recoveryfortexas.org

It Ain't Over Till It's Over: The Texas Legislature and the American Reinvestment and Recovery Act

For immediate release: March 22, 2011

For more information contact Bee Moorhead, 512-636-3136 or bee@texasimpact.org

available online at http://www.txstimulus.com

“It Ain’t Over Till It’s Over”

Advocates Say Legislature Should Still Care About ARRA

AUSTIN, TX—           In a report issued today, Texas public interest advocates urge the Texas Legislature to maximize Texas’ remaining opportunities regarding the American Reinvestment and Recovery Act (ARRA). The report argues that legislators should have provided more oversight of Texas’ $16 billion in ARRA funds, but says that despite state lawmakers’ lukewarm response, the federal legislation succeeded in providing 236,000 Texas jobs, made public services available to millions of Texans, and strengthened Texas’ transportation, health care and energy infrastructures.

The report, entitled It Ain’t Over Till It’s Over: The Texas Legislature and the American Reinvestment and Recovery Act, was written by the interfaith group Texas Impact with contributions by other state and national organizations. The report is part of an ongoing national effort funded by the Open Society Institute to provide private sector monitoring and analysis of ARRA implementation and outcomes.

Bee Moorhead, Texas Impact executive director, said the Texas Legislature bears ultimate responsibility for ARRA’s success or failure in Texas. “There has been a great deal of attention paid to state agencies and local contractors, but at the end of the day they have all been operating in a matrix designed and overseen by the Legislature. Lawmakers could have been much more thoughtful and farsighted in establishing their policy frameworks for ARRA implementation in Texas,” Moorhead said.

To illustrate the Legislature’s lack of interest in ARRA, Moorhead points to the website www.txstimulus.com.

“There was only one legislative committee ever monitoring ARRA in Texas—the House Select Committee on Federal Economic Stabilization—and www.txstimulus.com was its website. The committee’s interim report uses the website as a source and incorporates information on the site into the report. But the committee disbanded in December and let their domain lapse in March, taking with it hundreds of documents, including memos from the committee to the other members of the Legislature and correspondence between Texas legislators and our congressional delegation,” Moorhead said.

Rather than allowing the domain to be snapped up by cyber squatters, Moorhead said, she purchased it herself. “Hopefully legislators will take steps to ensure the security of legislatively related websites in the future. Legislative committees can use the Internet really effectively, and there are great examples of committees doing that this year, but those websites contain government information and they can’t just be handled like some individual’s blog,” Moorhead said. 

The report recommends ten steps the Legislature could take during the current legislative session to maximize Texas’ remaining ARRA funds and to apply lessons learned in ARRA implementation to ongoing state programs. The recommendations include drawing Texas’ full share of ARRA-related unemployment insurance funding; transferring Texas’ low-income weatherization program from the Department of Housing and Community Affairs to the State Energy Conservation Office; and increasing budget oversight for Texas’ law enforcement online intelligence center.

Don Baylor, a senior policy analyst at the Center for Public Policy Priorities, said Texas could draw $555 million in federal unemployment funds that would allow the state to reduce—or at least avoid increasing—unemployment taxes for Texas employers. “This simple, business-friendly policy change would generate more than $1 billion in economic activity at zero cost to the state budget. Creating jobs, while minimizing employer tax rates, is the logical thing to do,” Baylor said.

The report finds that lack of legislative direction hampered ARRA transparency in Texas. “The Comptroller’s website keeps improving, but it can only be as good as the data agencies are required to report, which is minimal,” said Lanetta Cooper, an attorney with Texas Legal Services Center.

Moorhead said legislative leaders lost interest in ARRA prematurely. “Texas will keep spending ARRA dollars for at least another 18 months and we could still draw hundreds of millions of dollars more. Considering the losses of jobs and services that are likely to result from looming state budget cuts, lawmakers should be trying to maximize every penny,” Moorhead said.

Recommendations

1.     Draw down the unemployment dollars.

Texas still could qualify for $555 million in funding to replenish our Unemployment Insurance Trust Fund. Legislators should make the statutory changes needed to qualify for its remaining unemployment insurance funds and access those funds before the deadline.

2.     Keep a legislative eye on the game till it’s over.

There was only one legislative committee formally charged with monitoring ARRA implementation in Texas, and it has disbanded. The leadership should reconstitute the House Select Committee on Federal Economic Stabilization and charge the committee with monitoring and reporting on Texas’ ARRA implementation until all ARRA funds that flowed through the state treasury have been exhausted and final reports have been issued.

3.     Move the low-income weatherization program from TDHCA to SECO.

SECO and TDHCA both received ARRA funds for energy efficiency, and both agencies administered their funds through a large number of grants to local public and private sub-recipients. SECO’s administration has gone more smoothly that TDHCA’s, and in the future SECO can expect to continue to administer the same kinds of funds through a variety of programs. TDHCA’s weatherization program should be transferred to SECO. Legislators should require SECO to report more information than is currently required about recipients and sub-recipients in the program and make changes to improve sub-recipient performance.

