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The Senate Committee on State Affairs met on December 8 to hear invited testimony on interim charges. An archive video of the hearing can be found here. This report covers discussion and testimony on the following interim charge:

“Study how governmental entities use public funds for political lobbying purposes. Examine what types of governmental entities use public funds for lobbying purposes. Make recommendations to protect taxpayers from paying for lobbyists who may not represent the taxpayers’ interests.”

The HillCo report below is a summary of remarks intended to give you an overview and highlight of the discussions on the various topics discussed. This report is not a verbatim transcript; it is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Opening Comments

  • Chair Bryan Hughes – Invited testimony only, encourages public to submit testimony in writing which will be passed along to the committee members

 

Study how governmental entities use public funds for political lobbying purposes. Examine what types of governmental entities use public funds for lobbying purposes. Make recommendations to protect taxpayers from paying for lobbyists who may not represent the taxpayers’ interests.

  • Chair Hughes – This has to do with public agencies using funds such as dues and fees to hire lobbyists
  • Chair Hughes – Every individual has the right to speak through the First Amendment, but we’re talking about entities using tax funds
  • Chair Hughes – SB 29 was passed out of the Senate banning taxpayer-funded lobbying but did not pass the House, SB 65 relating to transparency was passed
  • Sen. Bob Hall – This issue has gotten a lot of public support, planning to file a bill on this issue this session, Rep. Middleton is assisting
  • Sen. Eddie Lucio – Might have to play devil’s advocate on this issue, especially how it may impact taxpayers affecting the use of their taxes at a local level, but agrees that lobby groups may not be doing their best to represent communities; should be brought to the attention of local entities

 

