The Real Texas Challenge:
Human & Resource Infrastructure Crisis
One Texas is driven by:
1)
Demographic shift of Texas
2)
Need to elect a new class of Latino Leaders
3)
Ensure our leaders are focused on:
• Making Hard Choices
• Smart Investments
• And asking Texans to share in the sacrifices
Pd. Pol. Adv. by One Texas PAC, 130 E. Travis Street, Suite 425, San Antonio, Texas, 78205
Future of Texas: 2011-2012 k-12 Demographics
• What are the Anglo & Latino population
percentages of Houston ISD?
• What are the Anglo & Latino population
percentages of Dallas ISD?
• What are the Anglo & Latino population
percentages of San Antonio ISD?
• Statewide in all ISDs?
HISD 2011-2012 k-12 Demographic
What are the Anglo & Latino
population percentages of
Houston ISD?
Anglo: 8% Latino: 62%
DISD 2011-2012 k-12 Demographic
What are the Anglo & Latino
population percentages of
Dallas ISD?
Anglo: 4% Latino: 69%
SAISD 2011-2012 k-12 Demographic
What are the Anglo & Latino
population percentages of San
Antonio ISD?
Anglo: 2% Latino: 91%
Statewide 2011-2012 k-12 Demographic
Statewide in all ISDs?
Anglo: 30.5% Latino: 51%
3.5 million Minority children out
of 5.0 million, nearly 70%
Notable ISDs
Latino majority in a matter of 2-3years:
Tyler ISD 43%
Amarillo ISD 44%
Galveston ISD 46%
What Does the Future hold?
• 62.4% of today’s public school students K-12
are low income
• 2,976,311 children on free or reduced lunch
• In 1999-2000, it was 52.5 percent
• 1999-2000: 1,974,319 children in the free and
reduced lunch program
• 1.0 million more children in 12 years. Trend
line suggests it will only get worse.
Source: Kids Count Database available at
http://datacenter.kidscount.org/data/bystate/stateprofile.aspx?state=TX&group=All&loc=45&dt=1%2c3%2c2%2c4
Rapid Demographic Change:
Texas Public School Demographics 1995 to 2012
3,000,000
Bottom line
2,500,000
Between 1995 and
2011-2012:
2,000,000
1,500,000
Anglo
Latino
1,000,000
•229,763 fewer white
students
•1,144,114 more
Hispanic children
500,000
0
# of Children
# of Children
Enolled in 1995- Enroled in 20111996
2012
Source: Texas Education Agency
Demographic Change
Texas Population 1850-2010
30,000,000
25,000,000
2010 CENSUS
•4.293 Million new Texans
•89.1% of new Texans are
Minorities, fully 3.825 million
people
20,000,000
15,000,000
10,000,000
5,000,000
0
•65% of the population growth in
the last decade is Latino or 2.791
million new Latinos just in the last
decade
•1 million new children added to
Texas from 2000-2010, 95% of them
are Latino.
•9,460,921 Latinos in Texas, nearly
38% of the population
Classroom Comparison 2000 v. 2040
Source: “The Population of Texas: Historical Patterns and Future Trends Affecting Education”, Steve Murdock, p. 40
Yet, these Latino students will only make up a
plurality of college students
Source: “The Population of Texas: Historical Patterns and Future Trends Affecting Education”, Steve Murdock, p. 42
By 2040, Latinos will be driving the Texas Economy
Source: “The Population of Texas: Historical Patterns and Future Trends Affecting Education”, Steve Murdock, p. 45
Growing & Declining
Implication:
A Texas
economy
that will be
weaker, less
educated,
and poorer.
Source: “The Population of Texas: Historical Patterns and Future Trends Affecting Education”, Steve Murdock, p. 49
A less healthy Texas
The right thing to do: Texas is the uninsured
capital of the United States. More than 6.23
million Texans - including 1.2 million children
- lack health insurance.
Return on Investment (ROI): If Texas chooses
to expand Medicaid to adults, the Federal
Government will provide Texas $100 billion
over the next ten years to fund the growth
of the program. This expansion would only
cost Texas $15 billion. This is an ROI of
567%.
Jobs, Jobs, Jobs: Medicaid expansion would
generate 231,100 jobs by 2016, the first year
of full implementation. Many of these jobs
would be in health care, an industry that
pays well and provides good job security and
benefits, including health insurance, and
wages would average $50,818 during the
2014-2017.
