Burnt Orange Report

Texas' Grand Canyon of Income Disparity

By Phillip Martin

A study by the Center on Budget and Policy Priorities and the Economic Policy Institute shows that "no state in the nation has a wider gap between its richest and middle-income families than Texas." From the Houston Chronicle:

"Texas has arguably the most extreme separation between the well-off and everyday people in the United States," said Don Baylor, a policy analyst at the Center for Public Policy Priorities, an Austin think tank that advocates for working families.

"In many states, the income gap is like a gully," he added. "In Texas, the income gap is like a deep canyon."

From 2001 to 2003, the average annual income of the top 20 percent of Texas families — $118,971 — was nearly three times the average income of the middle 20 percent, which made $41,015, the study shows.

The average income of Texas' richest fifth of families was more than eight times greater than the $14,724 average of the poorest fifth.

By comparison, the average income nationally of the richest top fifth was 2.3 times greater than the middle fifth and 7.3 times higher than the bottom fifth.

The article goes on to talk about how the cost of living in one region or another varies in Texas, citing the example that, "a family living in a border town such as McAllen with an income of $60,000 would enjoy a much higher standard of living than a family in Houston with the same income."

True, but what is that really saying? It's OK to not make that much money in the Valley, because the region is so poor anyway? That family with an income of $60,000 still needs to send their children to college, and if they can't afford higer education opportunities, it's going to be twice as difficult for that family to "raise themselves by their bootstraps" into the higher income brackets.

To read the full article, you may click on the link below.

Income disparities are bigger in Texas

Study finds no state has a wider gap between rich and middle class

By POLLY ROSS HUGHES
Copyright 2006 Houston Chronicle Austin Bureau

AUSTIN - No state in the nation has a wider gap between its richest and middle-income families than Texas, according to a national study released Thursday.
ADVERTISEMENT
Click to learn more...

At the same time, Texas ranks second only to New York when it comes to income disparities between the richest and poorest families, according to the study by the Center on Budget and Policy Priorities and the Economic Policy Institute in Washington, D.C.

"Texas has arguably the most extreme separation between the well-off and everyday people in the United States," said Don Baylor, a policy analyst at the Center for Public Policy Priorities, an Austin think tank that advocates for working families.

"In many states, the income gap is like a gully," he added. "In Texas, the income gap is like a deep canyon."

From 2001 to 2003, the average annual income of the top 20 percent of Texas families — $118,971 — was nearly three times the average income of the middle 20 percent, which made $41,015, the study shows.

The average income of Texas' richest fifth of families was more than eight times greater than the $14,724 average of the poorest fifth.

By comparison, the average income nationally of the richest top fifth was 2.3 times greater than the middle fifth and 7.3 times higher than the bottom fifth.

"What we found is that inequality is growing across the country," said Elizabeth McNichol, a senior fellow at the Center on Budget and Policy Priorities.

In the past two decades, average incomes nationally of those in the bottom two-fifths of families grew just under 11 percent, the study shows.

The top fifth saw their incomes rise more than four times that much.

And, those in the top 5 percent of all incomes nationally saw their incomes skyrocket by 65.6 percent.

Uneven growth
McNichol said such uneven income growth violates the fundamental priniciple that hard work will be rewarded with a rising standard of living.

"When income growth is concentrated at the top of the income scale, the people at the bottom have a much harder time lifting themselves up out of poverty and giving their children a decent start in life," she said.

The study tracked U.S. Census data from the early 1980s to early 2000s. Incomes are adjusted for inflation, using the national consumer price index and reflect the impact of federal but not state taxes.

Among the 19 philanthropic organizations funding the study were the Ford Foundation, the Annie E. Casey Foundation, the William and Flora Hewlett Foundation, the Rockefeller Foundation and the John D. and Catherine T. MacArthur Foundation.

Globalization blamed
The study attributes growing income inequality over the past two decades to globalization, long periods of unemployment, the loss of well-paid manufacturing jobs, weaker labor unions, the rise of lower-paid service jobs and a national minimum wage that hasn't risen in eight years.

It recommends that states narrow the gap by raising the minimum wage, relying more on income rather than sales taxes and offering transportation and child care help for low-income workers.

"We're going to rise or fall as a state together," said Baylor at the Austin think tank, adding that Texas leaders should also start investing more in public and higher education.

"The notion that you're on your own," he said of the state's cultural ethic emphasizing self-reliance, "that logic comes back to bite you at some point."

Some Texas economists caution that income distribution studies, especially when they also advocate social policy changes, run the risk of distortion.

"The notion that income inequality has gotten worse in the United States in the last 20 years — I believe that," said University of Houston economist Barton Smith. "The idea that it is worse in Texas than in other places — I don't know that I believe that."