4.     Modernize Texas’ Freedom of Information Act.

Texas’ implementation of ARRA transparency provisions pointed out opportunities to improve public information across the board because of the availability of the Internet. The Legislature should modernize the Texas Freedom of Information Act to account for new forms of electronic information and ensure transparency for all state programs.

5.     Make the Texas Fusion Center’s budget transparent.

DPS used some ARRA funds to help establish the Texas Fusion Center, a law enforcement intelligence hub that interacts with other law enforcement jurisdictions at the federal, state and local levels. Now that ARRA funds are gone, DPS needs continued appropriations to fund the Fusion Center’s activities, but DPS’s budget is not clear from which line items those additional appropriations come. Legislators should provide additional budget transparency to the Texas Fusion Center through a line item appropriation with associated performance measures.

6.     Require more project-specific information on TxDOT projects.

TxDOT set up a special “Project-Tracker” website to provide transparency in their funding decisions, but the site does not include outcomes information, especially regarding impacts on local communities and populations of interest. Legislators should require a greater level of detail on TxDOT’s website regarding specific projects and their impact on local communities.

7.     Be ready for more funding.

Texas and other states face ongoing challenges in maintaining and improving the nation’s transportation infrastructure, and congressional discussions about future transportation initiatives including the possibility of more bond opportunities. Legislators and TxDOT should investigate whether Texas could position itself favorably for future federal transportation funding, including ARRA funds turned back by other states, especially by increasing its commitment to rail transportation.

8.     Target ARRA energy efficiency dollars to areas of greatest need.

SECO’s energy efficiency programs are designed to maximize return on investment, but including additional criteria would ensure that they also maximize benefit for populations of special interest to the Legislature. Lawmakers could refine SECO’s energy efficiency programs by requiring that a share of remaining ARRA funds and future revolving loan funds target disadvantaged geographic areas or populations.

9.     Build on ARRA health infrastructure investment.

Federal investment in Texas’ Community Health Centers increased access to primary care for many Texans in medically underserved areas. Legislators should look to Community Health Centers and similar community-based health care delivery models to meet some of the needs of the large newly insured population expected to result from implementation of national health insurance reform.

10.   Protect the integrity of all state government-related websites.

The legislative committee charged with monitoring Texas’ ARRA implementation dissolved and its Internet domain registration expired, deleting scores of state documents that are referenced in the committee’s interim report. Legislators should require that the administrative contact for the URL of any website that styles itself as the website of a legislative entity such as a committee must be a staff member of a state agency.

The full report is available online at http://texasimpact.org/content/it-aint-over-till-its-over-texas-legislature-and-american-reinvestment-and-recovery-act or http://www.txstimulus.com

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Straus: "No New Taxes" State Budget

On May 11 at the House Appropriations committee meeting, Speaker of the House Joe Straus told committee members that they should balance the 2011-2012 biennial budget with no new taxes.

Straus argued that federal income taxes will be too high in the coming years due to declining revenue and growing population; therefore, it would be in the best interest of the people of Texas to keep state taxes low. He said that "every cost savings idea must be on the table" and said that the 5% budget cuts that Gov. Perry mandated this biennium are just the beginning.

An official from the Legislative Budget Board predicted that Texas will be short between $15 and $18 billion for the next budget cycle. This is up from an estimate earlier in the year that Texas would be short $11 billion. The Texas Constitution mandates that the state budget be balanced; therefore, the $18 billion hole must either be filled by cutting state services or increasing revenue.

During the meeting, Rep. Helen Giddings spoke about the budget cuts from 2003 that drastically cut social services, such as CHIP and Children's Mediciad. She predicted that the cuts will only be deeper this session. "If we had a cold in 2003, we're easing up on pneumonia now," she said.

Chairman Pitts told committee members that in addition to budget cuts, they will also have to find "revenue-enhancing measures" that aren't taxes. When Rep. Villarreal asked what those measures might be, the Chairman and several other committee member insinuated that the state could raise a lot of money if gambling were legalized.

Energy Efficient Rebates Snapped up Within Hours

On April 7th, Texans reserved more than $23 million in rebates for energy efficient appliances, exhausting the State's Recovery Act funding for the program in a matter of hours.  The program provides rebates for consumers who purchase an ENERGY STAR appliance during a two-week period later in April, and it provides for increased rebates when the old appliances are recycled.

The State Energy Conservation Office administered the program, which they called the Texas Trade Up Appliance Rebate program, and the agency reported that almost 39,000 rebates were reserved on the first day they were available, with 32,283 being resereved online and 6,581 more over the phone.

Texans have other opportunities to access energy efficiency incentives and programs.  For example, a statewide sales tax holiday for certain ENERGY STAR appliances will take place over Memorial Day weekend.

Recovery Act Prominent During Tax Time

As Americans rush to fill out and send in their taxes before April 15th, they are finding relief from the Recovery Act.  The average tax refund so far this year is $3,036, up ten percent from last year.

