Plano Chamber Public Policy Newsletter

ELECTIONS

Run-Offs and Special Election - In response to COVID-19, Governor Greg Abbott postponed the Primary Run-off Elections until July 14, 2020, the same day as the Special Election for State Senate District 14. Early voting for both the Primary Run-off Elections and the Special Election in SD 14 began on June 29 th . It runs through July 10 th . Because July 4 th is a state holiday, no early voting will be conducted on that day. Semi-annual campaign finance reports are due on July 15 th .

STATEWIDE

Looting and Violence is a Federal Crime – On June 1 st , Governor Greg Abbott, along with all four United States Attorneys in Texas, announced that individuals who come to Texas from out of state to engage in looting, violence, or other destructive acts in violation of federal law will be subject to federal prosecution. Anyone who is arrested and charged with such offenses will be transferred to federal custody. The United States Attorneys will be working with local prosecutors and law enforcement officials to aggressively identify crimes that violate federal law. The four United States Attorneys joining the announcement were: John F. Bash, Erin Nealy Cox, Stephen J. Cox, and Ryan K. Patrick. Governor Abbott said, "Texans must be able to exercise their First Amendment rights without fear of having agitators, including those coming from out-of-state, hijack their peaceful protest. This announcement will ensure there are harsh consequences for those breaking the law and that they will be prosecuted to the fullest extent of the law." Texas Response to Protest Violence – On June 2 nd , Governor Greg Abbott held a press conference in Dallas where he provided an update on Texas' response to protest violence across the state. In his remarks, the Governor called for swift justice in the case of George Floyd’s death, and discussed the ways Texas is working with local law enforcement to maintain order and uphold public safety so that peaceful protestors can continue to make their voices heard. Governor Abbott said, "What happened to George Floyd was a horrific act of police brutality, and I join the millions of American who seek swift justice. George Floyd's death has touched every corner of our country, and people are rightfully angry. The beautiful thing about America is that every person has the right to make their voices heard and protest against injustice. However, violence and vandalism are never the answer, and they have no place in the Lone Star State. It is essential that we end the violence, vandalism, and looting that we have seen. But restoring calm in our communities does not end with this task - our work will not end until justice, fairness, and equality become reality in every part of our state. Texas is up to this task, because Texans can overcome any challenge. We will seize this moment to bridge the divides that exist in our state so that we can keep Texas the greatest state in America." To end the violence, vandalism, and looting experienced across the state, the Governor deployed DPS officers and Texas National Guardsmen to several cities in Texas - including 1,000 DPS officers and hundreds of Guardsmen to the Dallas-Fort Worth region. They are working alongside federal partners from the Federal Bureau of Investigation (FBI) to stop the violence and protect those protesting peacefully. The Governor was joined at the press conference by Dallas Mayor Eric Johnson, Fort Worth Mayor Betsy Price, Dallas Police Chief Renee Hall, Fort Worth Police Chief Ed Kraus, Major General Tracy Norris of the Texas National Guard, and Texas Department of Public Safety (DPS) Director Colonel Steve McCraw. Criminal Justice Reform – On June 10 th , Representative Garnet Coleman (D-Houston), chair of the House County Affairs Committee and Senator John Whitmire (D-Houston) chair of the Senate Criminal Justice Committee announced that they will continue to work together on criminal justice reform during the upcoming Texas Legislative session. Chairs Whitmire and Coleman have worked together the last few sessions to pass important criminal justice reform including the Sandra Bland Act, and HB 4468. Coleman and Whitmire released the following joint statement: "The recent murder of longtime Houston resident George Floyd by a law enforcement officer in Minneapolis is a painful reminder to us that though we have traveled so far, there is still a long way to go. The passion shown by the millions of people who have made their voices heard against racism have helped fuel our commitment to continue to work towards justice. In honor of George Floyd and his family, and to continue to honor Sandra Bland and her family, and all the other families seeking justice and change. We are committed to passing a package of policies next legislative session that will improve our criminal justice system. Including criminal justice policies that will ensure equal treatment for people of color, increase transparency and accountability, and keep both law enforcement and the public safer.” Texas 2036 Strategic Framework – On June 18 th , Texas 2036’s founder Tom Luce and CEO Margaret Spellings released The Texas 2036 Strategic Framework. Luce said, “This vision for Texas is built on seven broad policy pillars and 36 aspirational goals. While the policy pillars and goals comprise a wide range of topics, this framework is not meant to be a comprehensive plan for Texas. Nor should it necessarily be seen as a final product; rather, the Strategic Framework is designed to spark conversations across the state about what matters most to Texans and how we can effectively work together to build a bright future for our state.” The seven policy pillars are Prosperity & Well-Being; Education & Workforce; Health; Infrastructure; Natural Resources; Justice & Safety; and Government Performance. Each aspirational goal includes a target and a baseline. Targets and baselines are frequently compared to “Peer States.” Those 11 states in addition to Texas are: California, Colorado, Florida, Georgia, Illinois, New York, North Carolina, Ohio, Pennsylvania, Virginia, and Washington.