Smith said the study fails to capture major differences in the cost of living from one region of Texas to another. For instance, a family living in a border town such as McAllen with an income of $60,000 would enjoy a much higher standard of living than a family in Houston with the same income.

"Texas is a big place and at the bottom is the Mexican border. You are looking at vast geographic and cultural differences," said James K. Galbraith, who teaches economics and government at the University of Texas at Austin.

"If Texas were two states or five states, any one of them would be more egalitarian, that's for sure," he said. "It's not all because we are run by rich, white guys with regressive agendas."

However, Galbraith said raising the minimum wage would help close the gap as would an environment where it is easier for workers to form labor unions.

National phenomenon
Stephen Klineberg, a professor of sociology at Rice University, said Texas policy makers should heed growing income gaps or risk falling behind economically.

"What we're talking about is a national phenomenon, but it's not surprising that it's stronger in Texas," he said.

"Texas and Houston are traditionally the worst places in the nation to be poor because there's so little help for the poor."

Klineberg said Texas and Houston thrived in the last century with a natural resource-rich economy producing abundant, well-paying jobs. Many of those jobs, such as those in the oil fields, did not require higher levels of education.

The high-tech economy of Texas' future, however, depends much more on higher educational attainment for all Texans, he said.

"Texas and Houston have got to massively upgrade their education systems," he said. "If we don't find a way to educate the work force in the 21st century, the state is not going to be competitive."

Cruel Intentions

By Jim Dallas

"Jeebus Alito's a fascist" is Atrios's response to this recent New York Times editorial which asserts, in part, that:

In a second memo released yesterday, Judge Alito made another bald proposal for grabbing power for the president. He said that when the president signed bills into law, he should make a "signing statement" about what the law means. By doing so, Judge Alito hoped the president could shift courts' focus away from "legislative intent" - a well-established part of interpreting the meaning of a statute - toward what he called "the President's intent."

In the memo, Judge Alito noted that one problem was the effect these signing statements would have on Congressional relations. They would "not be warmly welcomed by Congress," he predicted, because of the "novelty of the procedure" and "the potential increase of presidential power."

Frankly, Atrios is overreacting; even at its worst, consolidating power in the presidency is more monarchism than fascism (and I might as well say now that, while I disagree with Judge Alito and probably wouldn't vote to confirm if I were a senator, he's certainly smart, qualified, and not a fascist).

More importantly, though, I think that the discussion raised by Alito's memo is an important discussion that people (not just lawyers) ought to be having. I'll explain why below the fold.

I think most appellate judges - and not just conservative "originalists" - will tell you that looking at the intentions of the founding fathers and subsequent law-givers is an important undertaking when interpreting the Constitution or a statute. This is spurs from a common-law tendency to attempt to read documents as their authors meant them. At least until the 19th century contracts were interpreted (kindasorta) through the lens of subjective intent; the buzzword today is "objective intent". Wills are treated in a similar way. There is pretty much an agreement among most people that laws are not just made up on the spot.

But that's where the agreement breaks down, at least with statutes, because the question is - whose intent should matter? The bill author? The whole Congress? The mark-up committee? Legislative intent is difficult to figure out. Some judges - for example Justice Breyer - will give weight to conference committee reports, while others - for example Justice Scalia - won't. And so while there tends to be an agreement that intent matters, there are many different yardsticks for assessing it.

The New York Times reports that Judge Alito once preferred - and may still prefer - to give the President's interpretation weight. I presume this position is rooted in the logic that "the buck stops there." Rather than having 535 opinions to sort through, a presidentialist would only worry about one - the president's. Already, some folks will give at least a little weight to presidential signing statements. The controversy seems to be how much weight to give it.

I personally think that giving too much weight to the president would be a mistake - and not just because I have an instinctive pro-Congress bias (like most liberals, I think, when it comes down to questions of presidential versus congressional prerogative). The problem with relying on the president is that he (or she) doesn't have to give any opinions at all. Many presidents - like George W. Bush - are basically just rubber stamps, rarely ever vetoing bills, and often giving scarce attention to the contents of bills that reach his desk. To be sure, many members of Congress don't read the bills they vote on. But at least they're supposed to have an opinion (or intent) about them.

The reason why I say this is something everyone should consider is because it really is a question about who writes history. As Orwell wrote, he who controls the past controls the future. Ultimately, judges must decide which history (or histories) should be given controlling weight. All too often I think our current president has been willing to doctor history for political purposes (Members of congress do it too, I'll concede, but at least you get both sides of the story when reading the Congressional Record). Do you really want the judiciary relying heavily on politically-sanitized history? I don't.

NEA: Per Pupil Expenditures Falls in Texas, Increases Everywhere Else

By Phillip Martin

A recent report by the National Education Assoication showed that Texas is the only state in the country that lowered the amount of money it spends per student, falling from $7,214 in 2004 to $7,142 in 2005. In contrast, the average expenditure per pupil nationwide increased by $300.

