Bill Hammond, CEO of the Texas Association of Business, brought his 2015 Jobs Agenda to the Austin Club sharing the association’s legislative preview and priorities for 2015 in an event sponsored by Texas Mutual Insurance.
Roads & Infrastructure
Hammond began by addressing needs related to Texas’ infrastructure, stating that the TAB was seeking a total of $5 billion to improve roads based on the Texas Department of Transportation estimates for construction, maintenance and repair. The $5 billion includes $3 billion to expand the system, $1 billion to maintain current highways and another $1 billion for roads in the shale fields.
Texas Proposition One, the state constitutional amendment which recently passed with 80 percent of Texas voters approving the $1.7 billion for roads, Hammond said simply isn’t enough. “We’d like to end the non-constitutional diversion of the gas tax,” Hammond said. Doing so would increase money for road projects by $700 million per year. If half of the motor vehicle sales tax was added, Hammond calculates that would up the ante to $2.3 billion a year and get past the halfway point to $5 billion.
Cutting the Ties to the State for Texas Mutual
In 1991, the Legislature created Texas Mutual Insurance as the insurer of last resort for workers’ compensation policies. Hammond wants to see Texas Mutual take the final step to cut ties to the state, be regulated by the Texas Department of Insurance, and pay federal taxes.
With their current structure, Texas Mutual cannot sell policies to insure workers outside of Texas. As a result, if a Texas company operates in Oklahoma, Texas Mutual cannot insure the Oklahoma employees for workers’ compensation insurance. Hammond said, “Government should be less involved in private business, and allow insurance companies to sell policies to Texas companies that do business outside of the state.”
If Texas Mutual were freed, Hammond said, “Doing so will create even more jobs for Texans if these companies are allowed to grow beyond the state’s borders.”
A Move to Outcome-Based School Funding
Hammond largely focused on the state of higher education where he emphasized major change in graduation rates is crucial. While the number of people attending college may be increasing, Hammond said graduation rates are lacking, citing that just 26 percent of UTSA students graduate within six years.
“That’s not OK because you as a taxpayer are paying for their education,” Hammond said. “It’s not OK for their parents who are paying for their education, either.”
To increase graduates rates, Hammond proposed making 10 percent of the funding that goes to four-year schools contingent on outcomes. Hammond wants to hold higher education accountable and the way to do that is to tie funding to graduation rates.
“If we increase their productivity by 5 or 6 percent, we’ll go a long way to meeting the needs of employers in the 21st century,” Hammond said. “If we don’t, we won’t be competitive.”
Meanwhile, 65 percent of jobs created today require at least some kind of post-secondary education, creating a troublesome situation for Texas businesses looking to hire Texas graduates.
The Growing Need for Medical Workers
Texas needs more medical workers, including doctors and nurses. But Hammond stated that Texas does not have enough residencies available for all of the doctors who graduate from Texas medical schools. This leads medical school graduates out of the state, where many of them remain, leaving Texas even more in need. “That’s the definition of crazy,” said Hammond, “we pay for their medical school, then they leave Texas for their residency in some other state and stay there to practice medicine.”
To change this discrepancy, the TAB is seeking an additional $40 million to provide more residencies in Texas.
“If we had enough residencies, not only would we keep our doctors, we’d also attract people from other states, and then they will stay in Texas,” Hammond said.
Besides medical doctors, Texas needs nurses. Hammond said the TAB is asking for $20 million to fund training for APRNs, to help boost patient satisfaction and doctor performance at a lower cost.
Speeding the Environmental Permitting Process
Air and water permitting in Texas is convoluted, Hammond said, and it can take businesses years to get needed permits. These extensive delays could turn off companies looking to invest in Texas. Hammond said his hope is that Texas will reform its permitting methods to be more in line with other states that avoid the “consented case” process, which is where delays often occur.
“We’d also like to limit the number of people who can comment [on a permit] and require that they have to be directly affected by the process before they can comment,” Hammond said.
The Future of the Emerging Technology Fund
When asked what he thought was in store for the ETF, Hammond replied that he believes the fund is in trouble. Of all the incentive funds, he thinks it’s the least likely to be reenacted in 2015.
“Texas is very limited in terms of the incentives we offer to entice businesses to come here,” Hammond said. “It’s very important to maintain these incentives, and while we may not beat another state, we have to recognize this is a competition.”
Hammond closed by reminding attendees that if they want change, they need to engage their legislators.
Disclosure: Texas Mutual Insurance is a corporate sponsor of Texas CEO Magazine.