Texas Needs Economic Recovery Now
On March 26, 2020, 3.3 million people filed for first time unemployment benefits – this was 400% more than on any other week since we began keeping records – more than during the dotcom bust of 2001, more than the credit bubble and great recession of 2008. Then, on April 2, 2002 an additional 6.6 million individuals filed for unemployment and again on April 9 another 6.6 million people filed for first time unemployment – all prior records are meaningless. The consensus is that the unemployment rate will continue soar and some economists are forecasting an unemployment rate of 20% or higher in the coming weeks. As of April 8, 2020 more than 900,000 Texans have already filed for unemployment.
These huge numbers represent people, families, older workers nearing retirement age, single moms and dads struggling to provide, new graduates burdened with outrageous student loan debt. While history will tell us whether the shutdown orders were necessary, the damage it is doing to our economy and the lives of those we love is not acceptable.
It is not enough for our elected representatives to take photo ops delivering groceries to the elderly while offering empty platitudes assuring that we will all “make it through together” if we “just do our part.” Worse is when our policymakers act out of a sheer desperation to do something to make it look like they have taken action, but in doing so, only make the problem worse.
Anyone who calls themselves a leader at this moment needs to be making a bold stand for the businesses, entrepreneurs, investors who have risked their life savings to create jobs. Any elected official with any integrity should be shouting from the rafters about the millions of families being devastated, facing homelessness, depression and starvation from sudden job loss at no fault of their own.
On March 12, as this epidemic was taking hold, I called for our government to provide robust testing and data and let the market provide solutions.
Instead, our government got in the way, delayed approval of testing, and made the problem worse. The widespread shutdown of the economy was the result of a lack of widespread testing and the inability to get a handle on the real data that could have driven rapid effective response. Now, thirty days later, we have to start acting to reverse the damage.
In a complete failure of responsible leadership, policymakers in Washington DC doled out millions in unnecessary handouts to the Kennedy Center for Performing Arts, the Smithsonian and the Corporate for Public Broadcasting among other outrageous and embarrassing unrelated spending at a time when Americans are losing their jobs, businesses, lives and livelihoods. Our economy will not be fixed by a one-time $1,200 check to some, a bail out for foreign registered cruise ships, or child care for our federal legislators. The CARES Act was the largest spending bill in the history of the world, and when it doesn’t work, which it won’t, the Federal government will dig deeper into debt, borrowing against the prosperity of future Americans, to again try to show that they are “doing something” to fix the problem. The result will be further economic disaster.
This madness needs to stop. Our State and Local policymakers have an opportunity to show true leadership and take bold steps in the face of an enormous problem and massive human suffering.
Below I have outlined a 10 Point Plan to Economic Recovery to provide guidance to our state and local governments for immediate action, right now, in April 2020, to protect our communities. Localities that follow these principles will be the first to re-open businesses, the fastest to get people back to work, and will be the strongest in economic growth.
As for the federal government, I ask every U.S. Congressman, U.S. Senator and the White House to Stay Home and Shelter In Place, the American people have deemed all of you to be “non-essential.”
THE PLAN
Brian Elliott's Economic Recovery Plan
for Texas 2020
End the shutdowns
While well intentioned to save lives due to the virus, the lockouts, and shelter in place orders and blanket mandates restricting movement of people and commerce are extraordinarily harmful to the economy and will put at risk many more lives than the lives already at risk from the pandemic. This unprecedented harm will continue to be disproportionately burdened by the most vulnerable and at-risk members of our communities. Allowing and encouraging people to get back to work as soon as they can safely and responsibly operate and protect their employees and the public must be the immediate, number one, priority.
Government’s role should be to educate and promote best practices, publish safety protocols and advocate common sense reasonable and voluntary restrictions. The free market has and will provide better solutions than the government ever can or will. Our policymakers should provide guidance and leadership, share the best data, champion the best information and ideas and support our hard-working businesses and entrepreneurs to encourage a rapid but safe return to normalcy, and resist the impulse to overact in the face of a crisis.
The repair must start immediately.
Its only when policymakers lift the shutdown orders that we will begin to assess the damage. When that day comes, and I hope it will come soon, we will need swift action from our elected officials to repair our communities and restore prosperity as quickly as possible. I present the following 10 Point Plan to Economic Recovery as a guideline for policymakers across Texas and across the Country.
I am seeking the votes and support of the people of the great communities of Cedar Park, NW Austin, Leander, Brushy Creek and Jollyville, Texas for the November 2020 General Election. If I have the privilege of being their next Representative in the Texas Capitol, I will fiercely advocate for each of the positions presented below. Please take these ideas and share them with your current State Representatives and local officials and ask what their plan is to get our communities back to prosperity.