Texas State Teachers Association (TSTA) President Donna Haschke had the following to say about the recent slip in per-pupil spending:

“The Texas Supreme Court just warned the legislature that we are ‘drifting toward constitutional inadequacy,’ and this new data indicates that our state education investments may have already failed to make the grade and slipped into that category,” said Texas State Teachers Association President Donna New Haschke.

“Although teachers and education support professionals have fought against all odds to help our students continue to make progress and meet academic standards, they cannot continue to do so without the tools they need for teaching and learning,” Haschke observed.

“The legislative leadership has failed to craft and pass a viable plan to provide funding to improve Texas schools for the past three years,” she said. “It was inevitable that Texas would continue to fall farther behind what other states are doing to help our students and teachers.”

The report didn't factor in the recent influx of students from Hurricane Katrina.

Also to consider: Texas teachers make $6,688 less than the national average. Compared to other states, Texas teacher salaries fell – for the fifth consecutive year – to 33rd in the country. Nationwide, teachers saw more than $1,000 in average pay increase; in Texas, teachers only saw slightly more than a $500 average pay increase, received due to local districts and built-in salary increases. The state has not given teachers a raise since 1999.

Personal Space

By Karl-Thomas Musselman

When I became politically aware, I didn't realize for some time that my views as a Democrat about space exploration were out of sync with what many Democrats feel is a big waste of time and, well, space. That may be in part to the fact that my prior interests before politics were to work for NASA. (My thoughts- if Armstrong is the first man on the moon, then obviously a Musselman should be the first man on Mars)

I was glad to read and now pass on an article written by Jeff Brooks, who was policy director for the Kelly White campaign last year, about why Democrats should support space explorations. So explore it if you will.

Sen. Eltife Speaks Out on School Reform

By Phillip Martin

State Senator Kevin Eltife (R-Tyler) gave every elected official in Texas an "F" for failing to pass any sort of improvements for our public schools, and called on members of his own party to start using their clear majority to start leading.

From The Paris News:

“We should have cut property taxes, properly funded public education and should have given teachers a pay raise they desperately deserve,” Eltife said.

He noted the average beginning teacher earns $24,000 yearly.

“That’s an embarrassment,” he said.

Eltife said many leaders blame lobbyists for the legislature’s past failures but that the buck stops with elected officials.

“Some will go around blaming the business lobby and some the education lobby,” Eltife said. “If you want to blame somebody, blame every elected official in this state.”

Eltife targeted his own political party.

“I am a Repub-lican,” Eltife said. “Republicans control the House, Republicans control the Senate and Republicans control every statewide elected office. If we are going to control all these offices, we need to provide leadership and it is time we step up to the plate. We asked for these jobs and we need to deliver.”

No matter the political consequences, the District 1 senator says he will continue to vote his conscious and what he believes are the wishes of his district on matters facing the Texas Legislature.

“It doesn’t matter whether the governor is on the other side of the issue or the lieutenant governor, when I am on the Senate floor and I make a vote it is going to be for my district and what is right in my heart no matter who is on the other side of an issue,” Eltife said to a round of applause.

Put into context with the recent targeting the Republican Party of Texas has done to many "moderate" Republicans in the House, this article points to the prominent difference between the Republican leadership (Perry, Dewhurst, Craddick) and everyone else in the Texas Legislature (Republicans and Democrats, alike) on the issue of education.

Look What You've Done

By Karl-Thomas Musselman

So many of the married couples that voted for Proposition 2 are feeling pretty pleased right now, considering they have constitutionally restricted marriage and all it's fun to themselves. Well, I'm sure that 76% will be equally pleased to know that they have now emboldened Rep. Warren Chisum to start tinkering around with heterosexual marriage.

Denton Chronicle: Rep. Warren Chisum, who wrote the amendment, Proposition 2, endorsed by Texas voters by a ratio of more than 3-1, said Wednesday that it's too easy for spouses to split up.

The state should consider repealing or modifying its no-fault divorce law, the Pampa Republican said.

"Gee whiz, our divorce rate's higher than New York," Mr. Chisum said.

He proposed that between now and their next regular session in 2007, lawmakers study ways "to make marriage thrive more in our state."

Apparently he's realized that hitting on homos doesn't help make marriage thrive. Amendment foes aren't even interested in challenging the ban in court, as we're going to have to expend resources defending Travis and Dallas County's domestic partner benefits from lawsuits. So this gives free reign for Chisum to go meddle with marriage once more.

She endorsed Mr. Chisum's call for a review of the no-fault divorce law, which took effect in 1974.

