- Associated Press - Tuesday, January 13, 2015

Longview News-Journal. Jan. 11, 2015.

Prepare now for likely effects of low oil prices

Anyone who’s been around Texas awhile understands that the price of oil rises and falls. That’s the norm with any commodity.

Oil isn’t just any commodity, of course. The prices of corn or wheat are important, but don’t begin to compare with how the U.S. economy lurches to and fro along with the price of oil.

But while Texans like to believe we’ve seen it all before, chances are we haven’t seen anything quite like the current swoon in the price of oil, and the likelihood is that the market isn’t going to be “straight” anytime soon.

A report by the Federal Reserve Bank of Dallas suggests oil prices will stay low through 2015 and that supply will continue to outstrip global demand.

One of the differences in this oil price drop and others is that it is driven in large part by production in the United States, particularly in Texas and the Eagle Ford shale, which accounts for a whopping 40 percent of all oil production in our state.

And, the Fed report says, though prices have been falling for six months, production has not slowed. In fact, more oil was produced per day this December than during the same month a year ago.

But at some point - we don’t know when and the Fed isn’t predicting, either - the supply is going to grow so large or the price is going to drop so low that companies will slow or stop production. When that happens the inescapable layoffs will follow, which are going to have an obvious effect on us in East Texas.

The situation could be alleviated to some degree if oil producers were given the ability to export crude oil, which has been largely banned since the first oil crisis in the 1970s. This is a controversial subject and any lifting of the ban must come with controls but it might help stabilize the market. We hope Congress gives it thoughtful consideration.

As the situation unfolds, our area should not just watch and wait. Much work already has been done to diversify our economy but energy is still its main driver, so we should make it a priority to further broaden the range of industries across our area.

We also should ready retraining programs for those who face layoffs from the oilfield. Longview-area unemployment has been low, so it will probably be possible for good workers to move from one field to another.

The Legislature also must be aware the oil-driven Texas miracle is sputtering. That means the state government that relies so heavily on taxing the oil industry will be working with less revenue for a few years. Given that transportation already is under-funded and with the reality they’ll have to find more money for education, lawmakers must realize now isn’t the time for politically motivated tax cuts.

There’s a bright side, even for state government. Every business and public entity buys gasoline and travel, both of which are less expensive because of depressed oil prices. Consumers will have more money to spend on goods because they’re paying less for fuel. In theory, this should help state and local sales tax collections. Other industries - including manufacturing and chemical production - also benefit from low oil prices.

Amid so much uncertainty in this situation, we are confident of this: The Texas economy of today is much different than the one that took us through the last major collapse in oil prices.

Today’s Texas economy is more diverse, with other sectors producing more new jobs in recent years than energy. The latest boom has increased our population and further broadened our industry base.

We hope Texas and its new economy are ready to pass this test.

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Austin American-Statesman. Jan. 9, 2015.

Vouchers don’t equate to better education, hurt school districts more

School choice proponents hope that the stars have aligned this coming legislative session to make way for a school voucher program in Texas. For the economic and educational future of this state, we hope they are wrong. Dismantling the public education system, even with its flaws, is not a recipe for a bright, economically competitive future for Texas.

The Texas Public Policy Foundation and the Texas Association of Business gave a taste of their education agendas last week with the release of their joint study, “The Texas Economy and School Choice.” The study suggests that adopting a universal voucher program - any student could use up to 60 percent of a state allotment to pay for private school tuition - would raise graduation rates, improve student performance and add $260 billion to $460 billion to the Texas economy.

Rather than rely on an educational expert to make the case, the two groups hired an economic investment research firm founded by economist Arthur Laffer, who is probably best known for being a leading proponent of supply-side economics from the Reagan era. The result is a study that cherry picks data from existing school choice programs around the country, including an experiment in Milwaukee, Wis., that the Laffer report uses to suggest Texas could cut its existing drop-out rate in half.

Hogwash. The evidence from educational research is far from clear that school choice programs improve student outcomes. While the state may save money initially by spending 40 percent less than it already spends under our current inadequate public school funding, there might be high costs down the road.

For example, Laffer refers to a study by the University of Colorado’s National Education Policy Center to suggest that students in the Milwaukee program are more likely to graduate, but he leaves out the fact that nearly 75 percent of students who start in the voucher program do not stay in the program until graduation. The Milwaukee studies do show improvement in student performance, but the authors also indicate that crediting vouchers was likely premature, since the state also implemented a high-stakes accountability policy for private schools at the same time.

Just those two caveats in the findings make suggesting a $260 billion windfall from a voucher program in Texas a risky venture at best, while ignoring the very real costs to our constitutionally required public education system.

