Thursday, January 12, 2006

Texas Eminent Domain Bill: "Passing incomplete legislation removes the pressure of an issue and stymies a reform."

Political class gathers for 2006 policy debate


by James A. Bernsen, William Lutz and Christine DeLoma

Volume 10, Issue 20
The Lone Star Report
Copyright 2006

Legislators, staff, and the lobby got a scattershot picture of the legislative landscape going into the new year this week at the Texas Public Policy Foundation’s annual legislative orientation.

The conservative confab has become the must-attend event for the Texas wonk class, with roundtable discussions of the biggest issues facing the Legislature.

The large attendance highlights the growing influence of conservative, free-market proponents in the Texas political process. In the past, a lobby raised on the milk of Democratic one-party rule might have tried to ignore such an occasion, but after four years of Republican control of the Legislature, and with no Democratic revival in sight, the conservative revolution is a reality the lobby has come to accept.

Nonetheless, the intractability of school finance has transformed the state’s part-time legislature into a de facto permanent one. Although this was supposed to be a session-free year, the Supreme Court ensured that elected officials would have to come back to push the ball over the line, rather than punt to next year.

Speaker Tom Craddick told the gathering that the coming session would provide a historic chance to fix school finance.

“I do think that you and I have a chance as a legislature - a chance that I’ve never seen in my legislative career - and that’s to fix the system,” he said. “It’s not just to dump more money into it, but actually fix the system.”

School finance and tax issues are discussed in a separate article in this week’s LSR.

Health care

The growth in spending in state-run health care programs threatens to overtake education as the largest expense in the budget. Rep. Dan Gattis (R-Georgetown) hosted a panel to debate health care reform and policy.

Gattis said one of the cost drivers has been the Children’s Health Insurance Program. CHIP, as it’s called, “has become not merely for the needy, but for everyone,” he said.

Panel members discussed several reforms, including electronic prescriptions. As Jim Frogue with the Center for Health Transformation put it, evacuees from Hurricane Katrina could go to a Jiffy Lube in Houston and download their car’s oil change history, but their medical records, which only exist in hard copies, were probably lost forever in the flood waters.

Gattis, on the other hand, noted a recent case in which a man was hospitalized after a pharmacist had misread a prescription. The emergency room and other costs, he said, were totally avoidable.

One of the leaders in reform of Medicaid is the State of Florida, which requested and received a waiver to get out from under several federal mandates so as to innovate. Alan Lavine of the Florida Agency for Health Care Administration, said Texas could follow that state’s example.

“Now that we’ve done that, I think any proposal that comes behind ours will have a better chance,” he said. The key, he added, was having a governor who was personally engaged on the issue, as Florida Governor Jeb Bush was.

In another health care forum, Rep. Dianne White Delisi (R-Temple), the chair of the House Public Health Committee, said that one of the problems making health care costs so intractable is the legislature’s scattershot approach to the issue.

“We tend to legislate body part by body part, disease by disease, subgroup by subgroup. A patchwork quilt that in my opinion, doesn’t cover the bed,” she said.

The single biggest problem facing the state, she said, is the aging of our society, which she compared to a Tsunami about to hit the health care system.

“We can see this wave of baby boomers moving inexorably toward us,” she told the attendees. “This baby boomer has 78 million members.”

With a forecast that the number of senior citizens in America could double in the next 20 years, Delisi said getting health care costs in control now is not just good public policy, it’s an imperative.

“Literally, not millions, not billions, but trillions of dollars are at stake,” Delisi said. Projecting Medicare costs of $609 billion for the U.S. in 2013, Delisi said that was “unsustainable.”

Delisi recommended several solutions:

* The promotion on all levels of government for the need to plan one’s own retirement.

* Partnerships with non-profits and faith-based groups to develop home-based care for the elderly.

* Allow Medicaid to buy long-term care insurance for enrollees.

Criminal justice

In the 1990s, Texas dramatically increased prison capacity to eliminate a space shortfall and allow for tougher mandatory sentence guidelines. That growth spurt, however, bought the state only a little time. Legislators are already facing another looming shortage of space, which by 2010 could result in a 14,000-bed shortfall.