Supporters of Proposition 2 said that during debates, they regularly heard gay rights activists cite Texas' divorce rate. Texas had about 3.9 divorces for every 1,000 residents in 2002, a higher rate than New York (3.4) or Massachusetts (2.5), according to the Centers for Disease Control and Prevention. (ed. note: That's right, gay old Massachusetts has a divorce rate nearly half that of gay-hating Texas)

Mr. Chisum said he planned to ask House Speaker Tom Craddick, R-Midland, to convene a panel to examine no-fault divorce, longer waiting periods for marriage applicants and "covenant marriage," an idea tried in three other states.

A covenant marriage provides an alternative to the traditional marriage contract for couples who oppose no-fault divorce or who want to demonstrate a stronger commitment. Couples selecting a covenant marriage must get premarital counseling and may divorce only after a separation of two years or after proving adultery or domestic abuse.

See what you've done, you 76%? Waiting periods for marriage applications? I guess getting hitched isn't enough like getting an abortion in Texas. Maybe parental notification of your intent to marry someone's daughter will be next.

And now he's coming after your ability to divorce. At which point the new chorus of the gay and lesbian community will be, "Why should I care, I can't even marry?"

For your sake 76%, I don't know whether to cry or laugh.

Perry Issues Executive Order on Teacher Pay

By Phillip Martin

Governor Perry issued another executive order on education today, this one on teacher incentive pay. According to his release, the plan is that 100 economically disadvantaged schools that show improvement in performance will each be eligible for a $100,000 grant, 75% of which must go to teachers. That's only $10 million. Perry's order calls for $35 million, asking the Legislative Budget Board to direct another $25 million for his incentive pay plan to be spread out across an additional 250 campuses.

Chris Bell had the following to say about Perry's latest order:

“All teachers need an incentive to stay in classrooms, whether they are in poor, rich or middle-class neighborhoods. Rick Perry has been ignoring a legitimate crisis in teacher retention for five years, and this gimmick would do little to address that...We can’t treat teachers like glorified test monitors and pay them accordingly if we want to have any hope of keeping teachers in classrooms. We need to bring all teachers up to the national average, put them in charge of their own classrooms, and then we might see some different results.”

Well said. This executive order, like others before it, amounts to little more than an overblown and out of touch press release that proposes a failing solution that a majority in the Texas Legislature have already decided is simply not enough for our teachers.

From the Texas State Teacher's Association:

"If the Governor really cared about the hard working teachers of Texas, he would get behind an across-the-board teacher pay raise proposal that would move all teacher salaries to at least the national average rather than proposing a 5% solution that rewards only a handful of teachers and leaves 95% of our teachers behind."

In total, 350 campuses could see money from this executive order, but that's assuming the LBB has $25 million to redirect to 25 other campuses. The grant that Perry proposed would only go out to 100 campuses across the state.

Well, there's almost 8,000 school campuses in Texas, meaning the grant Perry has proposed would not give a pay raise to at least 278,000 of the 288,000 teachers in Texas. Compare that to the $2,000-$3,000 across-the-board teacher pay raises that Republicans and Democrats proposed during the Regular and Special Sessions.

As Chris Bell said, we can't keep ignoring the fact that teachers are leaving public schools because they aren't getting paid what they deserve.

David Van Os Speaks Out Against Political Coruption

By Damon McCullar

David Van Os, candidate for Attorney General, had a few words to say about the legal woes of the current administration. This is what he had to say:

Government by lies, secrecy, and cronyism is not what the American Revolutionaries had in mind when they proclaimed government by the consent of the governed. The Bushite government is crumbling by the minute. It will be up to us, the grassroots American people, to pick up the pieces and rebuild self-governing democracy the way it should be: every citizen a 100% equal part owner of the government, and government serving the people.

Let’s do it right this time, and dismantle the whole corrupted political culture that led us down the path to Bushite government. Let’s restore democracy and the political process to their owners, the people. No more of electing hustlers who use public office to benefit themselves and their cronies. No more of government by pollsters and marketing consultants. No more corporate government.

David Van Os

I guess all I can say is Amen, brother.

Peace in the Texas Hill Country

By Karl-Thomas Musselman

Something is afoot in the Hill Country west of Austin. The peace movement has been reactivated. If anything, I think it is a sign that even in some of the most conservative areas, the atmosphere has altered enough that these actions are coming together once again.

The Hill country Peace Movement emerged on the eve of the Iraq War in 2003 when a number of concerned citizens in the Kerrville, Fredericksburg and Boerne area organized peace walks in these cities urging the Bush Administration to settle the concerns with Iraq diplomatically, rather than go to war. Unfortunately this Administration choose to attack Iraq and we can now see the terrible results, both in lives lost and casualties, as well a hundreds of billions of US dollars spent on this effort.

The Hill Country Peace Movement has been reactivated. The Movement believes that ending the war and occupation of Iraq now supports our troops by saving their lives rather than continuing on a course that will only add to the casualties and is not honoring the memories of our fallen and wounded heroes.

