Many Texans are poor, not because they don't work, but because their work pays too little to raise a family out of poverty. To ensure economic prosperity, Texas public policy must support work, make work pay, and help families build their assets. The most important thing the state can do to enhance economic opportunity is to invest in public education—from early childhood education all the way through higher education.

Recent Economic Opportunity Publications

Update on Unemployment Assistance for Hurricane Evacuees (12/1/2005)

More than 300,000 displaced Louisiana workers (62,000 of whom are living in Texas) have been collecting jobless benefits as a result of Hurricanes Katrina and Rita, but as of November 27, the rules have changed. Now, many displaced workers living in Texas may qualify for additional assistance, including up to two extra weeks of benefits. But in order to continue collecting assistance, these workers must report their job search efforts to the Louisiana Department of Labor on a weekly basis, ending the emergency exemption previously authorized by Governor Kathleen Blanco.

Statement by F. Scott McCown on the Texas Supreme Court’s School Finance Ruling (11/22/2005)

Today, the Texas Supreme Court ruled (7 to 1) in the school finance case, holding that local school district property taxes capped at $1.50 per $100 valuation constitute a state property tax prohibited by the constitution but that public school financing does not yet violate the “general diffusion of knowledge” mandate of adequacy, efficiency, or suitability. The Court did not rule that “Robin Hood” or “recapture” is unconstitutional. The Supreme Court extended the trial court’s October 1 deadline for a legislative solution to June 1. Read the statement of retired state district judge Scott McCown, who presided over all of Texas' public school finance cases from 1990-2002.

President Suspends Wage Laws for Gulf Coast Workers (10/7/2005)

Last month, the President suspended the Davis-Bacon Act for federally contracted cleanup and reconstruction projects in counties and parishes directly affected by Hurricane Katrina. The Davis-Bacon Act"a federal law since 1931"requires federal construction contractors to pay the prevailing hourly wage for each occupation in a geographic area. The prevailing hourly wage for construction occupations averages $9.50 per hour in the affected areas of Alabama, Mississippi, and Louisiana. However, the President’s repeal of Davis-Bacon enables federal contractors to hire minimum-wage workers to rebuild the Gulf Coast.

Analysis of Sixty-Five Percent Rule in School Spending (09/27/2005)

In August, the Governor issued an executive order requiring that “65 percent of school district funds be expended for instructional purposes as defined by the National Center for Education Statistics." Requiring school districts to spend at least 65% of their operating budget on “instruction” as defined by the federal government would not enhance student achievement, would have unintended negative consequences, and would move Texas back to measuring process rather than performance.

Policy Alert: Take Action Against Payday Lenders (09/15/2005)

On August 17, the Center for Public Policy Priorities and the Gone To Texas Coalition (including TexPIRG, Texas Impact, and Texas ACORN) called on Texas’ Consumer Credit Commissioner Leslie Pettijohn to request Texas Attorney General Greg Abbott to take enforcement action against companies that violate the state’s usury laws. You can help by contacting Commissioner Pettijohn and General Abbott and urging them to take all necessary steps to prevent payday lenders from operating outside of the law.

Letter to the Consumer Credit Commissioner (09/15/2005)

Read the letter that the Center for Public Policy Priorities and other local organizations sent to the Consumer Credit Commissioner, requesting that the Attorney General take enforcement action against payday lenders for violation of the state's usury laws.

What's the Latest on the Texas Economy? (09/2/2005)

This report tells a mixed story. Over the past several months, the Texas unemployment rate has improved considerably " in July matching the national average of 5.0%. However, rising long-term unemployment and the declining labor force participation rate indicate underlying problems with the Texas labor market. More importantly, Texas workers have been experiencing wage and income stagnation over the past two decades, limiting the pace of economic growth and the ability of those individuals at or near the poverty level to work their way out of poverty. In addition, educational attainment continues to be a major factor in determining income. Texas’ high share of workers with less than a college education keeps overall wages lower than the national average.