ECONOMIC DEVELOPMENT

Potential Economic Impact of Non-Discrimination Protections – On June 18 th , Economist Ray Perryman released a study examining the potential economic and fiscal benefits of Texas passing a nondiscrimination in employment, housing, and public places access act. It concluded that the impact would likely be substantial. The report said, “The US Supreme Court recently ruled that employers cannot discriminate against gay or transgender persons under the Civil Rights Act of 1964. Discrimination in employment, housing, and access to public places such as restaurants, hotels, and shops leads not only a loss of dignity and opportunity for those on the receiving end of such treatment, but also involves significant economic costs stemming from both a diminished ability to attract knowledge workers and reduced opportunities for tourism, conventions, and related activity. As we emerge from the pandemic, these concerns will be magnified. In particular, the LGBTQ community has been a focus of systemic discriminatory patterns. There have been high profile instances of bias in employment, housing, and access to public places. Moreover, this group has not specifically been identified in national non-discrimination legislation, and the Supreme Court’s decision is a major step toward correcting this gap. Empirical studies indicate that non-discrimination protections encourage the location of knowledge workers and young workers in an area, thus contributing to the attraction and retention of high-growth industries conducive to long-term economic growth. Similarly, surveys of travelers and convention professionals demonstrate that full access is increasingly necessary for an active tourism market. Social policies, which are perceived to be discriminatory, can have detrimental effects on travel and tourism by decreasing an area’s attractiveness to event planners and potential visitors. In the aftermath of the COVID-19 pandemic, these issues will escalate notably.” Specific findings of the study include: Passing a comprehensive nondiscrimination act in 2021 would lead to a total increase in business activity in the state by 2025 of an estimated $19.8 billion in annual gross product and 180,226 jobs, with benefits rising substantially over time. Regions with greater concentrations of knowledge workers and greater opportunities for tourism and convention activity tend to be most significantly affected, though all metropolitan areas and the rural segments of Texas would be expected to see increased employment. In addition, business activity generates tax revenue.   The estimated annual fiscal benefits of passing a comprehensive nondiscrimination act in 2021 would be $1.2 billion to the State and nearly $0.9 billion to local government entities by 2025, rising substantially over time. Ray Perriman concluded by saying, “Obviously, these funds would be highly advantageous given the shortfalls due to the current situation with the coronavirus. The Supreme Court’s recent decision is an important aspect of reducing discrimination. Texas can benefit further with passage of a nondiscrimination act and creation of an environment welcoming to all workers and visitors.” Economic Impact of Texas Military Installations – On June 22 nd , Governor Greg Abbott announced the results of a study completed by the Texas Comptroller of Public Accounts at the request of the Texas Military Preparedness Commission (TMPC) analyzing the impact on the state’s economy of the various U.S. military installations within Texas. The Comptroller estimates these military installations contributed at least $123.6 billion to the Texas economy in 2019 and supported more than 630,000 jobs in communities across the state. Governor Abbott said, “Texas is the proud home to 15 military installations and the U.S. Army Futures Command. Not only are these military installations critical for the defense of our nation, they support more than 630,000 jobs in communities across this great state and are a key driver of the Texas economy. Now more than ever, these jobs add critical stability for communities focused on economic recovery following the COVID-19 pandemic. That is why I will continue to work with the Texas Legislature and TMPC to ensure that military installations in Texas keep adding unmatched value for our nation.” Comptroller Glenn Hegar added, “The military installations in Texas are a vital contribution to our strategic national defense and provide a significant economic impact on the entire state economy. In most cases these bases and the men and women who work there are the lifeblood of their communities – supporting local businesses, buying homes and creating the fabric of their neighborhoods. But the economic impact can be felt by every Texan and supports jobs in a wide variety of industries and sectors of the state economy. I applaud the Governor’s efforts to ensure continued support for these important installations.” Estimated Contribution of U.S. Military Installations to the Texas Economy, 2019: Total direct jobs                                                        226,555 Total employment (direct and indirect jobs)       633,892 Economic output                                                      $123,653,980,000 Estimated Contribution of Each U.S. Military Installation in Texas, 2019: Army Futures Command, Austin             2,342 jobs     $359,285,000 Corpus Christi Army Depot                       10,887           $1,776,685,000 Dyess Air Force Base, Abilene                19,200           $3,836,359,000 Ellington Field, Houston                            2,323             $470,506,000 Fort Bliss, El Paso                                      130,943         $25,666,292,000 Fort Hood, Killeen                                      152,701         $29,859,518,000 Goodfellow Air Force Base, San Angelo 21,410           $4,538,086,000 Joint Base San Antonio                             210,998         $41,325,690,000 Laughlin Air Force Base, Del Rio             10,201           $2,032,980,000 Naval Air Station Corpus Christi              15,261           $2,795,340,000 Naval Air Station Fort Worth                     20,042           $3,793,927,000 Naval Air Station Kingsville                       4,695             $852,119,000 Red River Army Depot, New Boston       10,566           $1,718,185,000 Sheppard Air Force Base, Wichita Falls 22,323           $4,629,008,000 The Comptroller’s study represents an analysis of the economic impact of the population and employees directly affiliated with the military installations in Texas. This includes active duty, visiting and other military personnel, dependents, civilian employees and contractors directly affiliated with the base. The TMPC within the Office of the Governor advises the governor and the legislature on defense and military issues, and on ways to strengthen the position of Texas military installations in preparation for any future Base Realignment and Closure (BRAC). The commission is composed of 13 members serving six-year staggered terms, typically representing an installation in their community.

GENERAL BUSINESS

Small Business Assistance Advisory Task Force – On June 17 th , Governor Greg Abbott reappointed Michael Guyton and appointed Eduardo Contreras and Lisa Fullerton to the Small Business Assistance Advisory Task Force for terms set to expire June 14, 2021. The task force advises and assists the governor, lieutenant governor and speaker with issues that relate to small businesses, and provides information in plain language to the public on issues related to small businesses.