The group will sponsor a Peace Walk Friday, October 28 at the Gillespie County Courthouse in Fredericksburg. This walk will be patterned after a walk held in Kerrville on October 7. The Peace Walk will begin at noon with a prayer for peace and for the safety of our GI’s engaged in this war. Walkers are encouraged to bring their own signs expressing their opinion on the Iraq War, keeping in mind that the purpose is to "Honor our Warriors - Not the War" and urging the withdrawal of troops from Iraq without delay. Next, they are asking that the US lead an international effort to aid in the recovery of Iraq with many other countries helping.

About 200 bi-partisan walkers have attending previous marches.

You're in Shitty Hands with Allstate

By Phillip Martin

From the Houston Chronicle:

The insurance company that bills itself "the good hands people" damaged its reputation by its conduct following the destructive passage of Hurricane Rita over Texas and Louisiana. In the face of nearly a hundred claims by people who lost access to their houses, the second-largest home insurer in Texas refused to pay up because the policyholders could not document physical damage to their property.

In addition to the Chronicle, Texas Watch has easy access to all the stories about Allstate over the past few months, including the story about the ad they ran trying to scare people into buying additional auto insurance from them. Thankfully, Texas Attorney General Greg Abbott issued a cease and desist order to get Allstate to stop running the misleading advertisements.

Abbott and the Texas Department of Insurance have again ordered Allstate to do what's right, telling them they must pay out the claims they owe. Not surprisingly, Allstate will contest the order in an October 20 hearing.

Now, imagine this commercial:

Scene opens with dark images of homes knocked to the ground, with the sparks from a broken telephone wire providing the only light. Suddenly, a tall man dressed like he just walked out of an Old Navy ad emerges from behind a streetlamp. He speaks:

"You never prepare for a natural disaster. But you certainly can ignore it. When Hurricane Rita plowed through East Texas, our operators were the first ones there to hang up the phones on almost 100 Texas customers. When policyholders told us they didn't have the right paperwork, not only did we refuse to help them, but we laughed at them, mockingly, on the other end of the phone.

(Chuckling) I mean, really. You want us to just trust you?

Next time, bring the right forms. It makes it easier for us to jack up your insurance premiums and increase our profit. That's the Allstate stand.

Remember, you're in shitty hands with Allstate."

Would be a little more like the truth, wouldn't it?

An Editorial Response to Royal Masset

By Phillip Martin

"No amount of hot air from any politician or political operative can damage the strength and character of our state. What can hurt Texas, however, are Legislators that do not put the best interests of the people of Texas first."

As has already been posted here, Royal Masset, the Republican consultant, wrote a piece for Quorum Report's R&D department claiming that the TRMPAC money had zero influence on the 2002 Texas House elections.

First of all, someone wanted that money to go to the campaigns, so someone thought it was important. Secondly, the investigation into TRMPAC revolves around the illegal use of corporate money, not its influence on the 2002 elections. Finally, the TRMPAC money was intended to influence and persuade Republican candidates to vote for Tom Craddick for Speaker and Tom Delay’s congressional redistricting plan – and that, in and of itself, is what is potentially harmful to Texas.

The crux of Masset's argument is that TRMPAC only donated money late in the campaign, when it couldn't have paid for any influential GOTV material. By insisting that the timing of the money renders the donations mute, he chooses to ignore that campaigns often aren't able to pay for all of their GOTV costs upfront. For example, consultants who produce mail pieces early on in the campaign often aren't fully reimbursed for their services until the end of the election season. Furthermore, purchasing additional yard signs, fliers, or even hiring block-walkers are all costs that increase at the tail-end of a campaign, and it is outright impossible to calculate the influence such expenditures may have on an electorate.

The question, however, is not whether or not the TRMPAC money influenced the elections; it's whether or not the money was legally donated. Masset's defense that the money had no bearing on the outcome of elections does not permit illegal corporate donations. Illegal money is still illegal, no matter the consequences of its use. That’s the case Ronnie Earle is making.

The point that Democrats and Independents continue to make, however, is different, because we’re holding Delay to a higher standard – a standard voters in Texas and across the country should be able to expect of their elected officials. Our point is that TRMPAC invested in a Legislature that would vote favorably for those special interests that had donated to TRMPAC. That's a tremendous distinction, and one Masset chooses, quite shrewdly, to ignore.

And that, in truth, is the real crime of Tom Delay. He wanted to buy votes in the Texas Legislature. Delay insisted that money be spent on those 2002 Texas House races in order to curry favor with those candidates and guarantee that Texans would elect a Legislature that voted for the congressional redistricting plan he wanted. Delay has said as much himself, and for Masset to say otherwise is absurd.

Delay may or may not go to trial for the illegal use of money, but the court of public opinion is already judging him for his intent to use money to persuade and influence Republican candidates.

