorem taxation for public school purposes from $15,000 to $25,000, providing for a reduction of the limitation on the total amount of ad valorem taxes that may be imposed for those purposes on the homestead of an elderly or disabled person to reflect the increased exemption amount, authorizing the legislature to prohibit a political subdivision that has adopted an optional residence homestead exemption from ad valorem taxation from reducing the amount of or repealing the exemption, and prohibiting the enactment of a law that imposes a transfer tax on a transaction that conveys fee simple title to real property.”

Proposition 2

“The constitutional amendment authorizing the legislature to provide for an exemption from ad valorem taxation of all or part of the market value of the residence homestead of the surviving spouse of a 100 percent or totally disabled veteran who died before the law authorizing a residence homestead exemption for such a veteran took effect.”

Governor Abbott Proclamation 

Tim Chase is the new economic development president for the Hutto EDC. 

• From Wichita, Kansas
• Former president of the Greater Wichita Economic Development Coalition.
• Former president and CEO of the Wichita Falls Chamber of Commerce & Industry. 
• 2009 Chase  appointee to the Texas Governor’s Regional Commercialization and Innovation Council
• 2011 elected to the International Economic Development Council Board of Directors.

Austin Business Journal

WHAT? $63.5 Million in Texas Tax Credits

WHO (qualifies)? Private multifamily developers competing in the 2015 Housing Tax Credit Program

WHERE?  Texas Department of Housing and Community Affairs

WHY? The program is estimated to generate $434.6 million in economic activity 

Austin Business Journal  

Harris County is implementing the nationa’s first wireless broadband system for emergency service personnel.

What can this new high tech system do?

• Livestream video, vital signs and EKG results while en route  to ER
• Doctors can transmit back to EMS life-saving treatment protocols

The wireless system, dubbed FirstNet, stems from the 9/11 Commission recommendation that part of the FCC’s radio spectrum be reserved for public safety purposes.

Governing

This week the 3rd Court of Appeals handed a win to the Comptroller by ruling that  out of state comapnies shouldn’t use the 3 factor formula of the multi state compact (which is in Texas Tax Code Chapter 141) but rather should use the fracnhise (margin) tax calculation methods of Chapter 171.

Tax nerd stuff. But, big dollars at stake, so brush up on the nerd lifestyle.  How many corporations can you think of that aren’t headquartered in Texas but do business in Texas?  Lots & Lots.

Next stop: TX Supreme Court.

Graphic Packaging Corp v. Hegar  Law360

• The Debt Plan proposed by JPS assumes savings not detailed.
  • “far fetched financial plan”
  • “dubious assumptions”
• The Plan is inconsistent. It claims simultaneously savings are rooted in operational improvments in one section and in another it claims the the savings are rooted in eliminating 360 jobs.
• Increasing capacity and reducing staff is again inconsistent.

Empower Texans

Arizona has a tax credit for private education. The numbers haven’t broken down quite as estimated:

1. The 1997 estimated cost was $4.5 million a year
2. The current cost per year exceeds $140 million.
3. Plus, Arizona has to eat the cost of $50 million in additional tax credits for public-school extracurricular activities for these students.
4. That’s a total cost to the state of $190 million per year. Far off the $4.5 million estimate.

Governing 

Valero has a large refining facility in Galveston County. The Galveston County Appraisal District valued the facility at $1.05 Billion.

The valuation quickly headed to the courts. Here’s what happened:

• 2013 trial court sided with Valero that the property was inequitably appraised
• Spring of 2015,  14th Court of Appeals said probably some unequal value but let’s have the trial court look at it again.
• July 2015, Valero asks the TXSCT to determine whether the facility was equitably valued

San Antonio Business Journal

Connecticut’s enacted Senate Bill 949 contains significant data security requirements for entities contracting with state agencies and entities in the health insurance and administration business. 

Contracting entities must provide:

• Comprehensive data-security program, including:
  • the use of security policies,
  • annual reviews of such policies,
  • access restrictions, and
  • mandatory security awareness training for employees beginning July 1, 2015.
• Restrict access to Confidential Information only to authorized contractor employees,
• Maintain the Confidential Information in secure servers with firewall protections
• Implement security and breach investigation procedures.
• Undergo annual reviews
• Include ongoing employee security awareness program.

National Law Review

Because separation of powers in a republican form of democracy is a fluid concept, attorney general opinion request, RQ- 0039-KP, wants to know this:

whether state funds must be expended in accord with US Supreme Court ruling in Obergefell (gay marriage)?

Why does this matter?  If the answer is yes, Obergefell requires funding expended in accord with its holding, then things like ERS offering benefits for couples of the same sex will occur. Which means, members of the Legislature will be on record voting for those expenditures by approving ERS appropriations.