February 5, 2001

Eagle Eye on Austin - DOMA Gets a Senate Sponsor

SENATOR CHRIS HARRIS (R-ARLINGTON) FILES SENATE DOMA BILL WHILE LIST OF JOINT AUTHORS AND CO-SPONSORS CONTINUES TO GROW IN THE HOUSE
Senator Chris Harris filed SB 488 on Wednesday, giving the Defense of Marriage Act a presence in both chambers of the Texas Legislature. Harris' bill is identical to Warren Chisum's (R-Pampa) HB 496 on the House side, and gives the issue added impetus now that Senators can sign on as co-sponsors of the bill. Speaking of cosponsors, Texas Eagle Forum's Carolyn Galloway has been busy recruiting House sponsors for DOMA. To date, 68 Representatives have signed up as cosponsors, while four have added their names as co-authors of the bill. The list of co-authors includes Rep. Charlie Howard (R-Sugar Land), Rep. David Counts (D-Knox City), Redistricting Committee Chairman Rep. Delwin Jones (R-Lubbock), and Calendars Committee Chairman Rep. Barry Telford (D-DeKalb). Both the Senate and House versions of DOMA have been referred to their respective chamber's State Affairs Committees. Texas Eagle Forum will stay with the DOMA issue throughout the session, keeping you informed as HB 496 and SB 488 make their way through the legislature.

To view HB 496, click on http://www.capitol.state.tx.us/tlo/77r/billtext/HB00496I.HTM
To view SB 488, click on http://www.capitol.state.tx.us/tlo/77r/billtext/SB00488I.HTM

REVIEW OF RECENT ABORTION RELATED LEGISLATION REVEALS MIXED BAG
Most abortion related legislation aims at affecting incremental change on the road to either expanding or restricting access to abortion. This incrementalist approach continues to carry the day with the filing of HB 1198, HB 1106, and HB 1156. Filed by Rep. Kim Brimer (R-Ft. Worth), HB 1198 requires the Texas Supreme Court to compile aggregate statistics on a regional basis relating to the number and outcome of petitions filed by minors for judicial bypass orders allowing them to obtain an abortion without notifying their parents or legal guardians. This bill would hold judges somewhat accountable for their interpretation and use of the judicial bypass rule. The filing of HB 1106 by Rep. Glen Maxey (D-Austin) and HB 1156 by Rep. Garnet Coleman (D-Houston) serve to expand the universe of women eligible to receive Medicaid (read: taxpayer) funded abortions. The bills both state that the Health and Human Resources Department cannot set the income eligibility cap for "medical assistance" to indigent women below 185% of the federal poverty level. Apparently, however, the department can set the cap as high as it wants, allowing thousands of additional women to extinguish the lives of their unborn children on the taxpayer's dime.

To view HB 1198, click on http://www.capitol.state.tx.us/tlo/77r/billtext/HB01198I.HTM
To view HB 1106, click on http://www.capitol.state.tx.us/tlo/77r/billtext/HB01106I.HTM
To view HB 1156, click on http://www.capitol.state.tx.us/tlo/77r/billtext/HB01156I.HTM

Brief Notes From Near and Far

LIBERALS TELEGRAPH LONG-TERM STRATEGY AS ASHCROFT CONFIRMATION IS FINALIZED
With John Ashcroft's successful confirmation as Attorney General now a matter of record, liberal interest groups that aligned against his nomination are indicating that they intend to pester Bush nominees for years to come. Although the 58 votes netted by Ashcroft were enough to secure him a cabinet chair and a warm mug of coffee for the next four years, Senate Democrats took heart in the fact that they have the 41 votes needed to maintain a filibuster against future nominees. Although liberal leaders have yet to identify which appointments they hope to target, conservatives are unanimous in predicting that the Ashcroft imbroglio was only a warm-up for future clashes over the penultimate in Presidential appointments - nominations to the Supreme Court. This battle royale could be joined as early as June, when the current Supreme Court recesses and retirements are most likely to be announced. Liberals are particularly concerned about the appointment of conservative judges to the nation's highest court in the aftermath of the narrow 5-4 Casey decision upholding the specious "right to legal abortion." Given the impact that a conservative, pro-life appointee could have on a Court closely divided over abortion, the invectives hurled at John Ashcroft may prove nothing more than the Left's opening salvos in what may come to be known as the "appointment wars."

Commentary - Teacher Health Insurance: At What Price?

     Amidst the inevitable flurry of activities and ideas that accompanies the opening of a legislative session, a handful of important issues always make their way to the forefront of public attention. This year, the creation of a statewide teacher health insurance benefit has taken center stage. Although a number of large school districts already provide health insurance coverage for their employees, several rural districts lack the resources to provide adequate coverage for their teachers. The resulting disparity in health insurance coverage between large urban districts and small rural districts, as well as the inability of even large districts to provide reasonably priced health insurance plans, has led to calls for the state to step in. State law already requires school districts to provide employees with health insurance plans comparable to those offered to state employees, but leaves the responsibility of funding such plans to individual school districts. Advocates of a statewide plan would like to see the legislature create a statewide health insurance pool for teachers, and fund the pool with state dollars. With a price tag of between $1 billion and $4 billion per year and only $150 million in discretionary state funding available this year, legislators have been handed the unenviable task of locating the funds necessary.

