Forrest for the Trees

Today was a marathon day for discussion of funding the state water plan. In both House and Senate committee hearings, it seemed like everyone with something to say on the issue—in other words, a ton of people—got their say. Agriculture, energy interests, water utilities, environmentalists, San Antonio Mayor Julian Castro, big engineering firms and so on.

Support for funding the $53 billion water plan appeared to be unanimous. Everyone pledged fealty to water conservation. The question now, as Sen. Troy Fraser (R-Horseshoe Bay) suggested this morning, is *how* the financing is structured. Will the consensus hold, or will interests fracture along regional and economic lines?

“We can’t afford to pit one [group] against another,” said Laura Huffman, of the Nature Conservancy. “A growing state is going to want to eat, drink and turn the lights on.”

Much will depend on whether key lawmakers—Rep. Allan Ritter (R-Nederland) and Fraser in particular—can craft a fair structure for distributing what will likely be billions of dollars over the coming decades.

“I think it’s like most of the issues that come before this body,” said state Rep. Doug Miller (R-New Braunfels). “Follow the money.” Austin American-Statesman reporter Asher Price did just that. He found that one of the organizations behind the push for a state water bank, H2O4Texas, is funded by “industries that stand to benefit from massive projects to move water around the state.”

That’s not terribly surprising but suggests that legislators will have to be careful to guard against allowing the water bank to turn into a slush fund.

The key word is: prioritization. The state water plans lists 562 distinct water projects, a wish list drafted by hundreds of “stakeholders” organized into 16 regional water planning groups. Those projects are the essence of the plan. But how do you pick which ones to fund? What form does the funding take—grants, loans, etc? Which projects get funded first? Do conservation-focused projects receive a leg up or is the money going to flow into new reservoirs?

Ritter’s legislation, House Bill 4, has been praised by environmentalists for requiring that at least 20 percent of the funds go toward water conservation.

Sen. Fraser’s legislation, Senate Bill 4, would create a fund outside of the state treasury but would put the Texas Water Development Board in charge of prioritizing the projects. But Fraser repeatedly complained today that the board is ill-equipped to take on such a huge task. Fraser said he’d had trouble getting a simple list of water-supply projects that the board considers top priorities.

Under Senate Bill 4, the Water Development Board would be run by three full-time commissioners instead of six part-timers. It would also set up a nine-member advisory committee to recommend water projects to the full board. Other senators, however, piled on Fraser’s proposal, leading him to stress that it was a work in progress and likely to be negotiated until the bitter end.

Perhaps the most compelling testimony came from mayors, including San Antonio’s Julian Castro, Houston’s Annise Parker as well as the mayors of Abilene, Midland and San Angelo. The message was that cities have done a tremendous amount of infrastructure-building and water conservation but that state support is critical.

“Further economic development and the population growth that comes with it require new water supplies,” said Castro. “The challenge is funding.”

The West Texas mayors, who have faced a near-crisis situation during the current drought, presented a unified front. For the last two years, San Angelo, Midland and Abilene have worked together on long-term solutions to the drying up of large reservoirs the cities rely on.

Alvin New, the mayor of San Angelo, pointed out that the city was only a year away from running out of water. Beneficial rainfall in September bailed San Angelo out temporarily; the city now has a 20-month supply, a bit of breathing room while a pipeline is built to tap an aquifer 60 miles away.

Abilene, meanwhile, is working on Cedar Ridge Reservoir, a $240 million reservoir proposed for the Brazos River. Mayor Norm Archibald described Cedar Ridge as an “incredibly significant financial investment,” one that can’t be undertaken without state support. Permitting alone will cost $12 million and is bound to draw opposition. For one, the reservoir would reduce flows on the Brazos River system, which is already running low. The Brazos River Authority also has a water rights application pending before the Texas Commission on Environmental Quality that would effectively lock up most of the “extra” water in the basin.

A project as expensive, complex and politically fraught as a new reservoir may be in West Texas’ interest, but what about the rest of the state? State Rep. Bill Callegari questioned the wisdom of building a new lake when the region’s other surface water supplies have dried up.

“What are you going to do differently to make sure you can fill them first and keep them full?” he asked.

They call him “mucus.” And not just, or primarily, because of his initials—MQS. In Texas politics, conservative kneecapper Michael Quinn Sullivan inspires more fear and loathing than a special session—not least from Republican lawmakers who’ve been insufficiently radical for his tastes and thus find themselves with a primary opponent to the right of Barry Goldwater.

