Time to Tap the State Rainy Day Fund for Regional Flood Projects

The State of Texas prudently maintains a “Rainy Day” fund.  Currently the fund balance is just over $10 billion.  The technical name for the fund is the Economic Stabilization Fund.  Either of its monikers strongly suggest that it should be tapped at this time to jump start critical flood control projects in the Houston region.

Our region is subject to two types of flood risks.

The first is a storm surge from a hurricane.  A storm surge from a “Scenario 7” storm, a Category 4 or larger that makes landfall near Freeport, is an existential threat to our region.  Such a storm would flood all of Galveston County, about half of Brazoria County and about 20% of Harris County.  It would kill thousands, cause billions in property damages and inestimable ecological damage as the surge overruns sites with decades of industrial pollution.  It would also wreak havoc on the State and national economy as a large percentage of the refining and petrochemical capacity would be offline for months.

The second risk is from massive rain events which outstrip our drainage system’s ability to move the rainwater to the Bay.  Of course, the recent Harvey flooding was an extreme example of such an event.  These events are occurring more frequently because we are getting more rain than we have in the past and because we poured concrete and asphalt over soil that used to soak up some of that rainfall without making adequate provision for the resulting increased runoff.

The good news is that there are solutions to both problems.  The bad news is that the solutions are expensive. . . . and I mean really expensive.

The solution to storm surge flooding is a coastal barrier, as originally conceived by Texas A&M Galveston’s Bill Merrill, and subsequently refined by input from a variety of stakeholders.  The cost is $10-15 billion.

The solution to Harvey-type flooding is more multifaceted and probably still requires some additional study.  But it clearly must include shoring up the Barker and Addicks reservoirs, adding massive amounts of additional detention, tightening up detention regulations and building codes, and potentially building a third reservoir.  The costs for these measures is less certain but could easily be another $5 billion.

I am not suggesting we should drain the Rainy Day fund to build these projects.  Most of the tab will have to be picked up by the Federal government.  But the Federal government gives preference to projects where local and State governments are willing to pick up a share of the costs.  If our State leadership goes to the Feds with a commitment to use some of the Rainy Day fund, say $2 billion, we will stand a much better chance of getting Federal funding.

If we fail to address these risks there will be long-term adverse economic consequences for our region, the State and indeed the entire nation.  The Houston region accounts for almost 30% of the State’s total GDP.  As goes Houston so goes the State.

After a week of nonstop national news coverage about how vulnerable Houston is to flooding, what corporation is going to relocate here?  Would you schedule a convention in Houston during hurricane season?  How many companies are going to build a new plant in a place where it could be inundated by a 25-foot storm surge?

Now is the time for bold leadership, not Republican primary posturing.  There is nothing conservative about failing to make investments that we know are needed to avoid future losses.  In fact, it is grossly irresponsible not to do so.

A hundred years from now no one is going to remember anything about bathroom bills or even know what that the hell a sanctuary city was.  But, as we remember the construction of the Galveston Seawall over a century after it was built, our grandchildren will remember whether we, as a generation, stepped up and ended the threat of devastating flooding to our region and the State’s largest economic engine.

Many Questions Need to be Answered Before Raising the City’s Taxes

    Harvey was an extraordinary event and calls for an extraordinary response.  That response may include raising more revenue for flood projects in our region.  But the proposal by Sylvester Turner for City Council to immediately raise the City’s property taxes by $113 million raises a number of troubling question.

    First, let’s not kid ourselves that his money is going to be used to stem flooding.  Since 2012, the City has collected about $800 million in “drainage fees.”  A tiny fraction of that money has actually been spent on flood control projects.  Trust me, none of this $113 million will be.

     Under the property tax cap charter amendment, City Council can raise additional property tax revenue over the cap by an amount “necessitated by city expenditures related to the inclusion of the city in any declaration of an emergency or disaster.

