Last night’s State of the Sate very much tracked the preview we were able to provide yesterday morning. Below we track the major themes of the speech – using excerpts from the speech itself. We’ve tried to share key themes from the Democrats’ response to the State of the State throughout, and you can watch the official response from the party here.
Please also note brief comments pertaining to the budget below.
“[A]s we gather tonight, I can tell you that the state of our state is brimming with promise.” The Governor indeed struck a hopeful tone last night, emphasizing the pandemic will not be “a reversal of who we are as Texans.” While fully recognizing the “personal hardships and the pain that we have all endured,” he declared that “Texas remains the economic engine of America. The land of unmatched opportunity.”
In response, Texas Democrats offered a more sobering outlook. Senator Carol Alvarado lamented: “I wish I could tell you that the state of our state is strong and working for all Texans, but the sad truth is it’s not.” Democrats emphasized the on-going pandemic, including continued high case counts and high unemployment, slow vaccine distribution, and a high uninsured rate.
The Governor declared several emergency items. As foreshadowed yesterday and is typical for the State of the State, the Governor declared several emergency items. As a reminder an emergency item is simply anything the Governor deems important enough to prioritize during the coming legislative session. By designating the item as an emergency, members are permitted to decide to vote on those items earlier in the session than they are normally permitted to do by the Constitution. Of course, they should also be viewed as a use of the Governor’s bully pulpit. Here are the five (5) items that he declared emergency items … they largely track the issues we previewed yesterday.
“From medicine to education to business, broadband access is not a luxury—it is an essential tool that must be available for all Texans.” Emphasizing that telemedicine had “proved very helpful during the pandemic,” the Governor noted Texas must seize this momentum to permanently expand telemedicine. As the quote above reflects, the Governor also notes that the expansion of broadband access is essential for education as well. Response from legislators – on both sides of the aisle – showed broad consensus for expanding broadband access. We expect bills that would establish a statewide broadband office, mandate a statewide plan, and – assuming money is to be had – create a broadband development incentive program (particularly for rural Texas) to move quickly through the legislative process.
State Representative Senfronia Thompson (Houston) emphasized: “The COVID-19 pandemic uncovered the ugly truth of the inequities in our healthcare system” and called to increase coverage for women to 12 months of post-partum care and alluded to the need for expanding coverage by “draw[ing] down federal Medicaid dollars.”
“To keep Texans safe, and to discourage cities from going down this dangerous path, we must pass laws that prevent cities from defunding police.” As expected, the Governor continued to emphasize that “Texas has always been a law-and-order state” and the need for continued support of law enforcement … and declared this issue an emergency item. We expect a bill which would use the power of the state’s purse to disincentivize cities from defunding police to be heavily pushed by the Governor’s office.
Criticism from Democrats revolved largely around the continued need to improve policing: “Our communities should not have to live with trauma and fear of wondering if they or their families or their neighbors will be next to die from police brutality.” (Dr. Candice Matthews)
“To fix our flawed bail system and keep dangerous criminals off our streets, I am making the Damon Allen Act an emergency item this session.” As we suggested yesterday, bail reform will be a major priority for the Governor this session. Two years ago, the Governor announced the Damon Allen Act, which would have increased qualifications for magistrates able to set bail and amended the Texas Criminal Procedure Code to ensure that magistrates consider criminal history when setting bail. Damon Allen was an officer that was killed in the line of duty by a man who had been released on $15,000 bail despite having been previously convicted for assaulting a sheriff’s deputy.
“Texas businesses that have operated in good faith [during the pandemic] shouldn’t have their livelihoods destroyed by frivolous lawsuits.” Emphasizing the great measures that businesses have taken to remain open and operate safely, the Governor asked the Legislature to quickly pass a bill that would protect from civil liability individuals, employers and healthcare providers that operated safely throughout the pandemic.
“One thing all of us should agree on whether you’re a Republican, Democrat, or Independent, is that we must have trust and confidence in the outcome of our elections.” The Governor also declared election integrity as an emergency item, but offered few specifics on how to address the issue of election integrity.
In his own words … other major priorities. The Governor also mentioned several other major priorities. Here are a few other highlights from the speech:
The budget and taxes. “To say the least, we must balance the state budget without increasing taxes.”
Jobs. “There's no brand more powerful than Made in Texas … Products with the Texas brand must be made by Texans. We must protect Texas jobs for Texas families. Employers should be hiring Texans when they fill job openings. If job training skills are needed, Texans will work to provide them.”
Civics education. “[I]f we expect the next generation of Texans to keep Texas the best state in the nation, we must teach them why we are so exceptional. We must educate them what it means to be an American and what it means to be a Texan.”
Freedom of religion. “We must ensure that freedom to worship is forever safeguarded. I want a law this session that prevents any government entity from shutting down religious activities in Texas.”
Border security. “Public safety also extends to our border. Because of the federal government’s open border policies, Texas must fortify its efforts to secure our border.”
Life/Abortion. “Estimates show more than 40 million babies lost their lives to abortion in 2020. That’s shocking. It’s horrifying. It must end.”
Senate Finance Committee sets hearing dates. The Senate Committee on Finance has scheduled several meetings to discuss S.B. 1, the state budget. The first meeting will be held on February 8, when the Senate returns to Austin. The Committee has scheduled 16 hearings that will run through March 2.
State Sales Tax Revenue totaled $3.1 billion in January. On Monday, the Comptroller released his monthly revenue watch, reporting that sales tax – the primary revenue source for the state budget – totaled over $3 billion. Importantly, collections were only 0.3% below last January. The number demonstrates a continued return to pre-pandemic activity … where revenue and collections were actually running ahead of previous projections. Notwithstanding the positive sales tax news, the Comptroller did note that these gains were “offset by continued deep declines in collections from recreational services and the oil- and gas-related sectors.” Oil and gas severance taxes directly fund the state’s Rainy Day Fund and the State Highway Fund and should be watched closely as the economic recovery continues.
House committees to be announced soon. We expect Speaker Phelan to announce committees very soon … possibly by the end of this week.