Which team is eyeing a new retractable roof stadium? The Rangers

Will it be a public-private financing arrangement? Yes. A 50/50 Cap with the local government contribution capped at $500 M.

What’s the next steps? 

• Approval by Arlington City Council on Tuesday, May 24, 2016.
• November 2016 approval by voters

ESPN | Rangers to build $1B stadium with retractable roof, to open in 2021

Ft. Worth Star Telegram | Rangers could play in new, air-conditioned ballpark in 2021 season

The State: Pennsylvania

The Vetoed Pension Reforms: The veto was only one down fall to 2015 pension reforms in Pennsylvania. The 2nd downfall for pension reform in 2015, was the demise of a state budget package.

What’s the 2016 pension reform? Stacked Hybrid Plan

What’s a Stacked Hybrid Pension?

• Applies to all new employees- state employees & public school teachers
  • baseline pension
  • traditional formula of years of service x 2% of final average salary
  • converts to a (401)k-style plan for any income earned over $50,000-per-year, & for all income after 25 years of service
  • For new enrollees, the the 401(k) threshold income would be adjusted up by 1%
  • 7% employee contribution
  • 4% state contribution on compensation above the 401(k) income threshold
• No impact to current employees or teachers

What’s the saving to the state with this pension reform plan? $10 billion over 30 years

Pennsylvania HB 1499
Penn Live | Public employee pension reform gets a fresh look in Pennsylvania

Reading Eagle | State House panel moves forward on pension bill

• CO & WA tax revenues from marijuana exceeded estimates
• States are considering lowering 30% marijunana tax rates which did not stop a blackmarket
• Tax rates are ranging from 10-25%
• Most workable method to tax marijuana: final retail sales tax
• Medical marijuana is more loosely taxed and more loosely regulated
• Tax generation has a lag time with a new tax system
• The taxation of marijuana also requires addressing health, agricultural, zoning, local enforcement, and criminal penalty issues

Tax Foundation | Marijuana Legalization and Taxes: Lessons for Other States from Colorado and Washington

• A  12,000 seat high school stadium draws a lot of attention 
• The largest approved bond package was $290 Million for Galena Park ISD
• 26 bond measures defeated
• 82 approved
• 76% bond passage rate throughout Texas

It’s done: McKinney residents vote for new stadium, one of the priciest in the state | Dallas Morning News 

12,000-seat high school stadium going forward in North Texas | News OK

Texas school district will get $62.8 million stadium for football and soccer | NY Daily News

That’s Right, $63 Million for a Football Stadium … for High Schoolers | NY Times

The Week in Politics: A $50 Million High School Stadium, an Assault Victim’s Victory and More | Governing

Texas Transparency | Bond Election Results

John Elliott of Austin

• A partner at Smith, Robertson, Elliott & Douglas, L.L.P
• Bachelor of Business Administration in accounting and a Juris Doctor from The University of Texas at Austin

Greg Gibson of Schertz

• Superintendent of Schertz-Cibolo-Universal City Independent School District
• Bachelor of Science and Master of Arts in education from Midwestern State University and a Doctor of Education from the University of North Texas

Christopher Moss of Lufkin (a re-appointment)

• President of Allendale, Inc. DBA The Advanced Financial Group
• Angelina County Fair board member & committee member of Angelina County Go Texan
• Bachelor of Science from Texas A&M University and a Master of Business Administration from Sam Houston State University

Governor Abbott | Governor Abbott Appoints Three To Teacher Retirement System Of Texas Board Of Trustees

Which state has a May 17, 2016 constitutional proposition to reform the state pension systems? Arizona

What’s the PRO argument? police, fire fighters & politicians agree that the refoms will preserve the financially challenged pension system for Arizona’s first responders

What’s the CON argument? Short term costs. Due to a pending Arizona Supreme Court case about 2011 pension reforms, the proposition could cost Arizona an additional $91.4 million in fiscal 2018 according to the Arizona Joint Legislative Budget Committee

AZ Central | Will fixes proposed in Proposition 124 save pension plan money?

Which taxing entity is involved?  Montgomery County Emergency Services District #11

What Emergency Services District  actions were a catalyst for this A.G. Opinion? ESD #11 wanted to raise its sales and use tax rate by 1/2%

Did the ESD #11 tax election take into account tax caps? 

• Yes, it excluded the towns of Splendora and Patton Village 
• However, it did not exclude areas in which East Montgomery County Improvement District (“EMCID”), Economic Development Zone No. 4 (“EDZ #4”) already maxxed out the cap

Can this be fixed post election? No, there is no statutory mechanism to fix this taxing oops

What statutory fix would fix this problem? 

• The Comptroller needs specific statutory authority to selectively collect sales and use tax

• Special districts also need statutory authority to unilaterally and retroactively withdraw its right to collect sales and use tax 

KP-0084

What kind of governmental approval does the Bi-National Economic Development Zone need?

• Federal Approval of the Zone
• State support of the Zone

What is the purpose of the Bi-National Economic Development Zone?

• Support design, engineering and advanced manufacturing
• Win back manufacturing jobs lost to Mexico

7 Proposals for the Bi-National Economic Development Zone:

1)  Create a governing Coordinating Board for the Rio South Texas Bi-NED Mega Region.
2)  Develop a single economic development plan
3)  Parallel the Zone proposed for the Mexican side of the border
4)  Integrated International Metropolitan Statistical Area
5)  Alternative L-1 Visa Program. 
6)  Joint U.S.-Mexico Built Certification. 
7)  Border Free-Trade Corridor Designation. 

Rio Grande Guardian | KROLL PROVIDES STRATEGY FOR RIO SOUTH TEXAS BI-NED MEGA REGION

Concerns about the Longview Firemen’s Relief & Retirement Fund are:

• $67 Million in unfunded liabilities
• Increasing city contributions by 1% equals but is only available by cutting some part of the 40% of the budget that is not public safety funding

What reforms have been initiated for the Longview Firemen’s Relief & Retirement Fund?

• City will increase contribution rates by 1%
• If the city cannot meet a 1% increase, the firemen support a 1/2% increase over a lapse in increased contriobutions
• Expanded benefit calculations from the last 3 years of service to a calculation based on the last 5 years of service
• Members of the fund voted to pay into benefits for their widows or widowers (previously a free benefit)

Longview News Journal | Budget woes could hit Longview firefighter pension

Which state governor signed into law new fantasy sports laws? Tennessee

What is this new tax on fantasy sports? 6%  privilege tax on all adjusted revenues of fantasy sports contests offered by a fantasy sports operator to Tennessee consumers

Where is the regulation within Tennessee state government? The Tennessee Secretary of State

What will be required of fantasy sports operators?

