MCALLEN, RGV – The chairman of the state affairs committee in the Texas House of Representatives says state Comptroller Glen Hegar was given unexpected advice when he met with credit agencies in New York.
State Rep. Dade Phelan, R-Beaumont, recounted what happened while visiting McAllen to promote Proposition 8.
Proposition 8 is on the statewide November ballot. It proposes an amendment to the Texas Constitution to allow Texas to pump hundreds of millions of dollars from the state’s rainy day fund into a new Flood Infrastructure Fund (FIF).
“We are triple-A rated in the state. Glen Hager went up to New York and met with these credit agencies to make certain we are doing everything correctly with our budget,” Phelan told the Rio Grande Guardian.
“These credit agencies said, everything is great in Texas. It is awesome you all have the biggest rainy day fund in the nation. But, it is too big. You have aging infrastructure, you have roads (that need repairing), you have flooding issues. Use that money for infrastructure.”
The rainy day fund comes from oil and gas severance tax monies. The credit agencies determined, along with Hegar, that $7.5 billion is a healthy rainy day balance.
“Going into this session we were at almost $14 billion. We used some of it for (Hurricane) Harvey and some for other issues. That fund will keep replenishing itself. By the time we go back (into session), it will be $12 billion,” Phelan said.
While the credit agencies were telling Hegar that too much money was being stored in the rainy day fund, Phelan and his colleagues were agreeing that future flood mitigation projects must be designed and coordinated on a regional basis. So, they came up with the idea of a flood infrastructure fund.
“Proposition 8 creates a flood infrastructure fund at the Texas Water Development Fund (TWDB) that can only be used for flood mitigation, going forward. It cannot be used for any other purposes by the state, as good as those purposes may seem,” Phelan explained.
“The state, for the first time, is getting involved in flood mitigation. We have never done that before. It has always been a local issue. It became very apparent to me and some of your leaders here in the Valley that we have to start regionalizing our projects and start looking beyond county lines, city lines and drainage district lines.”
Phelan said Texas has to look beyond municipal jurisdictions because the state is growing fast and its infrastructure requirements are not keeping pace.
“The development that is happening in the state of Texas is phenomenal. The growth is fantastic. They call it the Texas Miracle. But with that comes flood concerns. We have to address that on a watershed basis, not political boundaries,” Phelan said.
Phelan was invited to speak at the McAllen Chamber of Commerce by his colleague on the State Affairs Committee, state Rep. R.D. ‘Bobby’ Guerra of McAllen. In addition to Phelan and Guerra, other speakers included Raul Sesin, drainage district director for Hidalgo County, and Hidalgo County Commissioners David Fuentes and Eddie Cantu.
Asked if Hurricane Harvey was the catalyst for Prop. 8, Phelan said:
“Hurricane Harvey was an eye opener for how much we have grown here in the state and how little we have done for flood mitigation. We are allowing development to occur in areas that are prone to flooding. We are not looking at elevation maps as we should,” Phelan said.
“The base elevation for homes in some of these communities should be higher at the onset. You can go to a city and pull some development maps and say you are going to build 500 homes in this area and then the next week someone else may go pull a permit to build a 1,000 homes right next door and you will never know that until the work begins and it is too late to mitigate the floods. That needs to change. We need to cooperate and talk and have dialogue on how we are going to grow going forward.”
Phelan said FIF monies would be available for structural and non-structural projects alike. He took note of the comments of Fuentes when the county commissioner said there needed to be money available for flood mitigation planning.
“There will be money there for planning and engineering. Some communities do not even have the right staff to mitigate so the state is going to help out with that,” Phelan said.
Phelan confirmed that FIF would have just shy of $800 million from the state’s rainy day fund.e confirmed something Rep. Guerra said from the podium – that passage of Prop. 8 would not result in a tax increase.
“The rainy day fund is paid for through oil and gas severance tax so oil and gas producers are taxed and that money goes in the rainy day fund. It is not coming from sales tax. It is not coming from property tax,” Phelan said.
“We are going to keep it in that fund so it is not used for other purposes. You are not going to see a tax increase. That fund will always be replenished as oil and gas revenues continue to rise. By the time we reconvene in 2021 that money is already going to be replaced by oil production.”
In his remarks at the news conference, Phelan made clear his wish that the Texas Water Development Board start funding flood mitigation projects as soon as possible, assuming voters approve Prop. 8.
“With the federal government, it seems to take years before money hits the streets. When the rule-making is done (by TWDB) it is going to take less than three months and the money will be available for communities to be more resilient. We are not going to sit around on the treadmill.”
In his remarks, Phelan also explained that, five years from now, once TWDB has developed a state flood plan, no state funds would be available for projects that have not made it into the plan.
“So, you might as well start now on a regional cooperative basis. You might as well start identifying projects now, start engineering them now because in five years, if you have not done that, you are not going to have an opportunity for funding from the state,” Phelan said.
Phelan said TWDB will create the rules on how the funding will be allocated for flood mitigation projects. “They are creating the buckets of money, a bucket for loans, a bucket for grants, a bucket for structural, a bucket for non-structural, they are figuring that out. I am just the state rep from southeast Texas. We are going to let the experts in Austin figure that out.”
Phelan said it is important to keep politicians out of the rule-making process.
“I do not think the politicians locally or in Austin should be deciding what project makes the most sense. Let the engineers, the hydrologists, those who understand how water moves, let them figure that out. We did that with transportation, we took it out of the politician’s hands and left it to the transportation commission. We said, let the professionals decide. We should do that with drainage.”
Asked for a wrap-up remark, Phelan said: “The Flood Infrastructure Fund will make your communities more flood resilient. This will empower your local community. By passing Proposition 8 you can make sure the monies are there in the future.”