From the Office of State Senator John Carona

FOR IMMEDIATE RELEASE
[DATE], 1998
CONTACT: John Krueger, 512/463-0116

Senator John Carona -- capitol update

December 1998

76th LEGISLATIVE PREVIEW

As the 76th Legislature prepares for the upcoming session which begins January 12, 1999, much of the groundwork on major issues has been laid through the hard work of interim committees. Numerous committees held hearings throughout the state gathering information with which to recommend legislative changes. While no one can predict all of the more than 5,000 bills which will be filed by legislators during the next five months, this newsletter will discuss some of the major issues and recommendations.

Before beginning a discussion of the issues, it is important to take note of the major changes in statewide officeholders. Beginning in January, there will be a new Attorney General, Comptroller, Land Commissioner, Agriculture Commissioner, and Lieutenant Governor. As the presiding officer of the Senate, the Lieutenant Governor exercises significant control over Senate functions. There is much speculation regarding possible changes of Senate committees and chairpersons of those committees. For this reason, it may be the end of January before any real work on legislation is begun in the Senate. The changes in the House of Representatives should be less dramatic as the Speaker is expected to remain in place.

Budget Surplus

One of the more significant issues facing the next legislature is the $5.3 billion surplus available for the next budget biennium. The $17.3 billion tobacco settlement will provide the state additional revenue for the next 25 years.

The growing state economy that produced the revenue surplus also places growth demands on state government. Increased public school student enrollment, prison growth, and the costs of federal mandates will consume more than $3 billion of the surplus. This leaves approximately $2 billion to finance the proposed spending requests and tax cuts. The good economic times should be enjoyed, but the legislature must act responsibly by setting aside some of the surplus to prepare for leaner economic times in the future--an action important for reducing the need for future tax increases.

Education

The recent election results demonstrated that education continues to be a top priority for Texans. As the Texas economy grows, and the state attempts to lure more businesses to Texas, the availability of an educated workforce is even more critical.

Several proposals which may be considered by the legislature could greatly affect the way education is financed in Texas. Currently, the majority of local school funding is raised through local property taxes with the rest financed by the state and a small amount from the federal government. Coupled with the Robin Hood school finance system, which requires school districts with the highest property values to send millions of tax dollars to lower wealth districts, the education tax burden has been growing on the backs of local taxpayers. To reduce this burden, the Governor proposes increasing the states share of education funding by $3 billion.

To assist students in financing their college education, some legislators propose granting tuition scholarships to students who have a 3.0 grade point average in high school and maintain that average while in college. Other states have already begun similar programs.

Another area of focus is the early education of students. Governor Bush has made literacy a top education priority. Through increased literacy programs and elimination of social promotion for younger students who fail to pass basic skills tests, all students will be given the necessary educational tools to accomplish future academic and professional goals.

An education-related issue which recently gained attention is the projected shortfall in the Teacher Retirement System (TRS) health insurance program for retired teachers. According to recent estimates, the program may experience an $81 million deficit by fiscal year 2001. The legislature must address this problem through a restructuring of the funding formulas.

Economic Development

The Texas economy continues to thrive as the unemployment rate lingers near five percent. Our state has witnessed an increase of more than 200,000 jobs since January 1998, as more companies are recognizing the benefits of doing business in Texas. However, the competition for attracting new businesses remains strong.

The legislature will consider several proposals to provide incentives for business in Texas. One would grant a tax credit for research and development. Our state is one of only a handful of states that does not provide this credit, which discourages businesses from moving their research and development departments to Texas. To continue high tech growth, we must become more competitive in luring research and development.

To assist small businesses, which make up more than 97 percent of all businesses in Texas, there is a proposal to eliminate the state franchise tax for businesses with income of less than $100,000. Small businesses are the heart of job creation and the legislature must do more to encourage their growth and expansion.

Tax credit and reductions can lead to increased business and job creation, which will stimulate more state revenue.

Taxation

The multi-billion dollar budget surplus provides the legislature a historic opportunity to establish funding priorities for the next biennium without having to cut services or raise taxes. Government currently spends too much rather than too little, which is why a portion of the record surplus should be returned to the taxpayers.

A direct form of tax relief is the proposal to eliminate the state sales tax on nonprescription medicine and health-related products. While Texas is one of the few states without a state income tax, it has a relatively high sales tax rate. Providing a sales tax break on these essential products will allow Texans to keep more of their hard-earned income.