Sullivan’s bête noire is the Establishment in all its manifestations, the “Libs” who want to allow gays in the Scouts, the #dinosaurmedia, speaker of the House Joe Straus (RINO!!!), certain GOP political consultants and pretty much anyone else who doesn’t follow his ultra-conservative, anti-government agenda to the letter. He is Texas’ answer to Grover Norquist. (Important side-note: Peek behind the curtain of Sullivan’s group, Empower Texans, and you find one Tim Dunn, a Midland oilman with beaucoup dollars.)

Liberals and Democrats don’t care for MQS because he’s helped turn the state budget into a bloodbath. Many GOP-ers can’t stand him because he’s holding them hostage to the fringe of their party. But one thing everyone should be able to agree on is that he’s horrible at math. Twice in the past month, Sullivan’s been thoroughly busted on the widely disseminated, but bogus, numbers that he uses to convince credulous tea partiers and lawmakers that Texas is a profligate spender.

First, former Observer editor and current Texas Monthly Senior Editor Nate Blakeslee profiled Sullivan in the Monthly‘s January issue. The key question Blakeslee ponders, “Can you really build a grassroots movement around a premise that is fundamentally untrue? Perhaps the better question is, Why would you want to?”

Blakeslee looked at figures that Sullivan uses in his anti-government lectures around the state. It is a thorough fisking. (Feel free to skip ahead if you’re not into numbers.)

There were some problems with the math. Adding the growth in inflation between 1990 and 2012 (77 percent) to the population growth (55 percent) gives you 132, which, as Sullivan likes to point out, is a much smaller number than 300, the percentage growth in state spending over that period. Sullivan’s numbers, though he misquoted them a bit in Missouri City, come from a February 2012 report from the [Texas Public Policy Foundation.] The problem is that simply adding the percentage growth in population and inflation does not allow for the compounding effect one figure has on the other. (To accommodate a population increase of 55 percent and an inflation increase of 77 percent, a budget would have to grow by 174 percent, not 132 percent.)

Think about what Sullivan and the Texas Public Policy Foundation, a conservative think tank, have done here. Instead of multiplying growth rates, they’ve added them, which is the kind of C-student error that’d earn you a wet willy from my high school math teacher. And even after getting called out, they’ve yet to admit or repair the error.

Blakeslee continues his public service of wading into Sullivan and TPFF’s fun with numbers. There are no other apparent math errors, just plenty of sins of omission and commission.

And it doesn’t tell you how much public spending grew during that 22-year period, after adjusting for inflation and population growth. The answer is 63 percent. That may seem like a lot, but there is some cherry-picking going on here. In the early nineties, the Legislature was forced by court order to significantly increase spending on both prison construction and public education. There has not been a significant tax increase since that time. If, instead of a 22-year span, you just look at the past 20 years–as the Legislative Budget Board, which includes the leadership from the House and Senate, did in its most recent report–you see a much more modest increase of roughly 15 percent from the 1992-1993 biennium to the current 2012-2013 biennium. Of course, the recession-ravaged 2012-2013 budget is something of an anomaly. But comparing the baseline with the 2010-2011 budget reveals an increase of only 35 percent.

Yet even that figure is not what it seems. The LBB adjusts for inflation using the consumer price index, a measure of the cost of a “market basket” of goods and services bought by the average family. But consumers and governments don’t necessarily buy the same things–governments spend an awful lot on items like health insurance premiums, for example, the cost of which has risen much faster than prices on average over the past twenty years. (Most consumers, on the other hand, have their premiums paid largely by their employers or the government, if they have insurance at all.) Health care is such a huge part of the state budget–roughly 30 percent–that escalating costs in that sector have a disproportionate impact on state spending, one that is not reflected in the LBB’s inflation-adjusted figures. That’s not the only caveat to that 35 percent figure. In 2007 the Legislature took some of the burden of funding schools off local school districts–which is to say, off property-tax payers–and began collecting the new margins tax and a higher cigarette tax to compensate. On paper that looks like an increase in state spending on public education beginning in 2008, but really it was just a shift in spending from one level of government to another. In fact, if you strip out these types of dedicated funds along with federal funds, which are allocated according to formulas over which the Legislature has little control, you get a much clearer picture of just how thrifty the state of Texas really is. General revenue spending fell 4 percent between 2000 and 2011.

In other words, MQS magically turned an actual decline in spending into a 300 percent increase through the power of fuzzy math. A credulous tea party audience, one already inclined to believe that state government spending is out of control, would of course eat this stuff up. The problem, of course, is that it’s deceptive, as even MQS’s sugar daddy comes to realize.