James Quintero, Texas Public Policy Foundation

  • Believes this is one of the most consequential issues the next legislature takes up, has ramifications for almost every other issue
  • This primarily occurs in 3 ways: outside lobbyists contracts, in-house lobbyist teams, and membership organizations collecting annual or monthly fees
  • Cities and counties spent significantly to lobby the state legislature last session, transparency legislation last session gives us an idea of these activities; local governments continue to spend significantly on outside lobbyists
  • Presents list of 10 cities that spent the most: Houston spent the most during FY20-21 @1.3 million, Austin spent second @almost 1.3 million; San Antonio, Lubbock, Arlington, Grand Prairie each spent over $100k; top 10 cities spent roughly $5 million combined
  • Dallas is currently trying to determine amount to spend on lobbying, debating item to spend $200k this session
  • In-house lobbying is equally expensive for taxpayers, in Austin the intergovernmental relations department will spend >$800k this session, this amount is growing
  • Measures advocated for by the IGR team include: oppose city spending limit, support legislation allowing city to raise revenue, oppose lobbying ban; these do not benefit taxpayers
  • Membership organizations include things like Texas Municipal League, Texas Association of Counties, Texas Association of School Boards; from 2010-2020 Austin spent almost $400k in dues to TML
  • All are familiar with the property tax bill last session, local officials and lobbyists testified against the bill
  • Recommendations include: ban local governments from contracting with outside lobbyists, prohibit hiring anyone whose primary role is advocacy, and stop public funds from going to organizations who represent local governments
  • Sen. Lucio – What percent of the municipal budget do these amounts represent? Do they represent session-only costs or is it an annual cost?
    • Differs between cities and entities
  • Sen. Lucio – Let’s take Houston for example
    • I don’t have Houston’s GR budget, expense is probably a fraction of a percent, overall budget is probably several billion dollars
  • Sen. Lucio – Should have a complete breakdown of every entity; would also like to see what kind of work they’re doing to earn this money
  • Sen. Lucio – Many of the people who work for these communities also go to agency hearings, work with other communities, etc., not just legislative or session work
  • Sen. Lucio – Many communities around the state want to leave this as it is
    • Chair Hughes – Part of the information, Houston’s budget is a little over $5 billion
  • Sen. Lucio – Texas is a large state so the total may be large, but want to know individually if this money is being well spent; many are hired just like other employees to do certain jobs
  • Sen. Hall – Most things the percentage of money being used is important, but with this it is more about damage being done to citizens working against legislation we’re trying to pass; this money could go to other issues
  • Sen. Lucio – Well taken, damage is something I’m very interested in seeing, not seeing anything in front of me right now that tells me that damage is going on; would like to see this in writing from those that feel that way from those elected to represent communities
  • Sen. Lucio – No one is forcing these communities to hire individuals, these are decisions made by the communities
  • Sen. Brian Birdwell – Are in-house lobbying and intergovernmental relations two separate definitions in your mind?
    • No, these are the same in my mind
  • Sen. Birdwell – You mentioned geopolitical subdivisions, would you consider IGR personal at state agencies to be lobbying?
    • I’m focused only on the local government component
  • Sen. Birdwell – You’re right to do so, but I have a concern; if we’re telling cities and counties they can’t do this, I question the clarity of our status as a state entity, whether it’s with IGR folks in state agencies or the Texas Office of State and Federal Relations
  • Sen. Birdwell – Want to think through what impact we’re having on locals that we’ve exempted ourselves from
  • Sen. Bridwell – Is there a bifurcation of acting on behalf of a governmental entity that is not detrimental to taxpayers? River authorities could be in a slightly different situation, almost as if we’ve defined this as all or nothing, is this an urban versus rural battle?
    • There should be a distinction made between education and advocacy; member education is appropriate, but I take issue with contracted lobbyists or in-house lobbyists advocating against taxpayer interest
    • Lobby mounted against the taxpayer on SB 2 is an example
  • Sen. Birdwell – Also about member organizations, I certainly have my issues with TAC and TML, but the way I understood your comments is that TML and TAC would not be allowed to testify on behalf of cities and counties, is this correct?
    • I think it is appropriate to testify on, but I think it’s an issue when they testify for or against
  • Sen. Bridwell – But we’re not going to treat TML and TAC as lesser organizations than we would TSRA or TPPF
    • I would be happy if TML was treated on equal footing as TPPF, we’re a private org that operates at our own expense
  • Sen. Bridwell – Is there a definition of what’s against the taxpayer?
    • I would be happy to work through TML’s legislative agenda and specify which items I believe are against taxpayer interest
  • Sen. Bridwell – Is there a way to categorize those
    • I believe we can come up with something
  • Sen. Bridwell – Have had conversations with city personnel, Houston can outspend many other communities, so in some ways this is our largest counties versus everyone else; supported Sen. Hall’s bill, but want to be precise, especially regarding our own federal relations office
  • Sen. Lucio – Who develops the priorities for cities? Don’t cities memorialize priorities through resolution? Cites McAllen’s expense of $5k/$60k/year for IGR contracts, when it would cost much more to hire a full-time employee to cover the same services
    • Sen. Lucio – I too have seen lobbyists over the last 40 years that I wouldn’t have hired if I were a city or county commissioner, but this is up to them to decide and those that vote to do so
  • Sen. Brandon Creighton – This is the next chapter of many sessions on the charges before us; regarding damages, the impact I’ve seen is regarding homeowner appraisals
    • Sen. Creighton – Took us a long time to get to SB 2, years of work in the House and Senate on appraisal reform preceded this
    • Sen. Creighton – Still had former chief appraisers at those SB 2 hearing hired by local governments to advocate against SB 2; appraisal cap bill was fought repeatedly in the past, there was a lot of damage or negative impact against homeowners
  • Sen Lucio – Would like to add that legislation is successful on its own merit, question is whether it was lobbyists or the political will of the legislature; I’m hearing that certain subjects should be taken off the table

 

Tom Forbes, Professional Advocacy Association of Texas

  • Governmental entities are complex and have a lot of dealings with other governmental bodies, especially the state government
  • Local bodies are often elected, have the authority to hire experts to assist them
  • Also ought to be able to hire experts in state government if the need arises
  • The best way to inform the public about what goes on in the government is a rigorous system of registration and records
  • If the legislature works to prohibit this activity, it wouldn’t go away, it would just go underground; having the activity be visible is beneficial
  • Local governments are controlled by their constituents through voting; if these entities are not representing taxpayers and taxpayer interest, constituents replace them