• Application to the Tennessee Secretary of State
• Receive a license
• Maintain records of all Tennesee players for at least 5 years
• Annual reporting
• Fees- licensing, renewal, operational fees- all will be set by the TN Secretary of State
• A violation triggers the TN Deceptive Trade Act (read: the state can impose big fines)
• No minors betting
• No betting on sports involving minors, including college if the participants are predominantly minors

Tennessee Senate Bill 2109

PR news Wire | Ryan Co. | Tennessee Enacts Fantasy Sports Bill, Privilege Tax

Which Texans are involved in funding a Philadelphia resolution to pass a soda tax? Laura and John Arnold are backing Philadelphians for a Fair Future which supports the new tax

How are the soda tax opponents framing their argument? Philadelphians Against the Grocery Tax. Its not about soda but about incresing the cost at the grocery store

How are the soda tax supporters framing their argument? This will fund pre-K education for Philadelphia’s children. Revenue from this tax is marked for pre-K funding and parks

Philly.com | Want political chips with your soda tax?
 

Which state frames its economic development funding as innovation funding? Hawaii

What part of the Hawaii economy do Hawaii’s economic development programs target? the innovation economy

What are examples of businesses in the innovation economy?

• Startup Paradise community, a diverse private sector group of local entrepreneurs, investors and businesses

How does innovation funding help the existing businesses and economy in Hawaii?​

• Supports the creation of high wage jobs
• Supports the rapidly evolving digital age
• Provide resources that our local entrepreneurs need to start & grow businesses 

Governor of the State of Hawaii David Y. Ige | DBEDT NEWS RELEASE: 2016 LEGISLATURE APPROVES FUNDING IN SUPPORT OF STATE INNOVATION INITIATIVES

Which state enacted new fantasy sports regulations? Colorado

What were the arguments for regulations:

• reasonable regulation
• preserve the popular games
• fair playing
• No minors
• No illegal betting

Highlights of the new fantasy sports regulations in Colorado:

• Operators of fantasy sports would have to:
  • have background checks
  • contract annual independent audits
  • maintain records of daily operations for at least 3 years
  • Register with the newly created Office of Fantasy Contests within the Colorado Department of Regulatory Agencies

Colorado’s House Bill 1404

Denver Post | Colorado legislature puts rules on pay-for-play fantasy sports leagues

A Texas Association of Business Op-Ed in the San Antonio Express News offers 4 arguments to support local control over pension plans:

• The state is blocking local control
• The state is blocking local reforms to control pensions
• The state should make it easier for local governments to reform their own pension plans
• Its the state that is impacting local bond ratings because of state control over local pensions

By example, the City of Houston & the Houston Firefighters’ Relief & Retirement Fund:

• Could be enjoying financial benefits from their agreed to refroms
• But,  failure to get legislative approval in 2015 is causing financial implications

Gary Gibson | Texas Association of Business Op-Ed | San Antonio Express News | Local control best for city pension plans

TPPF is working its way through the state budget’s articles identifying trends. Up this week- Article 3:

• Article 3 is up 59% while population + inflation was only up 555 since 2004-2005
• Article 3 general revenue spending is up 65% since 2004-2005
• Top 3 item increases in Article 3 for 2016-2017 are:
  • 34.8% increase for Higher Education Coordinating Board
  • 28.0% increase at Available Univeristy Fund
  • 25.4% increase for group insurance and retirement
• The 2016-2017 Article 3 budget is below population growth plus inflation 
   

TPPF Spotlight | TEXAS BUDGET TRENDS IN ARTICLE III 

Tyler Morning Telegraph editorial offers 2 recommendations for proeprty tax reform:

• More rollback elections
• Eliminate the property tax and replace it with an increased sales tax

Tyler Morning Telegraph | Property tax reform should be a priority

Who sued whom & why? Online retailers are suing South Dakota for imposing an online sales tax.

How are online sales currently taxed? To trigger a sales tax, the retailer must have a physical presence in the state

How could this South Dakota online sales lawsuit impact Texas? The U.S. Supreme Court is widely expected to take up this case and decide whether a physical precense is required to trigger a local and state sales tax.

Governing | In South Dakota, a Test Case for Online Sales Taxes

Your informed intel:

What’s the issue property tax lenders are figthing in court? Whether property tax loans trigger federal lending laws

What court recently ruled that property tax lenders do NOT trigger federal lending laws? 5th Court of Appeals in New orleans said  tax-lien transfers (property tax lenders) are not extensions of “credit” that trigger federal lending laws

Why does this matter in Texas? 

• 4 different Texas courts ended up with 4 different answers on the issue
• Arguments against property tax lending paint the industry as high interest loans that “trap borrowers in a cycle of debt” which echoes arguments made about the pay day lending industry.

San Antonio Express News | Property-tax lenders win appeal 

Which state Governor called for higher caps on property tax rates? Kansas

What was the imputus for the Kansas Governor to call for higher tax caps because of straining local property tax system? 

• Kansas has the highest commercial property taxes in the nation
• Tax abatements
• Lower revenue sharing from the state to local governments

What does the new tax cap consist of?

• Mandatory elections to approve a rate increase if it exceeds the rate of inflation
• Exemptions include:
  • construction of new buildings, improvements or renovation of existing structures
  • increases in personal property valuations
  • court judgments and settlements of legal actions
  •  federal mandates
  • expiration of property tax abatements
  • expenses related to disasters.

Topeka Capital Journal | Legislature prepares for votes on city, county property tax lid

Kansas HB 2088

The Informed Intel about well run pensions:

• 90% funding levels
• modest, well controlled benefits
• cost study requirements before a benefit enhancement can be made

GOVERNING | Pension Envy: Lessons From Well-Managed Plans

Someone tried to remove a Tea Party local governmental official because they voted not to fund their own entity? Yes. A guy who won a seat on the Somervell County Hospital District Board and voted to set the hospital tax rate to 0%.

What did the court say? The Tea Party is safe. It is not incompentency to vote to not fund the governmental agency upon which you serve.

What law was involved? Its believed to be the 1st time Anti-SLAPP statute was used against the government. The Hospital Board official has 1st amendment rights to hold his own opinions, including a 0% tax rate.

Which court made this ruling?  Waco’s Tenth Court of Appeals in Harper v. Best

Texas Lawyer | Appellate Court Rules Texas Official Can’t Be Removed for Anti-Tax Stance

• Art. 2 Largest Article. For the first time, Art 2 was the largest budget item for 2014-2015.
• Growth Exceeds Inflation + Population. Article 2 is up 76% while inflation and population grew at 55%
  • HHSC Budget was up 16.6% for 2016-2017
  • DAFPS was up 14.9% for 2016-2017
  • DSHS, DAFS, and DADS were all down for 2016-2017
    • DADS budget was down -36.3% for 2016-2017
• 2017 Supplmental Appropriations Bill of $1.4 billion would make Art 2 the largest article in the state budget for the 2nd biennium.

TPPF | SPOTLIGHT: TEXAS BUDGET TRENDS IN ARTICLE II

Utah, home to the Great Salt Lake, and held out as an example of Rainy Day Fund Policy.