Texas Economic Impact from
Medicaid Expansion
231k
New Jobs
Lowers the
Unemployment
Rate by 1.8%
$90 Billion Dollars in
increased economic
activity
Sources: http://www.texmed.org/Uninsured_in_Texas/#who ; http://www.nytimes.com/2012/12/02/us/texas-democrats-expect-deal-on-medicaid-despite-perry.html ; "Smart, Affordable and Fair: Why
Texas Should Extend Medicaid to Low-Income Adults", Commissioned by Methodist Healthcare Ministries of South Texas, Inc. p. 21, http://www.star-telegram.com/2013/01/24/4573849/nelsonproposes-a-deal-for-medicaid.html
Resource Infrastructure Challenges
Texas faces several urgent resource and
infrastructure challenges:
Water Policy
“Pray for Rain”
1997 Water Plan
• In 1997, the State adopted a Water Plan
• The purpose of this plan is to ensure that our state’s cities, rural
communities, farms, ranches, businesses, and industries will have
enough water to meet their needs during a repeat of the drought of
record.
• Authorizing the construction of 18 water reservoirs
• Allocating $2.72 Billion dollars to fund massive amounts of water
infrastructure improvements.
Source: Texas State Water Plan 2007, p. 213
The longer we wait the more we will pay
5 years
10 years
15 years
Category
2002 Water Plan
2007 Water Plan 2012 Water Plan
Cost of
Implementation
$17.9 Billion
$31 Billion
$53 Billion
5%
13%
Status of
Completion
Source: Texas State Water Plan 2007, p. 8
-
Estimated Cost for 2012 Water Plan
“…trends indicate
that delays in the
implementation of
projects will likely
result in continued
cost increases…”
The 2012 State
Water Plan will
cost $53 Billion.
2012 State Water Plan Stats
• Texas’ population is expected to
increase by 82% from 2010 to
2060 (25.4 million people to 46.3
million people)
Water Supply & Demand 2010 v. 2060
25
20
• Water demand is expected to
increase by 22% by 2060
15
2010
• Existing Water Supplies will
decrease by 10% by 2060 (15. 2
million acre feet)
2060
10
5
• We will need to increase our
water supply needs by 8.3 million
acre feet by 2060 (2.7 trillion
gallons)
0
Water Demand Water Supply
15 Years Later & No Progress
• No major reservoirs built in the past twenty years
• Our water supply will not support our population
• Texas’ population will double by 2050
• Unless Texas increases its water resources, 83%
of the Texas population will not have adequate
water supply in times of drought
Source: http://blog.chron.com/txpotomac/2011/08/analyzing-rick-perry%E2%80%99s-record-water-woes-could-cost-texas/
Ever been to Happy, Texas?
“Happy's
problem is that it
has run out of
water for its
farms. Its
population,
dropping 10 per
cent a year, is
down to 595.”
Available @: http://www.telegraph.co.uk/earth/8359076/US-farmers-fear-the-return-of-the-Dust-Bowl.html
Ever been to San Angelo?
“…San Angelo recently
came within a year of
running out of water, as
it faced a severe
drought that produced
brown lawns, dying
bushes — and fear.”
“…the drought in West
Texas is not over... The
two-year drought, the
region’s worst in more
than half a century, has
starkly exposed its
vulnerability. ”
Source: http://www.texastribune.org/texas-environmental-news/water-supply/despite-rain-west-texas-water-woes-continue/
Energy
Texas is no longer a world leader in energy production,
delivery, or innovation. Will we have enough energy for our
future?
Will we have enough energy?
“Texas likes to be No. 1
at everything. But we
are currently dead last
when it comes to the
reliability of our
electrical system,
according to a recent
assessment by the North
American Electric
Reliability Corporation…”
ERCOT Overview
RESPONSIBILITIES
ERCOT has four primary responsibilities:
•
•
•
•
System reliability – planning and operations
Open access to transmission
Retail switching process for customer choice
Wholesale market settlement for electricity
production and delivery.
QUICK FACTS
•
•
•
•
•
•
75% of Texas land
85% of Texas load
More than 40,500 miles of transmission lines
550+ generation units
68,379 MW peak demand (set August 3, 2011)
Physical assets are owned by transmission
providers and generators, including Municipal
Utilities and Cooperatives
ERCOT connections to other grids are limited to
direct current (DC) ties, which allow control
over flow of electricity
New Records at ERCOT in 2011 & 2012
New Peak Demand Record: 68,379 megawatts
 68,379 megawatts (MW), August 3, 2011
- 4 percent increase over 2010 previous record – 65,776 MW
New Weekend Record
 65,159 MW, Sunday, August 28, 2011
- 5 percent increase over 2010 previous record – 62,320 MW
Winter Peak Record
 57,315 MW (February 10, 2011)
- 3 percent increase over 2010 previous record – 55,878 MW
New Peak Demands – Summer 2012
- For June of 66,626 MW on June 26th
- For July of 65,835 MW on July 31st
Source: “Long-Term Resource Adequacy and Investments”, Tripp Doggett, slide 8
2011 Reality Check
• In 2011, Texas had a unusually cold winter
that disabled generation due to freezing
conditions.
• The summer was extraordinarily hot and
pushed our energy system into shortages,
forcing emergency actions.
• Meanwhile drought conditions threatened to
derate or disable capacity.
Source: “ERCOT Investment Incentives and Resource Adequacy”, The Brattle Group
What happened during Winter blackout?
“On February 2, 2011, ERCOT
experienced extreme cold
weather, causing a record
winter peak demand of 56,493
MW…”
“…82 generating units
representing more than 8,000
MW to go offline, or never
come online…”
“…record demand and unit
outages caused ERCOT to shed
up to 4,000 MW of load across
an 8-hour period…”
Source: “ERCOT Investment Incentives and Resource Adequacy”, The Brattle Group
Annual Energy & Peak Demand (2003-2011)
Annual Energy and Peak Demand
340,000
Annual Energy
335,000
Peak Demand
68,379
330,000
319,097
320,000
70,000
68,000
66,000
65,776
312,401
310,000
305,715
299,227
290,000
64,000
63,400
62,339
62,174
62,188
62,000
MW
GWh
300,000
308,278
307,064
60,095 289,113
60,274
60,000
284,954
58,531
280,000
58,000
270,000
56,000
260,000
54,000
250,000
52,000
2003
2004
2005
2006
2007
Year
2008
2009
2010
2011
2014 Outlook
In a nutshell:
• Lack of investment in Energy generation will deplete
our energy reserves margins below 10%; almost 4%
down from reserve margin targets of 13.75%.
Reserve margins will decline further unless new
resources are added.
• Translation = Texas is running out of Energy to keep
up with population and demand
Source: “ERCOT Investment Incentives and Resource Adequacy”, The Brattle Group
PUC Response to Resource Adequacy
• In July of 2012, the
PUC followed some
of the Brattle
Group’s advice and
increased the offer
cap to promote
investment in energy
infrastructure.
• The PUC increased
the cap from $3,000
to $4,500 (only 50%
of the $9,000 offer
cap modeled by
Brattle)
Available at: http://www.puc.state.tx.us/industry/projects/rules/37897/37897.aspx
One Big Storm Away from Disaster
•Keep in mind: the PUC only increased the
offer cap to 50% of Brattle Group
recommendation
•At double the current offer cap, the Brattle
Group warns: “On average, the 10% reserve
margin … would result in approximately one
load-shed event per year with an expected
duration of two-and-a-half hours, and thirteen
such events in a year with a heat wave as
severe as the one in 2011.”
•The Report continues: ““The year 2011
presented extreme weather conditions…These
events occurred when the planning reserve
margin was 14%, which suggests vulnerability
if the reserve margin were to fall to the much
lower projected levels.”
Available at: http://www.ercot.com/content/news/presentations/2012/Brattle%20ERCOT%20Resource%20Adequacy%20Review%20-%202012-06-01.pdf
Resource Adequacy is the biggest concern
• Investors’ want to expect future revenues to be
high enough to cover the costs of building a
plant, including a return on capital
commensurate with risk.
• Translation = We can’t make a profit that justifies
the investment risk
Source: “ERCOT Investment Incentives and Resource Adequacy”, The Brattle Group
Texas’ Energy Solution
• No energy plan from State Leaders
• No Legislative proposals
• No incentives, vision, or plans to address this
critical issue
• Current proposals bring us no closer to a
solution
Transportation
Running out of time, money, and roads…
According to the Texas Transportation
Institute, Texas will need $488 billion to meet
our state’s transportation needs by 2030.
Sources: ftp://ftp.dot.state.tx.us/pub/txdot-info/gpa/072809_tempo_report.pdf
The Limits of Small Thinking: Fewer New Roads
For the first time in Texas
history, our leaders spent
more money paying debt
service on existing
transportation projects
than on new road
construction.
