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  #1  
Old 10-11-2013, 04:13 PM
Irishman Irishman is online now
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Texas Constitutional Amendment Prop 6

The third in the series, Prop 6, labeled SJR 1. I have to confess that this one I cannot make heads or tails of. The legalese is tripping me up, and I'm just not sure what it means. This is also the most controversial of the proposals, so I would like to understand it.

SJR 1 would create a State Water Implementation Fund as a special fund inside the state treasury and outside the General Revenue Fund. Money in the fund would be administered by the Texas Water Development Board and would be used to implement the state water plan, as adopted by general law, by TWDB.

The proposed amendment would read on the ballot:

Quote:
The constitutional amendment providing for the creation of the State Water Implementation Fund for Texas and the State Water Implementation Revenue Fund for Texas to assist in financing of priority projects in the state water plan to ensure the availability of adequate water resources.
That doesn't sound that complicated, but the devil is in the details. I'm trying to read the summaries and analysis linked above, but I get lost in all the details about general obligation bonds and bond enhancements and related credit agreements.

As I understand the proposal, the existing Texas Water Development Board is charged with overseeing a plan to ensure Texas has adequate water resources for the future. Given the existing statewide drought that has been ongoing for a couple of years and projected water use for the growing population, the Board has a challenge to ensure that projects are created to protect the necessary water supplies.

This proposal authorizes the creation of two new funds under the authority of this Board. These funds would be separate from the General Funds, and thus would gain some legal advantages for the State. The proposal also would take money from the Rainy Day Fund and transfer it as seed money to the funds. This would be considered taking money previously intended for these activities and putting it under the Board's controls.

Opponents of the proposition argue the rainy day fund should not be used to create the two new funds, and that any new funds should come from general funds. They think taking money from the rainy day fund will affect the state's credit rating, as well as reduce resources for a potential future emergency (like a hurricane). They argue doing so is an accounting trick to avoid a constitutional limit on spending. They also argue the funds are unnecessary, as there already exit two dedicated water development funds and several financial assistance programs for water infrastructure administered by the Board.

Unfortunately, both sides just blindly claim it will or will not affect the state's credit rating. There is no justification for either position.

Also, what is the need for these new funds? Are there existing funds? If so, how do these new funds differ, what would they allow that isn't already possible?

Like I said, the nuts and bolts of the proposal are making my eyes glaze over without making sense to me (just what the funds are doing, how they get the money, etc). Something about issuing bonds and ensuring they have funds to cover the bonds. At this point I don't understand enough to support the proposition, but I would like to try.
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  #2  
Old 10-13-2013, 10:20 PM
dropzone dropzone is offline
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Texas needs constitutional amendments for all this shit? Why do they elect a legislature?
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  #3  
Old 10-13-2013, 10:50 PM
Little Nemo Little Nemo is offline
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Quote:
Originally Posted by dropzone View Post
Texas needs constitutional amendments for all this shit? Why do they elect a legislature?
I can think of two reasons and they're both related to corruption. If the proposed amendment is honest it may be a means to create a dedicated fund for important water projects so the money can't be re-routed to somebody's pocket.

Or maybe the amendment is designed for corruption. Maybe people are trying to create the special fund so they can raid it without legislative oversight and put the money in their pockets.
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  #4  
Old 10-14-2013, 08:14 AM
Drum God Drum God is offline
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Quote:
Originally Posted by dropzone View Post
Texas needs constitutional amendments for all this shit? Why do they elect a legislature?
The Texas Constitution is filled with stuff that would be better handled by statute. We believe in "Independence", remember? Power to the people. The Governor is constitutionally very weak. That's why I laugh when people cite George W. Bush's or Rick Perry's experience as Governor as being a qualification for President. Perry has a lot of power only because he has been Governor for so long that every person on every board and commission was appointed by him. Everyone in state government owes him favors. Bush did not have that.

If history is any guide, Little Nemo's second proposition is likely correct. Raiding this new fund will be completely legal.
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  #5  
Old 10-14-2013, 09:27 AM
Zakalwe Zakalwe is offline
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It's not entirely dispositive, but in cases like this I fall back on this question:

Who's for it and who's agin it?

That will generally tell you what the ultimate purpose is. For example, in this case, I would look at Sierra Fund (or similar), Rancher's Association(s), Land Developers Association(s), etc. Depending on which of those sides you agree with generally, you'll have at least some guidance on how to vote.