Rainy Day Fund lessons from the west:

• Stress Test. The Utah Legislature’s budget staff put the state’s finances to a fiscal stress test
  • This let budget writers know forecasted spending and revenue under conditions of severe economic stress
• Stress Test Lesson 1. Rainy Day Fund is large enough.
• Stress Test Lessonn 2. legislators began talking about  “proactive budget adjustment” when talking about how spending may impact stress test results
• Stress Test Lesson 3.  Rainy Day Funds can “stabilize the often volatile politics of state budgeting”

Governing | The Great Recession’s Lessons on Rainy Day Funds

• Goldilocks Quagmire. Rainy Day Funds shouldn’t be too large or too small.
• Microeconomics. Each state has its “own optimal rainy day fund amount;” there is no national standard for Rainy Day Funds
• Platitudes Fail. “5 to 8 percent of annual spending” rule do not work
• Save,save,save. Most states do not save enough. Caps on Rainy Day Funds should cover  typical recession-led drops in revenues.
• Spending. Rainy Day Fund policies must also take into account  state spending policies.

Governing | The Great Recession’s Lessons on Rainy Day Funds

Which state has a pension reform measure on its constitutional amendment ballot? Arizona’s Prop. 124

Who supports Prop. 124? 

• Police and firefighter organizations
• League of Arizona Cities and Towns
• State Legislature
• Arizona Governor Doug Ducey
• Mayor of Prescott

What does Prop. 124 do?

• COLA Change. Switches the current 4% COLA to an increase capped at 2% and tied to the Consumer Price Index
• Save Taxpayers  $1.5 billion over the next 30 years.
• Keeps the promises made to police officers and firefighters
• Allows for statutory changes for new hires. Arizona SB 1428

  • Choice between a defined contribution plan or a defined benefit hybrid plan.

  • Changes age eligibility requirements from 52.5 to 55 years of age

  • Reduces the maximum pay for pension calculations from $265,000 to $110,000/year

  • Requires employees to split retirement costs 50/50 with the employer.

  • Reduces or eliminates COLAs if a pension plan falls below a 90% funded ratio.

Prescott Daily Courier | Column: Pension reform needs a ‘yes’ vote on Prop 124

Prescott Daily Courier | Prop 124: Pension fix has broad support

Which state is top in new data centers? Texas

Do data centers represent a lot of jobs? No, they are low staff facilities

How are data centers lucrative tax bases? Millions of dollars of taxable property, even after tax abatements.

• Let’s Look: Tarrant County & Ft Worth’s economic devleopment deal with Facebook:
  • $$146.7 million in tax abatements for up to 20 year
  • Estimated tax revenue:  $228.5 million in additional property taxes

New York Times | Texas Lures Data Centers, Not for Jobs but for Revenue

Which paper ran an editorial about corporate welfare? Corpus Christi Caller Times

What economic development deal triggered this editorial? An economic development deal between the State of Texas and Chevron.

What did the Chevron economic development deal look like?

• Texas offers up $12 Million in economic incentives from the Texas Enterprise Fund
• Chevron promises to build a 50 story, $662 million building in Houston
• Chevron promises to create 1,752 high wage jobs

Was the office bulding built & the high wage jobs created? No, 1,500 were laid off from Chevron

Did Chevron face a clawback? No, the editorial says the building construction and high wage jobs wer enot included in the economic development contract.

Corpus Christi Caller Times | A Texas-style corporate welfare case

Konni Burton & Empower Texas applaud Chair Nelson & Lt. Gov. Patrick call for zero based budgeting.

Empower Texas | Texas Senate Leads on Fiscal Responsibility

• Evidence says private retirement planning via 401Ks aren’t working
• In 1991, West Virginia moved to 401Ks & 14 years later the retirement system was funded at 25%. The state repealed the move away from defined benefit contributions.
• In 2005, Alaska switched new employees to 401Ks due to budget woes of $5.7 billion. Today, the budget woes are steeper at $6.7 billion.
• San Antonio Fire & Police Pension is a prime example of a healthy pension that has kept San Antonio’s AAA bond rating in tact.

Houston Chronicle | Patterson: Retain defined benefits for Houston’s public employees

TPPF highlights these trends in Article I budgeting:

What divestment triggered a rethinking of the divestment? Tobacco divestment by CALPERS

When did CALPERS Divest from tobacco? 2001

Why the tobacco divestment? CALPERS has a social responsibility to not invest in cancer causing products

Why the change of heart? A study showed CALPERS left $3BILLION off the table by divesting

Governing | The Week in Public Finance: CalPERS’ Rethinks Tobacco Divestment, Fact-Checking Illinois’ Exodus and Income Recoveries

The LBB made these points to the Appropriations Committee about ERS 2016-2017 appropriations, House Bill 9, and cost of living adjustments? 

• ERS state contribution rate for 2016-2017 is 9.5% per year
• ERS state + agency contribution rate for 2016-2017 is 10%, the Constitutional maximum
• ERS member contribution rate for 2016-2017 is 9.5%
• In 2013, the state & member contribution rate to ERS was 6.5%

How were the changes to ERS made?

• Appropriations within HB 1 and HB 9

What statutory changes did HB 9 require?

• Increases ERS member contribution rate
• Lowers ERS membr contribution rates, if the state contributes less than 9.5%
• The increase ERS member contribution is offset, with salary increases in HB 1
• Eliminates 90 day waiting period for ERS Retirement

What were the goals fo the changes to ERS Retirement?

• Improve the infinite funding period to 32 years
• Improve the actuarial sound contribution rate to 19.57%

What’s improved in ERS so far?

• As of 8/31/2015, the funding period is 33 years
• As of 8/31/2015, the actuarial sound contribution rate is 19.62%

LBB | ERS Retirement Program April 2016

Which state Insurance Department can issue advisory opinions about what salaries count toward pensions? Illinois

What did the State Insurance Department Advisory Opinion do? Contradicting a 1998 opinion, the agency voted to prohibit the use of holiday or double time pay toward pensions for all new hired

How did the Fire Pension in Springfiled react? By continuing the practice, sparking the threat of lawsuit by the City

State Journal Register | City threatening legal action over firefighter pension issue

Which state is considering a 1cent increase in sales tax dedicated to public education? Oklahoma

Where did the sales tax for education idea orignate? A coalition of teachers, students, and education groups led by University of Oklahoma President David Boren 

What specifically will the sales tax increase cover? 70% will be dedicated to teacher salary increase of $5000. The tax  is estimated to increase education funding by $615 million a year. 

KFDA News 10 | Boren delivers signatures for education sales tax plan

• Boost spending on children in foster care
• Boost public education spending
• Boost spending on pensioners, such as health coverage for retired teachers

Speaker Straus Letter to Appropriations

Speaker Straus Statement on his letter to Appropriations

Trailblazers | Dallas Morning News | Texas House Speaker Joe Straus, others warn of tough task ahead for balancing state budget

Statesman | Texas House Speaker Joe Straus: Next budget a ‘significant challenge’

Houston Chronicle | Speaker Straus: Energy woes complicate state’s finances

Which Pension Board was ordered to pay attorney fees for an opposing party? Jacksonville Police and Fire Pension Board

What was the case about? Access to open records concerning a $320 dispute. 

