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Friday, January 15, 2021

Analysis: The odds for legal pot and casinos in Texas just got worse

Posted By on Fri, Jan 15, 2021 at 9:50 AM

MICHAEL FISCHER / PIXELS
  • Michael Fischer / Pixels
If and when you go looking for the killer of legislation to bring marijuana or casinos to the state of Texas in 2021, consider the evidence against Texas Comptroller Glenn Hegar.

The comptroller didn’t kill anything outright, and the killings weren’t intentional. He wasn’t campaigning against either pot or wagering. He hasn’t taken a loud position on either one; that’s a legislative concern, and he’s not a legislator any more.

But his unexpectedly optimistic official forecast of the state’s fiscal future all but erased any urgency for new state revenues to make the next budget balance. And that urgency — or the perception of it — is the only thing that ever gets our conservative Legislature over the hump on controversial money-making schemes.

It’s how Texas created the lottery, and how it legalized bingo and pari-mutuel wagering on dog and horse races. The need for money, combined with officeholders’ congenital allergies to new taxes, overcame their historical opposition to gambling.

Some of the folks promoting casinos and marijuana sales in Texas were hoping the recession triggered by the pandemic would open legislative minds to the possibility of new ways to raise money without angering taxpayers. They’re working hard. One example: 25 lobbyists have registered with the Texas Ethics Commission to represent Las Vegas Sands in its quest to legalize casinos in the state.

Hegar’s forecast turned that into a hard sell.

One way to make Texas legislators do something they don’t want to do is to give them an alternative that’s even worse.

They carp about increases in state spending, for instance, but they consistently vote for bigger budgets because the alternative — cutting programs their voters demand — is even more unpopular.

Who wants to get fired?

Months ago, it appeared the Texas Legislature would be in a fiscal vise during the session that started this week. State officials were talking about a big deficit in the current budget that runs through the end of August, and a shortage of money for the two-year budget that follows — the budget they’ll be writing during this session.

That sent them to begin consideration of an unwritten tight-budget checklist familiar to state officials and anyone who’s watched them for long.
  • Reexamining current spending and cutting the easy stuff comes first, but it doesn’t produce much money. Those things are in the budget because somebody wanted them there.
  • Polishing up the accounting tricks that balance a budget without spending money or raising taxes. An example: Delaying a $1 billion payment from the last day of the current budget reduces spending by that amount — for this budget. Paying it the next day adds $1 billion to the next budget, creating a problem that doesn’t have to be solved for a year or two. Hold your nose if you want, but it’s free and doesn’t interrupt services or disturb tax rates.
  • Raising taxes that either don’t matter to most voters — this makes certain industries and businesses very nervous — or that voters seem to control with their own behavior. It’s hard to avoid sales taxes, and most people pay them; an increase would be politically painful. But people don’t have to play the lottery, or smoke cigarettes or — in the current conversation, go to casinos or consume marijuana. Those are generally referred to as “sin” taxes, but in political terms, taxes on fun and games are considered voluntary, and safer than their mandatory kin.
  • What’s last? Cutting popular programs. The biggest items in the budget, by far, are education and health and human services. You know the state faces a terrible financial strain when those programs are cut. Even proposals for the dreaded new or higher taxes are often preferred.

Hegar’s biennial revenue estimate was welcome news to the lawmakers who will write the budget. The COVID-19-induced recession didn’t put Texas in dire straits after all.

It’s not a perfect fiscal photo. They have to find $1 billion to trim from the current budget, but that’s not really much in the face of a $250 billion budget. And they won’t have more money in the next budget cycle than they had in this one, which means they’ll have to do some magic tricks to cover increased costs of population growth and inflation.

But it also means they won’t be desperate.

Necessity is the mother of invention — and new taxes, too. But Mother Necessity has called off this year’s visit to Austin.

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