PUBLIC EDUCATION

TTARA Overview of the Texas School Finance System – On June 10 th , Sheryl Pace of Texas Taxpayers and Research Association gave a webinar presentation on the school finance system in Texas. As part of the presentation, she presented the following statistics: Texas has more school districts than any other state – 1,016 independent districts; 178 charters, and six special districts (military). Texas has the 2nd highest number of campuses of any state – 8,759 campuses, including 705 charter campuses. Texas has more school employees than any other state – 711,768 total employees (2018), 356,838 (50%) are teachers; 29,182 (4%) are administrators; 69,753 (10%) are professional support personnel; 71,889 (10%) are educational aides; and 183,636 (26%) are auxiliary staff. Texas has the 2nd highest number of students of any state – 5,385,012 (2018); 700,052 (13%) are African American; 2,800,206 (52%) are Hispanic; 1,507,803 (28%) are White; 376,951 (7%) are Other; 3,177,157 (50%) are Economically Disadvantaged ($47,638 annual income for a family or four); and 1,023,152 (19%) are limited English Proficient. Funds Dedicated to Public Education: Available School Fund - Constitution directs earnings from the Permanent School Fund to be transferred to the Available School Fund - $2.4 billion in 2019 for technology and instructional materials per student distribution to school districts. Motor Fuels Tax – Constitution directs 25% of occupation taxes to be transferred to the Foundation School Fund - $2.2 billion in 2019. Lottery – Statute directs lottery revenue after prizes and other costs to be transferred to the Foundation School Fund - $1.617 billion in 2019 (25.8% of total lottery receipts). Property Tax Relief Fund – Statute directs a portion of the motor vehicle sales tax, cigarette, cigar and tobacco production tax, and franchise taxes to the Property Tax Relief Fund to pay for 2006 tax rate compression - $1.8 billion in 2020 (estimated). Tax Reduction and Excellence in Education Fund (TREE) – Constitution allows available School Fund transfers of up to $600 million per year from the State Board of Education or the General Land Office to the TREE fund - $242.5 million in 2020. HB 3 from the 86th Legislature implemented the recommendations of the Texas Commission on Public School Finance: Provided $6.5 billion in additional funding to public education and school employee compensation. Provided $5 billion in property tax relief. Reduced Recapture by an estimated 47% for the 2020-2021 biennium due to formula changes. Increased the state share of public education funding from 38% to 44%. Total Public Education Funding for the 2019-2020 School Year - $69.7 billion: $36.4 billion (52%) local property taxes. $38.0 billion (40%) state funding. $5.3 billion (8%) federal funding. Public Education represents 29% of the total state budget; and 42% of the general revenue budget. The basic allotment for the 2019-2020 school year was $6,160, a 19.8% increase over the previous year’s $5,140. The minimum salary schedule increased by approximately 19.8%. Charter schools were authorized in 1995. Applications are submitted to the Commissioner of Education. The State Board of Education can veto commissioner’s approval. A maximum of 305 charters may be granted. There are currently 178 charter holders with 705 campuses. 308,337 students attend charter schools. Commissioner Morath’s Interview on Broadband Access – The June 17 th Rio Grande Guardian ran a guest column based on an interview with Education Commissioner Mike Morath on Monday, June 15 th hosted by the Rio Grande Valley Partnership. Here is information from that interview organized by topic.  Flexibility to Educate at Home – “We want to make sure that parents have the option, if they are afraid for a family member, for whatever reason, that they have the option to keep their kids home. The parent is the one exercising that option. But, I think it is incumbent on me that we don’t see inequities as to who has that flexibility. We want to make sure that everybody that has a legitimate public health concern, or a personal health concern, that they have the flexibility to do so.  Broadband Access – “We are trying to work with school systems all over the state to ensure that these problems of access to broadband and devices at home can be satisfied. We have a task force set up called Operation Connectivity. The sole purpose of which is to ensure that everybody who is getting remote instruction has access to broadband at their house and has access to digital devices. We are looking at funding streams to reimburse school districts when they are providing those devices. We are looking at additional funding streams that might reimburse the private sector for subsidizing places, especially in rural Texas, where there is not enough market to satisfy the same kind of broadband services. This is very high on our radar. I am hopeful we will have some real, tangible solutions in time for the school year. But, we have to be honest with ourselves, some of those solutions are far quicker than others.  Longer-Term Broadband Solutions – “If you are in a place where there is no cell phone tower sending signals to your houses, where there is no fiber optics, we ain’t going to get that solved by August. There is just no way to do it. The construction projects take too long. There are solutions. None of the solutions are easy. Don’t get me wrong, I am not saying these are easily solved but there are solutions and we are working also to the extent that there are additive costs associated with these solutions; that we figure out a way to find a funding source to reimburse those addictive costs. That is easier said than done, as you can imagine, but that is something we are actively working towards.” Safe Classroom Space – “I think it is incumbent on us to be extra vigilant in ensuring that we have created very safe environments for kids in schools. This may mean even some kind of class experience in wings of our schools that are less dense than others so that those students have less face-to face-contact, and their teachers have less close contact. The evidence with the virus is, close contact is generally defined as 15 minutes or more, six feet or less away from somebody.”  At-Risk Students – “We can take steps in our schools to – for certain students – reduce that even if we can’t take those steps for all of our students. And that would allow kids who don’t necessarily have broadband at home to come into a completely safe environment. I can envision other situations where schools set up additional options.” Facilities Options – “We can think of the use of portables, rethink some space in a local commercial facility, using space in a local church that is typically closed during the week, for kids whose parents have extra concerns about their health but don’t have bandwidth and for whom we can’t solve the bandwidth problem by August.”  