• The Pension Baord claimed to see open records, a person had to hire someone to watch a person review records.

What were the attorney fees? $375,000

News4 Jacksonville | Florida Supreme Court orders pension board to pay legal fees

Which state was considering an option of a defined contribution bill? Florida

How far had the bill moved? It passed the Florida House on a margin of 2 to 1

What would the bill, Florida’s HB 7107 have done? 

• New employees could opt into the Florida Retirement System’s (FRS) defined-benefit pension program
• Or, new employees would be placed in the state’s defined-contribution program
• Current FL employees would continue to be “required to opt in to the defined-contribution program”

What did conservatives say to support the bill?  

• The “fair market valuation of Florida’s pension liabilities shows an alarming situation for the state’s hardworking taxpayers”—Jonathan Williams, vice president of the Center for State Fiscal Reform at the American Legislative Exchange Council (ALEC)
• Florida’s unfunded liabilities are “a staggering $183,400,221,000, with the pension system only 42% funded”
• defined-contribution plans are inherently pro-worker

Heartland | Florida Lawmakers Reject Public Pension Worker Choice Bill

What TIRZ  is involved? A TIRZ in Weatherford, TX

Which College Board of Trustees? Weatherford College Board of Trustees

What opposition arguments do the trustees make about the TIRZ?

• Its not the role of a college baord of trustees to engage in city planning
• No college funds for non-college purposes, like the TIRZ.
  • “…it’s not even in the realm of expectations”
• Creates new debt obligations that voters don’t get to vote to approve

Waetherford Democrat | College trustees divided over TIRZ

Which sate legislature is moving a new chemical production tax credit? Iowa

What is the tax credit for? Building production facilities that offer new uses for the co-products of biofuel production

Is the tax credit in existence in any other state? NO

What is the goal of the tax credit? To “attract inventors and manufacturers that will increase the value of the crops that we raise in Iowa”

Pilot Tribune (IA) | More important bills passed on Capitol Hill

Which state legislature  is negotiating a deal on home sharing taxes? California

Which tax options were rejected? a statewide system for collecting tourist taxes

What does SB 1102 require?

• ​Sharing company (AirBnB, HomeAway, et. al) would collect a local hotel tax
• Deals with local governments would not be preempted, allowing for local government opt out
• compliance would occur with the state controller
• retains privacy for property owners, who would not be disclosed to the state

The Recorder | Deal Taking Shape for Home-Sharing Taxes

The numbers from GM Financial Co. economic development deal to build in San Antonio:

• $3.23 million in public incentives
• $24.5 million service center to be built
• 700 jobs created in San Antonio
• 490 people will be employed when the center opens in about 1 year
• $49,794 average annual wage
•  $2.5 million grant from Texas Enterprise Fund
• $339,594 tax abatement over 6 years, at 50% tax abatement from San Antonio City Counci
• $406,148 tax abatement, a 90% tax abatement on real and personal property from Bexar County Commissioners

GM’s donations:

• $25,000 to My Brother’s Keeper in San Antonio, a program dedicated to keeping minority men in school
• $25,000 to Abbott in October

San Antonio Express News | Tax incentives draw GM Financial to San Antonio

Which legislative body is considering data security from the angle of improving existing computer infrastructure in government? Congress

What’s the cost associated with modernizing government computers? $ 3.1 Billion.

Bonjour procurement opportunities.

What’s the argument supporting infrastructure investment? “If we do not invest in our technology and cybersecurity now, we will have no one to blame for the next data breach but ourselves,” Rep. Ted Lieu (D-Calif.)

How will the funding operate? 

• The $3.1 billion will go into the Information Technology Modernization Fund
• Self-sustaining investment fund
• Allows for innovative & rapid upgrades to outdated & vulnerable IT systems
• Creates support for future federal technology infrastructure 

The Hill | House Dem stumps for Obama’s tech modernization push

What city plans to join Berkeley, CA by taxing soda? Philadelphia

How is Philadelphia’s strategy different than Berkeley?

• Berkeley made the issue only about health
• Philadelphia isn’t addressing health, but is focusing on funding education
  • Specifically: Universal pre-K & community schools
• Why is Philadelphia’s strategy different? Philadelphia has a 26% proverty rate, the nation’s highest
  • The argument the mayor touts is: Soda is Big Business that Targets Low Income Philadelphians

Texas Public Radio | Philly Wants To Tax Soda To Raise Money For Schools

State Debt by the numbers:

• Total Outstanding State Debt: $41.0 billion
• Top 3 Categories of State Debt:
  • Non-General Obligation Debt for Business and Economic Development
  • Non-General Obligation Debt for Education
  • General Obligation Debt for Business and Economic Development
• More than $30 Billion of the Bonds are Self- Supporting
• 1.38%  ratio of debt service on outstanding or issued debt  
• General Obligation Debt must pass each chamber by 2/3 vote and be approved by voters
• State Debt is 15.8% of all Texas government debt (state and local)

Local Debt by the numbers:

• Total Outstanding Local Debt: $212.4 billion
• Top 3 Categories originating Local Debt:
  • School Districts
  • Local Governments
  • Water Districts
• 62% of local debt is tax supported general obligation

LBB | Debt Summary 

LBB | Overview of State Debt

The State Auditor issued a report on the DSHS and TWC’s Use of Department of Information Resources Information Technology Staffing Services Contracts.

The Good News:

• DSHS and TWC documented their justifications for selecting specific contractors
• DSHS and TWC had adequate procedures to obtain and document approvals prior to contract award increases
• DSHS and TWC adequately monitored the contractors tested

The Need for Improvement: 

• Contractors need better disclosures of conflicts of interest- actual & POTENTIAL. The onus is on TWC and DSHS to take the steps to verify.
• Verify employment eligibility of contractors.  TWC and DSHS responsibility to ensure eligibility.
• DSHS did not perform background checks while TWC did. The SAO suggests DSHS do the same.
• DSHS nor TWC need documented procedures for obtaining and managing information technology staffing services

SAO | An Audit Report on Selected Agencies’ Use of Department of Information Resources Information Technology Staffing Services Contracts

In February, Governing Magazine crowned Georgia the state with the best procurement practices.

Let’s look at what Georgia did to improve its procurement practices. See what the procurement horizon looks like for Texas:

• Georgia increased training procurement officials, which allowed greater delegation of authority
• The more highly trained the procurement officer in an agency, the bigger the contracts that they can handle.
  • Well trained procurement officers oversee contracts up to $5 million 
• Statewide $25,000 no bid limit to increase flexiblity & speed of procurement
• 7 Stage Procurement Oversight Process created prior to 2011
• Hired more data and market analysts so procurement officers only handlded procurement 
• The “mathletes”, the data analysts, provided insight to regional trends so that procurement needs meets the state’s regional needs

Governing | Lessons From Georgia, the No. 1 Procurement State

Is illinois, like other sttes, look for a solution for pension reform? Yes

What group offered 5 Pension Reform Proposals?  Illinois Policy Institute (limited government and free market principles) 

What are the 5 pension reform solutions?