It ain't perfect, but sometimes it's the best I can do with limited time.
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  #6  
Old 10-18-2013, 11:21 AM
Irishman Irishman is online now
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Quote:
Originally Posted by dropzone View Post
Texas needs constitutional amendments for all this shit? Why do they elect a legislature?
Texas has a very tightly controlled Constitution. Looking online at the Taxation and Revenue section, I see the following:

Quote:
Sec. 7. BORROWING, WITHHOLDING, OR DIVERTING SPECIAL FUNDS. The Legislature shall not have power to borrow, or in any manner divert from its purpose, any special fund that may, or ought to, come into the Treasury; and shall make it penal for any person or persons to borrow, withhold or in any manner to divert from its purpose any special fund, or any part thereof.
There is apparently a long section about the Texas Water Development Board here.
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  #7  
Old 10-18-2013, 11:22 AM
Irishman Irishman is online now
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Quote:
Originally Posted by Zakalwe View Post
It's not entirely dispositive, but in cases like this I fall back on this question:

Who's for it and who's agin it?
That is one of the things I am endeavoring to determine.
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  #8  
Old 10-18-2013, 12:20 PM
Bridget Burke Bridget Burke is offline
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When we studied Texas Politics in Jr High, we learned that our Constitution sucked. Well, the teacher didn't use that word--but it's hardly a masterpiece in political thought. Amendments are common--one of the reasons our polling places offer ballots in several languages. Unless you're quite elderly, knowing English is a requirement for citizenship--but those propositions are not easy even in your "native" language.

The Burnt Orange Report, known to be run by Texas Liberals, is in favor of Prop 8.

Quote:
Texas has a crisis in water infrastructure. Our development of water projects has not kept pace with our population growth. While we believe that the Legislature should be responsible enough to pay for such urgent infrastructure out of the general fund, in the meantime we must make sure our water projects get funded and urge voters to cast a ballot FOR proposition 6.

Proposition 6 creates two new water funds: the State Water Implementation Fund for Texas (SWIFT) and the State Water Implementation Revenue Fund for Texas (SWIRFT). Should Proposition 6 pass, $2 billion from the Economic Stabilization Fund (aka the Rainy Day Fund) will be placed once and only one in the SWIFT to provide financing for State Water Plan projects.

Texas must act now to invest in water infrastructure, or else we may not have enough water to meet the needs of our state. Several towns and smaller jurisdictions are already close to running out of water, and the situation is already more dire than most Texans realize. The best first step to addressing this crisis is voting FOR Proposition 6 on this year's ballot.
The Lege meets every 2 years & the Republican members are too busy being TeaPartier Than Thou to pass the laws actually needed by the State of Texas....

Last edited by Bridget Burke; 10-18-2013 at 12:20 PM..
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  #9  
Old 10-18-2013, 04:12 PM
Irishman Irishman is online now
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While I don't particularly agree with this woman's opinions or methodology, this site has the most in depth analysis I have found.

Quote:
• 2011 – Texas voters passed Prop 2, with a narrow 1.5% margin, which authorized the Texas Water Development Board (TWDB) to issue general obligation bonds as long as the total amount did not exceed $6 billion at any time. That money has barely been touched.
Quote:
1.) Is it “constitutional”?
(Supports the constitutional republic)
Fail – The voters do not understand the funding mechanisms for water, nor that the $6 billion that taxpayers approved 2 years ago has barely been tapped to date.

2.) Is there a need?
(Do all the People have a need and benefit for the proposed government intervention?)
Fail – Funding is the purpose of Prop 6. All the people do not need funding. The problem with water availability is the permitting process, not funding.

3.) Affordability?
(Can the People afford it?)
Fail – If funding is the purpose of Prop 6, the Water Development Board currently oversees many funding mechanisms that most communities have current access to. If funding mechanisms are already available, why raid the Economic Stabilization Fund (aka the “rainy day” fund)? Raiding Texas’s savings account for an ongoing expenditure is unreasonable at best and fiscal dereliction of duty at worst. Texas currently has ample financing for water projects and provides the best access to capital of all government functions in Texas. Currently there are over a dozen constitutionally dedicated accounts and funding mechanisms for water development that are accessible by most communities in Texas. The problem with water development is not the funding but in the slow permitting process.
So the Board already has access to 6 Billion dollars in annual debt limit and is not spending anywhere that amount. Why do they need another $2B? If the problem is the permitting process, how does the creation of these new funds address the problem?

Looking at wikipedia, the reason Texas's Constitution requires so much tinkering appears to be it lacks a "Necessary and Proper" clause, so everything has to be spelled out to be allowed. Essentially, more power reserved to the people vs given to the elected officials to determine for us.
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  #10  
Old 10-18-2013, 07:57 PM
Bridget Burke Bridget Burke is offline
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So, the purpose of all your questioning is to recommend a Tea Party source. I notice you ignored my link.

