Post written by Rebecca Montgomery, SVP Advocacy
May 27th marked the final day of the 86th Session of the Texas Legislature, and Governor Greg Abbott had until June 16th to approve or veto legislation passed.
After 140 days, the session provided its share of successes and failures for the state and local business communities. But, overall, Texas in on track to maintain its strong, business-friendly climate.
More than 8,000 bills were filed with a passage rate of approximately 19.5%, which is on par with previous sessions. The Fort Worth Chamber of Commerce was actively engaged in more than 100 of these bills as they related to taxes, eminent domain, transportation and economic development.
Our Advocacy team supported the Chamber’s legislative agenda through one-on-one conversations with elected officials, cards, emails and letters of support, and a successful Tarrant County Days visit to the State Capitol with more than 200 attendees.
Key issues on our agenda were:
- Provide a reliable revenue stream for transportation infrastructure
- Reauthorization of Chapter 312 tax code to remain competitive
- Increase funding for our public education system
- Increase programs to support a healthy workforce
At the beginning of the session, state leaders Gov. Greg Abbott, Lt. Gov. Dan Patrick and House Speaker Dennis Bonnen identified their top priorities: public education finance reform and property tax reform. These issues have historically proven to be quite daunting to tackle, but this session they met with some success.
The one item that the Legislature is required to pass each session is the State’s biennial budget. As one of its final acts, HB 1 (budget bill) was finally approved HB 1 by both the House and the Senate on the final day of legislative session. The Legislature appropriated a total of $250.7 billion for the upcoming biennium. This includes $6.5 billion to school finance reforms and $5.1 billion dedicated to property tax relief. Important to note is this budget is 16% higher than the previous 2-year budget.
Win for the Fort Worth Chamber: School Finance
“The Texas Plan” (HB 3-School Finance Reform), provides $6.5 billion to improve our State’s school funding system with an increase in Texas’ per-student funding. This funding includes salary increases that benefit teachers, librarians, nurses and counselors. Additional funding was provided for full-day pre-K for eligible 4-year-olds, increased dollars to educating low-income students, dual language programs and improve dyslexia programs.
Compromise for the Fort Worth Chamber: Property Tax Reform
“The Texas Property Tax Reform and Transparency Act” (SB 2-State Property Tax Reform), requires cities, counties and other taxing units to seek voter approval before collecting 3.5% more property tax revenue over the previous year. Community colleges and hospital districts will follow the current election requirement for 8% or above in revenue growth. An unpopular “sales tax swap” proposal seeking to increase the state sales tax in exchange for lower property taxes notably failed to pass this session. Although the Chamber initially opposed lowering the requirement for a voter referendum, 3.5% is better than 2.5%, which was also proposed.
Questions remain as to the sustainability of these reforms in future state budgets. Time will tell.
Wins for Fort Worth Chamber: Economic Development Incentives
Through the concerted efforts of chambers of commerce and key business groups from around the state, the Texas Property Redevelopment and Tax Abatement Act, HB 3143-Tax Code Chapter 312 economic incentive program was successfully re-authorized. This program is utilized by cities throughout the state to attract business investments. Changes include additional public notice, hearing, and reporting requirements. Another win in the economic development arena was an increase in the Texas Moving Image Industry Incentive Program totaling $50 million. Also, approximately $150 million in funding was approved for the Texas Enterprise Fund (TEF), which often entices companies to relocate to Texas.
Win for Fort Worth Chamber: Mental Health and Medicaid
Although health care was not identified as a top priority by leadership this session, there were some successes including the creation of the Texas Mental Health Consortium intended to increase school safety by leveraging state mental health resources and better coordinating access to care and intervention. Further, to cover the state’s Medicaid shortfall, the Supplemental Appropriations bill, SB 500, dedicated $4.1 billion through a withdrawal from the Economic Stabilization Fund (Rainy-Day Fund).
Fort Worth Chamber remained neutral: Non-discrimination ordinances
Notable and with much national attention, several “non-discriminatory ordinances” (NDO) and “religious refusal” bills were filed and heard this session. Initially, House Bill 3172, the “Chick-fil-A” bill, would create a religious exemption for almost every law in Texas, though the final edited version does not change current law. This was seen by many as an anti-LGBTQ bill and the only of almost 20 similar measures filed this session to pass. Additionally, preemption legislation continued to be of issue including filed bills CSSB 2485, CSSB 2486 and CSSB 2487, which initially included ‘NDO’ non-discriminatory language. This language was eventually removed, only to be reinserted near the final days of session. Ultimately however, none of these bills passed.
Win for Fort Worth Chamber: Infrastructure Funding
With a strong rate of growth in Texas, infrastructure and transportation needs are critical issues. While not given priority by state leadership this session, they did receive some needed attention. A success was Prop 1 Funding (SB 962). This funding mechanism’s expiration was extended from 2024 to 2034 and establishes a formula (rather than a committee) to determine a “sufficient balance” in the economic stabilization fund to make the annual financial transfer.
Additionally, infrastructure funding tools such as Tolling, P3’s (Public Private Partnerships) and CDA’s (Comprehensive Development Agreements) remain unpopular with this Texas House and Senate. All legislation to bring back CDAs and P3 agreements failed to pass.
Win for Fort Worth Chamber: High Speed Rail
Several high-speed rail bills were filed this session attempting to derail the Texas Central Rail project from Houston to North Texas. A House Transportation sub-committee was even created and all bills referred to that committee were left pending, which means they were left to die in ‘committee land’. In addition to these bills, Rider 44 was added to the Senate’s version of the State Budget bill. Rider 44 would have prevented Texas Central Rail from coordinating with Texas Department of Transportation on the project. The Rider was removed during the Senate and House conference committee negotiations.
Win for Fort Worth Chamber: Defense Industry
The defense-related aerospace industry is a crucial contributor to the Fort Worth economy, employing well over 25,000 in Fort Worth alone. Passage of HB 1607 improves the competitiveness of such entities by better aligning the Texas franchise tax policy and the Federal Acquisition Regulation through amending current law relating to a deduction under the franchise tax for certain contracts with the federal government.
Wins for Fort Worth Chamber: Research in Higher Education
The Texas Research Incentive Program (TRIP) received $35 million to continue funding our institutions of higher education.
Fort Worth Chamber remained neutral:
Under the category of “Sometimes things are more complicated than they appear,” the Red Light Camera program comes to an end with Gov. Abbott signing HB 1631. The City of Fort Worth had 58 cameras in 44 locations around the city. The program began July of 2007 and the Fort Worth contracts included a provision that terminated the program immediately following legislative action. For the City of Fort Worth in 2018, the program generated $9.6 million in revenue, with $2.2 million directed to the State Trauma Fund (which helps fund trauma services in the state).
The city received $3.6 million for use towards traffic safety activities and the program employed 3 FTEs and aided in maintenance of traffic signage, traffic signals crosswalks and intersection lighting. City leaders will have to determine how to continue such traffic maintenance using other funding sources.
Finally, the Fort Worth Chamber would like to thank our members for your engagement and efforts when called to action supporting pro-business policies and legislation. Your voices were heard by our lawmakers in Austin and proved instrumental in shaping the outcome of many important new laws. This was a valued service to not only Fort Worth as the 13th largest city in the United States, also but the growing Texas economy. We shall continue these efforts of engagement as we move into the 2020 election cycle.