• No pensions for politicians
• 401Ks for new hires
• Optional 401Ks for existing pension participants
• Local pension costs should stay local. No state support for local pension systems.
• Allow cities to go bankrupt so as to restructure debt.

WSIL ABC 3 | 5 solutions to state’s pension crisis offered by Illinois Policy Institute

Which Texas billionaire’s foundation is putting $250,000 into reforming an Arizona pension? John Arnold’s Foundation

What is the AZ pension reform? Proposition 124

What position did the AZ fraternal order of police take?  Support reforms that lead to stability in the pension system. The impact of these reforms for existing pension contributors is to change benefit increases to cost of living adjustments based on inflation.

What was the bill package in Arizona? 

• SB1428, changes benefits for retired officers, active officers & future officers, hired on or after July 1, 2017. Must be approved by voters.
• SB1429, adds pension reform to the May 17, 2016, special election.
• HCR1019,  makes a one-time change to Article 29 of the Arizona Constitution.

AZ Proposition 124 for 2016

AZ Fraternal order of Police | Proposition 124 will ask voters to approve Pension Reform

AZ Chamber of Commerce | Pension Reform is Up to Us

Arizona Republic | Texas billionaire-backed group will donate to Arizona pension initiative

The latest pension divestment: fossil fuels.

Which pension plan is considering divestment from fossil fuel interests? Oakland, California Police and Fire Pension System.

The testimony from investment consultants? Such a divestment could reduce returns.

East Bay Express | Oakland Police and Fire Pension Considers Fossil Fuel Divestment 

• Billions can be reclaimed by not cutting retiree health care 
• How are the billions saved? By restructuring retiree health care and not prefunding retiree helath benefits. 
  • Translation: Stop treating retiree health benefits exactly like pensions are treated
• Revamping retiree health benefits save governments money, not pension fixes

The Manhattan Institute | The OPEB Off-Ramp: How to Phase Out State and Local Governments’ Retiree Health Care Costs

Governing | A Missing Opportunity to Fix Government Finances

What did Florida legislators do to the Governor’s Economic Devleopment Plan? Florida legislators rejected Govrnor Scott’s $250 million economic development plan

What did the legislators rely on to reject the economic development plan? Politics. Re-election fears of supporting “corporate welfare”

What is the anticpated economic hit from the legislator rejection of economic development funds? 50,000 jobs and 277 new businesses looking to move or expand in Florida

Tampa Tribune | Editorial: Legislators sabotage economic development 

State Coffers scored a victory, for the mean time. The case got kicked by to the Court of Appeals to deal with the other challenges raised to the tax.

Bonjour 2017 as small tobacco looks for a legislative fix.

Midland Reporter Telegram | Texas Supreme Court upholds $500M state tax on tobacco
Texas Tribune | Texas Supreme Court Upholds Tax on “Small Tobacco”

Previously on Informed Intel:

Which pension board is considering censuring a pension board member? Dallas Police/Fire Pension Fund 

Who is allegedly the target of the censure? Dallas Police/Fire Pension Fund board member Philip Kingston

Why is a censure being considered? Kingston allegedly spoken openly about pension fund liabilities. He’s said to be a lover of transperancy. His words were taken by other pension board members to cause potential harm to the fund and the potential sale of pension property.

What other weird comings and goings are happening in this caper?

• Counsel for the pension resigned after ti came to light he paid a private investigator to look into a councilmember

Dallas Observer | Police and Fire Pension Fund Should Be Ashamed of Going After Kingston

NFIB told Senate Finance that the franchise tax remains a thorn for small businesses because:

• the tax does not generate the projected revenue 
• small businesses think the tax is a failure and a repeal would lead to businesses investing tax dollars in their businesses and employees

82% of NFIB members call for a full repeal of the franchise tax.

NFIB | FRANCHISE TAX STILL A THORN IN SMALL BUSINESS SIDE IN TEXAS

States that deny fantasy sports operations: 5. AZ, IA, LA, MT, WA

States where fantasy sports is contested: 9. TX, GA, IL, HI, MS, NV, NY, SD, VT

States with legislation pending in 2016: 17. AL, CA, CT, FL, KY, MI, MN, MO, NE, NJ, NM, OK, PA, SC, TN, WV, WI

States with no current legislation: 13. AK, AR, CO, DE, ID, ME, NH, NC, ND, OH, OR, UT, WY

ESPN | Daily fantasy sports state-by-state tracker

Why adjust the gas tax?

• Gas tax has not been changed in 25 years
• Cars are more fuel efficient, so less gas is purchased and less revenue is collected
• Roads are more expensive to build than 25 years ago

Time Warner Cable News | State Leaders May Increase Fuel Tax to Improve Roads

San Antonio Express News Editorial, Revenue caps heavy-handed, bad for Texas,  gives us 5 reasons to oppose revenue caps.

Revenue Caps should be opposed because: 

• property taxes are driven by school districts, not counties and municipalities
  • In San Antonio, the average property tax bill is only 22% City of San Antonio 
• Lower property taxes can be achieved with improved state education funding
• City and County property tax levies have increased because of new residents, not by taxing the same static set of residents at a higher rates
• Revenue Caps limit city budget flexibility to plan for economic downturn
• Limiting the freedom of city’s to plan for economic downturns does not increase freedom for all

Which state Attorney General finalized fantasy sports rules? Massachusettes

What 3 elements do the rules target?

• who can play
• how the games are designed
• where companies can advertise

How does the Attorney General address who can play?

• Players must be 21
• Labels for “highly experienced” players if
• • 1,000 contests or
  • win three prizes of $1,000 or more will have to be clearly labeled as “highly experienced.” 
• Beginners will get their own games;
• Company insiders won’t be allowed to play against the general public
• Single screen names per person. 

Are software programs permitted to give players an edge? NO

Can games be designed on college sports? NO

Will there be gambling limitations?

• yes, a $1,000 cap unless the company determines the player meets certain criteria
• Can self limit amounts played

Boston Globe | Mass. finalizes new rules for fantasy sports games

Seattle Times | Massachusetts finalizes comprehensive fantasy sports rules

What loophole closed? the city allowed employees who transferred from the pension plan to a 401(k) style plan to get credit for the present-day value of future pension benefits, regardless of whether the employee had worked the five-year minimum needed to actually be eligible for securing a pension.

What city had this loophole? Jacksonville, FL

The new 401K transfer policy:  employees with less than five years of service move from the pension plan to a 401(k) style plan, the city will only transfer the amount of money the employees contributed from their paychecks.

Jacksonville Florida Times Union | Pension board enacts new policy to close costly loophole

To fill a state budget deficit, Connecticut is proposing a tax on profits to Yale’s endowment. 

Will this new CT legislative proposal apply to all university endowments? No, just those over $10 billion

What do policy makers point to for justification?