Amount Spent for FY 2012 (in
millions)
$900
$800
$700
$600
$500
$850 million versus $575
Debt Service from
Transportation Projects
$400
New Spending on Road
Construction
$300
$200
$100
$0
Debt Service from
New Spending on Road
Transportation Projects
Construction
source: http://blog.chron.com/texaspolitics/2012/05/texas-progressives-trying-to-amplify-their-message/
Ballooning Debt is limiting Texas’ Future
Texas began borrowing for
transportation projects in
2003 growing our state
debt from $13.4 billion in
2001 to $40.50 billion
today.
Meanwhile, borrowing
costs to taxpayers over the
lifetime of the existing
Transportation bond debt
(S17.3 Billion) is $31 billion.
Even with these funds,
Texas is no where close to
what it will need for
transportation
infrastructure for the next
thirty years.
Sources: http://blog.chron.com/texaspolitics/2012/05/texas-progressives-trying-to-amplify-their-message/; Texas
Debt Affordability Study, February 2012, p. 7
Problems with Borrowing
Texas pays $65 million in
finance fees for every
billion it borrows.
“Everybody knows about
California’s fiscal woes, but
why isn’t anybody talking
about the huge crisis
looming in the Lone Star
State? Is the Lone Star State
a fiscal time bomb?”
-The Week
Source: http://blog.chron.com/txpotomac/2011/08/analyzing-rick-perrys-record-texas-transportation-needs-left-behind/
http://theweek.com/article/index/210730/debt-crisis-is-texas-americas-ireland
;
Texas’ Debt in 2001-2011 growing
faster than the National Debt
“From 2001 to 2010, state debt alone grew from $13.4 billion to $37.8 billion,
according to the Texas Bond Review Board. That's an increase of 281 percent. Over the
same time, the national debt rose almost 234 percent, with two wars, two tax cuts and
stimulus spending.” Fort Worth Star Telegram 7/13/2011
Jet Fuel
Only three states do not tax Jet Fuel or Aviation Gas:
State
Excise Tax on Jet Fuel
Excise Tax on Aviation Gas (Avgas)
Sales Tax on Jet fuel or Avgas
Texas
NO
NO
NO
Connecticut
NO
NO
NO
Rhode Island
NO
NO
NO
California
Colorado
$0.02 per gallon, plus the state sales $0.18/gallon , no sales tax
tax
$0.04/gallon
$0.06/gallon
Florida
$0.069 per gallon tax
$0.069/gallon
Georgia
$0.135/gallon
$0.135/gallon
Illinois
New Jersey
6.25% sales/use tax + $0.008/ gallon 6.25% sales/use tax + $0.008/ gallon sold
sold (Environmental Impact Fee) + (Environmental Impact Fee) +
$0.003/ gallon (Underground
$0.003/ gallon (Underground Storage)
Storage)
$0.01/gallon(State tax) + County tax $0.02/gallon + county tax
(where applicable)
$0.06/gallon
$0.145/gallon
New York
$0.071/gallon
$0.178/gallon
Yes, 4%
Ohio
No
No
Yes, 5% plus local sales tax rate
Nevada
Yes, 7.25%
Yes, 4 %
Source: http://www.energy.dla.mil/DLA_counsel_energy/Documents/Tax%20Documents/Tax%20compilation%202012-04.pdf &
http://www.jetsalesofstuart.com/pdf/nbaa_taxreport.pdf (the above is just a partial listing as space would allow)
News Editorial
"The governor paid lip service to
these transportation and water needs
by calling for a one-time, $3.7 billion
investment from the Rainy Day
Fund in infrastructure programs. But
such a one-time infusion doesn't
begin to fund the long-term
investments required to keep people
and goods traveling on Texas roads
and water flowing to Texas homes,
businesses, farms and ranches….
In an alternate universe, it might be
possible to build more roads, develop
more water resources, increase the
quality of education for more
students and create more economic
opportunities for more people while
spending less money to do so. In the
real world, that's the equivalent of
defying the law of gravity."
“Perry’s tax proposal defies reality,” San Antonio
Express News – 1/29/2013
Source: http://www.mysanantonio.com/opinion/editorials/article/Perry-s-tax-proposal-defies-reality-4233340.php#ixzz2JbJEGYIP
New Leaders, New Direction, One Texas.
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Pd. Pol. Adv. by One Texas PAC, 130 E. Travis Street, Suite 425, San Antonio, Texas, 78205