Thanks for your concern....

Last edited by Bridget Burke; 10-18-2013 at 07:58 PM..
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  #11  
Old 10-19-2013, 05:16 AM
pravnik pravnik is offline
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It's worth mentioning that Prop 6 has strong bipartisan support. When Rick Perry and Wendy Davis are on the same side of an issue we should probably take notice.
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  #12  
Old 10-22-2013, 05:29 PM
Irishman Irishman is online now
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Quote:
Originally Posted by Bridget Burke View Post
So, the purpose of all your questioning is to recommend a Tea Party source.
You seem to be impugning my sincerity. I assure you, I'm not a Tea Party member. Hell, I'm mostly liberal when it comes down to it. I already mentioned that I don't agree with that lady's methodology for her determinations or many of her conclusions. But at least that page had actual information, which is what I'm seeking.

Quote:
I notice you ignored my link.
I did not ignore your link, I read it. Tell me where it explains anything about current budget allocations to the water problem. Show me where it justifies the new expenditures. I see it telling me that we have a water problem, but nothing to justify the claim that funding is currently an issue. At least that Tea Party site talks about the existing $6M that is slated for this Board's control to spend on water development projects. Sure, it claims the money is not being spent, and I'd like more support for that statement, and it claims the problem is not a shortage of funding but rather permitting. But like I said, it has given me the most actual information.

The point is I do not understand the proposed amendment, it's need, or the method of execution. Somebody make the case why this solution makes sense.

I know there's a water problem, but how does this proposed fix address the problem versus what is currently available for the board to spend?


Quote:
Originally Posted by pravnik View Post
It's worth mentioning that Prop 6 has strong bipartisan support. When Rick Perry and Wendy Davis are on the same side of an issue we should probably take notice.
All well and good, but nobody has explained it well enough to me to understand, so I'll probably vote against it.
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  #13  
Old 10-23-2013, 08:23 AM
Ca3799 Ca3799 is offline
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The League of Women Voter's Guide has a short explanation of the amendments here: http://lwvhouston.org/wp-content/upl...nglish-WEB.pdf

Last edited by Ca3799; 10-23-2013 at 08:24 AM..
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Old 10-23-2013, 12:07 PM
Tully Mars Tully Mars is offline
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When there are a bunch of propositions on the ballot in an off-year election in Texas, it's a fairly safe bet someone is trying to sneak someting past the voters because of the low voter turnout in off years. So, if you want to vote and don't have time to deeply research it, the safe thing to do is, "JUST SAY NO!".

Texas (and the rest to the country) has a serious water problem that will only get worse. I don't see anything in Prop 6 that fixes that. What I read into it, in all my glorious cynicism, is it's opening a loophole in the current water development funding to channel money into private developers' pockets.
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Old 10-23-2013, 02:07 PM
Irishman Irishman is online now
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Quote:
Originally Posted by Ca3799 View Post
The League of Women Voter's Guide has a short explanation of the amendments here: http://lwvhouston.org/wp-content/upl...nglish-WEB.pdf
Thank you. I read that, too. That has some useful information. There are still aspects I don't understand, but that explanation tries to give context on the funding and not brush over elements to fit an agenda.

Quote:
The Texas Water Development Board (TWDB) develops a state water plan [snip]. Existing state funding relies primarily on issuance of general obligation bonds, legislative appropriations, and federal grants that finance loans to local and regional water suppliers. In November 2011, voters approved a constitutional amendment that authorized the TWDB to issue additional general obligation bonds not to exceed $6 billion at any time. Proposition 6 establishes two funds to finance water plan projects: the State Water Implementation Fund for Texas (SWIFT) and the State Water Implementation Revenue Fund for Texas (SWIRFT). The two funds would receive financial resources for water projects, including revenue authorized by the state legislature, investment earnings and interest, and proceeds from the sale of bonds. The two funds would be part of the state treasury but outside the general revenue fund, a constitutional requirement to give the legislature control over disbursements.

Under Proposition 6, TWDB would have the power to enter into bond enhancment agreements to make bonds more attractive to purchasers. If the legislature provides authorization and the Legislative Budget Board (LBB) approves, TWDB would have the authority to issue bonds and related credit agreements and to make direct loans for water projects in the state water plan. Repayment of loans would provide a revolving cash flow for additional loans.