Payday Update: Unregistered and Unregulated, Payday Lenders Put Consumers at Risk and Flout Texas Usury Laws (08/15/2005)

Since Texas lawmakers defeated HB 846"an industry-backed bill that would have tripled the interest rates on short-term “payday” loans"the Texas payday lending industry has adopted another business model to evade state and federal regulation. In July, Texas-based payday lenders regrouped as businesses operating under Texas’ Credit Service Organization Act. As a Credit Service Organization (CSO), a payday lending company dodges both federal guidelines restricting payday loans and the interest rate limits established by the Texas Finance Commission (TFC). Meanwhile, a recent TFC study demonstrates how Texas consumers are being gouged by these high-cost, short-term loans.

The Performance of Public Education in Texas (07/30/2005)

A presentation Scott McCown delivered about the performance of public education in Texas.

Call to Action on School Finance (07/20/2005)

F. Scott McCown's Open Letter to the 79th Legislature urges members to vote "NO" on HB 2, the pending school finance legislation. Make your voice heard. Urge your representative and senator to vote NO.

Learning to Share; Justices Could Ensure Texas Children Get More Than Crumbs: Austin American-Statesman (07/7/2005)

If you have two boys, one big and one small, and you give the big boy a cookie and ask him to share, the little boy will get crumbs. And as long as the big boys are allowed to "share" this way, they won't throw in their nickels to buy a big enough cookie for all of the kids. When it comes to school finance, Texas needs a really big cookie.

Who Needs a Raise More: Tom DeLay or a Bus Boy?: Austin American-Statesman (07/6/2005)

Last week, the U.S. House gave itself a pay raise for the seventh time in as many years. But the House leadership refused to acknowledge that $3,100 more a year can be called a pay raise"they called it “an adjustment” in earnings. Since 1998, the House has raised its annual member salary by $31,600"a 23.7 percent cumulative increase to $165,200 per year. During these same years, the federal minimum wage has been stuck at $5.15 an hour"the second longest period of stagnation since its inception in 1938.

Foggy Business Climate Studies (06/30/2005)

Texas ranks relatively high on several “business climate” indices that compare state policies and outcomes related to economic growth and vitality. Texas’ low business taxes are often claimed to be a magnet for relocating businesses and a catalyst for interstate competitiveness and survival of existing firms. But in a new book, Grading Places: What do the Business Climate Rankings Really Tell Us? (, author Peter Fisher finds that these indices are neither useful for companies in selecting sites nor for state policymakers in gauging economic competitiveness.

Study: Major Business Rankings Not Accurate Measure of TX's Business Climate (06/29/2005)

Texas prides itself on being a good for business state, but what’s its business climate really like?

How to Judge What's Proposed in the Special Session (06/23/2005)

In the current special session the Legislature could make significant changes to the state’s revenue system, as well as to the school-finance system. The tax system established in a special session could determine the size of state budgets for the next ten years or more. Both tax and school finance proposals can be judged by the same criteria " equity, adequacy, and sustainability. This Policy Page will compare HB 3, the tax bill filed in the House for the special session, the version of the tax bill that the Senate passed during the regular session, the proposal by Governor Perry, and HB 15, an alternative school finance bill filed by Rep. Hochberg for the special session.

Houston KIDS COUNT Conference on Children Powerpoint Presentations (06/15/2005)

The following presentations were given at the Houston KIDS COUNT Conference on Children, a half-day conference on children's issues in the wake of the 79th Legislative Session.

HB 2421: Job Creation and Closing the Skills Gap (05/27/2005)

HB 2421 represents one of the most significant pieces of legislation concerning economic development considered by the 79th Legislature. We urge the conferees to generate enough job training dollars to move the Texas economy forward and improve the state’s business climate. A highly skilled workforce drives a company’s relocation or expansion more than a one-time cash grant.

Adequate Funding for Workforce Development on the Line (05/27/2005)

The Senate floor amendment to HB 2421 has flipped the tables, giving the lion’s share of a proposed employer investment assessment tax to the Enterprise Fund. Whereas the engrossed version of HB 2421 would quadruple training opportunities for Texas workers, the Senate amendment would slash Skills Development Fund allocations by 70%, and shortchange the needs of employers and workers trying to compete in the global marketplace.