Yet, given that the "time" component of his argument is pure farce, and that the investigations into Delay are about whether or not money was spent illegally -- not how the money affected the House races -- most of Masset's argument is hollow. What is left in his argument is a shallow, fear-provoking statement that if we "cease to believe in the basic fairness and goodness of Texas," Texas will die.

With this statement, Masset shows his true colors. If anyone thinks that this sounds eerily like, "if you don't support us, the terrorists will win," you're not alone. Masset uses fear-provoking rhetoric when he can’t win his argument with facts and logic. Anyone surprised?

The truth is that no amount of hot air from any politician or political operative can damage the strength and character of our state. Texas cannot be hurt by word alone.

What can hurt Texas, however, are Legislators that do not put the best interests of the people of Texas first. What can hurt Texas are votes that raise premiums on our already skyrocketing insurance. What can hurt Texas are votes that aim to restrict educational opportunities to the children of Texas, or votes that raise taxes on 90% of Texans. What can hurt Texas are votes that deny every Texan a fair voice in the democratic process -- votes that are bought and paid for by the illegal support of special interests.

The campaigns that TRMPAC donated to all were candidates that cast votes that hurt the people of Texas. That may not be illegal in the court room, but it is a crime against the interests of Texas citizens.

HHSC Refuses State Audit Report

By Phillip Martin

The Texas Health and Human Services Commission (HHSC) has refused a state audit report because the Commission disagreed with the report's findings. The folks over at Pinkdome have been following the story. Here's what's going on:

In 2003, the Legislature passed House Bill 2292, which consolidated and privatized many Health and Human Services agencies. That privatization has already resulted in the loss of jobs for workers and the closing of many HHS offices in smaller, rural communities.

Then, last week, the San Antonio Express-News reported that:

The $45 million in savings Texas' Health and Human Services Commission hoped to realize by privatizing its payroll and human resources operations will be far less, according to a state auditor's office report to be released next week.

The audit, a draft of which was obtained by the Express-News, said a substantial amount of the projected savings evaporated after "errors and complete data" were considered.

That version of the audit said the commission would save only $1.1 million over five years. The commission disputed that number.

The reason the HHSC privatization bill was able to pass, despite heavy criticism, was because of promises that it would save the state so much money a year. Apparently, when the independent state audit reported showed that the HHSC miscalculated and misrepresented savings to a tune of $43.9 million, the HHSC got testy:

Last year, the commission, which oversees all of the state's health and welfare services, said it was beginning its effort to privatize some services now provided by state workers as a cost-saving move.

Because the commission disagreed with the auditors' preliminary analysis that only $1.1 million would be saved, the figure was dropped from the auditors' final report, released Tuesday.

So what does all this mean? Well, it shows that these privatization companies are more concerned about increasing their profits and outsourcing than they are about actually saving the state money or providing health care services to Texans across the state. In rural areas of Texas, Health and Human Services offices are a major employer, and when you close an office you not only make it harder for people in that area to seek health care assistance, you take away the economic security of the workers and citizens of that community.

Thanks, again, to Pinkdome for keeping up with this.

An Interview with Alex Winslow, Executive Director of Texas Watch

By Phillip Martin

If the Legislature made the insurance companies lower their rates to where they should be, the average homeowner would get an extra $600 in their pocket.
--Alex Winslow

Last week, I saw a story on KVUE News reporting that Texas consumers may see an increase in their homeowner's insurance in the wake of Hurricane Rita. The story featured Alex Winslow, Executive Director of Texas Watch, an Austin-based watchdog group for insurance companies. I sat down with Alex on Monday to talk about the potential increase in homeowner's premiums, as well as a handful of other issues facing Texas consumers.

Q. Hurricane Katrina and Hurricane Rita are reported to cost $42 billion in damages. Now, when I get into a car accident, my insurance goes up. Why is it unreasonable for insurance rates to go up following the devastation we've seen on the Gulf Coast?

A. Insurance rates are set to calculate expected future losses, not to recoup losses. The insurance companies have already factored in potential damages due to hurricanes in your premiums. It's not like hurricanes are anything new, so they shouldn't have to raise rates to cover a loss they've understood and factored in for decades. Our research shows that insurance premiums for Texas consumers are already way too high, which would mean, at the very least, premiums should stay where they are. We actually believe they should still go down.

How could premiums still go down if insurance companies are having to pay out so much to cover their losses from this year's hurricane season?

We recently completed a study showing that insurance companies are overcharging Texas consumers by about $4 billion a year. That's an extra $600 a year for homeowners, and another $200 for drivers. These overcharges are an excessive tax on Texas consumers that are used solely to increase the profit of insurance companies.

For an explanation of overcharges, and the rest of the interview, click on the jump.

What are overcharges, exactly?

