Richardson Mayor Lobbys for Higher Taxes

Promising retribution against elected officials in higher offices, City of Richardson Mayor, Paul Voelker and other local special interests pressed members of the Texas Legislature to vote for continuing out of control local government spending.  Paul Voelker is exploiting the resources of public office of Mayor to lobby against citizens of Richardson on the issue of property tax reform.

Current law only provides citizens with the opportunity to attempt to gather a sufficient number of petition signatures to enable a public vote on high property taxes if the amount of money collected is 8% above the previous period.  In other words, citizens do not get to vote on higher taxes unless a petition is signed by a significant number of registered and qualified voters.  The petition process is used to prevent citizens from imposing the public will on local government spending by public servants.

The legislation Mayor Voelker opposes would provide for an automatic election that would result in requiring citizen approval when property taxes increase more than

Senate Bill 1 seeks to reform Texas property tax law by requiring local governments to obtain citizen approval when taxes increase above acceptable limits.  Simply put, Mayor Voelker does not want the citizens of Richardson to have any control over increases in property taxes.

The average property tax bill in Richardson has increased 80%-100% over the course of the past 10 years.  That means the amount of money citizens have paid has doubled and the amount of money the city has spent has also doubled.  The question becomes, how many property owners have had their paycheck doubled.  More significantly, what about government has doubled in value?



The Cost of Living in Richardson

easyfoolMore than a decade has passed since a small number of attentive citizens attempted to alert the community about out of control spending at City Hall. Now, the spendthrifts have abandoned the city and the aftermath is tragic for those who have no place to live but Richardson. 

Like a gang of drug dealers, in November of 2015 city leaders pushed another bond program that resulted in piling on another $115,000,000 in debt to tend to a repeated list of neglected infrastructure items. 

Ever since the Eisemann Center debaucle of 1998, unscrupulous refinancing of debt has become the black hole of the public financial resources while the city crumbled.  It is easy to conclude that planning ahead has fallen behind as a priority.  Who borrows money to stripe the streets or paint the water towers?  Who pledges tax revenue to fund special interests instead of government responsibilities?  Richardson, that's who.

brokebenchHad the previous quater-billion dollars been well spent, a significant amount of the aging and failing city structures could have already had a face lift.  More importantly, had Management engaged in advanced planning 30 years ago, sufficient funds would have accumulated in preparation for maintenance, repair, and replacement.  A windshield tour with corrective lenses clearly reveals what the aged eyesight of City Council has grown too macularly degenerated to see.

Perhaps this explains why the population growth rate of Richardson is 15% lower than the State of Texas and the average age has dramatically increased.  What upwardly mobile young person would want to live under a mountain of debt in a town so obviously poorly maintained? 

Next time the leadership wants to compare salaries with other cities, discount that by at least 15%.

Richardson Debt Profile

SJR 55 Election of Police Chief

SJR55, currently under consideration by the Legislature's State Affairs Committee in Austin will revise statutes and require any police chief in a municipality with a population of 5,000 or more to be publicly elected.

The measure came up for a reading in the Texas Legislature on March 23rd and calls for cities with a population of 5,000 or more to elect their police chief, News Radio 1200 WOAI reports.

  Currently, urban police chiefs are appointed by the mayor or city manager and appointed for an indefinite period.

  With increased scrutiny on the actions of urban police forces, civil rights activist Carlos Quintanilla of Accion Texas says an elected police chief would be more accountable to the public.

  "Many times, especially from the minority perspective, chief of police are not accountable to anyone," he said.

  Some Texas cities, most notably San Angelo, still elect thir police chiefs.  100 years ago, local police chiefs were frequently elected.

  "Sometimes it is very difficult to put pressure on a police department chief, so they feel very protected, they feel very buffered," Quintanilla said.

  Supporters of the bill say we currently elect urban county sheriffs, why shouldn't we elect big city police chiefs.

HB1288 Stops Straight Party Voting

House Bill 1288 is a bill introduced by Rep. Ron Simmons that would amend Section 62.011(c) of the Election Code resulting in the elimination of straight party voting in Texas.  Rep. Jodie Laubenberg (champion of legislation addressing abortion clinic safety during last session that drew a windy Davis filibuster) Chairs the House Committee on Elections that will process HB 1288 further action.

The potential for tragedy resulting from voters casting ballots without having some understanding of the underlying circumstance cannot be understated.  The historical record of ill suited individuals being elected to public office and the resulting harm caused by their activities while in office cannot be ignored.

It is only prudent that we should compel the highest level of conscious decision making in the selection process by anyone who casts a ballot.  To dilute the significance of a vote by enabling thoughtless action is to enable the winds of the political weather to dictate the quality of leadership.

Blind loyalty narrows the scope of representation and serves to concentrate political power in the hands of leaders who march to the drum beat of special interests that increasingly compete and conflict with the people.  There is no good reason for party affiliation to be the sole criteria resulting in ill suited malleable individuals being seated at a desk of public service.  The minimum requirement for casting a vote should include some measure of specific individual evaluation and comparison in each race.  Removing the conformity at the ballot box may likely result in more thoughtful decisions by elected representatives during the legislative process.