Economic Stimulus: Action that Texas State and Local Policymakers Can Enact Immediately
1. Remove State and Local Regulatory Barriers
Policymakers must recognize that the contributions of many people are going to be necessary as we pull together to combat this pandemic and repair our communities. Unnecessary regulations that seem like good ideas when all is well, need to be immediately reevaluated to determine whether they are ultimately necessary. Governor Abbott has already waived many regulations in the wake of this crisis. Any regulation that can be waived in a time of crisis, likely was not necessary to begin with.
Every emergency measure introduced during this crisis that imposed any new restrictions should include an automatic short-term expiration. For emergency measures that reduced regulations, our policymakers should require that before the regulation is re-established, the regulation must be demonstrated by clear evidence to be absolutely necessary to guard against an important public danger. And, if it turns out the regulation is not necessary, don’t reinstate it. Its simple, and we can show how we can use a crisis to strengthen our laws and our society.
And I call on our state and local representatives to be leaders on eliminating federal trade and regulatory barriers harming our communities and businesses – if a federal regulation is making it hard for businesses, take the fight to Washington and get a waiver for the people of Texas.
2. Repeal occupational licensing rules
Currently Texas requires licenses for more than 150 different occupations from auctioneers to interior designers, and shampoo apprentices to dog trainers. Most of these license requirements have no rational connection to any serious public danger that might ensue if these licenses did not exist.
Occupational licensing is known to reduce job growth by as much as 20%, decrease competition, raise prices, and discourage innovation and investment. Occupational licensing is estimated to cost the Texas economy between $30 and $40 billion per year.
Texas should immediately repeal occupational licenses from any field that does not have significant public health and safety concerns. For those licenses that are demonstrated to be necessary to maintain, the standards by which the licenses are awarded should be examined to ensure that the cost and burden to qualify for, and maintain, the license present as minimal an obstacle as possible, to get people working as fast as is reasonable.
While we reevaluate the necessity of many categories of occupational licenses, one common sense change that can be implemented immediately with little cost is to permit those holding occupational licenses in other states to come to Texas and continue their profession without interruption. This may mean full reciprocity and immediate recognition in Texas for holders of valid occupational licenses whose prior state licensing regulations are at least as rigorous as Texas. It also may mean a temporary permit to continue to operate or begin employment while an out of state license is updated to meet Texas' more rigorous standards. In either case, we need to reduce unnecessary barriers for skilled and appropriately qualified professionals to enter the Texas market.
3. Hold the line on taxes and Reevaluate Budgets and Spending Plans
At this time our State and Local Governments should be setting the example for how to do more with less. The temptation will be great to shift the burden on to others, governments must resist adding new taxes, growing new departments, and increasing spending, and instead look inward to find cost saving measures.
The reality for Texas and all local governments is that the budget they expected for 2020 is not going to happen. In addition to the devastating loss of employment and closing of businesses which will significantly impact tax revenues, the oil and gas portion of the expected budget is expected to simultaneously fall due to falling prices and decreased production.
As a result, every non-essential discretionary government spending item needs to be immediately cancelled for this budget cycle and, where possible, those funds need to be reallocated to direct assistance programs. That means that non-essential meeting and travel expenses go to zero, discretionary improvement and betterment budget items like replacing the drapes goes to zero, new soda machine for the cafeteria waits until next year, a hiring freeze should be implemented while governments reallocate skills of underutilized workers across departments. Everything that can be cut must be cut.
However, existing funded plans to build government buildings and schools, expand city hall, upgrade the libraries and technology, build a new courthouse, whatever the project, if it is funded, and has the potential of adding jobs and getting people back to work, accelerate the timeline and get it started. State and local governments can act today to put those businesses and the network of businesses that support them back to work.
Economic Development:
Items for Texas to Work on As Priorities
4. Abolish Property Taxes in Texas
Texas should abolish property taxes and convert to a statewide consumption-based tax. Property taxes discourage capital intensive industries from moving to Texas, they place undue burdens on property owners, and discourage investment in private property.
Property Taxes are hidden taxes. For the most part property taxes are escrowed and combined in mortgage payments or included, unseen, in rental payments. This is why when property taxes increase year after year many people don’t notice. When they can no longer afford their rent, they blame a greedy landlord instead of a greedy government. Property taxes are arbitrary, inefficient, costly to administer, disproportionately harm elderly and cause rents to rise.
In contrast, a consumption tax is visible and tied to voluntary activity. Studies show that a consumption-based tax replacing a property tax would add billions to the State revenue, increase the tax base, grow personal income, create thousands of jobs and grow the Texas economy. This is the time to abolish the immoral property tax.
While we work on a longer-term plan to abolish property taxes and switch to a consumption based tax system, one common sense change that can be implemented immediately is that we can stop property tax foreclosures. Each year in Texas, our local governments are responsible for creating homelessness as they forcibly evict and foreclose on hundreds of families every year for the inability to pay an immoral tax. This abhorrent practice should stop immediately.
5. Legalize marijuana
A wide a growing majority of Texans believe that the possession of marijuana by adults should be legal. The time has come to make this move.
As of January 2020, the legal cannabis industry across the country has seen a 15% year-over-year increase full-time-equivalent jobs created. Over the past year the cannabis industry has created tens of thousands of new jobs nationwide, making legal marijuana the fastest-growing industry in America.
Texans have asked for this modernization to our laws and now, when the economy needs the boost so much, there is no justification continuing to slow walk the policy change when the change is inevitable. Texas should be leading on this issue, not lagging.
While this reform is implemented, one common sense change that can be implemented immediately is to stop arresting and jailing persons in Texas for possessing the same substance that is legal in other states. The State of Texas does not need to unnecessarily crowd and burden its criminal courts and jails when the funding to support this misguided effort can be better used elsewhere.
6. Legalize sports betting
Sports betting has been legal across the United States since the “Sports Protection Act” was deemed unconstitutional in 2018. In overturning the Sports Protection Act the Supreme Court said “a more direct affront to state sovereignty is not easy to imagine.” Already, 21 states have implemented sports betting and another 9 States have legislation on the table that is likely to pass in 2020. By the end of this year a majority of states will have legal sports betting. Why not Texas?
The biggest opposition to sports betting in Texas comes not from the opposition of Texans, but from out of state casino lobbies – that’s not a good enough reason to keep this robust revenue source away from Texas.
In Texas, it is estimated that a regulated sports gambling market could boost the state’s economy by about $1.7 billion annually and create more than 9,300 jobs. These are jobs that will be desperately needed and sports betting should be implemented on a fast-track.
7. Rewrite local land use powers.
Local governments throughout Texas have run amok with their land use and development codes. Even though there is broad consensus that it needs to be fixed, the City of Austin has spent more than $10 million and is embarking on the eighth consecutive year of attempted rewrites and they have not managed to get it done. What they have done is create a confusing development environment that adds cost and time and is generally hostile to new development.
Over time, increasing zoning restrictions tend to reduce the supply of housing and increase the cost of development and significantly increase the cost of housing. Bad policies lead to higher prices. The growing housing affordability and homelessness problems Texas largest cities face is a product of bad policy.
While we evaluate the approach to fixing the overreaching local land use and development codes across Texas, one common sense change that can be implemented immediately and at zero cost is to override any Texas zoning regulation or HOA restriction that prevents people from working or conducting business out of their homes. While all of Texas is under some form of lockdown order, the new normal is that people are working from home more than ever before, as a necessity, not just a convenience. Rules preventing Work From Home are antiquated, hurt the economy and are costly and counterproductive to enforce.
The State Legislature can, and should, override local land use powers to cap or reduce local regulation to ensure that localities do not implement restrictions that will unnecessarily slow down or increase costs of development projects, hinder the growth of new business, increase the cost of housing or decrease housing supplies.
Direct Financial Assistance to Individuals
8. Targeted Assistance to the Most Disadvantaged
Any direct assistance program should be narrowly focused on the most vulnerable individuals in our communities, these would include the already homeless and newly homeless, children and the elderly, and the impoverished – those are the people we help first. And it needs to be done directly. These individuals do not need government telling them how to live, they just need a hand up.
To the extent there is money in the budget, from cost saving measures implemented elsewhere, the extra resources should be directed to existing social programs for homeless assistance, substance abuse programs, elder care, school lunch programs and similar to give these existing programs a boost to reach more people.
Strengthen Society
9. Deliver confidence through leadership
Deliver confidence by upholding, protecting and championing fundamental rights, the constitution, and all civil liberties. At the first sign of trouble do not run from your oath to uphold the constitution but look to it for strength. We must not permit a public health crisis to be used as an excuse to suspend civil liberties that are constitutionally protected. For example, government must not detain Americans indefinitely without trial or use technology for illegal tracking and surveillance.
10. Stop classifications.
People and their businesses should not be classified as “essential” or “non-essential.” This is an abhorrent insult to millions of people across America who have just been told by their government that their life’s work, their chosen occupation and the activity that keeps their family fed is not worth as much as someone else’s. I am personally embarrassed for any public official who put their name on such an order. Every job that puts food on the table is essential, period.
While we are at it, our policymakers stop engaging in and promoting class warfare, stop classifying people by their behaviors, who they associate with, whether or who they choose to marry, or whether they choose should to become parents. All people should be treated equally under the law, all the time, no exceptions, even during a crisis.