- Associated Press - Tuesday, August 26, 2014

Corpus Christi Caller-Times. Aug. 13, 2014.

Plenty for Texas to brag about, but there are limits

Texas Comptroller Chief Revenue Estimator John Heleman made some eye-opening observations recently about the booming Texas economy and its effect on taxation.

The state continues to be a job-creation leader, making a 3.3 percent gain from June of last year to June of this year, compared with the national gain of 1.8 percent. Heleman noted that Texas, if it were its own country, would be the world’s 12th largest economy, right between Canada and Australia.

Imagining Texas as its own republic is popular historically - it used to be one. But talk of Texas as its own ‘nother country has become more prevalent in recent years. Our state leaders take a cocky tone with the powerful political enemies they’ve made in Washington, partly because there’s economic backup for their cockiness.

They credit the Texas Miracle to their low-tax, low-regulation policies and call attention to the contrast with the federal government’s approach. The job growth engine continues to be natural resource-based. We have oil. Not everybody does, and therefore it isn’t the solution to all things in all states.

But there’s something to be said for Texas’ approach in developing its resources. New ways of getting the oil required intellect, ingenuity and the aforesaid low-regulation attitude toward using those new ways. There’s every reason to expect the Miracle to continue.

This kind of success in this low-tax state leads inevitably to talk of lowering Texas’ low taxes even further. A state law passed last year requires a cut in the business franchise tax next year if revenue is sufficient - and Heleman says it’ll be sufficient.

The problem with this law and with the attitude that inspired it - that we should cut taxes as soon as we start getting ahead - is that it ignores growth’s growing pains. Texas has plenty of those.

Its roads are being ground up by oil boom traffic - so badly that the state at one point last year decided to grind 80 miles of paved road into gravel, but later backed off.

Bad roads aren’t the only growing pains. Prosperity has lured new residents in large numbers - residents in need of social services, whose children are in need of schooling. Higher education in Texas is becoming increasingly expensive - to students through rapid tuition inflation, and to local property owners through tax increases by community college districts.

On the subject of schools and property taxes, Heleman said something we found particularly alarming: Local schools would receive an increase in local revenue, he said, because of increasing home prices.

See the problem here - and how ingrained it has become? There seems to be zero hesitance to lower the business franchise tax - and zero concern about rising local property taxes.

Not only that, but why is it assumed automatically that higher property valuations will mean higher revenue? What ought to be assumed instead is that local governments and school districts will lower their tax rates sufficiently to offset the rise in valuations and that they’ll get their revenue growth from actual economic growth - new houses, new storefronts, taxable properties that didn’t exist the previous year.

Local taxpayers need to show their state and local elected officials what a low-tax state really means - because clearly they have the wrong concept of one. Rather than disputing property valuations with their appraisal districts, local taxpayers should exercise their tax-mutinous urges at their school board, city council and county commissioners court meetings. They should save plenty of righteous indignation for their elected state officials and demand that rollbacks in business franchise taxes wait until the bill for maintaining a first-rate state is paid in full.

Texas can’t call itself low-tax as long as its state government lets the tax burden roll downhill to property owners at the local level.

And here’s another dose of reality: Texas leaders rant at the federal government while enjoying its protection. It ranks 12th among world economies partly because it doesn’t have to maintain its own military. With that kind of head start, where might Canada and Australia rank?


The Dallas Morning News. Aug. 19, 2014.

The dark side of Texas’ editorial miracle

Every day, Texans celebrate the fruits of light government regulation: Housing is cheaper here, the economy is healthy, and jobs are available.

The construction crane easily could be declared the state bird.

But our economic miracle has a troubling byproduct: Texas leads the nation in worker fatalities, according to a recent Dallas Morning News analysis of federal data. The special report by James Gordon reveals that over the last decade, 579 more deaths happened on the job than statistically should have occurred in a state the size of Texas. This embarrassing statistic cries out for Austin to fix the problem now.

