Evan Vitale Consulting: Business group faces tough fights in Legislature

Saturday, December 6, 2014

Business group faces tough fights in Legislature – Houston Chronicle

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The last thing the Texas Association of Business wants from the 2015 Texas Legislature is a cut in the business tax.

Long before lawmakers provide tax relief, the organization’s president, Bill Hammond, explained, the TAB’s 4,000 businesses and 200 chambers of commerce would prefer to see some responsible governing, including more transportation spending, health insurance for the poor, full funding for public schools, more funding for medical students and better graduation rates from state universities.

Only after those priorities are met and there’s money left over, “then we would like to reduce the rate on the franchise tax,” Hammond told me and the Chronicle’s editorial board during a recent visit. “We’re not for cutting the budget, we’re for making some investments in the future, and we’re for accountability.”

Undoubtedly, many tea party activists will declare Hammond a liberal or a Republican In Name Only, despite serving as a pioneering Republican at the Legislature in the early 1980s. But name-calling is a price he’s willing to pay for legislation that will keep the Texas economy growing and marginalize the ideologues who are more interested in political posturing than pragmatic leadership.

“We are more or less the establishment, and we want things like roads and water,” Hammond, who’s been in his present job since 1998, said.

There are also things the TAB wants Texas lawmakers to leave alone, such as immigration.

“It’s not a state issue, it’s a federal issue, and we support comprehensive immigration reform,” Hammond said. “We oppose immigration legislation at the state level, so we are strongly in favor of in-state tuition for undocumented kids … it’s the right thing to do.”

I know many business people will disagree with Hammond,and there are plenty who write checks to tea party groups instead of the TAB. But the positions Hammond espouse make sense for Texas businesses that care about their balance sheets, workforces and customers.

For example, every business relies on good roads. If your employees can’t quickly and inexpensively get to work, if your raw materials and finished product are damaged by potholes, or your customers would rather stay home than visit your shop, you can’t do business.

Texas ranks 44th in per-vehicle transportation funding. Voters made a difference by approving an additional $1.7 billion in November, but that’s not enough.

Just to maintain the current network, lawmakers need to find at least another $5 billion a year, according to the Texas Department of Transportation,

TAB recommends that the Legislature stop using transportation money for other expenses and consider raising the vehicle registration fee, which is the lowest in the country.

Business also needs skilled workers. Only 49 percent of students graduate from Texas universities within six years. That’s because public schools don’t adequately prepare students for college, they have a hard time paying rising tuition and fees, and universities don’t provide the coaching that struggling students need.

TAB recommends improving public schools, making universities accountable for graduation rates and fully funding the TEXAS Grants Program for poor kids.

Primary care doctors

Another problem is a massive shortage of primary care doctors. In 2011 lawmakers cut state funding for graduate medical education, and this year 63 newly minted doctors will leave the state for the final phase of their training, according to the Texas Higher Education Coordinating Board. That number will rise to 180 in 2016.

TAB recommends spending an extra $40 million a year to add 280 first-year residency slots in 2016. The Texas Medical Association says the number needed to be comparable with other states is about 1,000.

Lastly, TAB supports a Republican initiative to collect$90 billion in Medicaid money over the next decade and put a dent in Texas’ outrageous 24 per-cent uninsured rate. Right now Republicans are calling it the Texas Way, rather than Medicaid, but it’s imperative to enroll poor people in health insurance to keep hospitals and clinics from going bankrupt because they have to treat people who can’t pay their own bills.

Better roads, better workforce, better protection for the health care industry, one of the state’s largest employers.

Things have changed

There was a time when the Legislature could be counted on to give the business community almost anything they wanted, but these initiatives face stiff opposition.

Tea party victories over several longtime Republican leaders will deter moderates from taking the pro-business stand. Hammond lamented lost races, such as Arlington House member Diane Patrick’s loss to Tony Tinderholt.

“She got beat by this guy who wants to go to war with Mexico,” Hammond said. “We’re on the short stick in several campaigns, no question about it.”

I asked Hammond about his uphill battle. “We do what we can. We make the case, we make the argument for those who take the long view,” Hammond said in acknowledging the tea party opposition to TAB’s agenda.

I asked Hammond if TAB would ever endorse a Democrat against an incumbent Republican.

“Show me a Democrat that can beat a Republican,” was his response. “We have to see the opportunity.”

That leaves Hammond supporting the likely winners with the hope of convincing the new lawmakers to support a pro-business agenda. If you’re a Texas business person who cares about these issues, Hammond could use your help this spring in Austin.

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