Cities and Local Government Issues
The HillCo team has identified three areas in which cities may find themselves particularly vulnerable this session.
- In regards to the shortfall mentioned above, lawmakers may debate which obligations cities could pick up which could be in the form of unfunded mandates or lawmakers could pass legislation which would require cities to generate revenue for the state.
- The results of the last election seem to indicate there could be further scrutiny of eminent domain, annexation, zoning and rezoning, subdivision regulations and permitting.
- Lawmakers may revisit revenue caps and appraisals. Several appraisals cap bills have been filed. Revenue caps, in contrast, would place a limit on how much total property tax revenue can grow without voter approval.
Health Care Issues
Health care reform, the budget, and health care operations will be the driving force behind any legislation that moves forward this session.
Education Issues
Although some legislators have promised a bill to overhaul school finance, budget cutting issues will take the spotlight this session. Additionally, accountability issues will dominate much of the Legislature’s policy discussion.
Environment Issues
The structure of the Railroad Commission, which oversees the oil and gas industry in Texas will demand significant attention. The Sunset review of other energy and water agencies will also be closely watched, namely: The Texas Commission on Environmental Quality (TCEQ), the Public Utility Commission (PUC) and the Texas Water Development Board (TWDB).
Texas lawmakers may also get involved in the discussions between the state and the Environmental Protection Agency (EPA).
Transportation Issues
The recent publication of the TxDOT Restructure Council Report calls for changes at the Texas Department of Transportation (TxDOT), including changes in leadership and the Sunset re-review of TxDOT which could both be reports lawmakers may utilize for authoring legislation. TxDOT’s dwindling funds will mean some mechanism for increasing funding into transportation could be developed this session. Reauthorization of Comprehensive Development Agreements (CDA)/Public Private Partnerships (PPP) will also be a focus.
Pensions
Media reports are filled with stories of other states and local governments making difficult choices for their public pension plans and health care benefits. There is no question that the 2008 economic downturn had an impact on all trust funds around the country – public and private. But headlines may neglect to point out that the condition of Texas statewide and local public pension funds and health benefits is much better than most in the nation. The overall structure of Texas’ public pension systems and health care benefits which includes employee participation, one that is governed by local control of investment decisions and benefit levels, has helped Texas fare better than most states in the nation during the economic downturn.
Texas has illustrated further fiscal responsibility; facing a fiscal 2011 shortfall for state employee health benefits, which are administered by the Employees Retirement System (ERS) of Texas, the ERS board in May shifted $143 million in costs to state employees and their dependents, such as increasing copays for drugs and doctor visits. ERS projects that to maintain the level of benefits provided by the state employee group health benefits program in fiscal 2011 and to replenish a statutorily required reserve fund, the program will require an additional $887 million from all funding sources for fiscal 2012-13.
It should also be noted that the Pension Review Board and its actuarial committee will continue to meet as they work on recommendations for actuarial soundness to put Texas in the forefront of fiscal responsibility for public pension plans and health care benefits.
