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How Texas taxpayers are already paying the price of bad politics

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How Texas taxpayers are already paying the price of bad politics


In November 2023, Texas voters approved tens of billions of dollars in new bonds for school districts, cities, counties, special districts and other local governments. Proceeds from these bond sales will be used to construct and maintain schools, parks, roads, utilities and other infrastructure projects.

Voters approved these borrowings with the understanding they will incur substantial interest costs. But would they if they were aware that a portion of the interest costs will be for no purpose other than to make a purely political statement? In fact, that is how a substantial share of the interest payments — hundreds of millions of dollars — will be used.

In 2021 the Texas Legislature passed, and the governor signed, SB 13 and SB 19 that prohibit Texas state and local governments from entering into contracts with banks that have policies restricting investments in oil and gas as well as firearms companies. The measures, targeted mainly at Texas pension funds, were intended to prevent the funds from investing in financial institutions that directly or indirectly support the anti-fossil fuel or anti-gun movements.

Unfortunately, Texas school districts, counties, towns and utility districts must also contract with these same financial institutions when they issue debt. Hence, they (and their taxpayers) are collateral damage of the legislation.

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How so? When governments issue bonds they must rely on financial institutions to provide underwriting services. An underwriter purchases bonds directly from the issuer and resells them to investors. The municipal underwriting business is competitive, with scores of companies seeking the business of Texas governments. Not surprisingly, the larger, more well-established firms often have an advantage over smaller, more regional firms.

Owing to their size, they may not only be more efficient in performing the services expected of them, but also their national distribution networks are better able to market the bonds to investors. The result is that the larger firms can often enable the issuing governments to save on interest costs.

Ironically, these larger firms, such as Citigroup, JP Morgan Chase, Goldman Sachs, Bank of America and UBS, are the ones that have landed on the Texas comptroller’s list of ousted underwriters. As could have been anticipated, empirical evidence indicates that Texas governments did, indeed, pay a significant price for banishing them. A study by two economists, one from the Wharton School, the other from the Federal Reserve Bank of Chicago, estimated that based on $31.8 billion of bonds issued in 2022, Texas governments incurred between $300 million to $500 million of additional interest costs as a result of SB 13 and SB 19.

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Even if one disputes the study’s interest cost estimate, most economists agree that providing governments with a choice among fewer financial institutions undermines the benefits of market competition. Ironically, in a different political environment, Republicans such as Gov. Greg Abbott and most of the Texas legislators who championed this legislation would likely be among the loudest opponents of this anti-competitive legislation.

Within the last several weeks Citigroup announced it was exiting the municipal bond underwriting business entirely. Experts believe other investment banks may follow. Policies of both Texas and other GOP-led governments on fossil fuels and guns are among the reasons cited. To be both fair and politically neutral, it should be noted that the problem of using the financial markets to make political statements is not confined to Republican governments. On the other end of the political spectrum, Chicago has restricted contracts with institutions on the “wrong side” of issues relating to prior ownership of slaves and gun control.

Oil and natural gas companies employ almost 350,000 Texans. Hence, it would make perfect sense for our Legislature to protect and promote that industry. However, there is no evidence these firms have received anything of economic value from the Texas legislation. It seems reasonable to suspect executives of Texas oil and gas related companies check their computers daily for the international price of oil, not the investment portfolios of municipal bond underwriters. The latter have no demonstrable impact on their firms’ investment or employment decisions.

The benefits of any legislation should exceed its costs. To be sure, it is not unusual for governments to enact measures to ensure that contractors advance beneficial non-economic social goals. For example, they may mandate that contracts give preference to minority-owned or disadvantaged businesses. But in SB 13 and SB 19 we have laws that produce only costs, no benefits other than misguided anti-woke darts.

Texas growth will require substantial amounts of new investment in infrastructure. That means increased borrowing. To protect taxpayers by minimizing borrowing costs, we need more competition among bond underwriters, not less. Taxpayers should not have to pay for empty political gestures. But if they must, let’s at least be honest and tell them what they are voting for when they go to the polls.

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Michael Granof is the EY Professor of Accounting Emeritus at the University of Texas at Austin. Martin J. Luby is an associate professor at the LBJ School of Public Affairs at the University of Texas at Austin.

We welcome your thoughts in a letter to the editor. See the guidelines and submit your letter here. If you have problems with the form, you can submit via email at letters@dallasnews.com



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Texas

Nate Germonprez: Texas' Un-Real Breaststroker Becomes #7 Performer in History

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Nate Germonprez: Texas' Un-Real Breaststroker Becomes #7 Performer in History


2024 Texas Hall of Fame Invite

  • November 20-22, 2024
  • Where: Lee and Joe Jamail Swimming Center — Austin, TX
  • When: 10 am CT prelims/6 pm CT finals
  • Participating Teams: Pitt, Stanford, Texas (host), USC, Wisconsin, BYU, Cal Poly
  • Meet Info
  • Live Results
  • Results on Meet Mobile: “Texas Hall of Fame Swimming Invite”
  • Day 1 Prelims Live Recap | Day 1 Finals

The Texas Longhorns entered the summer with a lot of weaknesses on paper that needed to be addressed, and via the addition of high profile transfers and international recruits, they have addressed many of those.