Anywhere in the nation, a construction job is much more dangerous than a white-collar office job. In Texas, however, a construction job is 22 percent deadlier than the national average - even when the size of the state is taken into account. Overall, a worker in any occupation here is 12 percent more likely to be killed on the job than if they were doing that job in another state. Even populous states like California, Illinois and New York posted better overall safety records.

If you think this isn’t your problem, think again. Injured workers end up in hospital emergency rooms for treatment on the taxpayer dime or out of work with no place to turn for the medical treatment that would allow them to return to work. Guess who picks up the costs? You do, either in public assistance or in the loss of millions of dollars in unpaid payroll taxes skirted by companies intentionally misclassifying workers.

Some companies willfully game the system, listing workers, often unauthorized immigrants, as independent contractors. This paperwork trick shifts financial and other burdens from the companies to workers and, ultimately, to taxpayers. Workers become responsible for their own safety equipment and training, while firms can skirt paying minimum hourly wages, overtime, certain taxes, benefits and even compensation for on-the-job injuries. There’s a macabre joke among construction workers that if they slip from a roof, they’ll be out of a job before they hit the pavement.

A state law passed last session allows companies to be fined $200 for each misclassified worker at publicly funded worksites. Only one fine has been issued under the law. Separately, an interim legislative committee is reviewing the problem of improperly classified workers. Experts estimate 41 percent of companies probably improperly classify workers. Outrageous. Companies that play by the rules - and taxpayers - should be incensed.

Also, Texas is the only state that doesn’t require private companies to carry workers’ compensation insurance or the equivalent. Making workers’ compensation coverage mandatory, especially for hazardous industries such as construction, merits serious discussion.

Texas’ economic miracle is to be admired and enjoyed, but not on the backs of injured workers.


Fort Worth Star-Telegram. Aug. 25, 2014.

Accountability, like math, is complicated

Some of the pressure to understand math has been lifted from Texas public school fifth- and eighth-graders this year.

They’ll still be accountable to instructors for passing classroom tests, but they don’t have to worry about passing State of Texas Assessment of Academic Readiness math tests.

For this year only, Education Commissioner Michael Williams said last week, students can move on to the sixth or ninth grade without passing the statewide math exams.

That might bring a sigh of relief from many students, but it’s another layer of confusion for anyone who wants to understand the twists and turns of the state’s public school accountability system.

For years, that system was based on gradually increased rigor. Exams were a little tougher and passing scores were a little higher each year, with students and schools expected to take it in stride.

Most of them did. The state periodically upgraded its tests to stay ahead.

Business leaders were pleased. They’ve pressed for rigorous standards to ensure a better-educated workforce.

In last week’s announcement, Williams said relaxing standards this year is necessary because educators face “substantial challenges” in adapting to a new statewide math curriculum in grades three through eight.

The Student Success Initiative, adopted in 1999 and modified in 2009, aimed to deter social promotion. It said fifth- and eighth-graders could not move to the next grade without passing the math tests.

Business leaders were not pleased about backing away from that.

“The standard needed to pass these tests is already very low and the commissioner has just lowered that passing standard to zero,” said Bill Hammond, CEO of the Texas Association of Business. “This is another example of going back on high standards, even if it is just for this school year.”

Some other people have not been pleased with the Student Success Initiative promotion requirements. They point out that statewide tests are meant to be a tool to hold schools and educators accountable for educating students, not for punishing students who do not pass.

Pushback against the increasingly rigorous testing regime was particularly strong during the Legislature’s 2013 session.

It focused primarily on high school end-of-course exams required for graduation. Lawmakers listened and reduced the number of required exams from 15 to five.

At the same time, they made sweeping changes in graduation plans and the way accountability system results are reported.

Pardon the poor parents who might be a little confused about what to expect next.


San Antonio Express-News. Aug. 21, 2014.

Respect for migrants even in death

There shouldn’t have to be a law that people can’t be buried in trash bags.

And in Texas, there apparently isn’t. The state prides itself on its light touch on regulations. The result here is one more black eye for the state on how migrants are treated.

The remains in question are thought to belong to migrants who died attempting to enter the country illegally through Brooks County, a heavily used smuggling route.

