Texas Public
Economic & Social Policy
• Topical Scenario
• Economic Policy
• Social Policy
• State Finance
• Education Policy
• Health and Human Services
• Transportation Policy Policy
Topical Scenario
• Texas Public Policy Foundation
• Founded by Dr. James Leininger in 1990
• Initially supported electing conservatives to the
SBOE
• Expanded to support business community
agenda
• Continues to support conservative policies.
• TPPF
Center for Public Policy Priorities
• 1985 - Catholic Group focused on improving
health care for the poor
• Became independent research Group in 1999
• Priorities
– Workforce/Economic Development
– Access to public benefits
• Medicaid, Food Stamps, Welfare (TANF)
– Kids Count.
• CPPP
• Texans for Fiscal Responsibility
Public Policy Heritage
• From 1876 - 1976 Texas was a one party
state.
• Policy decisions pitted wealthy,
conservative Democrats against the
liberal/populist Democrats.
• Rich influential Democrats controlled the
campaigns and government.
• Economic policy controlled social policy
• Now the business oriented Republicans
control the government and economic
policy still drives social policy.
Primary Public Policy Areas
• Economic policy - affects economic
activity or has economic consequences for
groups or individuals.
• Social policy - guides our development
and relationships as human beings and
our interaction with the environment.
• Security policy - provides protection of
life and property while making every
effort to respect the personal rights of
individuals.
Policy Process
• Process Stages
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Agenda setting
Policy making
Implementation
Evaluation
• Policy Actors
– Business
– Elected Officials
– Special Interest Groups (TPPF)
• Policy Outcomes
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Distribution/redistribution of resources
Balancing power (economic and political)
Improve quality of life and environment
Political Economy
• Web of economic, social, governmental, and political
institutions and processes
Proposition 15
• $3,000,000 Bonds Proposal for Cancer Research
• Policy Actors
– LiveStrong Challenge – Lance Armstrong
– Patrick Rose
• 109 other Texas representatives
• Senate by overwhelming vote - ? (Proposition 11)
– Families Against Cancer Tax
• Policy Outcome
– Improve quality of life and environment
Economic Policy
• Fiscal versus Monetary Policy
• Includes policies which: improve job
availability, regulates productivity and
work environments and competition and
environmental concerns.
• Sometimes overlaps with social policy
• Pressures for regulation increases as
population increases and become urban
Subsidizing & Regulating
• Subsidizing - grant of economic resources
– land, highways, tax breaks, debt refinancing
• Regulation - restriction on certain business
activities (for example establishing a minimum
wage)
• 19th century - laissez faire
• First regulation use Railroad Commission
• Today includes financial institutions, oil
and gas production, utilities, insurance
and labor
• Affected by ideology, public opinion, and
interest groups
Wealth and Poverty
• Significant uneven distribution of
resources
• 17 % of population below poverty level
– 26% of Hispanics, 23% of African Americans
and 7% of Anglos
• State politics controlled by wealthy elite
• Economic policy developed and designed
by the wealthy elite
• Higher the income and education the more
politically active.
Budgeting and Borrowing
• Biennial budget system - 9/01/07 until 8/31/09
• Current budget $157 billion ($130 in 2005-2007)
• Legislative Budget Board (LBB) and the Governors
Budget Office (GBO) prepare budgets for
consideration
• Constitutional requirement to balance budget
• Legislature can borrow bond money within
constitutional debt ceiling – this is an exemption to the
balanced budget requirement.
The Budget Process
• Comptroller estimates available revenues
• Legislature uses LBB and GBO inputs to write
budget
• Comptroller must certify final budget bill
• If comptroller does not certify budget,
legislature may override with 4/5 vote
• Dedicated funds limits flexibility
• Constitutional limits based on economic growth
and welfare spending
• Budget execution authority - emergency budget
actions allowing LBB and Governor to move
funds in crises
Projected Growth
Certification for 2008/09
New Budget Surplus Projected
• From $4.3 Billion to $8.7 Billion
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Sales tax $1.681 billion
Franchise $719 million
Oil Production $524 million
Natural gas $1.799 billion
Other taxes and fees $950 million
Revenue - State Income
• Taxes – 51% of revenues
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general sales tax – 61%
new corporate franchise tax – 8.6%
motor fuel sales tax – 2.5%
motor vehicle sales tax – 10.2%
Insurance tax - 4%
oil/natural gas tax – 7.3%
tobacco, alcohol - 4%
utilities, inheritance, hotel/motel – 2.6%
Federal funds - 31%
Licenses and fees - 8%
Lottery - 3%
Other - 7%
Revenue - Federal Funds
• Primarily in form of grants
• Categorical grants - specific areas within
education, welfare, transportation
• Block grants - social services, child care,
Development Assistance to Needy Families
• 67% of federal aid goes to health and human
services
Tax Effects on Individuals
• Progressive tax increases as incomes rise
• Regressive tax decreases as incomes rise
• Proportional tax is a flat tax not
connected to income
• Federal income tax is progressive
• Sales tax is regressive
• In Texas the tax system is regressive
– income < $19000 pays 13.8% in taxes
– income $50000 - $70000 pays 8.5% in taxes
• Based on GDP – Texans pay one of the
lowest amount of tax.