HB 1025 authorizes the transfer of $2 billion from the economic stabilization fund, commonly known as the Rainy Day Fund, if the amendment passes. Money in the fund would be available to provide support for low-interest loans, longer repayment terms for loans, incremental repurchase terms for projects in which the state owns an interest, and deferral of loan payments. The enabling legislation for the proposed amendment, HB 4, prescribes how the funds are to be invested and how they may be apportioned within the state water plan. [snip]
Part of the reason for the proposed new funds appears to be to give the legislature freedom over "disbursements" that they do not have under the general revenue fund. What freedom does that entail?

They list several methods of making bonds more attractive: supporting low-interest loans, making longer repayment terms, incremental repurchase, and deferral of loan payments. I'm not sure what those specifically entail. Is that basically lending money to the project owners to finance paying back other loans/bonds they have created?

E.g. local community needs to build a dam. They want to issue bonds to cover the cost, but don't wish to raise their taxes high enough to pay those bonds back in the standard 10 year time frame (or whatever). The TWDB would allow that community to issue those bonds to build the dam, but essentially borrow money from TWDB to pay those bondholders back and then assess a lower tax rate to recoup that cost over a longer time frame, such as 50 years. Is that what they're talking about?

If so, is the problem with the existing funds in the Texas general revenue fund that the legislature does not have authority under the Constitution to do those kinds of lending? The reason for the creation of the two new funds is to place those funds into the Constitutional loophole of dedicated funds outside the general revenue fund? By doing so, it grants the legislature the freedom to do those lending programs?

The $2 billion would be seed money for investing, and repayments from those loans could be investing in other projects. The $6 billion available under the general revenue fund cannot be transferred to that account because the Constitution strictly controls the general revenue fund. That $6 billion is available debt obligation but must be paid by existing revenue streams (i.e. taxes).

Does that sound like I'm on the right track?

Quote:
Originally Posted by Tully Mars View Post
When there are a bunch of propositions on the ballot in an off-year election in Texas, it's a fairly safe bet someone is trying to sneak someting past the voters because of the low voter turnout in off years.
It has been pointed out that there is another big proposition that wants to take money from the Rainy Day Fund that has been postponed one year so they don't take two hits on the Rainy Day Fund at one time.

Quote:
So, if you want to vote and don't have time to deeply research it, the safe thing to do is, "JUST SAY NO!".
Well yes, but I'm trying to do a modicum of research.
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Old 10-23-2013, 02:26 PM
Irishman Irishman is online now
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Originally Posted by dropzone View Post
Texas needs constitutional amendments for all this shit? Why do they elect a legislature?
To do such productive activities as define marriage to preclude gays, and limit abortions and abortion providers.
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  #17  
Old 10-25-2013, 07:04 PM
Really Not All That Bright Really Not All That Bright is offline
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Plus there has to be someone to declare things the State Thingy. You know, State Migratory Bird, State Miley Cyrus song, and so on.
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Old 10-25-2013, 08:35 PM
Zakalwe Zakalwe is offline
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Originally Posted by Really Not All That Bright View Post
State Miley Cyrus song
Gotta be Wrecking Ball, right?

Last edited by Zakalwe; 10-25-2013 at 08:35 PM..
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Old 10-29-2013, 03:10 PM
Irishman Irishman is online now
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This article has a collection of links on both sides of the topic. Unfortunately, the only articles I see even discussing the existing $6B funding are from DallasNews and are defunct links, and I keep getting a forced pop up trying to get me to sign in.

The best explanation for why we supposedly need this new proposition is to allow the $2B so the legislature can lend this money out to other providers at lower rates than banks would. They claim it would help small communities, but the list of Prop 6 supporters is a lot of big industry providers like real estate and petro-chem companies. The enabling legislation nominally guides some of the funding to conservation efforts, but the wording on those elements are wishy-washy.

The TWDB has apparently been "streamlined" by appointing Rick Perry cronies, and the true beneficiaries are suspected to be industries wishing to siphon water from rural areas rather than any true efforts at improving the water situation.

Digging around, I'm getting the feeling this is a poor plan. There are better ways to address the real causes of water shortage, including:

1. Mandating industries improve their water efficiency.
2. Updating leaky water pipelines.
3. Possibly address the issue of water used in fracking. It is wasteful and removes water from the water cycle by locking it into bedrock.

Since nobody from the supporting side wants to address the available $6B, I feel like the point of this legislation is to bypass Constitutional protections and support cronyism.

FWIW, I'm not particularly concerned over the topic of taking from the Rainy Day Fund. I think the situation is crucial enough and the Rainy Day Fund healthy enough that if the rest of the plan were justified, I would be okay with the one-time raid for this project. I'm just not convinced it is necessary or that it is the best approach to solving the water crisis.
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