     Therefore, the threshold question must be:  How is the $113 million going to be spent?  The only explanations we have gotten so far is that the City will have to pony up about $20 million for it share of debris removal expenses, needs to replace about 300 flooded vehicles and repair some unspecified damages to some of the City’s facilities.  But we have a $20 million “rainy day fund” (recently renamed the Budget Stabilization Fund) for exactly this purpose.  And it should not cost more than about $15 million to replace 300 vehicles.  So where is the rest of the money going?

     And were any of those losses covered by insurance?  I found a note in the 2016 Annual Report that appears to suggest that the City is covered for any flood losses over $10 million.  I do not know if that is actually the case or not.  But if we do not have any coverage, why not?  (And for that matter, why were over 300+ vehicles left where they would be flooded in the first place?)  

     How much of these expenses will be covered by donations?  Are there alternatives to raising taxes?  Can some of the TIRZ money be tapped?  City reports show there is about a $50 million fund balance in the “dedicated” drainage fund.  Can that be used?  

     City Council has an obligation under the charter to demand an accounting of what expenses are necessitated by the disaster before voting to suspend the cap.  To do otherwise raises the question of whether this whole exercise is just a pretext to accomplish what the advocates of repealing the property tax cap knew they could not do at the ballot box.

    There are two things that make me suspicious this is just such a pretext.   First, the increase is exactly (to the one-hundredth percent) the amount the tax rate has been decreased because of the property tax cap.  Are we to believe that the city expenditures necessitated by the storm just happen to come out to that exact number?  

     Second, Turner’s main surrogate for the repeal of the property tax cap, Council Member Dwight Boykins, made a telling statement.  He told the Houston Chronicle, “Anything to bust that damn rev cap, I’m in.

    I think Boykins statement reflects the true opinion of many at City Hall.  They resent that Houston taxpayers have limited the amount that they can increase the property tax and will use any device or excuse to get rid of the cap, including exploiting a natural disaster.  

     I think it is also noteworthy that no other taxing jurisdiction in our area has proposed increasing taxes in response to Harvey.  The County and HISD both had more severe damages to their facilities, as did several of our sister cities on a relative basis.  Why is the City of Houston the only jurisdiction that needs to immediately raise its taxes.

    There could also be an unintended consequence from a tax increase.  It could spark a taxpayer backlash that will show up at the polls in the November for the City’s bond election.  My guess is that the improvement bonds are already in trouble since they have no money for streets or drainage.  But this could also imperil the passage of the pension bonds, which have, at least to now, enjoyed a comfortable margin of support.  The additional revenue from this tax increase will pale in comparison to the costs if the City is forced to go back to the drawing board on pensions.  

     Many in this City are hurting right now.  True, the proposed tax increase will not make a significant difference to most.  But the optics of the City piling on to their misfortune are ugly and will do much to unravel the unity we have found through this ordeal.

    And it is $113 million that the City Council will decide how to spend instead of taxpayers.  That is $113 million less for Houstonians to repair damaged homes, replace flooded items and give to charities.  

     Every tax dollar is a precious trust and especially so under these circumstances.  There may be a case for the City increasing taxes.  But that case has yet to be made.