House Skills Development Bill Quadruples Training Opportunities for Texas Workers (05/16/2005)

HB 2421 (Chavez) would create a larger and more stable source of funding for the Skills Development Fund (SDF)"Texas’ primary state-funded workforce development program. For the past several years, the Skills Development Fund, administered by the Texas Workforce Commission (TWC), has been hampered by relatively flat General Revenue funding at approximately $25 million per biennium. By dedicating a portion of unemployment insurance tax paid by employers, HB 2421 would generate $49.3 million for the Skills Development Fund for Fiscal Year 2007 grants. In contrast, SB 1096 would dedicate the vast majority of these unemployment insurance revenues to the Enterprise Fund"a program that promotes job creation at 10 times the cost of the Skills Development Fund and mostly subsidizes projects in metropolitan areas.

CSSB 1538: Senate Passes Bill To Help Low-Wage Workers Save for the Future, Bill Moves to House (05/11/2005)

On April 5 the Senate voted 30-1 to pass CSSB 1538 by Senator Barrientos. The House companion to this bill is HB 2450 by Representatives Naishtat, Luna, Guillen, and Jim Keffer. CSSB 1538 would establish a $1 million grants program at the Comptroller’s office to assist local communities in setting up Individual Development Accounts (IDA) for their low-income residents. The bill will be heard on Monday, May 16 at 2:00 p.m. or upon adjournment.

Oppose CSHB 846 (Flynn): Protect the Public from Predatory Payday Lenders (05/3/2005)

Texas has a longstanding tradition of fighting usury- in fact, specific interest rate caps were written into the original Texas Constitution. CSHB 846 substantially weakens these consumer protections and authorizes interest rates on loans as high as 780 percent!

Payday Lending Bill Offers No Protection to Cash-Strapped El Pasoans (04/28/2005)

The Texas House of Representatives is on the verge of rolling back consumer protection laws designed to prevent unscrupulous lenders from preying on cash-strapped Texans. Lawmakers are getting ready to vote on legislation by Representative Dan Flynn to legalize interest rates as high as 780 percent on so-called "payday" loans. Low-income El Pasoans rely on these high-interest loans when they have trouble paying their bills between paychecks.

Payday Loans Threaten Texans’ Financial Well Being (04/22/2005)

The Center for Public Policy Priorities today urged Chairwoman Beverly Woolley to oppose House Bill 846"a bill that would open up the practice of payday lending in Texas-in the name of promoting financial well being for all Texans. HB 846, by Rep. Dan Flynn, would make such loans more available, and more expensive, for desperate, cash-strapped Texans.

Individual Development Accounts Benefit Financial Institutions (04/8/2005)

An Individual Development Account (IDA) is an interest-bearing, tax-free savings account created to help low- and moderate-income families build assets and move into the middle class. Each dollar a participant saves in an IDA is matched by public or private sources (e.g., banks, foundations, etc.). IDA deposits are exclusively limited to earned income.

Who’s Funding Workforce Development? (04/6/2005)

Already overwhelmed by demand, the Skills Development Fund"Texas’ most successful state-funded workforce training program"is slated for massive cuts. The Senate is proposing to cut General Revenue appropriations for the Skills Development Fund by nearly 60%, or $14.5 million, compared to the current biennium. As a result, 9,000 fewer workers per year would receive customized job training. The Texas Enterprise Fund, a program designed to lure employers to Texas, compounds the funding crisis by using scarce Skills Development dollars as an incentive bonus for training costs that should be financed either by companies that are new to Texas or by the Enterprise Fund itself.

HB 846 is A Wolf in Sheep’s Clothing: Legislation Claims to “Regulate” Payday Lenders, But Actually Raises Interest Rates and Fails to Close Critical Loophole (04/1/2005)

A payday loan is a short-term, high-interest loan that some low-income Texans rely on when they have trouble paying their bills between paychecks. These storefront lenders charge exorbitant interest rates"sometimes as high as 800 percent"in addition to high “rollover” fees that extend the loan when borrowers can’t repay it on time. Payday loans take advantage of low-income families desperate for fast cash and can trap borrowers in a spiral of debt.

HB 2450/SB 1538: Legislature to Consider Bills That Would Help Low-Wage Workers Save for the Future (03/30/2005)

Representative Naishtat (HB 2450) and Senator Barrientos (SB 1538) have introduced legislation that would establish a $1 million grants program at the Comptroller’s office to assist local communities in setting up Individual Development Accounts (IDA) for their low-income residents. An IDA is an interest-bearing, tax-free savings account created to help low- and moderate-income families build assets and move into the middle class.