The voucher debate in Texas is not new. Our newly elected lieutenant governor, Dan Patrick, has a history of pushing voucher-like programs as a state senator, and he has made clear that he would like to see such programs succeed in the future. Republican state Sen. Donna Campbell of New Braunfels has filed a bill for just such a program. (She filed a similar bill in 2013.)

Until now, reason has prevailed in the Legislature on the subject of taking money from underfunded public schools to be given to unregulated private and parochial schools.

Despite the rhetoric by TAB and others about designing the programs to help poor and minority students trapped in low-performing schools, any universal voucher program will more likely subsidize private school for those who can already afford it. Vouchers do not change the dynamics of student preparation, family transportation or the inherent lack of alternative choices in the state’s rural communities.

Private and parochial schools have the advantage of being able to choose who they accept and what types of students they are willing to serve. They do not have to serve students with language challenges or learning disabilities. They can dismiss students who do not follow their rules. And any private school development officer will tell you that the tuition they do charge families does not cover the cost of educating the students they do take.

Despite the suggestion that marketplace competition will cure public education, alternatives do not necessarily equate to better education for students, as the Texas experience with charter schools can attest.

The consequences of lost student headcount should not be underestimated, and state lawmakers should remember that a decision to opt out of the public system is as much a referendum on them as it is a vote of confidence in the school. Some parents opt out because of school performance, but some opt out because of state-related mandates like diminished arts and physical education classes and objections to state-mandated testing.

What economists like Laffer and groups like TAB fail to consider is the high cost of removing the community connection to its school district. The success of any district is directly dependent on the participation of middle-class families, and once they are no longer vested in neighborhood schools, the students who remain and the community at large pay the price.

A universal voucher program would decimate that connection, making investment and serving the students that remain difficult, if not impossible.

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Houston Chronicle. Jan. 8, 2015.

Age inappropriate: Texas must recognize 17-year-olds are teens, not adults deserving of prison time.

In Texas, you have to be 21 to apply for a concealed handgun, 18 to play the lottery and 18 to get a body piercing without a parent’s consent. Yet a nearly century-old Texas law treats a 17-year-old who shoplifts an iPhone as an adult criminal. He is held with adults in jail, tried in adult criminal court, sent to adult prison if incarcerated and issued a permanent adult criminal record. In 41 other states, such a youth would enter the juvenile justice system instead.

It’s not just a question of whether 17-year-olds know the difference between right and wrong. Many teens that age have achieved the basic intellectual abilities of adults. With parental consent, 17-year-olds can enlist in the U.S. military.

But according to behavioral research and brain science, the process of psychosocial maturation - in other words, development of the internal governor that compels us against engaging in risky behavior - is not complete until their adult years. Not only brain science but a slew of depressing statistics supports the common-sense notion that 17-year-olds merit different treatment than adults.

Juveniles are five times more likely to be assaulted in adult rather than in juvenile facilities, often in the first 48 hours of incarceration, according to U.S. District Judge Reginald Walton, Chairman of the National Prison Rape Elimination Commission. Youths under the age of 18 are 36 times more likely to commit suicide in adult institutions, says University of Texas professor Michele Deitch. Similarly, after their release, youths incarcerated in adult facilities are more likely to struggle to get a job or housing because of their adult criminal record.

The adult system does not offer the education, rehabilitative services or the strict probation rules that the juvenile system uses to hold younger teenagers accountable, reduce the likelihood that they will commit future crimes and help them turn their lives around. Interventions that incorporate substance-abuse treatment into community-based services and that emphasize school continuity may be particularly well suited to reduce recidivism among 17-year-olds, according to some experts.

Most of the crimes committed by 17-year-olds are nonviolent misdemeanors.

Everyone knows that prison is often a school for crime, where hardened criminals mold young people by their example. It is counterproductive and cruel to impose the lifelong collateral consequences of the adult criminal system on 17-year-olds who might respond to rehabilitation.

To remedy this inequity, the Legislature should expand the age of juvenile court jurisdiction to include 17-year-olds, except where special circumstances indicate adult-level supervision is required. Problems with implementation should not excuse inaction. Lawmakers can provide counties lacking juvenile facilities with the flexibility and funding to make alternative arrangements.

Seventeen-year-olds are not children. But they aren’t adults, either, and it’s time Texas stops treating them as such. We shouldn’t throw away the key on a life yet to be lived.

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The Dallas Morning News. Jan. 9, 2015.

More quakes and more questions

Is this North Texas or Southern California? It’s getting difficult to tell the difference.