Not Everyone Concerned about Illegal Immigration is a Racist

     I have regular breakfast with a group of politicos that represent a cross-section of the political spectrum.  Recently we had a discussion about immigration.  I referenced a recent Texas Lyceum poll which found that 72% of Texans were either extremely or somewhat concerned about illegal immigration.  The same poll asked an open-ended question of the most serious issue Texas is facing.  Illegal immigration and border security came in first and third with a combined total of 27%, more than double education, which came in second at 13%.
     I asked my group why they thought illegal immigration was weighing so heavily on the minds of Texans.  Two of the more liberal members of my breakfast group attributed the concern purely to racism.  But there were some other findings in the poll that contradict this simplistic explanation.  Sixty plus percent:  (i) were opposed to deporting all those living here illegally; (ii) supported some pathway to citizenship; (iii) opposed building a wall; and (iv) thought immigration helped the country more than it hurt it.  When asked why illegal immigration was a problem, only 2% said because it diluted American culture.  These are not the responses of racists.
     And to completely lay the racist explanation to rest, 68% of self-identified Hispanics were either extremely or somewhat concerned about illegal immigration.  I’m pretty sure they were not motivated by racism.
     After kicking around these seemingly anomalous results, one member of our group with small children spoke up.  She said she was concerned about illegal immigration because of the effect it was having on her children’s school.  It had become significantly overcrowded because of an influx of immigrant children, most of whom spoke little or no English.  Trying to serve dozens of ESL children, including interfacing with parents who frequently spoke no English, was taxing the school’s resources and staff.  She noted cultural differences, especially as it related to the disparity in maturity regarding sexual matters.  She was also concerned about health issues.  Had these children been immunized as virtually all American children are?
     These were imminently reasonable concerns and not at all based on racial animus.  And her concerns are not isolated.  How many times have you heard someone complain about being involved in an accident with an illegal immigrant who had no insurance?  There is no doubt that dangerous criminal gang members have slipped into the country along with those coming here for a better life.  Nor is there any doubt that they are making our drug problem worse.  And while we may not be able to calculate the amount by which illegal immigrant workers are driving down wages in low-skilled jobs, the basic laws of supply and demand tell us it must be having some effect.
     Is some of the current anti-immigrant fervor based on racial bigotry?  Undoubtedly.  But, there are plenty of valid reasons to be concerned about illegal immigration other than racial hatred.  And this is where I think immigration advocates hurt their case.
     The American people are generous and caring.  We make more charitable gifts than all the other countries in the world combined.  No country has a history of accepting more immigrants and refugees than the U.S.  When immigration advocates go on a screed charging racism, they are telling those with legitimate concerns that their concerns don’t matter and thereby make badly needed immigration reform less likely.
     Like most public policy issues, immigration is complex.  But there is a broad outline of a rational policy that is obvious.  First, we must have a secure border, i.e., we must know who is coming and going in and out of country.  You cannot reform immigration without this predicate.  Second, we are not going to deport the roughly 10 million folks that are here without a valid visa.  So, let’s come up with a realistic plan about what to do with them.  Third, we must determine what is the appropriate level of immigration on an annual basis and how we should go about choosing the people we let in.
     Sure, there are those on the extremes who either want to have completely open borders or shut down immigration entirely.  But they do not represent the majority of the American people, notwithstanding that their slogans dominate the public debate on immigration.  As John McCain recently said, “To hell with them.”  It is time for reasonable people to come together to solve this problem.

The DACA Dilemma

     In Charles Dickens’ classic, Oliver Twist, when Mr. Bumble is told that the law presumes he controls his wife’s actions, declares that “the law is an ass.”  Similarly, the current law which provides that children who are brought to this country illegally by their parents should be deported back to the country where they were born is an ass.  So are the 15% of Americans who think these young people should be deported.  And there is no question that it is shameful that Congress has not already acted to fix this law.  But fixing the law through executive action, as President Obama did, pits two of our fundamental principles against each other.

     The first, of course, is fundamental fairness.  We do not hold children guilty for the sins of their parents.  Our law, in fact, does not even hold children guilty for crimes they commit.  Make no mistake: deporting a person to a country they have never seen and where they do not speak the language; ripping them from friends, family, their school or job, their community; is an unthinkably harsh punishment for a crime they did not commit.  That is why 85% of Americans oppose their deportation.

     The second principle is incorporated into Article III, Section 3 of the Constitution which provides that the president “take care of that the laws be faithfully executed.”  Most public officials are required to take an oath solemnizing the commonsense notion that executive officers are supposed to enforce the laws passed by the legislative bodies and not make up their own or decide which laws should be enforced.  To do otherwise violates our principle of the separation of powers.

     Of course, the concept of prosecutorial discretion is firmly established in our law.  In fact, the principle is mandated by the ethical rules for prosecutors to “seek justice, not merely to convict.”  The simplest example of prosecutorial discretion is when a police officer decides to issue a warning instead of a speeding citation.  I doubt many of us would accuse the officer of violating his oath of office or the separation of powers for issuing the warning; especially if we are the speeder!  But, I suspect most would feel differently if our local police chief announced he had decided that speeding laws were unnecessary and that the police force would no longer enforce them.