[Tim] Dunn appeared genuinely flummoxed when I presented him with the stark contrast between the picture drawn by Sullivan’s stump speech and the LBB’s numbers. “Can I keep these charts?” he asked. “I want to make sure the information we are putting out is accurate.”

Math is hard and anyone can make mistakes. Dunn, as Blakeslee notes, seems “genuinely flummoxed” and pledges to “make sure the information we are putting out is accurate.” So, how’s that going?

Judge for yourself. Last week, Texas Tribune reporter Morgan Smith looked at the oft-repeated claim, primarily from voucher and charter-school proponents, that spending on public schools has skyrocketed.

“School spending in Texas has grown rapidly over the last decade, with few academic gains to show for it — and we aren’t a step closer to the change that our students, parents and taxpayers need,” said James Golsan, an education analyst with the conservative Texas Public Policy Foundation.

Michael Quinn Sullivan, president of Empower Texans, said that Texas “has doubled per-pupil spending over the last decade, but average test scores have remained flat.”

But in his remarks from the bench Monday, Dietz said that the state does not adequately fund public schools. He pointed to a chart from the Legislative Budget Board that shows funding for public schools in 2013 is almost the same as in 2003, though enrollment has grown by almost 700,000 students.

The LBB chart, reproduced below, shows that state spending in 2003 was about $31 billion in “constant dollars” adjusted for inflation. In 2013, it was slightly above that. That’s despite the growth in student population in that decade from 4.3 million to nearly 5 million, according to the Texas Education Agency.

So, how in the heck do we reconcile TPPF/Sullivan’s contention that per-student spending has doubled with the LBB numbers that it’s been flat?

All of the data the Texas Public Policy Foundation uses on state education spending come from the comptroller’s office, Golsan said. He said in his statement he was referring to “raw dollars” spent on public education over the past decade, which did not account for inflation.

Sullivan said he also based his statement on raw numbers, though his came from the Texas Education Agency. [emphasis mine]

They didn’t adjust for inflation. Repeat: They didn’t adjust for inflation. That’s it. That’s the basis for their argument about the supposed “inefficiency” of public schools.

You know, when I was a kid, you could buy a Big Mac for $1.60. Now it costs $4. That’s a 150 percent increase and just goes to show We the People can’t trust McDonald’s with our money! 

You’d think there would be more to it. But, nope, that’s it. And, still, they won’t cop to their mistake. TPPF’s Josh Treviño, who enjoyed an extremely short foray into mainstream journalism last year, defended TPPF’s numbers as “technically correct” (the best kind of correct).

Sullivan’s explanation (“raw numbers”) is risible. It calls to mind the disastrous Republican effort to “unskew” the polls. Whatever it is, it’s not math; it’s alchemy that turns ideology into objective reality.

Former legislators don’t die, they come back as lobbyists quicker than you can say cha-ching! Today’s profile in reincarnation is former state Rep. Vicki Truitt, the Republican chair of the House Pensions, Investments & Financial Services Committee. Last session, she led a watered-down (and mostly failed) effort to rein in the excesses of the state’s payday and auto-title lending business.

In May, Truitt lost a primary challenge to Rep. Giovanni Capriglione, a tea party private equity manager who ran to her right.

And here we’ll let the inestimable Texans for Public Justice pick up the thread:

While there often is continuity between the interests that revolving door lawmakers service in the Capitol and the lobby, Truitt stands out for the sheer seamlessness of this unseemly behavior.

After losing her seat in the 2012 primary, Truitt left office on January 8, 2013. Payday lender ACE Cash Express agreed to pay her up to $50,000 to lobby just 17 days later.

Although Truitt played the part of fair-minded referee last session between the payday industry and its legions of critics, her biggest accomplishment was squashing efforts to close the loophole that allows payday and title shops to avoid Texas’ usury laws. Instead, Truitt ordered the fair lending crowd into a secret arbitration process with the industry’s lawyers. What emerged was a trio of watered-down bills. Only one addressed the cycle of debt problem that so many borrowers get plunged into. Truitt was unable to get the bill passed.

Truitt did play the hero briefly. In a bizarre, unseemly exchange on the House floor Rep. Gary Elkins, a Houston Republican and owner of a chain of payday loan shops, accused Truitt of messing with his bidness.

“Isn’t it true that you stand to add to your personal wealth considerably by killing the bills?” asked Truitt. “Mr. Elkins, do you understand the concept of conflict of interest?”

The difference between Truitt and Elkins is that she waited a little bit longer to collect her payday.