Fourteen tremors rolled through our normally earthquake-free communities last week, shaking foundations from the epicenter in Irving to Lewisville, McKinney and Rowlett. It is unnerving and follows years of mostly ignored complaints from Azle residents in Tarrant County that tremors from oil and gas activity in the Barnett Shale damaged their homes.

Clearly, something is going on, and Gov. Greg Abbott owes it to residents to help determine whether these are purely natural phenomena or whether man-made factors are to blame. Oil and gas drilling is an important industry in Texas; however, if something related to those operations is affecting fault lines, we need to know.

The Texas Railroad Commission is compiling seismic data and SMU researchers are analyzing it, a process that could take years. Communities need answers sooner. Irving Mayor Beth Van Duyne and Dallas Mayor Mike Rawlings are considering a regional task force to investigate seismic activity. Leadership should come from the governor, too.

Science shows that disposal wells used to bury chemical-filled water from hydraulic fracturing operations are likely causes of tremors. Some states have enacted drilling moratoriums or increased monitoring based on such probable links.

That is where the plot thickens in North Texas. Although there are no disposal wells or active drilling sites in Dallas County, thousands operate a few miles away in Tarrant and Denton counties. Is it possible that years of drilling and disposal operations there are causing the quakes we felt last week? Or, as some speculate, did the implosion of Texas Stadium (in 2010) move seismic plates?

State officials had been slow to ask these questions. Not until Azle residents and legislators intensified pressure a year ago did the Railroad Commission hire a seismologist and pass rules that would allow the agency to shut down or deny an injection-well permit if it was determined to potentially cause earthquakes. Still, Craig Pearson, the Railroad Commission’s seismologist, insists the quakes last week are unrelated to oil and gas operations in the Barnett Shale.

The new Railroad Commission rules require drillers to review U.S. Geological Survey data in a 100-square-mile circle around a well site. In areas with histories of intense seismic activity, operators would probably have to submit more data.

As oil and gas companies set up drilling operations closer and closer to major metropolitan areas, tremors that used to roll beneath empty fields now roll beneath homes, businesses and high-rises. Property damage and insurance issues from increased seismic activity affect us all. If the oil and gas industry is causing earthquakes, it should be held accountable. It is time to unravel this mystery once and for all.

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Fort Worth Star-Telegram. Jan. 10, 2015.

Being ‘California-ized’ can’t be good

Local officials across Texas are doing a bad thing when they enact restrictions on what residents or businesses may do, soon-to-be Gov. Greg Abbott says.

He even has a name for it that conjures up notions of liberal elites run amok: Texas, he says, is being “California-ized.”

Well! We certainly don’t want that, do we?

The way Abbott puts it, it sounds like unless some higher power - like the governor and/or the Legislature - steps in and saves us, we’re headed down the road to ruin.

But wait. Save us from what? Ourselves?

At a conference in Austin sponsored by the free-market-oriented Texas Public Policy Foundation think tank, Abbott complained about “a patchwork quilt of bans and rules and regulations that are eroding the Texas model.”

He cited these examples of where officials in some cities are going wrong: restrictions on the use of plastic shopping bags, limits on tree-cutting by property owners and bans on fracking oil and gas wells.

Such local rules, he said, are “a form of collectivism.”

The “Texas model,” as frequently cited by Abbott’s predecessor, Gov. Rick Perry, refers to a low-tax, relatively regulation-free environment that encourages business expansion and job growth.

Plastic bag bans are awfully small potatoes to be dragged into such a high-stakes discussion. Voters have all the clout they need to replace any elected official they feel is on the wrong side of a bag ban.

Ordinances that restrict tree-cutting are a little more serious. Abbott seems to believe that a property owner ought to be able to cut down any tree they own.

But Flower Mound, for example, has a well-established tree ordinance dating back to 1993 and updated significantly in 2008. It’s there because the people of Flower Mound decided they want to preserve the town’s forested areas, not see them clear-cut for each new housing development.

Developers seem to have adapted well. Why is it wrong for a community to take control of its own destiny in this way?

But the most significant of Abbott’s examples is the fracking ban. Plastic bags and even the right to cut down trees are nowhere near as serious in Texas as interfering with oil and gas drilling.

He can only be talking about Denton, where residents approved such a ban in a November citywide vote. Activists, saying they were fed up with gas wells being drilled too close to their homes, got enough signatures on a petition to call an election.

Only hours after the polls closed, oil and gas interests and the state’s General Land Office filed suit to keep the ban from going into effect.

In fact, there are strong legal arguments in Texas that mineral rights owners have the right to drill for and sell those minerals. Denton voters knew that when they cast their ballots.

For now, the courtroom is the right place for the local fracking ban fight. No need for Abbott to save the day.

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