• the tax doesn’t apply if Yale, the 5th largest employer in the state, reinvests endowment profits into the local economy or higher education 
• the tax would expand education access and create jobs

WallStreet Journal | One New Fix for Connecticut’s Budget Crunch: Yale University

What’s the cause of Houston’s financial obligations?

• pension liabilities
• years of structural deficits
• spike in debt payments

What triggered the reaction? Moody’s downgradfing Houston’s credit rating on $3 billion in general debt, which will make borrowing more expensive and cost Houston taxpayers more

What solutions are identified?

• stable and growing economy
• removing the revenue cap
• fixing Houston’s pensions (with a special eye on the Houston Fire Department)

Houston Chronicle Editorial | Debt crisis

Draftking and FanDuel are leaving which state? By agreement with the New York Attorney General.

What’s happened in New York? The Attorney General issued an opinion that fantasy sports are illegal gambling. The two sides have been negotiating since.

Are they really leaving New York? They’re operating a free site until the New York Courts make a determination.

Is there any way the shut down will change? Yes, the Legislature is considering legislation to legalize fantasy sports.

Findlaw | DraftKings and FanDuel Pull up Stakes, Leave NY

Wall Street Journal | FanDuel, DraftKings Agree to Shut Down in New York

Which local government is considering more parking meter revenue to fund a stadium? Sacramento

What changes to parking meters are proposed? Meters operate until 10pm, instead of 6pm

Why the extension in time? to cover the fans who attend events at the new stadium

Was this included in the King’s arena deal with the City? Some say by default, as the city agreed to ccommitting to the collection of millions of dollars in new parking revenue

Sacramento Bee | City Council proposes parking meter extension to pay arena debt

How much revenue did the sales tax on recreational marijuana generate in Orgeon in its first month? $3.48 Million. 

Does the marijuana tax in Oregon include medical marijuana? No, medical marijuna is excluded.

Did the sales meet economic estimates to the legislature? The 1st month sales exceeded what economists told the Legislature would be annual sales. The Legislature estimated $2-3 million in annual sales tax revenue. 

what’s the sales tax rate? 25%

is it a statewide decriminalization and taxation? No. 19 counties and 80 cities that have opted out of recreational marijuana sales. Those counties that opt out fo not share the tax revenue

Oregon Live | Oregon collects $3.48 million in revenue from first month of taxed recreational marijuana sales

The Illinois Supreme Court rejected Chicago’s pension reforms that would have required increase contributions by the city and reduced benefits to retirees because the reform plan:

         the reforms violated the Illinois Constitution‘s protections against reducing promised pension benefits.

ABC 7 | ILLINOIS SUPREME COURT STRIKES DOWN CHICAGO PENSIONS PLAN

The rules of attraction are complex  & mysterious.  Its equally true for attracting economic economic development. 

Governing gives us 3 reasons why economic development should focus on what to attract & 3 reasons why economic devleopment should focus on who to attract. Let’s look:

3 reasons why economic development shoud focus on what to attract:

• Resurrects struggling locations or sectors
• Favorite option of local government officials, as it builds things like stadiums
• Incentive for voters to approve spending now, with debt passed to future residents

3 reasons why economic devleopment should focus on who to attract:

• Builds public education programs
• Incentivizes high wages to ecourage an influx of people
• Builds mobility infrastructure

Governing | Should Economic Development Focus on People or Places?

What does TPPF say supports local pension control?

• The Pension Review Board report offers data that shows the high pension liabilities for pensions over which the state can exercize control
  • Since 2015, pension debt has grown by $1.2Billion
• the people directly affected by the pensions are the ones who should have a say
• “Restoring local control is the surest way to bring some short-term sensibility back to Texas’ big city pension plans”
• Its a common sense solution

Quintero: Lack of local control to blame for pension woes? via Statesman

What state is changing contracts in pension systems? Kentucky

What reforms were implemented?

•  Require pension systems to use open, competitive bidding procedures when hiring investment managers
• Require Senate Confirmation of the Governor Appointees to Pension Boards & the Executive Director
• Elected Official Pension systems would be required to post online audits, investment returns and board meeting reports
• Require an accurate disclosure of the millions of dollars in fees they pay those managers
   

•  latest in a series of troubling fiscal incidents
• need reform [on local debt]
• booming economy hid city’s spending and pension problems

TPPF | TPPF Statement on Moody’s Downgrade of Houston

• Lack of transperancy in these revenue generating districts
• The lack of tranperancy is so rampant, there’s an FBI investigation into some districts
• Temporary Voters are permitted to approve millions in bond debt

Empower Texas | Special Districts Run Amok

What is this new found pension panacea? Prevent local government employees from using overtime & other extra compensation to boost  pension benefits

What do supporters say about this new pension fix?  It will lower pension costs and make future pension costs more predictable

Can you imagine a law enforcement pension system that would exclude overtime?

Mackinac Center | New Bill Fixes Pension Problem, Leaves Major Problem Untouched 

Michigan HB 5438

Farm Tourism is a thing. Its a thing that draws tourism dollars to rural areas. “Call it a battle of crop dusters vs. crudités,” according to the Sacramento Bee.

Texas is ripe for agri-tourism, so let’s look at the lessons to learn from the Golden State. The best offense is a good defense:

• Industrial Farms Proprietary Standards are Private.No one wants to see industrial farming & farmers don’t want to open up their industrial farms to tourists. It can harm their industry.
  • “It becomes agricultural Disneyland,” Rominger said. “You don’t have ag production left.”
•  Nuisance Laws. Farming is loud and messy which some in the bed and breakfast business might call a nuisance. Agri trourism could be like a listener of Brahms going to an Opeth concert.
  • “Somebody will say they smell a chemical. Somebody will say we woke ’em up on Sunday morning. It will be an untenable position.”
• County Regulators in the Cross Hairs. Agriculture interests will pressure local license grantors to stop allowing new agri-tourism businesses.

Sacramento Bee | Yolo County struggles to balance farm tourism with farming

The State: Alabama

The Tax Proposal: Make Netflix, Amazon & Itunes purchases a tangible, taxable item

The Grover Norquist Position: Alabama’s economy is sluggish. There are more than 20 new federal taxes. Kill this job killing tax increase.

Americans for Tax Reform | Alabama Lawmakers Push for Gas Tax Hike and Tax on Digital Goods

• Chairman Jim Murphy initiated Attorney General Rquest RQ-0101-KP
• What does he want the A.G. to review?
  • Local pensions codified in state statute
• What does he want to know about the local pensions?
  • What power does the state have over them?
  • What liability does the state have if local pensions are put at risk of default?
  • Does the state have to assume pension payments if the municipality fails to meet pension payments?
  • Clarify the “consequences of decisions made in regards to these municipal retirement systems.”
• What facts does Chair Murphy raise to bolster his request?
  • Rising pension costs
  • Rising healthlcare costs
  • Unpredictable local revenues
  • Aging local infrastructure
  • high local debt load
  • Increasing costs for the delivery of city services
  • Municipalities’ ability to balance budgets
  • Cities ability to maintain strong credit ratings 

Which state are talking about? Florida

Which city pension system was in “crisis”? Jacksonville

What did the Legislature do to “help” Jacksonville? 