Spending 2006/7
• Budget was $130.5 billion
• Texas ranks 50th in per capita spending
– Constitutional amendment limiting welfare
spending
– California collects 44% more in tax dollars
but spends 61% more per person than Texas
• Spending by category
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Category
Education
Highways
Health
Welfare
National
30%
6%
7%
23%
Texas
34%
8.6%
37.8%
Education
• Constitutional right - Article 7, Section 1
– “an efficient system of public schools”
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TEA created in 1949
Largest state agency with a $13 billion budget
1033 ISDs - most in nation
274 Charter Schools - state contract schools
funded at $61 million not linked to any ISD.
• KIPP
• 5.4% of students attend private schools
School Financing
• State provides 38%
• Federal government provides 10%
• Local ISDs provide 52%
– Derived from property taxes
• Permanent School Fund - endowment
– revenue from state owned land
• Available School Fund - investment
income
A Question of Equal v. Efficient
• “an efficient system of public free schools”
• Rich districts versus poor districts
• Rodriguez v. San Antonio ISD 1971
– Federal lawsuit addressing equality in education.
– Texas school finance does not guarantee U.S.
Constitutional equality.
– Edgewood ISD - $5960 property value/student
– Alamo Heights ISD - $ 49000 prop val/stud
• U.S. Supreme Court upheld system
– agreed system in Texas not equitable
– but…education not a fundamental right
– Court upheld Texas position
• 1973 - 1987 little state reform
• 1989 Edgewood v. Kirby - Texas Supreme Court
agrees system is unconstitutional
• Court not satisfied until 1995
Robin Hood to the Rescue
• 83 ISDs had $465,535 ($796,732) property
val/stud
• 35 ISDs had $49,946 ($52,158) property val/stud
• 116 ISD’s pay - 883 receive -$2.5 Bil
• Courts directed redistribution of assets
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Capped taxable property wealth at $295,000
Rich districts consolidate with another (0)
Detach property and transfer to another (0)
Send money to state to transfer to another (66)
Pay for students in another district (20)
Consolidate tax base with another (0)
2004/6
• 300 ISDs sue state over wealth redistribution and tax
cap
– West Orange-Cove Consolidated ISD v. Alanis
• Texas Supreme Court agrees
• 2005 legislative session results in no plan for future.
• Special session began April 17th to address issue before
June 1st deadline
– New Business Franchise tax
– Cigarette tax increase $1.00 per pack
– Reduction in property Tax
Education Quality Efforts
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1983 Select Committee on Public Education
Increased teacher salaries
Mandated teacher testing
No pass - no play rule
TAAS Testing
1990 initiatives
– testing changes; TAKS now.
– safety
– social promotion
Texas Higher Education
• 100 institutions regulated by the
Coordinating Board of Higher Education
• Tuition for residents one of lowest in
nation
• Permanent University Fund (24 schools)
• Higher Education Fund (32 schools)
• Funds generate $475 million per year
• Hopwood case cause decrease in minority
enrollment
• Top 10% rule
Health and Human Services
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Joint entitlement program
Federally funded and run by state
Food Stamps - eligible low-income people
Head Start - education/health care preK
Social Security - retirement/supplemental
income
• AFDC - abolished in 1996 replaced by
Temporary Assistance to Needy Families
• Texas Department of Housing and Community
Affairs - block grants
• Texas is known for high poverty rates and low
social spending.
Health Care
• 1 in 4 Texans has no health insurance
• Medicaid - insurance for low-income
• Medicare - insurance for elderly and
disabled
• Children’s Health Insurance Program
– covers qualified children not using Medicaid
• Texas Healthy Kids Corporation
– state contract with private providers
– Goal 33% of children covered by 2004
– Discontinued because most in CHIP
Adequacy of Social Services
• Temp Assistance to Needy Families
– $1.2 billion in federal assistance for Texas
– $600 million provided by State of Texas
– $209 per family due to number qualifying
• Lone Star Card (Food Stamps)
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2.7 million applied in 1994
1.4 million applied in 1999
2.3 million applied in 2004
$85 per recipient per month
only 50% qualifying apply
Texas lost $800 million in 1999
Addition Policy Areas
• Gun Laws
– Handgun restriction
• Capital Punishment
– Mentally Retarded
– Adolescents
– Cruel and unusual punishment
• Abortion
– Parental notification/consent
– Waiting period
• Water Usage
• Air Pollution
• Global Warming
Transportation Policy
• Trans-Texas Corridor
• Focus on Texas Department of
Transportation (TxDOT) - roads
• Who pays?