HB 1938: Relating to the Award of a Grant and Reporting Requirements Under the Texas Enterprise Fund (03/22/2005)

Good afternoon, Chair Ritter and the Committee. My name is Don Baylor with the Center for Public Policy Priorities. Texans place great value in openness and getting the "biggest bang for our buck." Our state's sunshine and sunset provisions demonstrate Texas' commitment to these principles. In this spirit, the public and the Legislature need better information to evaluate the Enterprise Fund's effectiveness in delivering upon its stated goal: enhancing the state's capacity to deliver high quality jobs to Texas.

Austin Effort to Improve Schools Disappoints Again: Houston Chronicle (03/20/2005)

The Texas House has finished its education and tax bills. Now the Senate goes to work. Let's compare what the House has adopted with where the Senate is starting.

HB 846: A Bill to Regulate Deferred Presentment Transactions (03/7/2005)

I am here today because of the devastating impact so-called “payday” loans can have on low-income Texans and their families. While we support the intent behind CSHB 846"to regulate payday lenders"we cannot support the bill as filed.

Statement Regarding the House Public Education Committee Plan (02/28/2005)

Before becoming director of the Center for Public Policy Priorities, I was the state district court judge that heard the state's school finance cases from 1989 to 2002, including the Edgewood case and the initial phase of the West Orange Cove case, which is now pending before the Texas Supreme Court.

Getting the Facts Straight: Texas & the Minimum Wage (02/24/2005)

Until September 2001, the Texas minimum wage was $3.35 per hour. At that time, the 77th Legislature effectively raised the state minimum by eliminating a statutory dollar figure and adopting the federal minimum wage level ($5.15 per hour) by reference. The federal minimum wage is decided by Congress and the President and was last raised in 1997 to $5.15 per hour, its current level.

Individual Development Accounts (02/22/2005)

An Individual Development Account (IDA) is an interest-bearing, tax-free savings account created to help low- and moderate-income families build assets and move into the middle class. Each dollar a participant saves in an IDA is matched by public or private sources (e.g., banks, foundations, etc.). IDA deposits are exclusively limited to earned income.

Texas Economy Got $4 Billion Boost from the Earned Income Tax Credit (02/21/2005)

Last year, more than two million Texas workers claimed over $4 billion in federal dollars for tax year 2003 through the federal Earned Income Tax Credit (EITC). The EITC not only boosts the earnings of low-wage workers and stimulates the Texas economy; it also provides an excellent opportunity for working families to save for the future. Although outreach and free income tax assistance have improved awareness of the program, the Texas economy and working families lost out on nearly $1.2 billion in unclaimed EITC payments last year.

Testimony on Regulating Refund Anticipation Loans (02/21/2005)

In support of HB 398: Relating to the regulation of tax refund anticipation loans.

Testimony on the Earned Income Tax Credit (EITC) (02/14/2005)

The Center for Public Policy Priorities offers the following comments in support of HB 630.

Testimony on Individual Development Accounts (IDAs) (02/10/2005)

Individual Development Accounts (IDAs) enable low and moderate-income families to build assets. IDAs are interest-bearing, tax-free savings accounts that can be matched by qualifying public or private sources. All deposits into IDAs are limited to earned income. IDA matching ratios can vary"ranging from 1:1 to 7:1.

Enterprise Fund: "High Road or Low Road" (02/2/2005)

This policy page provides an analysis of the Texas Enterprise Fund (TEF), including its administrative processes and program results. This page also examines similar incentive programs and provides recommendations for an Enterprise Fund that promotes a "high-road" economic development program.

The Earned Income Tax Credit, the Child Tax Credit, and the Child and Dependent Care Credit (01/26/2005)

Earned Income Tax Credit (EITC), the Child Tax Credit (CTC), and the Child and Dependent Care Credit are federally funded anti-poverty initiatives that help low-income individuals and families meet their basic needs. Households in poverty and those surviving on meager budgets can significantly benefit from these opportunities to increase their net income.

How Resources are Treated in Federal Public Benefit Programs in Texas (01/26/2005)

Cheat sheet on how resources are treated in federal public benefit programs in Texas.

How the EITC Refund Affects Eligibility for Public Benefits (01/20/2005)

Presentation at the City of Laredo "Maximizing Federal Benefits" seminar.

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