The big question mark, though, was the breaststroke leg and whether the Longhorns had someone good enough to challenge for an NCAA title.

The group was led last season by 5th year Jake Foster, who swam 51.22 at a dual meet, and Will Scholtz, who was 52.09 at Big 12s. 52.0 is a nice time by almost any measure, but for a team hoping to climb several rungs on a ladder and challenge for an NCAA title, it wasn’t going to be enough.

The comments read things like “where are the Longhorns going to find a true breaststroker,” referencing the fact that Texas didn’t have a swimmer finish higher than 16th at NCAAs in the 100 breast last year.

But on Thursday morning, they may have found their guy as Nate Germonprez, now a sophomore, turned a corner with a 50.39.

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That makes him the 7th-best performer in the history of the event with the 15th best performance ever in a flat-start 100 yard breaststroke. Every time ranked ahead of him was done at a season-ending championship, making Germonprez’s swim the best mid-season time in history.

Top 10 Performers all-Time, Men’s 100 SCY Breaststroke

  1. Liam Bell, Cal – 49.53 (2024 NCAAs)
  2. Ian Finnerty, Indiana – 49.69 (2018 NCAAs)
  3. Max McHugh, Minnesota – 49.90 (2022 NCAAs)
  4. Caeleb Dressel, Florida – 50.03 (2018 SECs)
  5. Kevin Cordes, Arizona – 50.04 (2014 NCAAs)
  6. Carsten Vissering, USC – 50.30 (2019 NCAAs)
  7. Nate Germonprez, Texas – 50.39 (2024 Texas Invite)
  8. Caspar Corbeau, Texas – 50.49 (2022 NCAAs)
  9. Van Mathias, Indiana – 50.57 (2023 NCAAs)
  10. Brian Benzig, Towson – 50.59 (2024 NCAAs)

Germonprez is a bit of a paradox as a swimmer. He was a very good breaststroker in high school, winning an NCSA title in the 100 breaststroke in 2023. But he was so versatile that his 52.59 as a high school senior was almost overlooked, when in most classes that would make him a big ‘breaststroke’ signing.

We wrote several articles and did interviews in tribute to his versatility (here and here, for example).

He didn’t even swim a breaststroke race at the Olympic Trials, instead opting for the 50 free (53rd) and 200 IM (12th). He would later swim the 100 free (49.46), 200 IM (1:58.11), and the 100 breaststroke (1:00.48) at the Austin Futures meet, winning and going best times in each. His 100 breaststroke time would have put him into the semifinals at Trials.

Is he a real breaststroker? He’s not a pure breaststroker, if that’s what we mean when we say “real,” which is understandable because for most of swimming history, breaststrokers were sort of a different breed.

But he broke the school record of Caspar Corbeau (50.49), who is most certainly primarily a breaststroker (though he can sprint a little bit too).

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When Germonprez and Modglin both committed to Texas, it was fun to daydream about what that tandem of versatility could bloom into in the college ranks, and now we’re seeing it happen. As much as Texas needed guys like Chris Guiliano and Kacper Mawiuk and Hubert Kos to move back into the national title picture this quickly, they really needed a breatstroker, and now they have one.





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How To Spend An Overnighter In Fort Worth, Texas

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How To Spend An Overnighter In Fort Worth, Texas


If you’ve been one of the 10.8 million annual visitors to Forth Worth, Texas, you already know it’s worth a multi-day stay. But sometimes, you don’t have that luxury, and the best you can swing is an overnighter. I’m here to tell you, that’s not a bad thing. Fort Worth, a pleasantly compact city in comparison to its sprawling neighbor, Dallas, turns an overnight stay into an opportunity to immerse yourself in Texan culture while luxuriating in the finer things in life.

Start with a semi-private flight via JSX, which operates out of its own terminal outside of Dallas-Love airport. This streamlined service provides private-flying ease and comfort at a fraction of the cost (a typical flight from Houston to Dallas costs about $500 round trip and gets you there in about an hour). After an extremely comfortable flight, you’ll touch down in Dallas, and it is a matter of minutes to deplane, collect your bag, and hail a ride. Opt for a rental car from JSX onsite provider Go Rentals or just use a ride app for the day.