Public Schools to Open for In-Person Classes This Fall – On June 18 th in a teleconference with Governor Greg Abbott and Texas legislators, Education Commissioner Mike Morath reported that public schools will open for the fall semester. He said, “It will be safe for Texas public school students, teachers, and staff to return to school campuses for in-person instruction this fall. But there will also be flexibility for families with health concerns so that their children can be educated remotely, if the parent so chooses. Detailed guidance on what this will look like will be issued by the Texas Education Agency early next week.” Texas AFT Response - Texas AFT President Zeph Capo commented on Education Commissioner Mike Morath’s statement on upcoming plans for school reopenings. He said, “Texas AFT says a big ‘Hell No’ to what looks like a return to normal in August. We are not in normal times. We won’t sacrifice our members and students for politics. Mike Morath’s comments do not inspire confidence for students, parents, and teachers who would be returning to campuses. Parents and school employees need confidence that their voices have been heard in a meaningful way before they will return to school campuses. What Mike Morath said today does not inspire that confidence. No, it will not be ‘safe’ for students, teachers, and staff to return. Morath is following in the footsteps of the governor, who is expanding reopenings and loosening requirements in the face of growing numbers of COVID-19 infections and hospitalizations. While a completely safe return is impossible, most school districts are working hard to provide a classroom setting that will be as safe as possible. These are not normal times and we need to put safety first before any other considerations. We need to use masks whenever possible, instead of Morath’s comments indicating there would be discretion given to districts to base on ‘science.’ While we welcome the idea of flexibility for remote instruction for children of families with health concerns, consideration needs to be given to educators and other school employees. They need confidence that their concerns have been addressed and that their safety is top priority. Leadership means assuring confidence, and that is what we are looking for from Mike Morath.” Texas State Teachers Association Response - Texas State Teachers Association President Noel Candelaria also commented on school openings saying, “For several days now, we have been seeing record numbers of new COVID-19 cases in Texas, but Governor Greg Abbott apparently would like us to think we have this pandemic licked. Far from it. We don’t even know when the pandemic will hit a peak, and part of the reason is that Governor Abbott rushed to reopen restaurants, amusement facilities and other businesses too soon. Now, he seems to be in a big hurry to reopen schools, putting the health and safety of millions of Texas school children, educators and their families and communities at risk. We should be in no hurry to reopen school buildings, and safety should be the first and foremost consideration when we do. Teachers and other school employees need to be directly involved in planning for the safe reopening of school facilities. They have to work in school buildings. The governor and the state education commissioner don’t. When schools are reopened, the governor and the Texas Education Agency must require, among other things, that all students, employees and anyone visiting a school have a mask available and be given temperature checks and other observations for COVID-19 symptoms before entering. We all want to see Texas’ economy begin to recover. But safe schools and healthy students, educators and communities are key to that recovery.” Education and Business Leaders Call For Continued Investment in Education - On June 29 th a coalition of education organizations and business groups sent a letter to Governor Greg Abbott, Lt. Governor Dan Patrick, Speaker Dennis Bonnen, Education Commissioner Mike Morath, Higher Education Commissioner Harrison Keller, and legislators asking them to continue investment in public education and improving student outcomes. They asked for creation of a statewide task force to focus on the key challenges posed by COVID-19 to public education and to provide the necessary tools and guidance for schools and districts as they navigate the new realities posed by COVID-19. They specifically asked for input in the following six areas: Maintaining funding:  In June 2019, Governor Abbott signed historic school finance reforms to improve student outcomes and improve equity for Texas students. The state must maintain current education funding levels and allow time for all of the evidence-based reforms of HB 3 to be implemented fully. The task force should work with state leadership to maximize federal resources available for Texas public schools and allocate these federal dollars wisely to ensure that temporary revenues do not create new, recurring costs for local districts and taxpayers. Connectivity, access to technology, and contingency planning:  Education recovery and response plans should ensure connectivity for all 5.4 million PK-12 students, including access to reliable, high-quality internet and computers or tablets. School districts need support as they consider a range of possible scenarios that COVID-19 might present, including in-person, online, hybrid, and intermittent scheduling. Further, work must be done to ensure that online and alternative instructional methods are rigorous and high-quality for all students. Professional development:  Taking care of students begins with setting our teachers up for success. Educators are our frontline responders, and COVID-19 requires schools to respond by providing professional development for combined in-person and online instruction as well as equipping them with trauma training. Assessment and support for students:  Teachers and school leaders will need clear and ongoing data to assess students’ abilities and progress during these difficult times. This task force should identify and recommend methods of assessing learning loss that leverage districts’ existing longitudinal data, maximize student learning time, and provide critical statewide information to lawmakers regarding the breadth of students’ loss of learning during COVID-19. Health and safety:  Re-opening or contingency plans should place health and safety first. Public schools will face increased costs associated with purchasing personal protective equipment, refitting school spaces, and altering academic calendars and school days. Schools must have sufficient resources and sound plans to ensure the safety of students, staff, and families. Acknowledge the economic costs of inaction:  If our schools stumble, we all stumble. Failure to support our public schools and generate trust in the state’s and local districts’ ability to deliver quality education will have far-reaching and long-lasting consequences on our economy, our workforce, and our future prosperity. Today, with an unemployment rate of 13 percent and 2.4 million Texans filing for unemployment in the last 90 days (the vast majority of whom do not have a post-secondary credential), we must ensure our schools are prioritizing college, career, and military readiness more than ever so that students are prepared for in-demand, high-value jobs.  Organizations in the Coalition - Texas 2036, Commit, Texas Association of School Administrators, Raise Your Hand Texas, Austin Chamber, Dallas Citizens Council, Dallas Regional Chamber, E3 Alliance (Education Equals Economics), Educate Texas, Good Reason Houston, Greater Houston Partnership, North Texas Commission, Pre-K 4 SA, San Antonio Chamber of Commerce, Teach + Plus, Texas Association of Business, Texas Association of School Boards, Texas Education Grantmakers Advocacy Consortium, and Texas School Alliance.