Some legislators are looking for a way to add to the record $1 billion property tax reduction passed last session. While there is little chance of major property tax reductions being initiated this next session, an indirect way to encourage tax reduction is through increasing the states share of education financing which was mentioned earlier. By reducing the reliance on local property taxes to finance education, local property districts should be able to hold the line or lower tax rates, thereby lowering homeowners tax bills without reducing services.

I look forward to supporting initiatives that reverse the flow of tax dollars out of the pockets of Texans.

Health and Human Services

As long as there is illness and disease in the world, health care issues will remain a priority for Texas families. The legislature has made important changes to provide better access to the best health care system in the world. However, more still needs to be done.

The legislature has focused its attention on providing adequate health care coverage to the youngest and neediest in the state. Thanks to the multi-billion dollar tobacco settlement reached earlier this year, the state has the opportunity to dedicate a portion of this settlement to finance a new state/federal health care program for children. Entitled the Child Health Insurance Program (CHIP), this new program could provide Texas an average of $423 million each year for the next ten years to meet the health care needs of uninsured children. Preventive health care during the early years has proven effective in reducing long-term health care costs.

The major state health care agencies are up for Sunset review this session, which may lead to organizational changes. The Sunset process requires all major agencies to come before the legislature and justify their continuation. One staff recommendation would consolidate the Department of Aging with the Department of Human Services, a proposal which I oppose.

Legislators are looking to revise the welfare reforms passed in 1995. Some changes may be necessary for the state law to conform to federal requirements. In addition, the state is considering tightening requirements and increasing penalties for welfare recipients who are convicted of drug-related offenses or fail to assist the state in establishing paternity.

Other health-related changes will focus on the services provided through personal and home health care services and nursing home services. While legislation was passed last session to increase the protection and quality of care for nursing home residents, more changes are needed to ensure proper training of nursing home staff and adequate management of care for our most frail population.

Criminal Justice

Specific interim committees were appointed to address the problems presented by sex offenders, gangs and juvenile criminals, and other challenges facing the state criminal justice system.

The recent high profile executions of convicted killers have drawn attention to the way Texas punishes capital murderers. Legislation has been pre-filed to provide for the consideration of life imprisonment without parole rather than a death sentence.

To monitor dangerous sex offenders who otherwise are eligible for parole, an interim committee has recommended a civil commitment program. This program would allow the state to maintain treatment and supervision of these individuals, rather than simply release them into the community.

To address gang problems in Texas, the legislature will consider recommendations to fund juvenile prevention and intervention programs for at-risk youth, develop a statewide strategy for suppressing gang activities, and provide increased information sharing among law enforcement agencies regarding gang offenses and prison release of known gang members.

Public Information

The Open Records Act and Open Meetings Act were passed to provide exposure of government operations to citizens of Texas. While these acts have been fundamental to providing access to government documents and meetings, there are still problems with openness. I served on the Senate Interim Committee which studied this issue. Gathering information and testimony during eight hearings held across the state, the committee made several recommendations to improve the functioning of these acts. I plan to offer several bills to clarify the definition of open records held by government entities and streamline procedures for release of this information to requestors.

Additional Legislative Priorities

As part of my legislative package, I am interested in protecting consumers through legislation aimed at combating telecommunications companies who charge customers for unauthorized services or products. Known as cramming, this practice has become an epidemic in Texas that must be stopped just as slamming (the unauthorized switching of a customers long distance provider) was addressed last session.

DWI is also an issue which concerns me. Driving is a privilege in Texas, not a right, and that privilege carries responsibility. I plan to offer legislation increasing enforcement and punishment of DWI offenders. Those who drive in Texas on a license suspended for DWI would have their car impounded for the duration of that suspension. In addition, those who are convicted of DWI three separate times would permanently forfeit their driving privileges in Texas.

As the last state in the nation to authorize home equity lending, Texas is experiencing growing pains in implementing the provisions. Accordingly, I plan to offer legislation to clarify home equity and reverse mortgage provisions to make them more accessible to Texas homeowners, while preserving the important consumer protections.

If I or my staff can provide you any information or copies of the bills before the legislature, please to not hesitate to contact us at any of the addresses or numbers listed below. I look forward to serving you.

Sincerely,

John Carona

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