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The heart of Fort Worth is 40 minutes away – you’ll leave the hustle and bustle of the big city behind and find tree-lined (and impeccably clean) streets. You’ll also find the new Crescent Hotel Fort Worth, which Conde Nast Traveler recently dubbed the #1 Hotel in Texas. Service is on point – when I arrived feeling a little queasy, the staff managed to rustle up a bowl of soup and a grilled cheese sandwich, and that was with the dining room temporarily reserved for a television crew shooting on the premises.

Which apparently is a thing in Fort Worth. It’s becoming an increasingly popular destination for movie and TV filming, and it’s clear why. The landscape is quite pretty, made all the prettier in the Cultural District, where Crescent Hotel is located. It features lovely museum buildings and wide streets that will beckon you outside to explore, and that exploration should include the Fort Worth Botanic Garden, the oldest botanic garden in Texas. It boasts 23 specialty gardens, such as the Japanese Garden ideal for a serene stroll, along with sculptures, ponds, waterfalls, and a don’t miss greenhouse.

If you prefer the indoors, just across the street from the Crescent Hotel is the Kimbell Art Museum, which recently celebrated its 50th anniversary and features works by creative legends like Rembrandt, Picasso, and Cezanne. The Modern Art Museum of Fort Worth is a stone’s throw away, as is the Amon Carter Museum, currently featuring an exhibit entitled “Cowboy.”

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And speaking of cowboys, you must set aside time to witness an authentic and historically accurate cattle drive, which takes place twice daily at 11:30 am and 4:00 pm on Exchange Street in the historic Fort Worth Stockyards. Watch as wranglers outfitted in boots, chaps, and hats reminiscent of the early American days drive cattle through the town. You can learn more about Fort Worth’s cowboy culture at The National Cowgirl Museum and Hall of Fame, the Texas Cowboy Hall of Fame, and the Cattle Raisers Museum.

If you haven’t noticed by now, Fort Worth is a bit of a dichotomy with its attention to ranch life every bit as important as its evolution to modern city. That’s why a day here is a study in contrasts, and one of the best ways to see – and taste – that is through the food. Start with lunch on the hacienda-style patio at Joe T. Garcia’s, a popular Tex-Mex restaurant serving up margaritas and family recipes like bean chalupas since 1935.

For dinner, dive into Waters Restaurant for a fine dining experience helmed by Chef Jon Bonnell. Appetizers like crab cakes and tomatoes topped with fried goat cheese are about as close to perfect as you can get. And foods that depend on being cooked just right, like scallops and filet, are indeed just right. Waters is located in Sundance Square, a walkable entertainment and business district that is especially lovely at night and offers live theater, shopping, an historic Chisholm Trail mural, water features, and over 30 restaurants, in case you decide to stay.

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That’s the only problem with Fort Worth – one day and night will give you a taste that will have you hustling to get back. So maybe not such a problem after all.



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City of Houston defends keeping firefighter on payroll amid nude video controversy and lawsuit

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City of Houston defends keeping firefighter on payroll amid nude video controversy and lawsuit


HOUSTON, Texas (KTRK) — The City of Houston says its hands are tied when it comes to a firefighter who showed a nude video of a female firefighter to their colleagues.

John Barrientes was found liable in a civil trial last year and was ordered to pay former firefighter Melinda Abbt $250,000. City Council is considering approving an $850,000 payment to Abbt to settle a separate federal lawsuit related to the matter.

Yet some council members question why Barrientes has been allowed to keep his job.

The city points to an obscure Texas law governing police and fire departments.

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“If you’re looking to terminate someone’s employment because of a past act, the statutory scheme in Texas requires that that occurs within six months of the act,” City Attorney Michel Arturo said.

But that’s not how other attorneys see it.

“I’m not aware of any law that says you have to fire someone within 180 days of the misconduct,” employment attorney Michael Lombardino said.

Arturo sent Eyewitness News a copy of the Texas Local Government Code. Under a heading titled ‘Indefinite Suspensions,’ it reads:

“In the original written statement and charges and in any hearing conducted under this chapter, the department head may not complain of an act that did not occur within the six-month period preceding the date on which the department head suspends the firefighter or police officer.”

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Lombardino said that should only apply to indefinite suspensions, which he said are different than terminations.

“Sometimes you need to be able to conduct an investigation, so putting a time limit on when you would be able to terminate an employee doesn’t really make sense,” he said.

Arturo told council members that firing Barrientes could give him grounds for a wrongful termination suit. Some worry about the lawsuits the city could face by keeping him.

“If we have another incident that comes up, aren’t we in more legal jeopardy because we are aware of this behavior?” Councilman Fred Flickinger asked.

Council won’t vote on whether to approve the settlement with Abbt for at least another week.

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For news updates, follow Luke Jones on Facebook, X and Instagram.

Copyright © 2024 KTRK-TV. All Rights Reserved.





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