     To a growing number of lawmakers, the answer has come in the form of the state's Permanent School Fund (PSF). Established in 1854 with an initial capitalization of $2 million, the PSF has grown to a value of over $22 billion, spinning off over $700 million annually in interest and dividends to the Available School Fund for distribution to local school districts on a per pupil basis. Historically, school districts have used the majority of these funds to purchase textbooks, with the balance used to cover miscellaneous classroom expenses. This fact is in keeping with the fund's stated purpose, written into the Texas Constitution, that the monies in the "fund shall be applied annually to the support of the public free schools." The Constitution goes on to state that "no law shall ever be enacted appropriating any part of the permanent…fund to any other purpose." This Constitutional barrier has provided little reason thus far, however, for lawmakers to avert their cash hungry gaze from one of the nation's best performing public funds. Senator Eliot Shapleigh (D-El Paso) has submitted legislation directing the state comptroller to transfer funds from the PSF to a newly minted "school employees primary health coverage fund" on a yearly basis. Representative Rob Junell (D-San Angelo), who serves as chairman of the powerful House Appropriations Committee, has proposed a constitutional amendment calling for annual disbursements to be made from the PSF to a "public school employee health insurance fund." Supporters of the bills point out that the fund will continue to grow because the measures will only deduct a portion of the "total return" on investment produced by the fund, leaving the balance to be plowed back into the fund's principle. Such talk sounds reassuring, but ignores potent facts that, in the final analysis, demonstrate the irresponsible nature of such a scheme.

     The primary difficulty with calls for using the PSF to fund teacher health insurance lies in the realm of economic reality. The PSF is comprised of equity investments (i.e. stocks) that allow for steady growth, short-term investments (i.e. money-market mutual funds) that provide liquidity, and debt instruments (i.e. bonds) that provide fixed-income which in turn is funneled into the Available School Fund for distribution to public schools. The Texas Constitution specifically states that only interest and dividend income earned on investments may be appropriated for school use. Capital gains created by the sale of securities owned by the fund must be reinvested into the principle of the fund to assure future growth. These capital gains are what legislators would like to tap for the purpose of funding teacher health insurance; and it is the nature and function of these capital gains that causes the most difficulty with such a plan. Stocks are inherently volatile, as anyone can easily recognize thanks to the recent roller-coaster performance of the stock market over the past twelve months. Prudent investment managers use the phrase "pick and stick" to indicate that the wisest course of action that the average investor can take with respect to the stock market is to identify companies that are stable, consistent performers, purchase their stock, and then hold it for a long, long time. Such investors are typically rewarded to the tune of roughly 6-7% annual growth over the long haul, provided that they avoid panic selling during bear markets. The PSF has experienced steady growth precisely because its managers, the elected State Board of Education, have allowed the equities within the fund to grow unabated over time. Using capital gains generated from the sale of these equities for teacher health insurance threatens the health of the fund by undermining its ability to grow at an acceptable rate.

     The unpredictable nature of the stock market presents a second obstacle for fund-raiding enthusiasts. The market is a fantastic wealth-generating vehicle for those who have the capacity to invest over time, but serves as an unreliable source of annual income due to its inevitable short-term fluctuations. Bear markets can quickly turn capital gains into capital losses, oftentimes with little prior warning (please note stock market crashes of 1929, 1987, etc.). Relying on the market to provide consistent, yearly funding for a massive entitlement like teacher health insurance is a formula for disaster, especially when one considers the fact that health insurance costs are notorious for their inflationary tendencies. The end result can only be disappointment for those who thought they were receiving a guaranteed health insurance benefit, and mounting pressure for lawmakers to dip into the stream of money providing textbooks for Texas children in order to compensate for the loss of capital gain income.

     The Permanent School Fund has aptly been termed a "Texas Treasure" by SBOE member Don McElroy. For nearly 150 years, this treasure has been used to provide badly needed financial assistance to schools across the state of Texas while simultaneously posting solid gains in total value over decades of growth. During that time, the elected State Board of Education has defended the fund against encroachment from those who possessed good intentions, but lacked the foresight of the fund's founders who understood the mission of the PSF to be critical to the education of Texas children-critical enough to be written into the Texas Constitution. The provision of a health insurance benefit to the state's nearly 250,000 public school teachers is a well-intentioned effort deserving careful consideration and deliberation by the Texas Legislature. It is not, however, an issue that allows for quick and reckless solutions, and it certainly does not warrant placing the future of the children's textbook fund-the Permanent School Fund-in jeopardy.

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