PUBLIC EDUCATION

TPPF Recommendations to Ensure Access to Education During the COVID-19 Crisis – On April 7 th , the Texas Public Policy Foundation sent a letter to Education Commissioner Mike Morath and Governor Greg Abbott with recommendations for securing access to educational services through the Texas Virtual School Network during the COVID-19 crisis and its aftermath. The letter said, “Many Texas students are missing educational time that is key to their development as students, whether they are in their final year of high school preparing for college, or in the critical years of early literacy. The impact of this lost time for so many students may be felt for years to come if actions are not taken to ensure our children have the fullest possible access to educational material. Texans face a challenging task, and we are grateful for your tireless work and leadership. In a state the size of Texas, with more than a thousand individual school districts trying to do the right thing for their students and communities, addressing these problems will be bigger than just one solution. Empowering districts to weigh and meet the needs of their student communities will be critical. We believe that with decisive action, in keeping with the actions you have already taken, and a focus on ensuring every Texas student has access to high-quality education, the state of Texas can lead the way in reversing the negative effects of COVID-19 on our educational system.” The letter also includes 10 recommendations to help secure educational access for Texas students during school closures: Lift the current moratorium on districts’ establishment of new online schools within the Texas Virtual Schools Network (TxVSN). Allow funding to go to courses beyond the “three-course limit” on student access to the statewide course catalog. Open virtual resources to all grade levels. Currently only high school students have access to the course catalog, and K-2 students are barred. Waive the provision allowing districts to deny statewide catalog course enrollment if the district provides a “substantially similar” course. Waive ADA requirements as necessary to allow HB 3’s incentive for additional instructional days to cover students enrolling in virtual courses over the summer, up to the amount that would be provided for onsite courses. Revise the process by which courses are approved for the TxVSN. Place the responsibility for course approval in the hands of districts and/or approved third-party accreditors. Temporarily extend the timeline for required teacher professional development that could prohibit teachers from filling the gap in online course teachers. Direct a portion of available federal emergency education grant funding to modernize the TxVSN online systems. Waive the “prior-year public” requirement for full-time virtual education. Evaluate the course fee limit placed on Statewide Catalog courses and determine whether it is appropriately set for given subject areas (such as those that require lab kits, or other high-cost factors). Operation Connectivity – On May 8 th , Governor Greg Abbott, the Texas Education Agency (TEA), and Dallas Independent School District (DISD) launched Operation Connectivity, a statewide initiative to deliver internet connectivity and device solutions for school districts, families, and students in Texas. Operation Connectivity was originally started in Dallas to address the lack of high speed internet and/or home laptops for many DISD students which caused an interruption to their learning, as education in the classroom transitioned to at-home digital instruction due to COVID-19. This initiative now aims to provide internet connectivity to hundreds of thousands of students statewide. Governor Abbott said, "As Texas students continue their education at home through virtual instruction, it is essential that we provide them with the resources they need to connect and communicate online. I applaud Dr. Hinojosa and DISD for developing this innovative initiative for Dallas schools, and look forward to expanding Operation Connectivity statewide so that we can implement reliable and effective solutions that will close the digital divide for students across the Lone Star State." Education Commissioner Mike Morath added, "We are grateful for the work of Dr. Hinojosa and his leadership on this necessary undertaking in Dallas and are delighted to be working with the governor to take this effort statewide. With students learning remotely for the time being, it’s more important than ever for all our students to be able to access academic content at home. In order for that to happen, all students in Texas need access to computers and/or tablets, and internet outside of the classroom. Operation Connectivity is providing the right solutions to this big challenge."  Operation Connectivity Task Force - The statewide implementation of this initiative will be led by the Operation Connectivity Task Force. DISD Superintendent Dr. Michael Hinojosa and TEA Commissioner Morath will serve as co-chairs of the task force. Senator Larry Taylor, Chairman of the Committee on Education in the Texas Senate, and Representative Dan Huberty, Chairman of the Public Education Committee in the Texas House, will serve as members of the task force. The task force members will also include representatives from the following entities: Office of the Governor Local Education Agencies U.S. Department of Education Federal Communications Commission EducationSuperHighway Federal Reserve Bank of Dallas Department of Information Resources Texas Computer Education Association  Chief Technology Officer Council of Texas Duties - The Operation Connectivity Task Force will: gather critical information to determine which children in the state do not have internet access and/or home devices, document best practices, identify and secure technology solutions for broadband and devices, develop actionable playbooks for districts across the state, identify funding needs and help secure resources, demonstrate “lighthouse” examples, including at DISD, and push for federal and state-level policies that connect more students learning at home to available technology resources. Schedule of Task Force Activities - The task force will convene as a full group every month to review progress and resolve roadblocks, which will help to ensure the overall effort stays on-track. Working teams that support the larger task force will meet on a more regular basis to move forward on achieving milestones. A group of representatives from the Office of the Governor, TEA, and DISD, along with others, will be in regular communication to ensure rapid progress on this initiative. Senate Commitment to Maintaining Public Education Reforms – On May 26 th , the Texas Border Business publication ran an op-ed penned by Senators Jane Nelson (R-Flower Mound), chair of the Senate Finance Committee, and Juan “Chuy” Hinojosa (D-McAllen), vice-chair of the Senate Finance Committee reaffirming their commitment to public education and maintaining the reforms from the 2019 legislative session. They also suggested ways to leverage federal COVID-19 money for public education. The op-ed said, “Last session, the Texas Legislature passed HB 3 to invest more state dollars in our classrooms and give a much-needed salary increase to our teachers. With the coronavirus pandemic, we have learned to appreciate even more the role of our schools and teachers. Unfortunately, given the downturn in the economy due to this pandemic, we will face tough budget decisions next session. However, public education remains a priority and we are committed to not losing sight of our future – and that’s our children. We must continue working together to ensure they thrive and not let this current crisis become an everlasting obstacle in achieving their dreams.” The senators made recommendations for protecting education funding by maximizing the funding coming from the federal government. They said, “It is going to take full utilization of U.S. Department of Education, FEMA, USDA, and other sources of funding just to ensure that we have the funds necessary to continue to meet our responsibility to public education.” Elementary and Secondary School Emergency Relief Fund – “The Elementary and Secondary School Emergency Relief Fund (ESSERF) was established in the CARES Act. The ESSERF will provide Texas with nearly $1.3 billion for our schools and gives us the flexibility to have the funds we will need to fund public education during the next biennium. Texas Education Agency (TEA) Commissioner Mike Morath, presented superintendents across the state with the decision made by the governor and legislative budget-writing leaders to use ESSERF funds to cover current expenses in the Foundation School Program. This decision will both maintain full formula funding for schools this year and next, while simultaneously reducing the state’s obligation by approximately $1.1 billion. This savings now, will allow us to free up the funds to use again for public education as we begin drafting the state’s budget next session.” Coronavirus Relief Fund – “An additional piece of the funding puzzle is the Coronavirus Relief Fund (CRF). The CRF will provide the state with $11.24 billion that is split three ways: $3.2 billion for the twelve largest counties and 6 largest cities; $1.85 billion for the remaining 242 counties and cities; and, $6.18 billion for the state. These funds must be spent on coronavirus related expenses incurred March 1, 2020 through December 30, 2020. Using these funds to support school district coronavirus expenses is a permissible and encouraged use of the CRF. To help achieve our goal of preserving our commitment to public education, Commissioner Morath announced that the state will spend hundreds of millions of dollars from the state’s $6 billion CRF share to help cover part of coronavirus related expenses incurred by school districts this school year. This will provide much relief to our school districts who have incurred expenses for increased cleaning supplies, personal protective equipment, software licenses for online teaching, technology devices for distance learning, and other unanticipated costs due to COVID-19. While we are working at the state level to support public education, we still strongly encourage our school districts to also work with their city and county to help cover the school districts’ portion of current and future coronavirus-related expenses. It is our hope that local governments will sincerely consider partnering with their local school districts by providing them with monetary assistance from their Coronavirus Relief Funds.”

