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The Real Texas Challenge: Human & Resource Infrastructure Crisis.

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Presentation on theme: "The Real Texas Challenge: Human & Resource Infrastructure Crisis."— Presentation transcript:

1 The Real Texas Challenge: Human & Resource Infrastructure Crisis

2 Pd. Pol. Adv. by One Texas PAC, 130 E. Travis Street, Suite 425, San Antonio, Texas, One Texas is driven by: 1)Demographic shift of Texas 2)Need to elect a new class of Latino Leaders 3)Ensure our leaders are focused on: Making Hard Choices Smart Investments And asking Texans to share in the sacrifices

3 Future of Texas: k-12 Demographics What are the Anglo & Latino population percentages of Houston ISD? What are the Anglo & Latino population percentages of Dallas ISD? What are the Anglo & Latino population percentages of San Antonio ISD? Statewide in all ISDs?

4 HISD k-12 Demographic What are the Anglo & Latino population percentages of Houston ISD? Anglo: 8% Latino: 62%

5 What are the Anglo & Latino population percentages of Dallas ISD? Anglo: 4% Latino: 69% DISD k-12 Demographic

6 SAISD k-12 Demographic What are the Anglo & Latino population percentages of San Antonio ISD? Anglo: 2% Latino: 91%

7 Statewide k-12 Demographic Statewide in all ISDs? Anglo: 30.5% Latino: 51% 3.5 million Minority children out of 5.0 million, nearly 70%

8 Notable ISDs Latino majority in a matter of 2-3years: Tyler ISD 43% Amarillo ISD 44% Galveston ISD 46%

9 What Does the Future hold? 62.4% of today’s public school students K-12 are low income 2,976,311 children on free or reduced lunch In , it was 52.5 percent : 1,974,319 children in the free and reduced lunch program 1.0 million more children in 12 years. Trend line suggests it will only get worse. Source: Kids Count Database available at

10 Rapid Demographic Change: Bottom line Between 1995 and : 229,763 fewer white students 1,144,114 more Hispanic children Texas Public School Demographics 1995 to 2012 Source: Texas Education Agency

11 Demographic Change Million new Texans 89.1% of new Texans are Minorities, fully million people 65% of the population growth in the last decade is Latino or million new Latinos just in the last decade 1 million new children added to Texas from , 95% of them are Latino. 9,460,921 Latinos in Texas, nearly 38% of the population 2010 CENSUS

12 Classroom Comparison 2000 v Source: “The Population of Texas: Historical Patterns and Future Trends Affecting Education”, Steve Murdock, p. 40

13 Yet, these Latino students will only make up a plurality of college students Source: “The Population of Texas: Historical Patterns and Future Trends Affecting Education”, Steve Murdock, p. 42

14 By 2040, Latinos will be driving the Texas Economy Source: “The Population of Texas: Historical Patterns and Future Trends Affecting Education”, Steve Murdock, p. 45

15 Growing & Declining Implication: A Texas economy that will be weaker, less educated, and poorer. Source: “The Population of Texas: Historical Patterns and Future Trends Affecting Education”, Steve Murdock, p. 49

16 A less healthy Texas The right thing to do: Texas is the uninsured capital of the United States. More than 6.23 million Texans - including 1.2 million children - lack health insurance. Return on Investment (ROI): If Texas chooses to expand Medicaid to adults, the Federal Government will provide Texas $100 billion over the next ten years to fund the growth of the program. This expansion would only cost Texas $15 billion. This is an ROI of 567%. Jobs, Jobs, Jobs: Medicaid expansion would generate 231,100 jobs by 2016, the first year of full implementation. Many of these jobs would be in health care, an industry that pays well and provides good job security and benefits, including health insurance, and wages would average $50,818 during the Sources: ; ; "Smart, Affordable and Fair: Why Texas Should Extend Medicaid to Low-Income Adults", Commissioned by Methodist Healthcare Ministries of South Texas, Inc. p. 21, proposes-a-deal-for-medicaid.htmlhttp://www.texmed.org/Uninsured_in_Texas/#whohttp://www.nytimes.com/2012/12/02/us/texas-democrats-expect-deal-on-medicaid-despite-perry.html Texas Economic Impact from Medicaid Expansion 231k New Jobs Lowers the Unemployment Rate by 1.8% $90 Billion Dollars in increased economic activity

17 Resource Infrastructure Challenges Texas faces several urgent resource and infrastructure challenges:

18 Water Policy “Pray for Rain”

19 1997 Water Plan In 1997, the State adopted a Water Plan The purpose of this plan is to ensure that our state’s cities, rural communities, farms, ranches, businesses, and industries will have enough water to meet their needs during a repeat of the drought of record. Authorizing the construction of 18 water reservoirs Allocating $2.72 Billion dollars to fund massive amounts of water infrastructure improvements. Source: Texas State Water Plan 2007, p. 213

20 The longer we wait the more we will pay Source: Texas State Water Plan 2007, p. 8 5 years10 years15 years Category2002 Water Plan2007 Water Plan2012 Water Plan Cost of Implementation $17.9 Billion$31 Billion$53 Billion Status of Completion -5%13%

21 Estimated Cost for 2012 Water Plan “…trends indicate that delays in the implementation of projects will likely result in continued cost increases…” The 2012 State Water Plan will cost $53 Billion.

