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February 26, 2002     (512) 463-0300

Senate Committee Hears Tales of Broken Homes

Some North Texas residents have spent well over half a million dollars for a home that's unlivable due to shoddy construction -- and there's no government agency they can turn to for help. That's what the Senate Committee on Intergovernmental Relations heard at a hearing on Tuesday, February 26th 2002.

A hundred homeowners gathered at the University of North Texas System Center in Dallas to testify not only about their homes, but the fact that they've found themselves living in water districts and county development districts where no one seems accountable.

County development districts were created by the Legislature as an aid in promoting tourism. But the homeowners at this meeting testified that in Denton County CDD's are being used by developers to pass on building costs to the taxpayers of the entire county. They spoke of unelected boards passing rules and regulations during poorly publicized meetings that are run by developers for the exclusive benefit of developers. Other homeowners said that the development districts have also been used to help builders escape the responsibility for homes that are in some cases, literally falling down.

The committee also heard testimony regarding the difficulty in getting emergency trauma care in remote areas. Members heard testimony from medical professionals who said that emergency medical help can arrive at an urban accident scene in a few minutes. It may take up to three hours to get to an accident in a rural area.

The Senate Committee on Intergovernmental Relations is chaired by Senator Frank Madla of San Antonio. Members include Senators Jon Lindsay or Houston, David Cain of Dallas, Craig Estes of Wichita Falls, Florence Shapiro of Dallas, Todd Staples of Palestine, Royce West of Dallas and John Whitmire of Houston. Joining the committee for this meeting was Senator Jane Nelson of Flower Mound. The committee recessed subject to the call of the chair, with its next meeting scheduled for late April.

You can access the archived webcasts from the web page of the Senate Committee on Intergovernmental Relations.

Senators Concerned About Rising Cost of Health Care

AUSTIN - A fast population growth and the rising costs of health services and pharmaceuticals keep health care under funded in the state, even with the 39 percent increase during the last legislative session. On February 26, 2002, the Finance Subcommittee on Medical Costs met at the Capitol to see where the money goes, and if it is possible to cut costs without risking lives.

Senator Robert Duncan chairs the subcommittee. The members must study the issue of rising medical costs and its impact on the state budget, including health and human services, correctional managed health care, and teachers and state employees benefits. Its final report should recommend ways to control cost increases and identify best practices and opportunities for savings.

The first witness, Stephanie Coates from the Legislative Budget Board (LBB), reviewed funding issues before the members. In its last session, the Texas Legislature appropriated $21.8 billion to health care in the current biennium, a $6 billion increase from the previous biennium. The funds pay for health services in programs like Medicaid and CHIP, mental health, active and retired state employees and teachers, and the population in correctional institutions. Medicaid, the biggest item in the health budget, had a 12 per cent increase in enrollment and 23 per cent increase in cost since the previous biennium. Health care for prisoners is also expensive, more than for state employees, due to treatment of conditions like HIV, hepatitis, and drug abuse. Unlike employees, prisoners are not responsible for a co-payment. Their health care is totally free.

Phyllis Coombs and Ruthie Ford from the Comptroller of Public Accounts, gave an overview of the comptroller's report on Texas Health Care Spending. They said that a third of the state budget goes to health care, and two thirds of that to Medicaid.

Matt Keith, Chair of the Interagency Council on Pharmaceuticals Bulk Purchasing, presented a report about the joint purchase program among the departments of Health, Mental Health, Correctionals, State Employees and Teachers. He also talked about the efforts to substitute name brands for generic drugs to cut costs.

Don Gilbert, Commissioner of the Health and Human Services Commission, made an agency presentation on Medicaid and CHIP. The Legislature appropriated four billion dollars more last session for the Medicaid program, and simplified its process. But the program continues to grow, as it happens in every state, and is still under funded. Sixty-two per cent of those enrolled are less than 18 years old. The program serves predominantly Hispanics and pregnant women. Fifty-two percent of births in Texas are covered by Medicaid.

Gilbert explained to the members the 4:1 ratio between in patients and out patients' costs, indicating the importance of preventive care before the patient needs extended hospital confinement or emergency room care. Another big expense that keeps increasing is pharmaceuticals, the fastest growing item in Medicaid. New drugs are better but more expensive.

Although Medicaid is the fastest growing cost in state government, Texas is one of the states with the lowest abuse of the program. The state also has one of the lowest percentages of enrollees among people who qualify based on their income. CHIP provides health insurance to 530,000 children. Another 240,000 are eligible but not enrolled. Senator Truan said is not humane to cut costs if the poor are going to pay for it. The state government is also loosing federal matching funds for the program, since it does not invest as much as it should. Senator Barrientos said: "Texas and Arizona are dead last in insuring children." Gilbert replied that reductions in costs would not translate in more limits to enrollment.

The committee recessed subject to the call of the chair.

You can access the archived webcasts from the web page of the Finance Committee.

Industries Push for Lower Taxes

AUSTIN - The Senate Interim Committee on Finance met at the Capitol on February 26, 2002, to review its first interim charge. The group must survey and assess Texas' current tax system, including taxation authority given to units of local government. The final report should identify the economic value associated with all current taxes, as well as existent exemptions and abatements.

Senator Rodney Ellis of Houston chairs the committee. He welcomed to the hearing representatives of ten different industries, and asked them about the pros and cons of doing business in Texas, and what other states are doing.

Representatives of the Texas Strategic Economic Development Planning Commission presented a report about the role of Texas in the global economy. The state has grown in a relatively short time from an agricultural to a technological economy, and from a mostly rural society to one in which the population is concentrated in urban areas. The report indicates that the biggest need in relation to economic development is a better-educated and better-trained population. A well-prepared work force is the first goal to attract capital to the state. The study recommends ending social promotion in the school system, and more student accountability. It also indicates that the tax system is favorable to new businesses when compared to other states. Texas has no corporate or income taxes.

Also present were members of the Texas Taxpayers and Research Association, an organization made up of businesses. They advocated for less taxes, as did the representatives of ten different industries: accounting, airlines, chemical, health care, insurance, the legal profession, oil and natural gas, technology, telecommunications and utilities. Benefits for businesses operating in Texas include: current population growth, large urban areas and the quality of life. One of the negative points usually named was the lack of a well-trained, well -educated population. Almost all said they were unfairly taxed, asking for parity in the tax system among different industries, and those in other states.

Lower taxes and a higher investment in public education means less revenue in the already suffering state coffers.

Public witnesses followed the invited testimony. The committee recessed subject to the call of the chair.

You can access the archived webcasts from the web page of the Finance Committee.

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