TAX

Decline in Sales Tax Revenue – On June 1 st , Comptroller Glenn Hegar said state sales tax revenue totaled $2.61 billion in May, 13.2 percent less than in May 2019 and the steepest year-over-year decline since January 2010. The majority of May sales tax revenue is based on sales made in April and remitted to the agency in May. Widespread social distancing requirements were in place across much of the state throughout April. Comptroller Hegar said, “Significant declines in sales tax receipts were evident in all major economic sectors, with the exception of telecommunications services. The steepest decline was in collections from oil and gas mining, as energy companies cut well drilling and completion spending following the crash in oil prices. The business closures and restrictions and stay-at-home orders due to the COVID-19 pandemic spurred deep drops in collections from restaurants, amusement and recreation services, and physical retail stores. These declines were offset in part by increases from big box retailers and grocery stores that remained open as essential businesses, online retailers and restaurants that could readily pivot to takeout and delivery service. With the easing of state and local government social distancing orders beginning in May, business activity in the sectors most affected by measures to curb the pandemic should begin to slowly recover, but operations resuming at reduced capacity will result in continued reductions in employment, income and activity subject to sales tax for months to come.” Sales tax is the largest source of state funding for the state budget, accounting for 57 percent of all tax collections, but the effects of the economic slowdown and low oil prices were evident in other sources of revenue in May 2020. Texas collected the following revenue from other major taxes: Motor vehicle sales and rental taxes - $265 million, down 38 percent from May 2019 and a modest improvement over April’s results; Motor fuel taxes - $221 million, down 30 percent from May 2019 and the steepest drop since 1989; Natural gas production tax - $31 million, down 76 percent from May 2019; Oil production tax - $90 million, the lowest monthly amount since July 2010, down 75 percent from May 2019 and the steepest drop since a 77 percent drop in March 1988; Hotel occupancy tax — $8 million, down 86 percent from May 2019 and the steepest drop on record in data going back to 1982; and Alcoholic beverage taxes — $28 million, down 76 percent from May 2019 and the steepest drop on record in data going back to 1980. The Comptroller extended the due date for franchise tax payments this year from May 15 to July 15, meaning that comparisons to May 2019 collections are uninformative. The Comptroller’s office detailed other COVID-19 impacts to the Texas economy, including the skyrocketing claims for unemployment benefits, in the most recent edition of Fiscal Notes . Also, there is an extensive history of tax policy developments and fees since 1972, in the comptroller’s updated Sources of Revenue publication. The Highs and Lows of Texas Taxes – On June 8 th , Texas Taxpayers and Research Association (TTARA) issued a report, “The Highs and Lows of Texas Taxes” that explores the question, “Is Texas a low tax state or a high tax state?” The report concludes the answer is, “That depends on whether you’re an individual or a business.” The report is the latest in a series of studies TTARA has done over the years assessing state and local tax burdens on individuals and businesses across the 50 states. Though specific rankings have changed over the years, the basic story has not: Texas is a low tax state for individuals and a high tax state for most businesses. TTARA President Dale Craymer said, “This research brief clearly dispels the common misconception that Texas is a low tax state for businesses. A look at the various taxes paid by individuals and businesses shows that while Texas’ tax system is friendly for the individual Texan, the state is at a disadvantage when competing for businesses, particularly capital intensive ones like manufacturers.” Among the findings in the research brief: Because Texans do not pay an individual state income tax, unlike the residents of 43 other states, their state and local taxes relative to the money they earn rank Texas third lowest – 40 percent below the average across the states. By relying heavily on property and sales taxes, the average state and local tax burden on businesses in Texas relative to their economic output scores 11th highest, or 19 percent above the average of the states. Businesses pay almost two-thirds (62.3 percent) of the taxes collected by Texas state and local governments, versus 43.5 percent in the average state. Individual Texans pay 37.7 percent of all state and local taxes collected, well below the national average of 56.5 percent. The sales tax is typically thought of as a consumer tax, yet businesses pay 43 cents of every dollar the state collects. Sales Tax Distribution to Local Governments – On June 10 th , Comptroller Glenn Hegar announced that he will send cities, counties, transit systems and special purpose taxing districts $690.4 million in local sales tax allocations for June, 11.7 percent less than in June 2019. The allocations are based on sales made in April by businesses that report tax monthly. Because of the COVID-19 pandemic, widespread social distancing requirements were in place across much of the state in April, leading to the steepest year-over-year decline in allocations since September 2009. TAM/TTARA Op-Ed Supporting Chapter 313 Agreements – On June 23 rd , Tony Bennett, president and CEO of the Texas Association of Manufacturers and Dale Craymer, president of the Texas Taxpayers & Research Association released an op-ed in support of Chapter 313 