Your San Antonio Chamber of Commerce staff traveled to New Braunfels last week to join more than 350 Texas business and political leaders at the 53rd Annual Texas Legislative Conference. The purpose of the conference was to discuss some of the most pressing policy issues facing the State in 2018.
The event kicked-off with a panel on Hurricane Harvey Impacts on Texas, moderated by Ross Ramsey, Co-Founder and Executive Editor for the Texas Tribune. The takeaway there was that we can all expect the Texas Legislature to make issues related to Harvey a big priority next session.
According to the Media Panel that discussed the Texas Primary Results, there still remains quite a bit of uncertainty leading up to the general election November 6. The 2018 election has an unusually high number of prominent open races, with eight Texans in the U.S. House opting not to run for re-election and more than a dozen in the Texas Legislature doing the same. More than 30 Texas primary races are headed to a runoff, so we will be watching closely.
Ray Perryman, President and CEO of The Perryman Group moderated an interesting discussion on Federal Tax Reform and Taxes. Panelists included State Senator Kirk Watson, Texas Comptroller Glenn Hegar, State Representative Drew Darby, and Dale Craymer, President of the Texas Taxpayers & Research Association. Hager discussed the fact that the Tax Cuts and Jobs Act brought $12 billion in tax cuts to Texas, but we can expect to see more indirect than indirect benefits. The primary reason is that Texas does not have a state income tax, and there has not been any appetite from Texas legislators to change that. However, the new tax law provided businesses more opportunity to invest capital with a greater reduction. That has been seen most by the oil industry, since most oil rigs are in Texas.
Representative Darby made it clear that the new tax law was deficit-funded and will most likely lead to federal program cuts. While we can’t be sure which ones exactly, he did discuss those that would have the greatest negative impact on Texas such as Medicaid, transportation and education. An estimated 46% of Texans receive Medicaid, 30% being the elderly and disabled. The federal government allocates $5 billion to education toward Texas, seven times more than what the state puts in to the budget. A cut in federal education funding would be a tremendous hit to Texas.
An interesting fact that many may have missed was the elimination of the beer tax. So, while the cost to purchase been will go down, Texans can expect to see costs rise in other areas to compensate. The 40% cut in the marginal tax rate will put pressure on the debt market, which will lead interest rates to increase and ultimately drive up the cost to do business.
The event ended with a memorable keynote speech from legendary entertainer and “King of Country Music,” George Strait. Strait was named the 2018 Texan of the Year for his humanitarian efforts, particularly for Hurricane Harvey relief. To date, Strait’s efforts on behalf of Hurricane Harvey victims have raised more than $50 million.