As the Houston Chronicle reported last week, these types of remains have long been found on rugged Brooks County land. The county has relied on one funeral home, Funeraria del Angel Howard-Williams, to bury the bodies.

Researchers - trying to discern the identities of migrants who died from dehydration and exposure on the way here - exhumed the bodies at one county-owned cemetery. They found bodies in trash bags and bones of individual migrants jumbled with the bones of other migrants.

And no laws have been broken, according to an investigation by Lt. Corey Lain of the Texas Rangers. That’s because there is no such law.

There shouldn’t have to be, but since some can’t operate on common sense, the state should enact one. It should prohibit a funeral home and the county that pays it from burying people in trash bags. Another needed law should, where possible, allow for individual burials rather than bones thrown together.

“Where possible” is the operative term. Lain explained that, owing to various factors, bones are often mixed when found on rugged, wild land.

But Lain also discovered that there is no strict definition of “container” - of the kind bodies are supposed to be buried in. Technically, a trash bag qualifies.

That’s just wrong. And disrespectful.

We understand. Brooks County is financially strapped and yet is tasked with taking care of these bodies. Funeral home employees sometimes took it on themselves to put bodies in proper containers. And space at the cemetery is limited.

And still … bodies in trash bags? No matter how one feels about immigration, migrants should not be treated as trash.

State Rep. Terry Canales, D-Edinburg, said this report isn’t the end of the matter.

Right; it shouldn’t be. There ought to be a law.


Longview News-Journal. Aug. 17, 2014.

East Texas Oil Field sale a passing of baton from past to future

Some recent big news from East Texas did not make big waves in the financial world. One of the bigger splashes there in the past few weeks has been that a single share of stock in Berkshire Hathaway Inc. - the multinational conglomerate headed by Warren Buffett - now goes for more than $200,000.

But it should never be forgotten that today’s industrialists and wealthy paper traders merely stand on the shoulders of the pioneers who came before them.

So we should all sit up and take notice at news that Hunt Oil Co., the company founded by H.L. Hunt, is selling off its stake in the East Texas Oil Field to Vanguard Natural Resources. In a deal expected to close this fall, Vanguard will pay $278 million for 23,000 acres of oil and gas properties in the region. It includes the historic Daisy Bradford No. 3, the Rusk County well that opened the field.

This truly is the passing of an era.

If the story of the East Texas Oil Field had been written as fiction, literary critics would have laughed it off as being nothing more than a fairy tale, far too outlandish to be believable.

The cast of characters does seem like something from fiction: An independent oilman who sold the same stock certificates to multiple people and ran from the law, a geologist who relied on his innate knowledge of the earth and claimed to know more than any professional geologist, and a young man from Illinois who came to Texas seeking fortune and doing just about every odd job along the way including driving mules, gambling and working as a farmhand.

These three men - and a host of others - came together in the early 1930s to bring in the East Texas Oil Field that eventually came to be largely owned by Haroldson Lafayette Hunt, the colorful character from Illinois who shortened his name to “H.L.”

From those days just after the Great Depression hit until now, the field has become the most productive in history, putting forth more than 5 billion barrels of oil - so far.

That’s important because the 140,000-acre field, where more than 31,000 productive wells have been drilled, is still going strong and still, after more than 80 years, the major driver of the economy in this part of our nation. That isn’t about to end, either.

And all of it came from those who had a dream and were willing to work for it, get dirty for it, gamble everything they had for it. They didn’t just trade paper, they made history that changed the world.

Ray L. Hunt, H.L.’s son and chairman of Hunt Oil, said the company was proud of its East Texas heritage.

“While the production and leases of the East Texas fields were the foundation of Hunt Oil Co., even more important is the fact that the men and women who made Hunt Oil Co. what it is today came from East Texas,” he said earlier this month.

We know the corporate officers of Vanguard Natural Resources have an appreciation for this rich history but it gives us a sense of nostalgia to think of this passing of the baton from past to future. It should remind all of us in East Texas what can be accomplished with fortitude and vision.

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