One reason is the massive costs. A 1,000-bed minimum security prison costs $70 million, a 2,250-bed maximum security prison $250 million.

“This is one of the many reasons we need to look at alternatives to prison,” said Rep. Jerry Madden, chairman of the House Corrections Committee.

Madden and others want to look at alternatives for less violent offenders to allow the lockups to focus on the more violent ones. Key ideas in the debate are:

* Progressive sanctions, which tie probation revocation to the severity and frequency of violations, rather than to technical violations such as missing meetings.

* Drug courts. Dallas County has taken the lead on these specialized courts and has seen significant results. By getting minor drug offenders in court quickly and addressing their problem with specialized probation, the courts are designed to keep those offenders from learning to be better criminals through the prison system. Dallas Dist. Judge John Creuzot said the court has reduced the recidivism rate by 68 percent, saving $9 in prison costs for every $1 spent on the courts.

* Evidence-based practices. Geraldine Nagee, with the Travis County Probation Department, said the state needs to explore research-based best practices to modernize the probation system.

Eminent domain

Sometimes, passing incomplete legislation removes the pressure of an issue and stymies a reform. On eminent domain, proponents of tougher laws to protect private property hope to avoid that.

During the second special session of 2005, legislators passed a measure to shore up the state’s eminent domain laws in the wake of the Supreme Court’s Kelo v. City of New London ruling, which allowed eminent domain for certain economic development purposes.

Sen. Kyle Janek (R-Houston), sponsor of the legislation, said the urgency of the issue required a fix. Nonetheless, the issue turned out to be trickier than expected because of differing definitions of economic development. Thus the Legislature passed a statute banning such uses, but not a constitutional amendment.

Those definitions, however, are at the heart of an issue confronting the City of Dallas. Larry Casto, the city’s legislative director, said Dallas has been in an ongoing fight with some foreign owners of a downtown high-rise. The abandoned building, which is full of asbestos, has been appraised at anywhere from zero to $3 million. The city offered to purchase it for the higher value, but the owners demanded $9 million. Casto said that the Kelo decision actually did very little to change existing Texas law, but the fix to Kelo could end up hampering the city’s efforts at downtown redevelopment. Nonetheless, Scott Bullock with the Institute of Justice, which argued for the homeowner targeted in the Kelo case, said the new Texas law was a big step in the right direction.

The future of Telecom

Issues dealt with at the conference include:

* Universal Service Fund. Co-author of SB 5, the Telecommunications Reform bill, Rep. Phil King (R-Weatherford) predicted that the Legislature would take a look at the Universal Service Fund (USF), which was established to ensure affordable phone service for all areas. Local phone companies receive millions in subsidies from USF to service low-income and rural areas. Consumers pay for the subsidy on their phone bills.

With the arrival of technological advancements capable of bringing affordable voice service to the masses, King questioned the need for USF in its current state. Currently, the Public Utility Commission (PUC) is reviewing USF. Chairman Paul Hudson said the PUC will present the results of their findings to the Legislature in 2007.

* Video services market. According to Hudson, 16 state franchises for video service have been issued by the PUC or are pending with the commission. State franchise holders are now offering video service to 109 communities.

* Phone deregulation. Additional areas of the state are on schedule to be deregulated. Currently, 70 percent of the state is deregulated.


Toll roads have few friends in the legislature, but few alternatives have been proposed. The lack of funds for highway projects, noted Texas Department of Transportation Commissioner Ric Williamson, is largely a factor of diversions from Fund 6, the transportation fund.

Those diversions, he said, are partly a result of a philosophy of centralized decisionmaking and a process-oriented approach to finance instead of a results-oriented approach. That, he said, is the legacy of the Democratic control of the legislature. TxDOT, he said, was looking instead for market-based solutions. Toll roads, he said, are one option, and lacking any additional revenue, a necessary component of any future road plan.

© 2005 The Lone Star Report: