Give It All To Business – The GOP Tax Compromise

Posted in Around The Nation, Around The State, Inequality, Taxes at 12:31 pm by wcnews


Yesterday Joe Straus’ tax henchman alerted everyone to what the House GOP is willing to deal away to make a deal with the Senate GOP, Bonnen: I’d Scrap Sales Tax Cut for Larger Business Tax Cut.

As the Texas House and Senate appear at an impasse over what tax cuts to approve this session, House Ways and Means Chairman Dennis Bonnen said Tuesday that he’d be fine with replacing both chamber’s proposals with an even larger cut in the franchise tax paid by businesses.

“I would love to put it all into reducing the franchise tax,” Bonnen said. “I am beyond comfortable with that.”  [Emphasis added]

Bonnen, an Angleton Republican, authored the House’s $4.9 billion tax cut proposal, which would cut the state sales tax rate and the franchise tax. The Senate has backed a proposal from Finance Chairwoman Jane Nelson, R-Flower Mound, that would cut the franchise tax and increase homestead exemptions to lower local school property taxes. Bonnen has repeatedly dismissed the Senate’s proposal as an inevitable letdown for Texans, predicting most won’t see their property tax bills decrease because of increases in property appraisals and local tax rates.

That’s right, screw the sales tax and the property tax, they just want to give it all away to business. They should be given credit for telling the truth this early in the legislative session.

As noted last week (The Texas GOP’s Tax Trap), there really is nothing of any significance the GOP can do in this realm for the vast majority of Texas without raising taxes on the wealthy and big business. Therefore they might as well just give it all to their real constituents.  It’s the same at the national level as well.

Yesterday the Roosevelt Institute released a report called Rewriting the Rules.  Via Our Future.

The report calls for:

● “Taming the top” through such measures as ending the phenomenon of “too big to fail” banks, working to narrow the gap between CEO pay and that of average workers, and changing the tax code so that the wealthy and corporations pay a greater share of their income in taxes.

● “Growing the middle” through focusing both fiscal and monetary policy on full employment, particularly through public infrastructure investment; empowering workers by strengthening collective bargaining rights; and a broad range of economic security and justice issues, including universal preschool, affordable higher education, Medicare for all, universal paid sick and family leave, pay equity, a path to citizenship for undocumented residents and expanded Social Security.

Sen. Elizabeth Warren (D-Mass.), who no doubt inspired the title of the report by her popularizing the understanding that “the rules were rigged” against working people by the rich and powerful, said, “We know who trickle-down works for, and we know that if we want a strong middle class, it is time for new rules.”

“This country is in real trouble,” she said. “The game is rigged and we are running out of time. We cannot continue to run this country for the top 10 percent. We can’t keep pushing through trade deals that benefit multinational companies at the expense of workers. Government cannot continue to be the captive of the rich and powerful. Working people cannot be forced to give up more and more as they get squeezed harder and harder. … We know what we have to do.”

It’s obvious our state leaders could not care less about what most Texans need. If they did they could, at the least, set aside their ideology and expand Medicaid. But not only do we need to rewrite the rules, we need to elect people that will fight for what we need. But first a movement must be built, outside of a political party and it can’t be about one candidate.

Once the movement is built candidates will take on these issues as their own and then change will happen. That’s why the more publicity Bernie Sanders gets in his run for the Presidency the better off we’ll all be. Look at the issues that are being talked about just because he’s in the race.

Bernie Sanders’ 2016 website is nothing but a fundraising page. It says we can expect the real thing on May 26, the day of the Vermont senator’s formal 2016 launch in Burlington. But make no mistake, Sanders is already the real thing. And there’s no denying the lure of that.

Sanders is that unique White House hopeful who calls himself a socialist and habitually warns that “the forces of greed” are afoot in the land. He talks out loud about a single-payer health system and redistributing wealth, about what we can learn from Scandinavia and about economic trends that are “immoral” and “wrong.” He skips the sentimental Mother’s Day tweets and videos and marks the day by calling U.S. child care “a total disaster.” For Democrats weary of operating in the “reality-based community,” this is like diving into an icy pond on an oppressively hot day.

Those are issues the media and the corporations that own them don’t want to be discussed. It would be best if candidates would get on the correct side of these issues. They’re popular and they’re want the people want.

Further Reading:
Analysis: Making a Tax Deal Voters Might Not Care About.


How Do You Get Cornyn And Cruz To Agree With Obama?

Posted in Around The Nation, Trade at 3:11 pm by wcnews


Why a huge boon for multinational corporations of course, Trade Deal Backed by Cornyn, Cruz is Blocked in U.S. Senate.

Despite the support of nearly every Republican in the U.S. Senate, including both from Texas, economic legislation seek as key to President Obama’s legacy was blocked on the U.S. Senate floor Tuesday.

Senate Democrats united against the proposal authorizing Obama to negotiate with Pacific Rim countries on a massive trade deal that has been years in the making. And the Obama-Republican coalition was unable to pull together enough votes to meet the 60-vote threshold to stop a filibuster.

Fifty-one Republicans and a single Democrat, Sen. Tom Carper of Delaware, backed the authorization. Forty-five senators voted to block the measure.

The debate over whether to give Obama that power splintered the Texas delegation in recent months, creating strange alliances between liberals and conservatives on both sides of the issue.

U.S. Senate Majority Whip John Cornyn, R-Texas, is the chief vote-counter for Republicans and a key proponent of the legislation. Both he and fellow Texas Sen. Ted Cruz backed the authorization.

Great news and kudos to Democrats for standing as close to unanimous as possible against this legislation.


Business As Usual

Posted in Around The State, Money In Politics at 2:35 pm by wcnews


Our current state leaders have never hid the fact that they believe corporations and business are models for how our government should be run.  Profit-taking ahead of everything else.  So this should not surprise anyone, New call-in line helps business leaders shape Texas laws.

In Texas, where the wall between big money and government is like the low cattle fencing that pens the state’s ranchland, new Republican Lt. Gov. Dan Patrick’s new invitation-only calls have provided an especially direct connection between the state’s business elite and the Legislature’s agenda.

“Why wouldn’t I want to learn from and communicate with the job creators? Why would we want to pass legislation that might impact our economy in a negative way?” said Patrick, who schedules bills for action, explaining the calls.

Though many politicians have kitchen cabinets of advisers or issue task forces, Patrick’s private call-ins are considered unusual.

“It’s the first of this type of thing we’ve heard about,” said Edwin Bender executive director of the National Institute on Money In State Politics, which is based in Montana.

Patrick dismissed the idea that undue influence could be applied on bills. “I’m smart enough to filter that out,” he told The Associated Press.

A former conservative talk show host and state legislator from Houston who was elected last November, Patrick picked 56 prominent Texans at the outset of the session to give their thoughts on what the Legislature should be doing.

It’s unlikely that they really have to twist Patrick’s arm much. And Patrick’s intelligence in not is question regarding this issue. They’re just checking up on their investments to make sure they’re being handled well, and their needs are being met.

Those invited to the conference calls include Tilman Fertitta, a Houston restaurant magnate whose chains include Bubba Gump Shrimp Co., energy pipeline builder Kelcy Warren and railroad executive Bob Albritton. About 70 percent donated to Patrick’s campaigns for Senate and lieutenant governor, amounting to about $2 million in contributions, and many also gave to other top Republicans, such as Gov. Greg Abbott.

Panel members and Patrick say they mostly discuss big-picture issues, like transportation or energy. The invitees include those with backgrounds in various areas. Patrick said he mostly sits back and listens. But the sessions are having an effect.

These folks are Patrick’s biggest constituents. This is how our government works now. This is just business as usual.

TPA Blog Round Up (May 11, 2015)

Posted in Around The State, Commentary at 8:00 am by wcnews

The Texas Progressive Alliance is busy designing its own TexMoji as it brings you this week’s roundup.

Off the Kuff is busy popping popcorn so as to fully enjoy the Jonathan Stickland soap opera.

Letters from Texas guest blogger Russ Tidwell explains what the SCOTUS ruling that invalidated Alabama’s Congressional redistricting means for Texas.

Lightseeker at Texas Kaos examines the Texas founders’ vision for public education. As a teacher and scholar Lightseeker laments how far we have strayed from this noble goal. Why Texas Puts the Stupid into Educational Reform.

From WCNews at Eye on Williamson. It impossible to lower taxes in a way most Texans will actually notice without raising taxes on the wealthy and big business. That is The Texas GOP’s Tax Trap.

There’s a message from the last socialist mayor of a major American city to the various Republican and Democratic socialists running (in a so-called non-partisan race for) mayor of Houston. PDiddie at Brains and Eggs wants everybody to understand that we are all socialists of a form or fashion. And that’s not a bad thing.

Socratic Gadfly talks about how the New Democratic Party win in Alberta might have lessons for American Democrats, even in Texas.

Texas Leftist attended the first ever Houston Artist Town Hall— a meeting of nearly 200 artists from across the region. As Council prepare a new Cultural Plan for the Bayou City, artists themselves met to make sure they contribute to those plans.

CouldBeTrue of South Texas Chisme is appalled that Texas Republicans are using our taxpayer dollars to publicly bash gay people.

Neil at All People Have Value observed Jade Helm operations in Houston. All People Have Value is part of NeilAquino.com.


And here are some posts of interest from other Texas blogs.

Better Texas Blog reads a headline from the future about the short-sighted tax cuts of today.

Texas Vox mourns the passing of the anti-fracking ban bill.

Newsdesk puts on its tinfoil hat for a look at Jade Helm 15.

Paradise in Hell is amused by the effort to video stalk members of the Legislature.

The Current reports on Scouting for Equality and their crowdfunded work to get the Boy Scouts of America to repeal its ban on gay parents and adults.

David Ortez complains about Harris County’s role in killing the online voter registration bill.

Robert Rivard recalls the legacy of William Velasquez and wonders what he’d make of today’s turnout rates.


The Texas GOP’s Tax Trap

Posted in 84th Legislature, Around The State, Taxes at 11:43 am by wcnews


As the tax cut debate continues in Texas we must remember that this is a fight for the heart and soul of the GOP Primary base, aka, the semi-sane GOP vs. the wing nuts.

Efforts by legislative leaders to find common ground on cutting Texans’ taxes is complicated by political considerations much bigger than the financial impact to individual pocketbooks.

Each side is making overtures that appear aimed at resolving the impasse between the Senate’s plan to give a break to homeowners from school property taxes and the House’s plan to instead cut the state sales tax rate.

But there’s little evidence that the Senate is willing to budge from its position – despite Lt. Gov. Dan Patrick’s designation of five senators to informally negotiate with the House on the issue.

House leaders also tout the overwhelming support of their chamber for their own plan.

The disagreement could set up the potential for a special session that carries a new risk: the possibility of less money for tax cuts if the economic forecast dims.

The only folks that care about the issues being debated is a narrow slice of Texans that vote in the GOP Primary, Bonnen says Patrick holding border security bill “hostage” to get his way on tax cuts.

House Speaker Pro Tem Dennis Bonnen said late Wednesday that Lt. Gov. Dan Patrick has held up passage of border security legislation in an attempt to force the House to accept the Senate’s tax-cut proposals.

Bonnen, R-Angleton, said in an interview that Patrick has inappropriately linked the two matters.

Spokesmen for Patrick did not immediately comment.

Bonnen spoke just hours after the two chambers finished a two-day process of making token gestures of good will. Their GOP presiding officers referred the other chamber’s tax-cut bills to committees, amid pledges by committee chiefs that they’ll be heard. Patrick appointed a sort of shadow team of Senate negotiators to talk tax cuts.

Bonnen, who heads the House’s tax-writing panel and has emerged this session as Speaker Joe Straus’ pit bull in dealings with the Senate, was unimpressed.

While Bonnen thinks border security is the number one issue in the state, most Texans would likely disagree. I’m sure education, a good paying job, health care and transportation are more important to most Texans. Also the current tax cut schemes that have been proposed – where most of the cuts go to business and the wealthy – will make little difference in most Texans lives.

Here’s the tax trap the GOP is in. Texas is a low tax state for the wealthy and big business. That makes it impossible to lower taxes in a way most Texans will actually notice without raising taxes on the wealthy and big business. Since that’s not going to happen, the GOP is stuck in a trap.

So far there’s only one thing the House, Senate and Gov. Abbott agree on, and that’s a tax cut for the constituency they all share. And Abbott’s only veto threat so far.

He has said he will reject a state budget unless lawmakers also approve business-tax relief. That appears a near-certainty.

That should inform us all as to who and what is most important to them.  And that’s not going to do anything for the vast majority of Texans.

It’s still a shame that the Democrats did not try and distinguish the party from the GOP on this issue. They showed some life yesterday when the other Bonnen tried to pass a tax break for yachts, House Rejects Tax Break for Pricey Boats.

Several House Democrats decried the measure as a giveaway for rich people, though many Republicans also voted against it.

“A pig is still a pig no matter how you dress it up, and this is a big fat pig for wealthy people,” state Rep. Roland Gutierrez, D-San Antonio, said. “The mere notion that we’re doing this to save jobs is a joke.”

As has been said here repeatedly, little will change for most Texans when it comes to taxes until the wealthy and big business pay their fair share. And that won’t happen until we have a state income tax.


Time For Williamson County Democrats To Go “All-In” On One Race

Posted in Election 2016, Williamson County at 12:55 pm by wcnews


GOP Precinct 1 County Commissioner Lisa Birkman has announce she will not run for reselection in 2016.   Via the local Chamber of Commerce news, Birkman announces decision not to seek re-election to WilCo Commissioners Court.

Williamson County Commissioner Lisa Birkman announced April 28 she would not seek a fourth term as Precinct 1 commissioner in 2016.

Birkman, who was first elected in 2004, said she has achieved the goals she established when she was elected with the help of the community. Precinct 1 includes portions of Round Rock and Northwest Austin.

My hope is that Democrats in Williamson County put all their efforts over the next 16 months into winning this race.  An open seat, in the most Democratic friendly precinct in the county.  It’ll likely be 12 years before they get a shot like this again.

Getting someone on the Commissioner’s Court in Williamson County that’s not a part of the GOP establishment in this county would make a tremendous difference for accountability and transparency.

Coo Coo For Cocoa Puffs

Posted in Around The State, Bad Government Republicans at 11:14 am by wcnews


Governor’s don’t have too much power in Texas.  One they do have is spokesperson for the state.  And current Texas Gov. Greg Abbott has made clear in that role that he will react, and take seriously, any “tinfoil hat” theory the tea party adherents in Texas may have.

So much for those who still held out hope for him, Abbott’s Letter Elevates Jade Helm 15 Concerns.

Abbott’s letter came the day after Bastrop County residents reportedly packed an information session on Jade Helm 15, quizzing a military spokesman about it while clutching signs with ominous messages such as, “No Gestapo in Bastropo.” Among the concerned citizens who turned out: Kathie Glass, a long-shot candidate for governor last year who campaigned against an “increasingly tyrannical federal government.”

“I don’t buy into some of the more extravagant claims, but I think it is not routine and it needs to be addressed, and the people need to be comforted,” Glass said of Jade Helm 15. She applauded Abbott for shining a spotlight on the issue, saying that before he weighed in, most “people had never heard about it.”

Outside the Lone Star State, though, Abbott’s move has drawn more skepticism and fueled a perception — an incorrect one, his office would say — that he is lending more credibility than deserved to a cause mostly driven by internet rumors. Asked Wednesday about Abbott’s involvement, White House press secretary Josh Earnest responded over fits of laughter from reporters in the room.

“I have no idea what he’s thinking,” Earnest said of Abbott, adding that the operation will “in no way” affect the civil liberties or constitutional rights of Americans.

The best that can be said of this decision is that he’s only doing it to protect his right flank from Lt. Gov. Dan Patrick. But that’s an indictment as well, because it means he’s using the Texas National Guard for his political gain.

Abbott and the GOP have no one but themselves to blame. They’ve been going along with these folks as they head further and further off the deep end.

To show just how far this has gone, check out who else in Texas supports this, Conservatives Keep Pouring Fuel On The Texas Takeover Fire.

Rick Perry tried to tamp this down yesterday by saying that no one should ever question the military.

“It’s OK to question your government. I do it on a regular basis. But the military is something else,” said Perry, an Air Force veteran, as he prepared to speak to the World Affairs Council of Dallas/Fort Worth. “Our military is quite trustworthy. The civilian leadership, you can always question that, but not the men and women in uniform.”

That is wrong too, of course, no one is above being questioned.

Of course it was not this way when George W. Bush was president.  This is just, unfortunately, what has become the “Texas-way” since Barack Obama was elected President.  Anything the federal government does, as long as Obama is President, they will try and use to scare people.  It is, after all, why the tea party was started.


TPA Blog Round Up (May 4, 2015)

Posted in Around The State, Commentary at 9:02 am by wcnews

The Texas Progressive Alliance wishes everyone a Happy Star Wars Day as it brings you this week’s roundup.

Off the Kuff rounded up coverage of the voter ID appellate hearing at the Fifth circuit last week.

Libby Shaw at Texas Kaos and contributing to Daily Kos weighs in on the overall disgust for the TX Governor’s cowardice. The C.T Freaks Win: TX GOV Panders to Paranoia.

Socratic Gadfly wonders if, given this was not the first outbreak, having other information about the Food and Drug Administration from whistleblower Ken Kendrick and more, if we can really trust the FDA that much when it claims Blue Bell and other ice creams are safe.

Nonsequiteuse calls on Rep. Todd Smith and any other reasonable Republicans left in Texas to come collect their party.

Bernie Sanders declared for the Democratic nomination for president, and not even the events of Baltimore could keep him from extending his news cycle through the weekend. PDiddie at Brains and Eggs reports on the money part of the equation in the opening days of his campaign, and wonders if the stark differences between he and Hillary Clinton might actually produce a meaningful primary contest.

CouldBeTrue of South Texas Chisme wonders why so many Texas Republicans act to enable rapists.

From WCNews at Eye on Williamson. Hooray, Obamacare is working, The Good News About Healthcare In Texas For Everyone But Republicans.

Neil at All People Have Value said as shameful as Governor Abbott is to pander to the Jade Helm paranoia, there are in fact serious reasons people believe crazy things. APHV is part of NeilAquino.com.


And here are some posts of interest from other Texas blogs.

HISD Trustee Anna Eastman explains her standardized testing philosophy.

Susan Criss asks if anyone can call us a “Christian nation” if it is a crime to help people or pets.

The Texas Election Law Blog previews the arguments in the voter ID appeal.

Quoting the 2015 Teacher of the Year, the TSTA Blog says we do not separate people into groups that are more deserving than others.

Unfair Park and Paradise in Hell both wonder why Greg Abbott is giving comfort to the tinfoil hat crowd. Harold Cook may have the best explanation for it, and RG Ratcliffe joins the fun.

Texas Watch excoriates the Senate for choosing insurance company profits over families and businesses.

Mean Green Cougar Red gives his thoughts on the proposed I-45 rebuild in Houston.

Mari Aguirre-Rodriguez demonstrates some of the tools and technologies that a modern campaign can use.

Texas Vox documents the vote on the latest assault on the environment and local control.

Fascist Dyke Motors recaps her story so far.


The Good News About Healthcare In Texas For Everyone But Republicans

Posted in 84th Legislature, Around The State, Bad Government Republicans, Health Care at 10:50 am by wcnews


How far we’ve fallen.  But first the good news. Uninsured rates plunge across Texas.

While Texas continues to lead the nation in the number of uninsured residents, the percentage lacking coverage has fallen significantly since the Affordable Care Act’s insurance marketplace began enrollments a year and a half ago, a study released Thursday shows.

The decline, to 16.9 percent from 24.6 percent, represents a reduction of nearly a third between September 2013 and March 2015, according to findings by the Episcopal Health Foundation and Rice University’s Baker Institute for Public Policy.

“This is a dramatic drop that’s unprecedented in Texas,” said Elena Marks, president and CEO of the Episcopal Health Foundation and a health policy scholar at the Baker Institute. “It shouldn’t surprise me because this is what was supposed to happen. But considering the weak performance of the rollout of Healthcare.gov and the persistent drumbeat against the Affordable Care Act, I am pleasantly surprised.”

Certainly that’s good news, but let’s remember it could be better.

Some of the findings in Thursday’s report remain troubling.

As of March, Texans earning the lowest incomes remain almost four times more likely to be to be uninsured than higher-income residents.

This coverage gap has grown since 2013 because, under the Affordable Care Act, households above an established threshold can buy health insurance using subsidies and those below it were supposed to be picked up by an expansion of the Medicaid program, said Vivian Ho, chair in health economics at the Baker Institute and a Rice professor of economics. She co-authored the report.

Texas is one of 21 states whose leaders chose not to expand Medicaid coverage.

“Texas’ decision not to expand Medicaid leaves those at the lowest income levels with few coverage options,” the report said. The study further concluded that unless the state reverses its decision or finds another way to get coverage for the poor, they “are likely to remain uninsured.”

The 31 percent decrease in the rate of the uninsured in Texas is similar to drops in other states that did not expand Medicaid coverage, the report said. But it remains lower than the nation, which as a whole saw a 41 decrease, and “well below the rate of change for states that expanded Medicaid,” the report said. Those states had a 53 percent average reduction in the number of uninsured.

Remember how bad Obamacare was going to be? Paul Krugman wrote about it last week, Nobody Said That.

Go back to 2013, before reform went fully into effect, or early 2014, before the numbers on first-year enrollment came in. What were Obamacare’s opponents predicting?The answer is, utter disaster. Americans, declared a May 2013 report from a House committee, were about to face a devastating “rate shock,” with premiums almost doubling on average.

And it would only get worse: At the beginning of 2014 the right’s favored experts — or maybe that should be “experts” — were warning about a “death spiral” in which only the sickest citizens would sign up, causing premiums to soar even higher and many people to drop out of the program.

What about the overall effect on insurance coverage? Several months into 2014 many leading Republicans — including John Boehner, the speaker of the House — were predicting that more people would lose coverage than gain it. And everyone on the right was predicting that the law would cost far more than projected, adding hundreds of billions if not trillions to budget deficits.

What actually happened? There was no rate shock: average premiums in 2014 were about 16 percent lower than projected. There is no death spiral: On average, premiums for 2015 are between 2 and 4 percent higher than in 2014, which is a much slower rate of increase than the historical norm. The number of Americans without health insurance has fallen by around 15 million, and would have fallen substantially more if so many Republican-controlled states weren’t blocking the expansion of Medicaid. And the overall cost of the program is coming in well below expectations.

One more thing: You sometimes hear complaints about the alleged poor quality of the policies offered to newly insured families. But a new survey by J. D. Power, the market research company, finds that the newly enrolled are very satisfied with their coverage — more satisfied than the average person with conventional, non-Obamacare insurance.

This is what policy success looks like, and it should have the critics engaged in soul-searching about why they got it so wrong. But no.

Notice the sky did not fall. Quite the opposite actually, things have turned out pretty well. And as Krugman says there’s been no accountability for all the bad prognosticating.

You see, in a polarized political environment, policy debates always involve more than just the specific issue on the table. They are also clashes of world views. Predictions of debt disaster, a debased dollar, and Obama death spirals reflect the same ideology, and the utter failure of these predictions should inspire major doubts about that ideology.

And there’s also a moral issue involved. Refusing to accept responsibility for past errors is a serious character flaw in one’s private life. It rises to the level of real wrongdoing when policies that affect millions of lives are at stake.

In that vein I give you state Sen. Charles Schwertner (R-Georgetown).

Since its passage in 2009, Americans from every walk of life have come face-to-face with the stark realities of Obamacare: millions of health insurance policies cancelled, skyrocketing premiums, rising deductibles, and the frustration felt by anyone attempting to purchase coverage through HealthCare.gov. Obamacare’s top-down, Washington-first mentality has been an unmitigated disaster for the American healthcare system. You deserve the right to make your own healthcare choices, and no government has the right to interject itself between you and your doctor.

Now that we know most of that is now wrong, why would we trust what he’s saying about Medicaid expansion? Elected official’s like Schwertner can no longer be trusted on this issue. For them it’s only about ideological purity.  There is no longer a valid argument against expanding Medicaid in Texas.  Failing to do so just perpetuates unnecessary cruelty.

The CPPP has just released a report on the state of Medicaid expansion in Texas, Closing The Coverage Gap, and how the Lege is, again, ignoring it.

As we’ve seen again recently the GOP in Texas is now run by the wing nuts, and the semi-sane Republicans are no longer able to do anything about it, aka, pandering to idiots.

Hello Democrats, opportunity is knocking.


Acting Irresponsibly

Posted in 84th Legislature, Taxes, The Economy at 3:57 pm by wcnews

tax cuts cartoon_

In case you haven’t heard the economic numbers in Texas are starting to turn sour.  The so-called “Texas Miracle” is starting to look like it was just another oil boom/bust cycle. Texas manufacturing slips again as oil and gas orders disappear.

Texas manufacturing slipped again in April as the oil bust continues to wreak havoc on factories that supply machinery and equipment to the energy industry, according to responses to the Federal Reserve Bank of Dallas’s monthly survey.

The production index, a key measure of the manufacturing conditions, remained in negative territory for the second month in a row, with three out of 10 executives reporting seeing production fall between March and April, according to a survey of 108 Texas manufacturers in mid-April. Executives were asked to say whether employment, orders, prices and other business activity had changed in the past month.

Manufacturers continued to be pessimistic about future business conditions, with the company outlook index tumbling to its lowest reading in nearly 2.5 years, according to results. Fabricated metal factories appear hardest hit, with executives complaining about a total slowdown in business from the industry.

“Our oil and gas customers have come to a complete stop,” one fabricated metal manufacturing executive wrote. The comments are kept anonymous to foster candid responses. “It looks like everyone in the industry is digging in for a long-term trough.”

Gone are the expectations for a rapid rebound, which analysts sometimes refer to as a “V-shaped” recovery because of the way it appears on a chart. Predicting a prolonged period of distress, one executive wrote that recovery now looks like “a bathtub with a large drain at one end that will take some suppliers down.” [Emphasis added]

R.G. Ratcliffe puts in context just how irresponsible the tax cuts being discussed in The Lege are, An Unstable Economy Is Not the Time for Tax Cuts.

Property tax appraisals going out around Texas right now likely will give a boost to the Senate’s property tax cut proposals over the House plan for sales tax cuts. But a look at some of the appraisals show the Senate plan is too little to make a real difference to homeowners in fast growth areas. And an honest look at the state of the state’s economy finds the House plan borders on fiscal irresponsibility rather than fiscal conservatism.

The Texas economy is poised for a contraction, and, with that, comes a major decline in state government revenues. This may not be the time for tax cuts..

In the post he goes through how invisible a property tax cut would be for most homeowners. How most of the benefits of these cuts will go to those who already pay too little, big business and the wealthy, and how as all signs point to Texas heading into a recession tax cuts are irresponsible.  He ends with this.

The real bottom line here is that tax cuts will not stimulate major new economic growth, only an increase in oil prices will do that. A property tax cut may taste good, but, for the homeowners who need a break the most, the Senate plan will just be empty calories. And with the short-term future of the Texas economy so uncertain, the House sales tax cuts look irresponsible. A good argument can be made against raising taxes during a recession to avoid budget cuts because the increase doesn’t go away when the economy rebounds. The same argument can be made against cutting taxes when times are flush, because the rate will not automatically increase when the money becomes short.

The truly responsible thing is for the Legislature to spend what it has in the best way possible for the state and put off any tax cuts until we know more about what the economy is doing.

We must understand the consequences in the future if taxes are cut now, Texas go into a recession, and we have a massive budget deficit in two years from now. Our current political leadership is only able to cut taxes and make cruel and immoral budget cuts. They’re unlikely to advocate for tax cuts when there is a budget deficit. Which only leaves cruel and immoral budget cuts.

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