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Texas Speaker Tom Craddick recently sent a lengthy brief to Attorney General Gregg Abbott explaining why the AG should decline to opine of whether or not Craddick's interpretations of the House rules are correct or not. Check out the blog's coverage of the story here.
In a Sunday editorial, the Fort Worth Star-Telegram disagrees with Craddick and says the AG has a duty to rule. Read the op-ed piece here (free log-in required).
Sen. Kevin Eltife (R-Tyler) thinks Texas should build its own toll roads, if toll roads are needed. While we're at it, we should consider raising the gasoline tax too.
See the story in the Longview News Journal.
Although former Representative Gene Seaman was found not guilty of an ethics violation for using campaign funds to rent a residence in Austin from his spouse, current legislators no longer have that option.
Thanks to HB 3066, authored by Rep. Vicki Truitt (R-Keller) - who had evidently done the same thing, according to press reports - legislators are prohibited from using campaign funds to rent residential property from a spouse. Truitt's bill originally precluded renting from any close relative, but the bill was amended in the Senate so that the restriction only applies to a spouse, child or parent. It's still okay to rent from siblings, grandkids and grandparents.
A 9-year veteran of the Comptroller's office was apparently caught red-handed soliciting a bribe in Houston yesterday. Check out the Chronicle's coverage here.
It sure seems like these nimrods almost always get caught, which begs the question: are they arrogant, stupid, or some combination thereof?
Source: WebCPA
SEC Wants More Power for GASB
Los Angeles (July 19, 2007) - Securities and Exchange Commission Chairman Christopher Cox told a Town Hall Los Angeles meeting that he wants Congress to give more power to the Governmental Accounting Standards Board so GASB can police accounting practices at the state and local government level and better regulate the municipal bond market.
He would like the SEC to be able to enforce GASB accounting rules when it sees a violation by a state or local government, similar to the way the SEC can take action against companies that flout Financial Accounting Standards Board rules. Texas and Connecticut have both passed bills recently allowing alternative accounting rules, although Connecticut Governor Jodi Rell has vetoed that state’s bill.
Cox hopes to get a more reliable stream of financing for GASB, like the kind FASB has received in recent years, in which state and local governments are required to pay into a fund to support the board’s work, instead of voluntarily providing donations.
In addition, Cox wants to make financial statements from government bodies, especially about municipal bonds, more readily available to the public through a system like the Edgar database of filings from publicly traded companies.
Since the regular session of the 80th Texas Legislature is over, you could reasonably assume that the Speaker controversy is moot: after all, there's not session over which the Speaker will preside, and elections will occur before the next Speaker's selection in 2009. But the controversy continues and has spilled over into the Attorney General's office.
Rep. Jim Keffer (R-Eastland), Ways and Means committee chair, has formally requested an Advisory Opinion from Attorney General Gregg Abbott "on the legal and constitutional scope and limitation of claimed 'Absolute Authority' and other powers of the current Speaker of the Texas House of Representatives." Read Keffer's letter here, and the questions he poses to the AG here.
As if that's not enough drama, Rep. Will Hartnett (R-Dallas), Chair of the Judiciary committee, also submitted a request to Abbott asking for a ruling on whether or not the Constitution and the rules of the Senate authorize senators to remove the President of the Senate (i.e., the Lt. Governor) and if the President of the Senate has the power to refuse to recognize a senator for a motion. Since Abbott is known to have ambitions to become Lt. Governor, a ruling on Hartnett's request could come back to haunt him.
Speaker Tom Craddick (R-Midland) responded with a 40-plus-page legal brief sent to Abbott which claimed it would be inappropriate and indeed unconstitutional for the AG to become embroiled in an internal legislative matter dealing with the House rules. The brief is extensive, covering all issues mentioned in the Keffer/Cook requests just in case Abbott doesn't agree with Craddick's first point: that he shouldn't get involved.
Craddick's brief is supported by letters from the new House Parliamentarian, former Rep. Terry Keel, and Rep. Warren Chisum (R-Pampa), Chair of the Appropriations committee.
The Quorum Report never fails to supply expert, inside analysis of the goings-on here in the Capitol. Take a look at this:
UNEXPECTED COSTS LOOM AS STATE PAYS HIGHER PERCENTAGE OF PUBLIC SCHOOLS
Short term borrowing and associated costs to double and tripleWhen lawmakers decided last year to shift more of the funding burden for public schools to the state, one unintended consequence was to exacerbate the temporary revenue shortfalls that crop up annually in the state budget. Those shortfalls appear because the state disburses most of the schools’ budget in the first three months of the year while the tax revenue to pay for it comes in more or less evenly throughout the year.
The expected temporary shortfall next fiscal year is expected to run about $5 billion because the state comes into the next budget period with an $8.2 billion fund balance. By the following fiscal year, that fund balance will be largely depleted and the shortfall is expected to balloon to $11 billion.
The state’s Cash Management Committee - comprised of the Governor, the Lieutenant Governor, the House Speaker and the Comptroller of Public Accounts - authorized today the issuance of debt to cover those temporary shortfalls. The vote was 3-0 with Speaker Tom Craddick not attending.
The debt is paid back in the same fiscal year so it won’t cause the state any problems in making budget. However, issuing that much debt is problematic because of the costs of borrowing money as well as its impact on the state’s credit rating, Comptroller Susan Combs said. She noted that the shortfalls are expected to grow into the $13 billion to $14 billion range in the out years. Anything above $10 billion can start to have an impact on bond ratings.
She suggested that lawmakers study the possibility of changing the method of paying schools to smooth out the revenue disbursements to the districts. Doing so would significantly lower the amount of debt the state would have to take out to pay for schools.
Gov. Rick Perry indicated that he too was concerned with the level of temporary debt being accumulated, intimating that it wasn’t a wise use of taxpayer money. Lt. Gov. David Dewhurst was also in favor of changes, saying that the Senate passed legislation last session on the topic.
Suggestion of a permanent fix is notably lacking from Combs and Perry's comments.
Friend of TSCPA Harvey Kronberg posted a press release from the folks at Fitch Ratings about the potential impact on the state's bond ratings as a consequence of HB 2365's passage.
View/print/download a copy of the press release here.
The Texas Legislature passed a law allowing Texas state and local governments to ignore Government Accounting Standards Board Statement (GASB) No. 45 Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions.
Backers of the new law claimed the GASB didn't understand Texas laws and predicted dire circumstances for the state if GASB 45 was implemented. GASB supporters claimed that Texas leaders were just trying to ignore reality and postpone the day of reckoning for future obligations.
However, it seems other states are also questioning the rules maker and claim that GASB is out of touch with reality. To see the latest in the ongoing controversy, check out the Financial Week "State Pols Doing a Number on Accounting Board."
Bob Campbell of the Midland Reporter-Telegram writes about his disappointment over the lack of legislative action to slow down property tax appraisal creep.
As appraisal values increase, taxpayers' property taxes go up without local governments having to raise rates. It's a silent tax increase. Campbell is right that almost all bills that tried to address the subject were never allowed out of the House Local Ways and Means committee.
However, as you read Campbell's article, don't forget Rep. Hochberg's (D-Houston) HB 438 and HJR 40, which did pass the legislature. This legislation will allow voters to vote on a constitutional amendment to limit the maximum appraisal increase on residential property to 10% since the last appraisal. If the voters approve, appraisal increases cannot be anymore than 110% of the last appraisal, even if that last appraisal was several years back. So you have a chance to do something about appraisal creep on Nov. 6, 2007.
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