Return to August 2020 newsletter
Around the Texas Capitol: Ongoing elections, more COVID-19, back-to-school and more
By Lauren Spreen, Shayne Woodard and J Pete Laney
TAD Governmental Affairs
COVID-19 issues and elections still continue to dominate activity on the state government level. Right now, one of the biggest COVID-19 issues is how students across Texas will return to school. The dairy industry also should be interested in new leadership appointments at the Texas Commission for Environmental Quality. Also at the Capitol, discussion is intensifying about how the Texas Legislature will meet and operate starting in January to adhere to social distancing and other safety protocol related to the coronavirus – more on that in the coming months.
State Sen. Fallon favored to win congressional seat; could trigger Senate District 30 special election
State Sen. Pat Fallon (R-Prosper), whose North Texas district includes more than 90 dairy farms, on Aug. 8 was chosen by U.S. Congressional District 4 GOP county and precinct chairs to be the Republican nominee to replace U.S. Rep. John Ratcliffe (R-Heath) on the November ballot. Ratcliffe’s seat was vacated when Ratcliffe was confirmed as U.S director of national intelligence, creating a vacancy in Congressional District 4. Gov. Greg Abbott opted against calling a special election to finish Ratcliffe’s term, so the winner in the November election will take the congressional seat in January to serve a full new term.
Of course, should Fallon win (as is expected), that would create a vacancy of his Texas Senate seat that would need to be filled by a special election. However, the timing of that election depends on when Fallon vacates his Senate seat, assuming he wins. His options: resign early, or wait until he takes his new office in January.
Governor extends general election early voting period
In other election news, Abbott on July 27 issued a proclamation extending the early voting period for the Nov. 3 general election by nearly a week. In-person early voting now will begin Tuesday, Oct. 13 (instead of Monday, Oct. 19) and continue through Friday, Oct. 30. The proclamation also expands the period in which marked mail-in ballots may be delivered in-person to the early voting clerk’s office, allowing such delivery both prior to and also on Election Day.
TCEQ announces leaders to four top positions
The Texas Commission on Environmental Quality on Aug. 10 announced that three veteran agency leaders and a former state environmental attorney will fill top leadership positions. TCEQ impacts the Texas dairy industry through regulations and permitting that impact land, air and water.
Ramiro Garcia, Jr., former deputy director of TCEQ’s Office of Compliance and Enforcement, and L’Oreal W. Stepney, P.E., former deputy director of TCEQ’s Office of Water, will serve as the agency’s deputy executive directors. Garcia and Stepney, who have a combined 54 years at TCEQ, will assist Executive Director Toby Baker in the administration of the agency.
Earl Lott, former director of the Waste Permits Division for 12 years, has been named deputy director of the Office of Water. Lott will lead the office in working toward ensuring that Texas water is clean and available. This includes all aspects of planning, permitting, and monitoring to protect the state’s water resources.
New to TCEQ leadership will be Craig Pritzlaff, who will lead the Office of Compliance and Enforcement, ensuring compliance with state environmental laws, responding to emergencies and natural disasters, overseeing dam safety and monitoring Texas air quality.
Abbott extends state disaster declaration for COVID-19
Abbott on Aug. 8 extended his Disaster Declaration for all Texas counties in response to COVID-19. Originally issued on March 13, the Disaster Declaration provides the state a variety of resources to effectively serve Texans as the Lone Star State continues to mitigate the spread of COVID-19.
“Renewing this Disaster Declaration will provide communities with the resources they need to respond to COVID-19,” Abbott said. “I urge Texans to remain vigilant in our fight against this virus. Everyone must do their part to slow the spread of COVID-19 by wearing a mask, practicing social distancing, and washing your hands frequently and thoroughly. We will overcome this challenge by working together.”
AG Paxton issues guidance on opening of local schools
On July 28, Attorney General Ken Paxton issued guidance on the opening of local schools for the upcoming school year regarding the ongoing COVID-19 pandemic in response to responding to a request from Stephenville Mayor Doug Svien.
While playing an important role in protecting the health of school children and employees, local health authorities may not issue sweeping orders closing schools for the sole purpose of preventing future COVID-19 infections, Paxton said. Rather, their role is limited by statute to addressing specific, actual outbreaks of disease. School officials, both public and private, are the appropriate ones to decide whether, when and how to open school, he said in the guidance.
In response to Paxton’s letter, Education Commissioner Mike Morath issued a statement on school openings: “Over the past month, Texas Education Agency (TEA) announced a funding waiver framework that fully funds schools for remote instruction for the entire year for any family that requests remote instruction. To generate funding for remote instruction, school systems must also provide daily on-campus instruction for families that want to come on campus, with several critical exceptions designed to maximize the health of students, teachers, and staff.” Those exceptions:
- As part of an 8-week back to school transition period, school systems can offer a solely remote instructional setting, subject to some requirements.
- Schools will be funded for providing remote-only instruction for up to five days if a school building is closed due to a confirmed COVID-19 case on campus, at any point during the school year.