• Limited Scope. carves out an exemption limited to Jacksonville
•  Exception to state actuarial standards. the exemption allows for Jacksonville to go “beyond the 30-year maximum period” statutory actuarial soundness requirement
• Permits Local Sales tax to fund local pension. allows local voters to decide if they want to “enact a half-cent sales tax dedicated to helping pay off the city’s roughly $2.7 billion in pension debt”
• Flexibility before 1/2 cent sales tax. Before any new sales tax revenue flows, the city can either:
  • borrow to pay pension costs
  • reduce the actuarial problem by allowing for an accounting mechanism that would allow the present value of the future sales tax increase to count on paper as a financial asset

Florida Times Union | Pension bill lets city exceed pension debt repayment limits, state agency says

As loyal subscribers know, Site Selection Magazine designated Texas the #1 state for economic development.

There are those who oppose economic development programs. Their key phrases are subsidies and corporate welfare, and here are their 3 topline arguments:

• If Texas cut back on corporate subsidies , Texas “could pay the tuition for every college applicant in the state each year, with $500 million left over”
• Texas steers billions from public services to subsidies
• Texas ranks low on household economic security, school spending, public health

Know your opponent, like you know yourself.

Texas Observer | Greg Abbott’s Business-Friendly Cup Overfloweth

Which state was first to regulate fantasy sports? Virginia with SB 646

What regulations did Virginia impose?

• daily and seasonlong fantasy sports
• covering football, basketball and baseball contests, & others
• Registration with the state with a $50,000 fee
• Conflict of Interest provisions to prevent the alleged collusion reported in the media
• Annual Audits

What are other sports? Anything that meets the definitional requirement that

“no winning outcome is based on the score, point spread, or any performance of any single actual team or combination of teams or solely on any single performance of an individual athlete or player in any single actual event. “

Rugby, Cricket, the world’s football AKA soccer….

Governing | Virginia Becomes First State to Regulate Fantasy Sports

• People should be free to earn what they want, when they want to earn it
• Bills directed at the worker status in the sharing economy unfairly target these contract workers over other industries that also utilize contract workers

What governmental bodies are moving this type of sharing economy legislation, that targets the worker bees?

• Seattle by ordinance
• California, pending AB 1727

The Recorder | Internet Association Takes Shot at Gig-Economy Bill

• Texas #12 ranking is for its combined average local and state sales tax of 8.17%
• #1 is Tennessee at 9.46%
• #46 is Alaska at 1.78% (including D.C.)
• The highest local sales tax rate is Louisiana at 5.01% local sales tax
• 4 states have no statewide sales tax: NH, DE, MT, and OR.

Tax Foundation | State and Local Sales Tax Rates in 2016

What’s going on in South Texas? In January 2016, Cameron County and South Padre Island had agreed to a TIRZ for the purpose of the South Padre Island Convention Centre.

The city’s plans changed and now the county is a NO on the TIRZ?  

• Yes, city manager informed the county that the convention center would not be expanded and the city wants to open “ecotourism campuses.
• The city still wants to pursue a TIRZ for the same $12.5 million TIRZ.

Brownsville Herald | County hesitant to proceed with Island TIRZ

• FanDuel settled with Attorney General Paxton and will stop taking bets from Texans on May 2nd, after the lucrative March madness
• Draft Kings sued Paxton in state district court in Dallas
• Draft Kings want the courts to answer whether fantasy sports are legal or illegal in Texas

Governing | One Fantasy Sports Site Strikes Deal With Texas While Another Sues

Comptroller Hegar issued a press release warning caution for capital appreciation bonds. Let’s find out why:

• Capital Appreication Bonds, CABs, are a financial tool that fast growth schools use, but have a high price  in the long term 
• Can be costly to taxpayers when the eventual lump sum payments come due for the school district
• The compounded interest of CABs make the funding option much more expensive and heavy use can result in lowering a district’s debt rating

Supporters of CABs say:

• CABs are necessary “because of the state’s limit on bond debt”

Fiscal Notes March 2016 | Capital Appreciation Bonds

Comptroller Press Relase March 8 2016 | Texas Comptroller: Approach Capital Appreciation Bonds With Caution

• Governor Abbott announced a new 3 agency workforce initiative today.
• The agencies: 
  • TEA Commissioner Morath
  • THECB Commissioner Paredes
  • TWC Commissioner Andres Alcantar
• 8 statewide meeting schedule:
  • Midland – March 10
  • San Antonio – April 26
  • Houston – April 29
  • Dallas – May 11
  • El Paso – May 20
  • McAllen – May 25
  • Tyler/Longview – June 2
  • Austin Workforce Summit  – September
• 6 goals: Report and Recommend to the Legislature on these issues:
  • Identify & advance public and higher education initiatives for affordable college 
  • Work with industry & local stakeholders to assess local workforce needs, innovative workforce development models, coordination with industry partners and promote post-secondary success. 
  • Include career and technical education and science, technology, engineering, and mathematics education models in their assessment
  • Evaluate current agency, state & local efforts for web-based education & career awareness systems to link students, parents, & educators to the broad array of high-demand jobs 
  • Identify gaps in services to Texas veterans to enhance their education and employment opportunities for seamless and accelerated transition into workforce.
  • Recommendations to build workforce skills, advance regional economic expansion, job creation, and the goals of 60x30TX.

Office of the Governor | Governor Abbott Establishes Tri-Agency Workforce Initiative

Who reached an agreement? Attorney General Paxton and Fan Duel

What has FanDuel agreed to do? Stop accepting wagers from Texas by May 2nd.

What occurs before May 2nd? March Madness. Any wagering during March Madness? Hello Profits.

What has Paxton agreed to do? Not take legal action against Fan Duel.

Trailblazers Dallas Morning News | FanDuel agrees to stop paid fantasy sports betting in Texas in settlement with AG Ken Paxton

Texas Attorney General Office | Texas Attorney General Paxton, FanDuel Announce Settlement; Daily Sports Site Will Cease Paid Operations in Texas in May

What state is considering a move that would allow newly formed cities to be assessed a tax to cover existing pension costs? Georgia

Who would pay this new pension funding tax? Any newly formed cities or newly annexed areas in DeKalb County 

How would the tax operate? It would vary by property location, depending how long the locagtion had not been contributing to county coffers in a manner that would cover county pension system

Georgia HB 711

Atlanta Journal Constitution | Residents of DeKalb cities may pay pension tax

What initiative was being considered about commercial property taxes in California?  A 1% surcharge on real estate with assessed values more than $3 million. It’s a 1% on the 1%.

What was the purported purpose for higher commercial property taxes? Estimated to generate estimated $7.7 billion to fund anti-poverty and children’s programs

Was it an organized effort? Yes. It named itself the Lifting Children and Families out of Poverty Act

Sacramento Bee | Plug pulled on California property tax measure

Which publication ranks Texas #1 in economic development? Site Selection magazine

What facts about economic development in Texas did Site Selection review?

• Texas had 702 economic development projects
• Houston is #2 & Dallas #3 in expanded site projects among the top 10 cities
• Houston 7 Dallas produced 485 projects or 70% of Texas economic development

What are the minimum project criteria for Site Selection’s analysis?

• a capital investment of at least $1 million
• creating at least 20 new jobs or adding  at least 20,000 square feet of new floor space

San Antonio Business Journal | See where Texas ranks in economic development game

What entities can participate in the Transparancy Star Award Program?  cities, counties and other local governments

What does the Transperancy Star Program honor? local governmental entities that “go the extra mile in opening their books to the public. “

How are stars awarded? Local governemntal entities can use the online application to apply for recognition in five important transparency areas

What is the Comptroller’s Office looking for to award stars? 

• user-friendly
• graphics
• visualizations
•  downloadable datasets

Transparency Stars website

•  The taxes generated will be earmarked for pre-K education
• The tax will generate $400 million over 5 years for pre-K
• Revenue will also go to community scools, pensions, and parks

What arguments are offered to oppose the new tax?

• the soda industry provides thousands of good-paying jobs in the city
• residents are already overburdened by taxes

• Texas total state fees and taxes on gasoline are 20.00 cents
• Texas neighboring states are similarly low on state gasoline tax rates
• High state gas tax states are:
  • #5 California 40.62 cents
  • #4 Hawaii 42.35 cents
  • #3 New York 42.64 cents
  • #2 Washington 44.50 cents
  • #1 Pennsylvania 50.40 cents

Tax Foundation | State Gasoline Tax Rates in 2016

Which state legislature passed a new tax on MCOs? California

What arguments were made in favor of increased taxes on MCOs? More than $1 billion in federal funds would be drawn down to reduce California state debt

What does the MCO tax entail?

• An offset to minimize hits to MCOs that could be passed down to consumers
  • offsets will be to gross premimum tax & corporate tax
• To appease Republicans:
  • more funds were promised for treating autism
  • more funds for treating developmental disabilities
  • funds to reduce debt owed by hospital based skilled nursing facilities

What did opponents say?

• its offensive to use autism and developmental disabilities are a lure for votes
• nothing in this bill will directly help Californians

Sacramento Bee | California Legislature approves bills on taxing health plans

Los Angeles TImes | Q&A Everything you need to know about the healthcare plans tax the Legislature just passed

California Legislative Analyst Office | Overview of MCO Tax 

Background:

• Last week, the U.S. Supreme Court declined to hear a dispute between the state of New Jersey & its police and fire pension systems. That leaves in tact the ruling by the NJ Supreme Court.
• Around 2010, the pension systems & NJ agreed to changes. Included in those changes were mandatory payments by the state into the pension.
  • The police & fire pension agreed to concessions in exchange for enforceable payments into their pensions by the state.
• The State of NJ didn’t make the required payments & the NJ Supreme Court Agreed. 

The Intel you need to know when negotiating pension reforms:

• An agreement to get a state or city to contribute is unenforceable
• Why would an agreement be unenforceable? courts can say “[it] illegally constrain the ability of future lawmakers and taxpayers to rework future debts”

Christian Science Monitor| Supreme Court denies bid to revive failed NJ pension fix

Which pension system had less than favorable real estate investments? The pensions for Chicago’s teachers, cops, city employees and transit workers

Was it just a bad real estate market? Not, so much. An investigative report revealed:

• At the heart was “a real estate venture created by President Barack Obama’s onetime boss and a nephew of former Mayor Richard M. Daley squandered $68 million”
• The 5 pension plans have lost money on the investment
• The goal was to invest in risky real estate deals, primarily in neglected neighborhoods
• The real estate investment company collected its $9 million of the pension money for management fees

Chicago Sun Times | THE WATCHDOGS: Pension funds lost millions on deals with Daley nephew, Obama pal

27 TIRZ boards raised more than $100 million

What are comparable City of Houston budget items? $100 million is roughly the city’s annual parks & library budgets combined

Houston Chronicle | City Hall update

What pension is claiming a shortfall is really just the use of updated actuarial tables? Detroit

What is Detroit’s new shortfall? isn’t Detroit in bankruptcy proceedings? Yes, hence the close scrutiny that revealed the $491 million pension deficit. 

When were the outmoded actuarial tables from? 2000

Did Detroit know of the outmoded actuarial tables? No, the consultants who reviewed the Detroit pension plan did not inform the public pension of the mortality data.

Crain’s Detroit Business | $491 million pension shortfall may be result of using outdated actuarial tables

FERC Chairman says this is the game changer…. Large battery energy storage.

What will FERC do in response to this new sector of the energy market? ease the transition for large batteries onto the nation’s power grid

What does this mean for costs on the energy storage market? “energy storage costs should decrease 50 percent over the next five years”

Bonjour, Tesla and the others. Loyal Readers will recall the huge economic development deal Nevada put together for Tesla’s new battery plant in Washoe County.

Fuel Fix | FERC chairman: Energy storage potential “game changer”

Which state is contemplating pension funding thresholds be constitutional? New Jersey

What would the pension constitutional amendment require? 

• That the Legislature make full pension payments
• That pension payments must be made quarterly

What are the arguments against constititional pension requirements?

• tie the hands of legislators
• legislators need flexibility for balancing the annual budget
• the pension problem is complex since pensions have not been fully funded in New Jersey since 1997
• we don’t know what crisis might exist year to year and requiring billions come off the top to fund pensions, could harm new Jersey during crisis
• Illinois did this 46 years ago and today Illinois has the worst pension crisis in the country
• It will lead to tax increases that will hit business, and hit small businesses the hardest

New Jersey Business | Keep Pension Funding Out of the Constitution

Texas Public Policy Foundation wants to add these 3 additional items to the ballot for bond measures: 

• How citizens tax bills will be affected
• How much the bond will cost in full (principal and interest)
• How fiscally responsible the local government asking for more debt has been up to this point, i.e. local debt service outstanding per capita

What argumrnts are they using to support their position?

• Debt is bad
• Debt keeps growing for local governemtns in Texas
• At the end of 2015, Local government debt in Texas was an alltime high of  $338 billion
• Texas is #2 in the nation, behind New York and ahead of California, for per capita local indebtedness

Forbes Opinion by TPPF  | The Texas Borrowing Binge: What’s Another $30 Billion In Local Debt?

• California is set to reduce its gas tax by 2.2 cents.
• How did California get here? To keep budgeter hands off California general revenue when paying off transportation bonds, Gov. Schwarzenegger and his Legislature “swapped the state’s sales tax on transportation fuel for an equivalent “gallonage tax.”’
• A 1-cent adjustment to the tax= $149.2 million hit to state revenue
  Sacramento Bee | AM Alert: California set to lower gas tax by 2.2 cents