agreements, specifically the Tesla and Del Valle ISD proposed agreement. It said, “Tesla is seeking a limited property tax discount, which will likely be the focus of most headlines, but the project itself offers a textbook study in how tax incentives can provide a win for the potential new taxpayer, but an even bigger win for the community. Tesla has applied for an agreement with Del Valle ISD under Chapter 313 of the Tax Code. Here’s how the agreement would work: Del Valle ISD currently levies property tax rates of $0.97 per $100 of value for maintenance and operations (M&O) and another $0.35 per $100 for voter-approved bond debt service. A 313 agreement would allow Tesla a limited, temporary discount against the district’s M&O taxes, but not against debt service taxes. The land that Tesla is looking to develop is currently on the tax rolls at $5.1 million, generating about $50,000 in annual M&O property taxes for the school district. Tesla seeks a temporary, 10-year cap on the taxable value of their projected facility of $80 million. That means even in a year the incentive is in effect, Tesla will be paying almost $800,000 in school M&O property taxes - a 16-fold increase over the taxes the district currently collects on those properties. Once the incentive expires, Tesla’s facility will be fully taxed, paying roughly $4 million annually. Over the 25 years of the project, Tesla will pay a total of $66 million in school M&O taxes, which amounts to $65 million more than what the district would collect if the land remains largely undeveloped. How many new dollars that may mean for the school district will depend on state aid formulas, but the end result is still higher tax revenues. But that’s only part of the equation. At current tax rates, Tesla will also pay an additional $42 million in debt service taxes to the school district over the next 25 years. All totaled, Tesla would pay $108 million in property taxes to Del Valle over the next 25 years. Absent a 313 incentive, Tesla’s tax bill would be $158 million. That $50 million Tesla would save won’t cost Del Valle taxpayers a single penny. And unless the district issues new debt, Tesla’s debt service taxes could allow the school district to reduce the current debt tax, meaning current Del Valle taxpayers would actually save on their bills. Basically, it’s a binary decision: Offer Tesla a limited tax discount and collect $108 million in net new taxes, or don’t offer Tesla anything. Let them go elsewhere. That passed-over property won’t even generate $2 million in school taxes over the next 25 years. Let’s set aside the tax numbers and talk about the 5,000 new high-wage jobs at the Tesla plant. (Editor's note: The average salary at the Tesla factory is expected to be $47,147.) Those numbers substantially underestimate the statewide impact of the project. Tesla will buy materials and services from other businesses to keep their plant running. Those businesses will hire more workers to increase their production. Tesla’s workers will be regulars at Austin restaurants and other businesses, adding to their payrolls. The Bureau of Economic Analysis tells us that every auto manufacturing job creates another 5.8 jobs. Those 5,000 jobs in Del Valle could mean a total of more than 30,000 new jobs statewide. Offering incentives to successful multi-national businesses can be unpopular on the surface, but in fact, Texas can’t compete for many projects without them. Absent a personal income tax, Texas relies much more heavily on property taxes. Reportedly, Tesla is also looking at Oklahoma, where property taxes are a third lower than they are here. Absent incentives, Texas simply couldn’t compete tax-wise with most other states. Used correctly, economic incentives work. They don’t mean less money for taxing units, they actually leverage new tax dollars. And they bring new jobs to the entire community and state. That’s a win-win no matter how you keep score.” TORT: TCJL Pandemic Task Force – On June 2 nd , Texas Civil Justice League announced that three of Texas’ top legal experts on civil justice issues have agreed to join the TCJL Pandemic Task Force in advisory roles: former State Senator and Texas Tech Chancellor Bob Duncan, a prime architect of civil justice reforms in 1995, 2003, and 2005; former Chief Justice of the Texas Supreme Court Tom Phillips, currently a partner at Baker & Botts in Austin; and longtime TCJL advisor; and veteran litigator Shannon Ratliff, now a partner in the Austin office of the Midland-based law firm Davis, Gerald & Cremer. TCJL’s Executive Director Carol Sims said “We cannot express the depth of our gratitude to Senator Duncan, Chief Justice Phillips, and Shannon Ratliff for their willingness to assist TCJL with this critically important effort. All told, they bring more than a century of legal, judicial, and legislative experience to the table. This is just what Texas needs as we begin to build a legal structure in which businesses, health care providers, educational institutions, non-profits, and local governments can operate safely and with confidence in the current crisis, and, if necessary, in future pandemics.” The TCJL Pandemic Task Force has begun work on the identifying the potential legal ramifications of the coronavirus pandemic and possible legislative approaches for the 2021 regular session. TCJL General Counsel concluded, “We are concerned that the uncertainty surrounding liability exposure in the current environment will impede our economic recovery, adversely impact the health care system, and make it harder for our schools and universities to bring students back to campus. We’re in an unprecedented situation with a lot of unknowns, but Senator Duncan, Chief Justice Phillips, and Shannon Ratliff will help us ask the right questions and direct us to the best answers.”