This is complicated, just as a warning. The Texas Department of Insurance establishes an ideal profit level for insurance companies by setting an appropriate loss ratio. The ratio divides the premiums a consumer pays by the average amount the company will pay out in losses. Ideally, for every dollar paid in premiums, TDI estimates that insurance companies will spend fifty-eight cents on paying losses. After factoring administration costs, the Texas Department of Insurance states that insurance companies would be making about a quarter-cent profit on every dollar spent in premiums, which any businessman will tell you is more than ideal.

OK, I'm with you so far, but where do overcharges come in?

Well, as I said, the Department of Insurance calculated that loss ratio at 58%. Yet, in 2004, the Texas Department of Insurance calculated that insurance companies only spent about twenty-seven cents of every dollar paying out losses -- a 27% loss ratio. That's an extra 31% in profit! What we did in our report was determine how much money Texas consumers would have saved if this extra profit were returned to them, and it came out to a total nearing $4 billion in overcharges, which comes out to about $600 a year for homeowners, and another $200 for drivers.

That's incredible! That's bigger than the property tax cuts proposed in House Bill 3!

Right. And that's why we don't see any reason for insurance companies to justify raising premiums on Texans that are already paying too much in insurance every year.

For some background now -- what is Texas Watch? What role does Texas Watch play in state government?

Texas Watch is a non-profit, non-partisan consumer advocacy and civil justice group based here in Austin. We see politics as an outside game and an inside game. The outside game is the media and grassroots efforts where you try to educate and persuade the general public. Our primary goal is as a media player, sending the research and reports we do out through the press and through grassroots efforts to Texas consumers. We recently became more involved with the inside game, which is actually lobbying members of the Legislature and attending hearings and trying to shape what goes on underneath the dome, and not just around it.

Do you think your voice would be big enough, in the inside game, to counter the lobbying efforts of the insurance companies?

Well, our voice would be big enough, but our pocketbooks wouldn't be. Insurance companies, with that huge amount of profits they make overcharging consumers, pour millions of dollars into campaigns every year. They actually donated tons of money to TAB and TRMPAC in 2002, the election season currently under scrutiny because of the Delay indictment. The insurance lobby invested in a Legislature that will do their bidding. That's why you saw the tort reform legislation pass, it's why lawmakers passed a so-called insurance reform bill that actually benefited insurance companies, and it's why insurance companies were slated to receive the largest portion of the business tax cuts in House Bill 3 during the last session.

You mentioned the tort reform legislation from the 78th Regular Session. To what extent did the Prop 12/tort reform laws affect our insurance rates?

Prop 12 and the so-called tort reforms have been extremely detrimental to Texas consumers. We were told that the cost, quality, and access of health care would improve. I'm fairly certain that if you asked the average Texan, they would say that their health care costs haven't decreased, it hasn't gotten any better, and it hasn't gotten any easier to get the kind of care they need. Really, no one but the insurance companies have gained any sort of benefit from Prop 12, because it's harder to hold a bad doctor accountable and they don't have to pay out as much as a result.

What about doctors? As I remember, they were real excited about tort reform.

Doctors got used by the insurance lobby into believing that Prop 12 would lower their medical malpractice insurance. In reality, the Texas Department of Insurance has reported that half of all doctors haven't seen any decrease in their rates. Those who have seen reductions have only seen about 5% of their overcharges decrease, hardly the revolutionary reform Prop 12 proponents promised.

We Must Confront This Moral Poverty

By Phillip Martin

On September 15, President Bush addressed the nation to talk about his plans for rebuilding the city of New Orleans and the surrounding Gulf Coast region. During his address, he made the following comment about poverty in the region:

"As all of us saw on television, there is also some deep and persistent poverty in this region. That poverty has roots in racism and discrimination, which cut off generations from the opportunity of America. We have a duty to confront this poverty with bold action."

Poverty is hardly unique to the Gulf Coast region, nor is it solely rooted in racism and discrimination. Though racial discrimination has played its part in perpetuating Southern poverty levels, so too have the policy decisions of this and previous administrations.

The same policy decisions that have impacted the South are rooted in a moral poverty that has perpetuated economic poverty in every region of the country – among Americans of all races and ethnicities. In fact, the U.S. Census Bureau recently reported that the Midwest was the only region in America to see an overall increase in the poverty level last year. The Census Bureau also reports that "both the number and rate (of people living in poverty) have risen for four consecutive years, from 31.6 million and 11.3 percent in 2000, to 37.0 million and 12.7 percent in 2004 respectively." That's 5.4 million new people in poverty in the last four years under the Bush administration and a Republican Congress.

The primary cause for the increased poverty rate is a failed economic policy in which a vast majority of "new" jobs are actually replacement jobs that do not pay as well as jobs we have lost. These replacement jobs have caused the median income for American families to decrease for the second straight year, leaving more people with less money.