22 2012 State Water Plan Stats Texas’ population is expected to increase by 82% from 2010 to 2060 (25.4 million people to 46.3 million people) Water demand is expected to increase by 22% by 2060 Existing Water Supplies will decrease by 10% by 2060 (15. 2 million acre feet) We will need to increase our water supply needs by 8.3 million acre feet by 2060 (2.7 trillion gallons) Water Supply & Demand 2010 v. 2060

23 15 Years Later & No Progress No major reservoirs built in the past twenty years Our water supply will not support our population Texas’ population will double by 2050 Unless Texas increases its water resources, 83% of the Texas population will not have adequate water supply in times of drought Source: /http://blog.chron.com/txpotomac/2011/08/analyzing-rick-perry%E2%80%99s-record-water-woes-could-cost-texas /

24 Ever been to Happy, Texas? “Happy's problem is that it has run out of water for its farms. Its population, dropping 10 per cent a year, is down to 595.”

25 Ever been to San Angelo? “…San Angelo recently came within a year of running out of water, as it faced a severe drought that produced brown lawns, dying bushes — and fear.” “…the drought in West Texas is not over... The two-year drought, the region’s worst in more than half a century, has starkly exposed its vulnerability. ” Source:

26 Energy Texas is no longer a world leader in energy production, delivery, or innovation. Will we have enough energy for our future?

27 Will we have enough energy? “Texas likes to be No. 1 at everything. But we are currently dead last when it comes to the reliability of our electrical system, according to a recent assessment by the North American Electric Reliability Corporation…”

28 ERCOT Overview RESPONSIBILITIES ERCOT has four primary responsibilities: System reliability – planning and operations Open access to transmission Retail switching process for customer choice Wholesale market settlement for electricity production and delivery. QUICK FACTS 75% of Texas land 85% of Texas load More than 40,500 miles of transmission lines 550+ generation units 68,379 MW peak demand (set August 3, 2011) Physical assets are owned by transmission providers and generators, including Municipal Utilities and Cooperatives ERCOT connections to other grids are limited to direct current (DC) ties, which allow control over flow of electricity

29 New Records at ERCOT in 2011 & 2012 New Peak Demand Record: 68,379 megawatts  68,379 megawatts (MW), August 3, 2011 ­ 4 percent increase over 2010 previous record – 65,776 MW New Weekend Record  65,159 MW, Sunday, August 28, 2011 ­ 5 percent increase over 2010 previous record – 62,320 MW Winter Peak Record  57,315 MW (February 10, 2011) ­ 3 percent increase over 2010 previous record – 55,878 MW New Peak Demands – Summer For June of 66,626 MW on June 26 th - For July of 65,835 MW on July 31 st Source: “Long-Term Resource Adequacy and Investments”, Tripp Doggett, slide 8

30 2011 Reality Check In 2011, Texas had a unusually cold winter that disabled generation due to freezing conditions. The summer was extraordinarily hot and pushed our energy system into shortages, forcing emergency actions. Meanwhile drought conditions threatened to derate or disable capacity. Source: “ERCOT Investment Incentives and Resource Adequacy”, The Brattle Group

31 What happened during Winter blackout? “On February 2, 2011, ERCOT experienced extreme cold weather, causing a record winter peak demand of 56,493 MW…” “…82 generating units representing more than 8,000 MW to go offline, or never come online…” “…record demand and unit outages caused ERCOT to shed up to 4,000 MW of load across an 8-hour period…” Source: “ERCOT Investment Incentives and Resource Adequacy”, The Brattle Group

32 Annual Energy & Peak Demand ( )

33 2014 Outlook Lack of investment in Energy generation will deplete our energy reserves margins below 10%; almost 4% down from reserve margin targets of 13.75%. Reserve margins will decline further unless new resources are added. Translation = Texas is running out of Energy to keep up with population and demand Source: “ERCOT Investment Incentives and Resource Adequacy”, The Brattle Group In a nutshell:

34 PUC Response to Resource Adequacy In July of 2012, the PUC followed some of the Brattle Group’s advice and increased the offer cap to promote investment in energy infrastructure. The PUC increased the cap from $3,000 to $4,500 (only 50% of the $9,000 offer cap modeled by Brattle) Available at:

35 One Big Storm Away from Disaster Keep in mind: the PUC only increased the offer cap to 50% of Brattle Group recommendation At double the current offer cap, the Brattle Group warns: “On average, the 10% reserve margin … would result in approximately one load-shed event per year with an expected duration of two-and-a-half hours, and thirteen such events in a year with a heat wave as severe as the one in 2011.” The Report continues: ““The year 2011 presented extreme weather conditions…These events occurred when the planning reserve margin was 14%, which suggests vulnerability if the reserve margin were to fall to the much lower projected levels.” Available at:

36 Resource Adequacy is the biggest concern Investors’ want to expect future revenues to be high enough to cover the costs of building a plant, including a return on capital commensurate with risk. Translation = We can’t make a profit that justifies the investment risk Source: “ERCOT Investment Incentives and Resource Adequacy”, The Brattle Group

37 Texas’ Energy Solution No energy plan from State Leaders No Legislative proposals No incentives, vision, or plans to address this critical issue Current proposals bring us no closer to a solution

38 Transportation Running out of time, money, and roads…

39 According to the Texas Transportation Institute, Texas will need $488 billion to meet our state’s transportation needs by Sources: ftp://ftp.dot.state.tx.us/pub/txdot-info/gpa/072809_tempo_report.pdfftp://ftp.dot.state.tx.us/pub/txdot-info/gpa/072809_tempo_report.pdf

40 For the first time in Texas history, our leaders spent more money paying debt service on existing transportation projects than on new road construction. $850 million versus $575 source: The Limits of Small Thinking: Fewer New Roads

41 Texas began borrowing for transportation projects in 2003 growing our state debt from $13.4 billion in 2001 to $40.50 billion today. Meanwhile, borrowing costs to taxpayers over the lifetime of the existing Transportation bond debt (S17.3 Billion) is $31 billion. Even with these funds, Texas is no where close to what it will need for transportation infrastructure for the next thirty years. Ballooning Debt is limiting Texas’ Future Sources: Texas Debt Affordability Study, February 2012, p. 7http://blog.chron.com/texaspolitics/2012/05/texas-progressives-trying-to-amplify-their-message/

42 Problems with Borrowing Texas pays $65 million in finance fees for every billion it borrows. “Everybody knows about California’s fiscal woes, but why isn’t anybody talking about the huge crisis looming in the Lone Star State? Is the Lone Star State a fiscal time bomb?” -The Week Source: / ; /

43 Texas’ Debt in growing faster than the National Debt “From 2001 to 2010, state debt alone grew from $13.4 billion to $37.8 billion, according to the Texas Bond Review Board. That's an increase of 281 percent. Over the same time, the national debt rose almost 234 percent, with two wars, two tax cuts and stimulus spending.” Fort Worth Star Telegram 7/13/2011

44 Jet Fuel StateExcise Tax on Jet FuelExcise Tax on Aviation Gas (Avgas)Sales Tax on Jet fuel or Avgas TexasNO ConnecticutNO Rhode IslandNO California$0.02 per gallon, plus the state sales tax $0.18/gallon, no sales taxYes, 7.25% Colorado$0.04/gallon$0.06/gallon Florida$0.069 per gallon tax$0.069/gallon Georgia$0.135/gallon Yes, 4 % Illinois6.25% sales/use tax + $0.008/ gallon sold (Environmental Impact Fee) + $0.003/ gallon (Underground Storage) 6.25% sales/use tax + $0.008/ gallon sold (Environmental Impact Fee) + $0.003/ gallon (Underground Storage) Nevada$0.01/gallon(State tax) + County tax (where applicable) $0.02/gallon + county tax New Jersey$0.06/gallon$0.145/gallon New York$0.071/gallon$0.178/gallonYes, 4% OhioNo Yes, 5% plus local sales tax rate Only three states do not tax Jet Fuel or Aviation Gas: Source: & (the above is just a partial listing as space would allow)http://www.energy.dla.mil/DLA_counsel_energy/Documents/Tax%20Documents/Tax%20compilation% pdf

45 News Editorial "The governor paid lip service to these transportation and water needs by calling for a one-time, $3.7 billion investment from the Rainy Day Fund in infrastructure programs. But such a one-time infusion doesn't begin to fund the long-term investments required to keep people and goods traveling on Texas roads and water flowing to Texas homes, businesses, farms and ranches…. In an alternate universe, it might be possible to build more roads, develop more water resources, increase the quality of education for more students and create more economic opportunities for more people while spending less money to do so. In the real world, that's the equivalent of defying the law of gravity." “Perry’s tax proposal defies reality,” San Antonio Express News – 1/29/2013 Source:

46 New Leaders, New Direction, One Texas. Pd. Pol. Adv. by One Texas PAC, 130 E. Travis Street, Suite 425, San Antonio, Texas, OneTexas.org


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