– As you go
– Bonds
– Tolls
Pay-as-you-go or Tolls
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Interstate Highway System
Dallas Fort Worth Turnpike
Dallas North Toll Road
Sam Houston Toll Way
Transportation Taxes
– Federal gas tax – 18 cents/gallon
– State gas tax – 20 cents/gallon
• Hasn’t increased since 1991
Texas Mobility Fund
• Created by legislature in 2001
• Revolving Bond Fund for creating of toll
roads from existing roads
• Regional Mobility Authorities (RMA)
– Central Texas RMA created
– Expanded powers in 2003
– Capitol Area Metro Planning Organization
Policy and Public Opinion
• Constructing Public Opinion from
Surveys
• Public Opinion, Political Knowledge,
and the Importance of Ignorance
Measuring Public Opinion:
Questions
• How can public opinion be
measured?
• What problems arise from public
opinion polling?
Constructing Public Opinion
from Surveys
• Public opinion polls are scientific
instruments for measuring public
opinion.
• To be accurate, the poll must be
based on a representative sample of
the population.
• The validity of the poll depends on
the sampling procedure used.
• Straw polls - not representative polls
Problems with Polls
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The good citizen response
The bandwagon effect
Inconsistent responses
Push polls
Survey wording
Question Differences
Tax
TaxCuts
Cuts
Def
Prog
New Prog
Other
Other
Don't
Don'tKnow
Know
70
60
60
50
%%
2260
6925
612
34
%
%
50
40
40
30
30
20
20
%
10
10
00
Tax
Tax
Cuts
Cuts
Def
New Other
Other Don't
Don't
Prog
Know
Prog
Know
Texas Polls
• Affirmative Action - 1988
– 69% Oppose using in government employment
– 72% Oppose in private employment
– 52% Say it should be eliminated (1995)
• Funding Public Education - 1988
– 40% Consider it fair 32% Consider it unfair
– 45% Say funding inadequate 29% adequate
– 80% Support increased education spending (2005)
• 56% Opposed increasing sales tax to do it.
– 58% Support “Robin Hood” Plan (2005)
• English as Official Language - 1987
– 74 % favor
Flag Burning and Abortion
• Flag Burning - 1989
– 67% felt a flag burning amendment would not be a
limit on freedom of speech
• Abortion
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63% felt it should be conditionally legal in 1989
16% felt it should be absolutely illegal in 1989
41% felt it should be illegal in 1997
80% favored parental notification
77% favored the 72 hour waiting period
Illegal Immigration 2004
• 86% felt very serious problem - 13% not
serious.
• 48% favor Bush plan - 45% oppose plan.
• Hispanics: 55% favor plan - 40% oppose
plan.
• Anglos: 49% favor plan - 45 % oppose.
• Blacks: 37% favor plan- 56% oppose.
Medical Marijuana 2004
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75% favored idea
19% opposed idea
6% clueless
83% in Central Texas favored idea
Favored by Party
– 67% of Republicans
– 81% of Democrats
– 82% of Independence
• Favored by Age
– 18 - 29 - 81%
– 40 - 49 - 70%
– 60 - 80 - 60%
Gun Control and Civil Liberties
2004
• 80% Support renewing the assault
weapons ban
• 56% Support limiting civil liberties to
fight the war on terrorism
Taxes and Gambling 2005
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68% Support video lottery terminals
28% Opposed
4% Clueless
54% Say property taxes are too high
65% Support increasing cigarette tax by $1 per
pack.
• 33% Opposed
• 2% Clueless
Immigration Reform 2007
• Increase Border Security with Fencing – 83%
• Allow illegal immigrant chance to become legal
after fines, back taxes and background
investigations – 63%
• Penalty for employers hiring illegal immigrant
workers – 83%
• Require workers to return to native country
before status changes – 63%
UT Polls 2009
• Polls at Texas Textbook Web Page
Ideological Interpretations
• Hiring and Education Funding - majority favor
individualism over government regulation
• Social Issues (Abortion, Language, Flag
Burning, Religion in schools) - Majority
support government regulations.
• Polls show tendency to conservative ideology.