Here’s an early preview of tonight’s State of the State address by Governor Abbott …

Streaming statewide … from Lockhart, Texas. The Governor – and the state – will find themselves in unprecedented territory tonight. The State of the State, which is normally given in the Capitol in front of a joint session of the Legislature, will instead be streamed by Nexstar statewide from a small business (Visionary Fiber Technologies) in Lockhart, Texas.

The speech will be optimistic … but cognizant of the tough year the state and its residents have endured. Expect an optimistic speech that turns Texas’ eyes towards a return to normalcy. However, also expect the Governor to begin by recognizing the pain and grief that the pandemic has caused many. From lost loved ones to economic hardship, the Governor will likely be keenly aware that there is still healing taking place and that while there is an end in sight, the pandemic and the scars it has caused are not yet gone. As we look forward, the Governor will likely note the many months of job growth … and that, just like its past, Texas’ future will be bright. The Governor will undoubtedly mention the massive migration of corporate headquarters and manufacturing facilities to Texas as a harbinger of more good things to come (e.g., Oracle, Tesla, Hewlett Packard).

Expect the Governor to lay out some broad legislative priorities … many that we have highlighted previously in this update. The Governor will touch on a dozen or so issues that he hopes to see accomplished this session. Many of the issues are ones we have been tracking for many months as major trends during the legislative session. The Governor’s designation of some of these as an emergency item (see below) provides further momentum for these major trends.

  • Broadband and closing the digital divide. The Governor will undoubtedly discuss the work that has already begun here, but emphasize that Texas must seize on this momentum to ensure every family and every school child has access to quality broadband. This is an issue we have foreshadowed for many months as a major priority this session. The designation of it as an emergency item provides further momentum. (Emergency Item)

  • The continued expansion of telehealth. Again, expect the Governor to mention the expanded use of telehealth during the pandemic. The Governor will ask that many of these stop-gap measures employed during the pandemic be made standard practice. (Emergency Item)

  • Continued efforts to improve Public Safety. This topic will include gratitude for our public safety officers, including the Governor’s opposition and desire to see legislation to discourage movements to defund the police. The Governor is also very keen to see bail reform, to ensure that dangerous criminals remain behind bars. This will include expanded criteria that will need to be considered in setting bail and increased qualifications for judges that set bail. The Governor will also recognize the need for increased training for police officers as well. (Emergency Item)

  • Civil liability protection. The Governor will reiterate his desire to see a bill this session that shields individuals and businesses from civil liability during the pandemic. (Emergency Item)

  • Election integrity. Another legislative priority this session will be continued improvement of our election processes – to ensure both the integrity of the election system and voter confidence and trust in the system. As we have noted in previous updates, election issues often rise to the top following major elections and during redistricting years. (Emergency Item)

  • Other major priorities. The Governor will also mention several other major priorities … including the importance of balancing the budget without raising taxes; cutting regulations on small businesses to jump start the economic recovery; continued protection of First and Second Amendment rights; job training and skills for Texans to ensure Texans fill Texas job growth; border security; and protecting unborn life.

The Governor will declare several emergency items. As is typical for the State of the State, the Governor will declare several emergency items. We have noted the topics above that we believe are most likely to be declared emergency items. A quick Texas civics lesson … an emergency item is simply anything the Governor deems important enough to prioritize during the coming legislative session. By designating the item as an emergency, members are permitted to decide to vote on those items earlier in the session than they are normally permitted to do by the Constitution. Of course, they should also be viewed as a use of the Governor’s bully pulpit.

Here’s an update as we head into Week 3 …

Both chambers release initial draft budgets. Both the Senate and the House released very similar budgets. Both budgets are over the revenue estimate provided by Comptroller Glenn Hegar by nearly $7 billion. Both budgets will have to move through committee hearings and floor debates before being reconciled in conference committee, so there will be ample opportunity to debate how the state will address the $7 billion spending gap.

  • The State must have a balanced budget. Because the Comptroller is required to certify a balanced budget, lawmakers must either find cuts or utilize other tools to reduce spending, tap the state’s Rainy Day Fund, or as is sometimes the case, the Comptroller may revise his revenue estimate upward.

  • The budgets maintain key spending and tax cuts. Notably both chambers were quick to point out that the budget drafts released last week maintain the increased public education spending committed last session in HB 3, as well as related $1 billion in property tax compression. The combined amount of these two items represents about $4 billion of the $7 billion spending gap.

  • The $7 billion gap may be a telegraph to leaders in Washington as they consider another round of stimulus. The President’s newest proposal would provide nearly $350 billion in aid to state and local governments, more than double what was provided in the CARES Act. Under the CARES Act, which provided a total of $150 billion for state and local governments, the state of Texas received nearly $8 billion.

Governor Abbott held roundtable discussions of legislative priorities. In two separate events last week, Governor Abbott hosted roundtable discussions to discuss his legislative priorities. During a visit to a Houston hospital, the Governor discussed his healthcare priorities which included the continued response to COVID-19, and especially vaccine distribution and a renewed emphasis on advancing telehealth. The Governor also signaled an emphasis on mental health and plans to ensure the ongoing availability of personal protective equipment (PPE). Later in the week, the Governor unveiled Texas’ Homeland Security Strategic Plan, and discussed specific proposals such as bail reform, which would make it harder for offenders with a violent history, and potential legislative measures to freeze property taxes to disincentivize cities from defunding police departments.

What to expect this week …

  • Expect another light week. The House and Senate both return to Austin this week on Tuesday, but neither chamber has anything substantive up for consideration.

  • The Senate Committee on Redistricting has scheduled a series of meetings over the coming week.

  • House Committee preference cards are due at the end of this week. We believe the most aggressive schedule would provide for committee assignments to be announced at the end of next week, but potentially (and maybe even more likely) later than that.

  • It will be a quiet week inside the Capitol … although maybe not so quiet outside. Both the House and the Senate adjourned last week until the afternoon of Tuesday, January 26, deferring any business at all this week. There are likely two reasons for the long pause … the planned protests during inauguration week and the still elevated COVID-19 cases; one legislator tested positive at the end of last week. Some members have opted to self-quarantine for 10-days following the positive test of their colleague.

  • Both chambers pass updated rules packages; changes to deal with COVID-19 pandemic. Both chambers passed rules packages with the biggest changes outlining protocols in light of the ongoing pandemic. The Texas House will require members to wear masks on the floor unless speaking at the front or back microphone, but are not requiring members or visitors to be tested. Each office will decide whether to see un-tested visitors. The Senate is not requiring masks at individual desks, but is requiring members and guests alike to test in order to enter the chamber or a committee meeting. The House is also allowing some invited virtual testimony, but uninvited testimony from the public will not have a virtual option.

  • The Texas Senate votes to soften its supermajority requirement to bring a bill to the floor. As noted last week, the Senate did consider whether to soften its traditional supermajority requirement to bring a bill to the floor and opted to do so. The threshold to bring bills to the floor moves from 19 Senators to 18 Senators … the number of current GOP Senators.

  • The Lt. Governor issues committee assignments. At the end of the week, Lt. Governor Patrick gave committee assignments. Those assignments can be found here.

What to watch …

  • Governor Abbott travels to Houston for a roundtable discussion and press conference at Houston Methodist hospital midday on Tuesday, January 19, and will discuss legislative priorities for this session, likely related to healthcare. We expect more such travel around the state in the lead-up to the Governor’s state of the state.

Prevailing political winds …


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