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Tuesday, July 3, 2012
Update From the State
the primaries completed, things are starting to return to normal in Austin.
While we are still waiting for the runoffs in several congressional races,
state house races, and one state senate race, legislators and legislators-elect
have started discussions about policy issues for the next legislative session.
Justice Court Rules: Evictions
2011 legislative session came with an extremely challenging task for lawmakers:
how to solve a $15 - $27 billion budget shortfall. The legislature chose to
embrace cost-cutting measures instead of revenue enhancers to close the
part of that task, the legislature streamlined some courts and combined the
justice courts and the small claims courts. Prior to the combination, justice
courts were run by one set of rules, and small claims courts were run by a
separate set of rules. After the consolidation, the Texas Supreme Court was
tasked with developing a single set of rules for the combined courts. This was
an issue for Texas BOMA. Eviction cases are heard in justice courts. If the
rule changes slowed down the eviction process, or made it more expensive, they
could result in a revenue hit for commercial landlords. In mid-June, the
Supreme Court Advisory Committee (“SCAC”) met to consider proposed rule changes.
Texas BOMA joined with the Texas Apartment Association and the Texas
Association of REALTORS and submitted comments to the Committee on the rules.
At the hearing, several interested parties testi fied about the proposed rules.
The Committee made several modifications to the proposed rules which addressed
our issues, and then recommend the adoption of the modifications.
recommended rules from the SCAC now go to the full Texas Supreme Court. The
Supreme Court has the authority to follow the SCAC’s recommendations, or do
anything it wants on its own. We will continue to monitor this issue.
State Issues and Policy Matters
few weeks ago, some important was released: tax collections are coming in well
above the state’s projections. Each legislative session, the Texas legislature
is required to pass a balanced budget. The budget, which runs for two years,
must not spend more money than the state is estimated to take in. That number,
the revenue estimate, comes from the comptroller, who is constitutionally
required to estimate the amount of revenue the state will generate in the
coming biennium—a forecast that requires estimating economic activity up to two
and a half years into the future.
Comptroller estimated tax revenue growth statewide for the current biennium.
However, the economic recovery, combined with increased oil & gas
production and high oil prices, have increased the tax revenue growth
substantially. For example, comparing the first 9 months of fiscal 2012 to the
first 9 months of fiscal 2011 has oil severance taxes up 49.5% and natural gas
severance taxes up 53%--which amounts to nearly a billion dollars more in
revenue compared to fiscal 2011. The Comptroller’s official estimate had
natural gas production taxes going up 16.6% and oil production taxes going down
10%. Similarly, sales taxes have grown 11.9%, compared with an estimated growth
of 5.3%. Overall, for the first 9 months of the biennium, all tax revenue
collections are up 13.6% (about $4 billion dollars), compared with the revenue
estimate of 3.8% (which would have been about 1.1 billion dollars). What does
short answer is the state’s economy is rebounding from the recession, and there
will likely be more money available when the legislature reconvenes in 2013.
This may take some of the pressure off lawmakers to raise additional revenue.
While this is decidedly positive news, we must caution that these are early
numbers—it is possible for the state’s growth to slow down, though the numbers
do appear strong.
the primary elections are done and gone, there are a few runoffs around the
state. The one you will probably hear the most about is the runoff for the
Republican nomination to replace retiring U.S. Senator Kay Bailey Hutchison,
with Lt. Governor David Dewhurst facing off against former Texas solicitor
general Ted Cruz. Governor Dewhurst barely missed obtaining a majority of the
vote, and will be headed to a runoff with Mr. Cruz. On the Democratic side,
former State Representative Paul Sadler will face Grady Yarbrough in a run-off
for the nomination. In the state senate, Senator Jeff Wentworth (R-San Antonio)
will face emergency room physician Dr. Donna Campbell. There are also several
other runoffs for the state house, and a few for the U.S. Congress. The runoff
election will be held on Tuesday, July 31. The general election is Tuesday,
will continue to monitor these issues as they develop, and will keep you