     I do not fault President Obama for issuing DACA in the face of Congress’ failure to act.  No, any fault for this situation must be laid directly at the feet of our worthless, cowardly Congress who will not stand up to partisan extremists to solve this problem.

     I have no doubt that President Trump’s decision to rescind DACA was a callous appeal to his base.  If he really “loved” the young people involved he would have offered and pressed for legislation to address the issue and not just pass the hot potato to Congress.  But irrespective of his motives, he is right that Congress should act.

     Even President Obama conceded DACA was a stopgap measure.  While DACA was a welcome life ring for these young people, it was never true security.  Congress needs to fix this and fix it now; and provide permanent security for those stuck in this legal limbo through no fault of their own.

     In a strange irony, President Trump is putting some of his most ardent Congressional supporters between a rock and a hard spot.  Trust me, while Republicans in Congress loved to rail against President Obama’s “usurpation” of their power by enacting DACA, they were also enormously relieved they did not have to vote on an issue strongly favored by the districts but largely opposed by their primary voters.  And they know all too well that the first of these DACA young people that is actually deported with every news outlet in the world covering it live every step of the way, will be the end of the Republican majorities in both houses of Congress.

     Here’s the bottom line.  85% of Americans agree that those brought here as children illegally should not be deported.  If Congress cannot act and continues to allow 15% of the country to impose its will on the other 85% of us, we need to fire the whole bunch and start over.

Initial Thoughts on Harvey

     Because of the work I did on hurricane response after Hurricane Rita, I have gotten a number of calls from the media about Harvey.
The initial calls were asking about whether Mayor Turner and County Judge Ed Emmett had made the right call by not ordering a mandatory evacuation ahead of Harvey reaching Houston.  I think some in the media assumed that since Turner and I had been opponents in the last election, I would criticize his decision to not call an evacuation
     But, in fact, Turner and Emmett followed the protocol that was established in the aftermath of the disastrous Rita evacuation to, with some very limited exceptions, only evacuate those areas threatened by storm surge.  As a general proposition, it is not prudent to evacuate areas that are only threatened by rising water from rainfall
     The reason for this is that about 90% of fatalities from a hurricane are caused by storm surge.  Only about 10% come from wind or upland flooding.  In contrast, evacuations are very dangerous.  In Rita, about 130 people died in the evacuation.  That is more people than have ever died in a hurricane in Texas, with the exception of the 1900 Galveston Storm.  While it is miserable to be sitting in your house and watch it gradually fill with water (I know because I have experienced that twice), very few people die from their house being flooded
     I made these points in an interview with the New York Times.  Some of my comments were included in this article. [click here].  I also wrote an op/ed in the Times making these points in some greater detail which was republished in the Houston Chronicle today [click here or here]. I reiterated these points in an interview on CNN’s AC360 on his August 30 broadcast.  If you have Xfinity you can watch the interview in the their “On Demand” section.  Just before my interview there is a chilling interview with a man about evacuating his family from a Ft. Bend neighborhood, which highlights the dangers associated with attempting to evacuate.
     There are certainly ways that we can improve our response to this type of upland flooding and we will learn from this experience.  But ordering a mandatory evacuation was not the answer.
     Other calls I have gotten relate to what to do to prevent this from happening again.  I discussed this is in some detail in a Houston Chronicle op/ed  yesterday [click here ] and in a podcast with MSNBC’s Chuck Todd [click here].  The bottom line is that we have been skimping on our flood control investments for years.  Most of the money City taxpayers approved for flooding has been diverted to other uses.  The current City bond proposal has zero dollars for flooding.
     If we really want to do something about flooding in our region, we are going to have to get serious.  Spend the money.  Stop diverting money earmarked for flooding.  Eliminate the jurisdictional overlap and finger-pointing.  Adopt a regional approach.  It is not rocket science.
     Harvey will be a tipping point for the Houston region.  In which direction is up to us.