- Even beyond this five-day exception, any day a school building is closed as part of a legally authorized closure order, schools will be funded for providing remote-only instruction.
- High schools can offer an alternating on-campus/remote instructional experience in order to reduce the number of students in campus buildings at one time.
The AG issued additional guidance that indicated that blanket school building closures ordered by local public health authorities for preventative purposes are not lawful. School systems planning on starting the year with 100% remote instruction still will be fully funded in accordance with TEA’s previously announced eight-week back-to-school transition funding waiver.
Lawful building closure orders will continue to enable a school system to be funded when providing remote-only instruction. Also, it’s important to note that the school start date remains at the discretion of local school boards.
The Education Commissioner says TEA continues to monitor the public health situation very closely, working in collaboration with school systems, and remains prepared to adjust or adapt its waiver framework as necessary to ensure students, teachers and staff are kept safe.
Abbott provides update on PPE distribution to Texas schools
Abbott on Aug. 4 provided an update on the state’s distribution of PPE to Texas school districts for the 2020-2021 academic year. He noted that the state will continue to purchase and distribute PPE to schools at no cost to the school districts. The state has already distributed to Texas schools 59,410,640 masks, 567,948 gallons of hand sanitizer, 24,017 thermometers and 511,294 face shields.
Abbott waives grade promotion requirements for 2020-2021 STAAR testing
On July 27, Abbott announced that the grade promotion requirement related to the State of Texas Assessments of Academic Readiness (STAAR) test for students in grades 5 and 8 has been waived for the upcoming school year. Typically, school systems must take into account a student’s score on the STAAR test to determine whether the student can be promoted to the next grade level. The traditional A-F rating system will remain in place, albeit with certain adjustments due to COVID-19.
Typically, students enrolled in grades 5 and 8 are required to re-take a STAAR test late in the school year, and sometimes again in the summer if they do not meet grade level when taken during the spring. With this waiver, STAAR will be administered only in May for grades 5 and 8 in mathematics and reading assessments in the 2020–21 school year.
To learn more, visit TEA’s FAQ guide on STAAR.
State sales tax revenue gains reported for July following several months of decline
State of Texas Comptroller of Public Accounts Glenn Hegar on Aug. 3 reported gains in state sales tax revenue following months of declining collections related to COVID-19. State sales tax revenue from sales made in June and remitted in July were $2.98 billion, up by 4.3% compared to the July 2019 report.
“State sales tax collections in July were better than expected, increasing despite the high unemployment due to the pandemic,” Hegar said. “The increase was due to a surge in collections from the retail trade sector; receipts from other major sectors – including mining, construction, wholesale trade, services and restaurants – showed significant declines.
“Collections from e-commerce were up sharply, as many consumers chose to shop online rather than at brick-and-mortar stores. Also, more online marketplace and remote vendors are required to collect and remit Texas tax following the Wayfair decision and subsequent legislation passed last session. Increased time spent at home both for teleworking and staycations, in lieu of leisure travel, spurred sharply higher spending for home improvements.
“Collections from food and beverage stores also were up strongly, as consumers replaced purchases of alcohol from restaurants and bars with alcohol purchased for off-premise consumption (alcohol sales at bars and restaurants are subject to mixed beverage taxes, not sales and use tax),” Hegar said. “Collections from sporting goods stores also rose significantly, as consumers turned to home workouts, bicycling, boating, camping and other forms of outdoor recreation consistent with social distancing.
“With about 1.3 million Texans with continued claims for insured unemployment and another 184,000 receiving benefits under the Pandemic Unemployment Assistance program in June, it’s likely that consumer spending was significantly supported by enhanced benefits provided by the federal CARES Act and related legislation enacted in response to the Covid-19 pandemic. With the expiration of these benefits at the end of July, consumer spending and sales tac collections may decline in coming months.”
Total sales tax revenue for the three months ending in July 2020 was down 5.3 percent compared to the same period a year ago. Sales tax is the largest source of state funding for the state budget, accounting for 57 percent of all tax collections. The effects of the economic slowdown and low oil prices were more evident in other sources of revenue in July 2020, though most were improved compared to previous months.
Texas collected the following revenue from other major taxes:
- Motor vehicle sales and rental taxes – $466 million, down 3.7% from July 2019
- Motor fuel taxes – $304 million, down 2.2%
- Oil production tax – $187 million, down 40%
- Natural gas production tax – $37 million, down 71%
- Hotel occupancy tax – $34 million, down 42%
- Alcoholic beverage taxes – $110 million, down 6.2% (These collections were inflated by a delay in liquor tax remittances, resulting in the July receipt of four months’ worth of remittances in liquor taxes. Mixed beverage gross receipts and sales taxes, which make up the bulk of monthly alcoholic beverage tax collections, were down 41 percent.)
Fiscal 2020 franchise tax collections, which were deferred to July, totaled $4.17 billion, 4.8% percent more than in fiscal 2019 year-to-date.