TRANSPORTATION

Keep Texas Moving Coalition Supports Infrastructure Investment – On June 23 rd , local leaders from across the state joined representatives from Texas Association of Business (TAB) for the official launch of Keep Texas Moving , a coalition to support innovative infrastructure investment in Texas. The coalition, which includes small and large businesses, local chambers of commerce, commuters and local leaders in addition to TAB, is advocating for public-private partnerships that will help spur economic recovery, create jobs and build a better transportation system. By leveraging the private sector for key transportation projects, more Texas taxpayer dollars will be available for other essential spending priorities. Jeff Moseley, CEO of TAB said, “With oil severance tax, gasoline tax and motor vehicle sales tax revenues suffering from the COVID-19 recession and falling energy prices, funds available for Texas roads and highways are expected to take a big hit. But Texas must continue to improve and build new highways, roads and bridge infrastructure to accommodate population growth and stimulate economic recovery. Texas should once again look for innovative ways to fund transportation construction projects, including state approved private investment and optional toll lanes to pay for improved infrastructure. Our Keep Texas Moving coalition is all about fixing Texas roads and creating Texas jobs while harnessing the power of the private sector to help pay for needed transportation improvements.” The coalition presented statistics supporting their position: Texas will grow by 12 million people in the next 20 years, from 29 million today to more than 40 million by 2040. The Texas economy is expected to double by 2050. Each day, Texas adds more than 1,000 new people and hundreds of vehicles to Texas roadways. Texas’ roadway congestion is now at its worst level since the Texas A&M Transportation Institute began tracking traffic congestion in its Urban Mobility Report in the early 1980’s. A coalition of USA transportation experts recently estimated that transportation revenue will decline by 30 percent on average over the next 18 months, with some states potentially experiencing revenue losses as high as 45 percent. The coalition also presented results of a recent survey conducted by polling firm Morning Consult for TAB including: 84 percent of Texas voters believe it is very or somewhat important for Texas leaders to address infrastructure next year. 72 percent of Texas voters support public-private partnerships to fund highway and other infrastructure projects. 71 percent of voters said giving drivers the option to get to their destinations more quickly by paying a toll is an important benefit of a public-private partnership.  82 percent of voters agree that using public-private partnerships will free up public funds for other government programs. 94 percent said the most important outcome of public-private partnerships is increasing local jobs. Chris Wallace, CEO of the North Texas Commission, noted two privately financed projects in the North Texas region have saved taxpayers money. He said, “The LBJ Express project was completed at a 70 percent construction cost savings to state taxpayers and the northern segment of the North Tarrant Express is being constructed at zero cost to Texas taxpayers. It’s time for Texas to once again be open for private investment in our roads and bridges. With the COVID-created recession straining Texas coffers, we should welcome private dollars to build needed roadways and free up traditional tax dollars for other transportation projects or for critical health care, public education or emergency preparedness needs.”

WORKFORCE

Texas Economy Added Private Sector Jobs in May – On June 19 th the Texas Workforce Commission (TWC) announced that the Texas economy added 291,000 private sector positions over the past month. In May, Texas saw a decrease in the state unemployment rate to 13.0 percent. This is the first decrease in the state unemployment rate since March 2020 when the Texas economy was impacted by the COVID-19 pandemic. Texas is below the national rate of 13.3 percent. TWC Chairman Bryan Daniel said, “The Texas Workforce Commission remains determined to help all Texans return to employment or find new careers through innovative skill enhancement programs that will benefit all our communities. The Texas economy is reopening and TWC will continue to connect job seekers with employers through upskilling and personalized services." In May: Leisure and Hospitality Industry added 176,400 jobs; Education and Health Services added 51,900 positions; and Trade, Transportation, and Utilities added 20,700 positions over the month. TWC Commissioner Representing Labor Julian Alvarez said, “Our workforce is made up of millions of skilled Texans ready to get to work. If you have not already, register at WorkinTexas.com, reach out to your local board and explore the training opportunities available in your area.” The Amarillo Metropolitan Statistical Area (MSA) recorded May’s lowest unemployment rate among Texas MSAs with a non-seasonally adjusted rate of 8.5 percent, followed by the College Station-Bryan MSA with the second lowest rate of 8.6 percent. The Abilene MSA recorded the third lowest rate of 8.9 percent. TWC Commissioner Representing Employers Aaron Demerson concluded, “Texas businesses are opening their doors, taking precautions and working around the clock to serve all Texans. TWC and our partners are as committed as ever to providing relevant and useful information to all employers across the state.”

UPCOMING PUBLIC POLICY EVENTS

Plano Chamber Public Policy Committee Meeting Wednesday, September 16th 8:00 am to 9:00 am Zoom The Zoom meeting link will be sent to all registered at 5:00 pm on Tuesday, September 15th. Register HERE !

STATE WEBSITES

Additional information can be obtained via the Senate, House, and Capitol websites: www.senate.state.tx.us www.house.state.tx.us www.capitol.state.tx.us

Initiatives like these are made possible with support from:

‌ ‌ ‌