The cash registers (both at the state level and in private business) continue to ring at a record pace. I recently sent out a state revenue estimate report from Comptroller Hegar (included again with this update) that reflects his latest estimate. This is the last update before the end of the state fiscal year on August 31. The surplus number currently sits at around $40 billion. Our current budget for the biennium is $122 billion. I include that number for scale. Since I have been watching this yearly circus, the largest surplus I can recall was around $5 billion, and it seems like that has been in the last 6 or 7 years. Probably safe to say that come next January the number will have increased once again. Truly unprecedented.

Lt. Governor Patrick has issued his budget priorities:

  • $4 billion for property tax relief for next year
  • Increase homestead exemption to $60,000 (long-term goal $100,000)
  • Suspend state gas tax for remainder of 2022
  • Teacher pay raise, maintain current education funding and property tax cuts from 2019
  • Provide 13th check for retired teachers

To date I have not seen anything similar from either the Governor or Speaker Phelan. When the general election cycle begins in earnest after Labor Day, I would expect to see a more complete discussion on how and why some of this money will be spent. It’s your tax dollars (or stimulus money as the case may be), so make sure your local state Reps and Senators know how you feel these funds should be spent, if at all.

I begin every day reviewing the Texas drought monitor. You can find this handy information here.

Current levels are:

  • Abnormally dry: 99.2%
  • Moderate drought: 94.8%
  • Severe drought: 84.1%
  • Extreme drought: 56.7%
  • Exceptional drought: 20.4%

While you review these dry statistics, consider that our rainy season (if Texas actually has a rainy season) is really not until late September or October, unless of course, a hurricane blows through. Truly a unique situation when some might wish for a hurricane, just a small one. One might suggest that some of the surplus money should be spent on water infrastructure, controlled burns, and brush control.

Hearings on interim charges continue, mostly in the House. There is a full slate of hearings on a variety of issues over the next 6–8 weeks in the House committees. As of this date the Senate only has a single upcoming hearing in late August. Expect that to change in the not-too-distant future. The House Licensing and Administrative Procedures Committee has not yet posted, but rumor is we will have hearing in that committee soon. I will keep TWGGA members posted.

If you wish to monitor these activities on your own, the state has an extremely efficient and well-organized website. In this instance, your tax dollars are very well spent.

The race for Texas Governor is getting a little bit more interesting. There are NO limits on the amounts of money that can be contributed to or spent by candidates for state office in Texas. If someone wants to write a $1 million check, they can or even write more than one. In this case, on a recent report, Democratic candidate Beto O’Rourke received $2 million from an Austin couple. Don’t worry, as Governor Abbott has his list of large donors as well. In the most recent reports Governor Abbott raised $37 million, spent $52.2 million, and has $45.7 million on hand. Democratic nominee Beto O’Rourke raised $40.9 million, spent $15.9 million, and has $23.9 million on hand. These numbers are based on campaign reports that came out at the end of June. There will be updated reports available at the end of October. We won’t see final fundraising and spending totals till after the November election. Regardless, THIS. WILL. BE. BY. FAR. the most expensive Gubernatorial race in Texas history.

What do they spend ALL THAT MONEY ON?

For a little balance (just a little), the Texas population is almost 31 million people. Texas has 20 media markets (that’s a bunch for one state), including two in the top 10—DFW as #5 and Houston as #8, and San Antonio rounding out the group at #31. That means it is EXTREMELY expensive to get on TV in Texas. Plus, as we all know, during the last 3 weeks of the election every time we go to the mailbox we take out LOTS of direct mail that we put in the trash, usually without even glancing at it. That direct mail is very expensive. Plus radio, cable TV, social media, staff, travel, etc. It’s expensive to run a statewide race in Texas—always has been.

But so far, the two of them have already spent almost $70 million and not one general election vote has been cast. This is for a $153,750-a-year salary. Go figure.

After the election we will do the math to see how much the winner spent to receive each vote. One other thought: Do you think the future Governor answers the phone when the $1 million contributor calls?

This month’s update is a bit late, as we were waiting for the TABC Commission meeting that took place last Tuesday. There were several proposed rule changes that are of interest to our permit holders and an update on the agencies budget request for next session. A couple of items of interest in the upcoming budget request include 31 new peace officers in 2023 and 31 more the following year. In addition, there will be lots of replacement vehicles for those officers to drive. As for the proposed rule changes, a proposed new rule that is being published for public comment is a change to Rule 45.117 related to Gifts and Advertising Specialties. Current law sets a cap on the amount a winery owner can spend on a sign to furnish to a retailer at $125. The new proposed rule removes that cap, so there would be no limit in the new proposed rule.

The second potential change of interest is the new rule in a new Chapter 49 dealing with permit holders’ “safe harbor.” The proposed change was tabled for further discussion, so there is no proposed change at this time. Several of the Commissioners wanted to have additional discussion regarding these changes. This one is extremely important to license and permit holders. We will keep you up to date as the changes move through the process.

TABC announced last week at the conclusion of the regular commission hearing that Thomas Graham, current Director of Excise Tax and Marketing Practices is the new Executive Director. Graham has been with the agency since 2005. He is delightful to deal with, knowledgeable, and accessible. Good choice.

—Kyle Frazier,  TWGGA Legislative Advocate

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