The President's suggestion that he can raise New Orleans out of its "legacy of inequality" by creating a few minority-owned businesses is naïve at best, and condescending at worst. Poverty is not a disease we can cure with a prescription, nor is it a bad business deal we can counter with deeper investments.

Poverty, at its most devastating level, cuts the hope from our lives and the good from our hearts. Among all races in all regions, poverty fills too many Americans with desperation and despair so real that the great American dream provides no real hope, opportunity or possibility.

The cure for poverty is a true compassion that is carried beyond promise to practices and policies that reflect all the goodness we have and offer it to every single American, just as we have offered such to the people of the Gulf Coast. We cannot be conservative with our compassion, opening our hearts only in times of disaster, to those we choose, or when it is far too late. We must create policies that reach out to each and every citizen, just as we create weapons that search to destroy the most isolated of enemies.

Unfortunately, our government does not provide or support such compassionate policies. Instead, we send money to fight wars where we don't belong while giving tax cuts to people who don't need them. We try to outlaw love between two people, yet are proud to sentence others to death. We talk about how our children are our most precious resource, yet cut public education funding and stand idly by while 1 in 4 American children have no health insurance.

We will never be able to fully address the economic poverty in this country until we confront the moral poverty of our government.

We have a duty to change our country, starting at the top, along with all those elected officials -- Democrat, Republican, or otherwise -- who choose to embrace or endure our President’s hollow promises. By taking responsibility with our voices and votes, we can turn from the path of willful ignorance to a course worthy of our country's central ideal: all men are created equal. A moral government would treat everyone that way.

Frances Newton Put to Death by State

By Phillip Martin

From the Houston Chronicle:

After weeks of intense legal wrangling, Newton's execution went ahead after the U.S. Supreme Court and Gov. Rick Perry refused to intervene. She was the 349th killer put to death in Texas since executions were resumed in 1982, and the first black woman executed in Texas since the Civil War...

For death penalty opponents, Newton's case seemed to embody everything they found wrong with capital punishment. In her initial trial, she was represented by an attorney who acknowledged he had done little to research the case and later was suspended by the State Bar of Texas.

When Newton received a stay to, in part, retest incriminating stains on the dress she wore the night of the killings, defense attorneys were stunned to learn earlier testing had destroyed the evidence.

It is past time for Texas to pass a law requiring a moratorium on state executions. According to the Texas Moratorium Network, 119 innocent people have walked off Death Row in the modern era. The cost to try a death penalty case costs about $2.3 million, three times as much as detaining someone in a cell at the highest security level for 40 years.

2005 Texas Rankings

By Karl-Thomas Musselman

But remember, in Texas, Sexy Cheerleaders, Chuck Wagons, and Duplicative Marriage Amendments are what we actually spend time debating.

Prepared be the Office of the Texas Comptroller

State Government Taxes and Spending
49th Tax Revenue Raised
49th Total Expenditures

Women’s Issues
2nd   Birth Rate
2nd   Teen Birth Rate
37th  Prenatal Care

Per Capita Spending on
45th  Public Health
46th  Mental Health
49th  Water Quality

Environment
1st  Toxic and Cancerous Manufacturing Emissions
1st  Number of Clean Water Permit Violations

Education
50th  High School Graduation Rates
48th  SAT Scores

Workforce
9th   Unemployment
46th  Average Hourly rate
43rd  Income distribution inequality
50th  Government Employee wages

State of the Child
1st    Child Population Growth
1st    Percentage of Uninsured Children
48th   Spending on Child Protection

Public Safety
1st    Number of Executions
1st    Number of Gun Shows
1st    Number of Registered Machine Guns
2nd   Rate of Incarceration
5th    Total Crime rate
11th  Violent Crime Rate

Health Care
50th  Percentage of Population with Health Insurance
50th  Percentage of Insured Low-Income Children
48th  Percentage of Poor Covered by Medicaid
45th  Rate for Substance Abuse Treatment is Received

Health and Welfare
7th   Poverty Rate
2nd   Percentage of Population that goes hungry
3rd   Percentage of Population that is malnourished
47th  Amount of Welfare and Food Stamp Benefits
49th  Number of WIC recipients

Democracy
44th  Percentage of Eligible Voters that are Registered
47th  Percentage of Eligible Voters that go to the Polls

Crude Awakening

By Karl-Thomas Musselman

Forwarded to me from a friend for those that are interested here in Austin.

A group called Crude Awakening is holding a town hall meeting on Friday, August 5, on the subject of: "The End of Cheap Oil and What It Means for Austin." A brief presentation on peak oil will be followed by a panel discussion among Austin community leaders and energy experts: Bill McLellan of Envision Central Texas, Councilman Brewster McCracken, Michael Osborne of Austin Energy, and author Robert Bryce.

For more information check out their Meetup site.