The Recovery Act's most well-known tax provision provided up to $800 in tax relief for all workers making up to $250,000, but other benefits included credit for first-time homebuyers, students, and the unemployed.  A full list compiled by RecoveryForTexas.org can be seen here.

The White House has produced an online tool that allows taxpayers to determine which Recovery Act benefits they are eligible to access.  Households with low to moderate incomes can receive free tax assistance through the VITA program; to find a VITA site near you, click here.

Legislative Hearing in Dallas to Focus on Weatherization

The House Select Committee on Federal Economic Stabilization will hold a joint hearing with the House Urban Affairs Committee in Dallas on Tuesday, March 30, to dicuss the Weatherization Assistance Program, which was infused with $327 million in Recovery Act funds.  Legislators will tour a weatherized home in the morning and then invited and public testimony on the administration and effectiveness of the program.

The meeting will be held at Dallas City Hall at noon.

A One-Year Anniversary Report on ARRA and Jobs

On the one-year anniversary of the Recovery Act, the Center for Public Policy Priorities provides an overview of the impact of the legislation on employment in Texas and makes recommendations as Congress considers proposals to protect existing jobs and create more jobs.

The full report, which details Recovery Act effects on job creation and calls for more fiscal relief for states, can be downloaded in .pdf form.

Stimulus Fills Holes Along the Border, While Groups Urge More Action on Budget

Governor Rick Perry, Lt Gov. David Dewhurst, and House Speaker Joe Straus recently ordered state agencies to make a 5 percent cut in their budgets, as the state is staring at a potentially huge budget gap when the Legislature returns next session. For the Department of Public Safety, that will mean almost $15 million in cuts, with more than $10 million of that chunk coming out of border security operations. Luckily, Recovery Act funds allocated to prevent such cuts in law enforcement operations will save jobs and keep supporting the work of local sheriffs working along the border.

Meanwhile, the budget gap is looming large on the minds of state and local government officials, and some groups are calling on the federal government to continue the Recovery Act aid that is keeping many states afloat. The Center for Public Policy Priorities, a think tank based in Austin, has sent a letter to Congressional leaders asking them to provide more of the Medicaid and education funding that closed 98 percent of Texas' budget gap last session. That gap could be as much as $17 billion when the Legislature returns in January of 2011.

New Reports Detail Recovery Act Programs and Job Creation

The education, homeless assistance, and career development sectors all got a significant boost from Recovery Act funds in the last quarter of 2009, according to reports released on Recovery.gov. More than 28,000 jobs were created or saved between October and the end of the year due to contracts and grants stemming from the Recovery Act, with a majority of those jobs created by grants for education entities, including Head Start and Early Head Start programs and special education. The reports cover only grants, contracts, and loans during the last quarter of 2009, so they do not include economic activity created by the tax breaks, entitlements, and unemployment insurance contained in the Recovery Act.

Keep reading for more on the jobs, the data, and the programs.

Texas created more jobs than all but three states during the last quarter of Recovery Act spending, an improvement from its tenth-place finish in the first round of reporting.  The single largest Recovery Act job creator in Texas last quarter was the State Fiscal Stabilization Fund, a pot of more than $3 billion that was allocated to improve educational outcomes and equality while ensuring that no services were cut because of state and local budget gaps. More than 12,000 teachers, administrators, and others had their jobs saved or created during the reporting period. Other funding streams dedicated to education were responsible for thousands more jobs; for example, 250 jobs were spread across 50 Head Start and Early Head Start programs across the state.

When the first reports came out last October, we highlighted Department of Labor (DOL) programs that had created almost 5,800 jobs to that point, many of which were green jobs. Similar data is found in these latest reports, with DOL work programs, Work-Study placements, and Americorps expansions combining to connects thousands more people with good jobs. The AmeriCorps projects are funding hundreds of people as they engage in community service in locations across the state, doing work with homeless populations, helping kids prepare for college, and enhancing literacy.

The data was compiled in a new way this time around, as recipients were instructed to add up all of the hours spent on Recovery Act projects rather than counting each job individually. The new method was meant to make the process simpler and less subjective. Accuracy is still a concern, as it was in the initial round of reports. For instance, while 3,191 enitities filed reports for this period, only 1,255 reported creating at least one job. The remaining 1,936 entities collected more than $847 million for a range of projects, yet they reported either zero job creation or fractions of a job. While many of those projects have yet to get under way and many more involved little more than purchasing new equipment or supplies, a number of them have simply been misreported. For example, one road construction project underway in Bryan received more than $670,000 and lists a number of positions—including superintendents, truck drivers, and carpenters—that are being filled due to Recovery Act funds, but its job creation column still says zero. Instances such as this are bound to create underreporting and overreporting, but the data overall is a fairly accurate count of spending and job creation throughout the state.

Texas Impact continues to connect people with Recovery Act benefits while advocating for transparency and accountability as funds are spent.

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