 

Chris Hill, Collin County Judge

  • Foundational to the USA that individuals may speak freely individually or collectively, collective organizations can choose someone to speak on behalf of the group; this is “lobbying,” government should be careful to protect this practice
  • Flaw in taxpayer-funded lobbying is that it uses time, resources, etc. of the individual by force to support positions that may be counter to his interests; inevitably taxpayers are forced to support positions they oppose
  • Does not matter if government officials believe they are acting nobly
  • Argument that taxpayer funded lobbying will happen regardless of it is prohibited is an empty argument
  • Sen. Pat Fallon – Nobody’s saying you can’t lobby or advocate, only saying you can’t use taxpayer funds to do it
  • Sen. Hall – This is the heart of the matter, not a matter of how much is being spent or what is done with it, it is just wrong; citizens acting individually or collectively are doing it with their money and time, local governments are using public funds

 

Ron Jenson, Mayor of Grand Prairie

  • Grand Prairie has hired professionals for a variety of issues, lobbyist advocate and keep the city abreast of fast and frequent changes of state and federal policy
  • These types of measures do not protect taxpayers, but allow large organizations to be heard over local voices
  • Taxpayers of Grand Prairie communicate with us daily, it is the duty of local governments to protect the citizens of the community and if this is not done, they let us know
  • If this proposal is to prohibit membership in organizations, using lobbyist professionals, etc. this is detrimental to Grand Prairie
  • This issue can cause a wedge between local governments and the state government
  • Sen. Lucio – Happy to work with you and anyone you choose to hire to represent your community; what do you spend on these activities?
    • Pay IGR personnel $105k/year, not sure how much of this is policy education or
  • Sen. Lucio – I expect you wouldn’t hire them if they didn’t perform?
    • Have a great relationship with them, have had great lobbyists, need someone checking bills and guiding us through the process
  • Sen. Lucio – You set priorities, vote on these through council meetings, correct?
    • Yes, set agendas, approve these through council meetings which are open to the public
  • Sen. Birdwell – Because of the nature of the metroplex, you’re uniquely situated very large city split between Dallas and Tarrant Counties, what challenges does this bring coordinating between jurisdictions?
    • Used to think this wasn’t difficult until COVID, keeping track of what different rules we need to follow has been difficult
    • Even as a member of the RTC, have to look in two directions for votes, many different jurisdictions in terms of water districts, ETJs, etc.; complicated situation
  • Sen. Hall – You’ve spoken a lot about things that fall outside what the bill would do; I know you get information and training that helps you do your job, none of which would be prohibited by the bill, bill focuses on the lobbying and influencing part
    • Appreciate the clarification, still difficult to wrap my head around, e.g. if I felt like it was in my community’s interest to come speak for or against something, but the legislature disagreed, this is confusing
  • Sen. Hall – Wouldn’t prohibit you from coming down, making a phone call, direct communication, etc.; part of the idea is to encourage more communication from elected officials; unsure who lobbyists are speaking for and what their agenda might be

 

J.R. Johnson, Texas Ethics Commission

  • Resource witness
  • Sen. Birdwell – How would the Office of State and Federal Relationships be classified and how would state IGR personnel be impacted?
    • Laws exist on the books to prohibit agencies and the state government from spending state funds to lobby at the state level
    • Bill proposals would not affect any governmental entity from lobbying the federal government
  • Sen. Birdwell – Would the federal lobbying only be applicable to the state office or to geopolitical subdivisions that interact with the federal government?
    • My understanding is that this would not cover this issue, drafts deal specifically with prohibiting lobbyists who register under the state lobbying law
    • An amendment was offered last session hat would have extended it to federal lobbying, but haven’t seen that this session yet
  • Sen. Birdwell – Supported bill last session, l support the direction this session, but want to make sure lanes are clearly defined
  • Sen. Hall – State governments are the core, states formed the federal government, our job is to make sure to protect people from local and federal governments
  • Sen. Birdwell – States were the nucleus of how we govern ourselves, but my concern is that we may be doing this activity that we’re asking local governments not to do through different offices