House Committee on Elections

Rep. Jodie Laubenberg, Chair
(512) 463-0186, (972) 424-6810

Rep. Craig Goldman, Vice Chair
(512) 463-0608, (817) 731-3712

Rep. Pat Fallon
(512) 463-0694, (469) 362-0500

Rep. Celia Israel
(512) 463-0821

Rep. Dade Phelan
(512) 463-0706

Rep. Ron Reynolds
(512) 463-0494, (281) 208-3574

Rep. Mike Schofield
(512) 463-0528

SB10 Fox Watching Hen House

Rick Casey writes in today's San Antonio Express News about his rightful opposition to SB 10, the legislation proposed by Sen. Joan Huffman from Houston, that would open the doors for corrupt local public servants and elected officials.  Objectivity would be completely lost if a bought-and-paid-for District Attourney could exercise prosecutorial discretion (more than presently) when considering wrong doing by any number of local public servants or elected officials.  The idea gives a whole new definition to the term "public integrity" and would make the office of District Attorney the most powerful political position in the neighbor(la)hood.  Infractions on public trust would become a commodity traded with impunity.  It is already next to impossible to get any law enforcement official to pursue a case involving public corruption.  The Sharpstown scandal case that resulted in the Texas Open Meetings Act and Texas Open Records Act would have never seen the light of day.  Mr. Patrick needs to be reminded of this pivotal time in Texas history so he won't so readily support SB 10.

HJR77 Convention of States

HJR 77 is currently under consideration by a Select Committee of the Texas Legislature.  This bill would authorize the State of Texas to process an application to join other states in a convention of the type described in Article V of the U.S. Constitution.  Article V was the fifth article included in the U.S. Constitution for the express purpose of assuring the Federal Government could be constrained if it ever became out of control of the states that enabled its establishment.  Lots of things have changed since those days, including the dumbing down of the population about the purpose and intent of a democratic Republic and how it was suppose to work.

Regretfully, the Texas Eagle Forum is misinformed about Article V and the process by which provisions within the HJR 77 application mandates its execution.  The information being circulated is both inaccurate and misleading.  There have been many contrived renditions of how the Article V process would work, and even misleading, inaccurate terms purposefully being used to direct attention away from its true purpose. 

  • The underlying application participation in HJR 77 proposes a Convention of States, which does not equal a Constitutional Convention.
  • The carbon-copy application being processed by states specifies a limited agenda.
  • The carbon-copy application being processed by states also prescribes restricted delegate activity which is subject to the scrutiny of their State.
  • Article V does not authorize or provide for Congress to participate in a Convention of States.
  • Article V limits Congress to a face-saving option of deciding whether they ratify, or the States ratify any resulting actions, including Amendments to the U.S. Constitution.

It should be noted that the Texas Eagle Forum article being circulated refers to positions and interpretations presented by Congress, Congressional special interest groups, and others with an interest to prevent a Convention of States having the potential of limiting the powers they have become accustomed to exercising.

It is no surprise that terms and phrases like "liberals" and "rewriting the U.S. Constitution" would be used in an attempt to instil fear among State representatives.

As State Legislators, the most challenging aspect of the Article V process is gathering the strength of character needed to stand up to the coercers of Washington and those weakened by its trappings, including our friends, who we have placed as representatives of these states in Washington.

Please remain resolute in your position to hold strong in defending the liberty and rights of each state.  Support HJR 77.

Petition Straus Out

Do you support a change from left-leaning Texas House Speaker Joe Straus?  If so, please review and sign the petition:


WHEREAS the Republican members of the Texas House of Representatives campaigned on clear and unmistakable promises to support the passage of conservative legislation in the Texas House, and

WHEREAS the people of Texas, who elected a large majority of House Republicans on November 4, 2014, sent a clear and unmistakable signal in support of the conservative agenda promised by the Republican House candidates, and

WHEREAS the current Speaker of the Texas House. Joe Straus, has been elected three times with the unanimous support of the House Democrats, and

WHEREAS Joe Straus has used his power as Speaker, time and again, to appoint left-leaning Democrat and Republican committee chairs and to prevent popular conservative legislation from receiving a vote or even a hearing,


The undersigned Texas Voters strongly urge all Texas House members to vote to replace Speaker Joe Straus with a true conservative who will appoint conservative committee chairs and support, rather than oppose, conservative legislation.


Subj: Dallas County GOP Endorses Scott Turner for Texas House Speaker

 FOR TEXAS HOUSE SPEAKER _(passed by the Dallas County GOP
 Executive Committee on November 17, 2014)_

 Whereas Representative Scott Turner was born and raised in
 neighboring Collin County and is a 4th generation Texan;

 Whereas Representative Scott Turner, since his election to the
 Texas House of Representatives in 2012 has fought for government
 transparency and efficiency, fought for tax relief for hard
 working Texans and small business owners, supports pro-life, and
 supports school choice;

 Whereas Representative Scott Turner is Recognized by GOPAC as one
 of Texas' emerging leaders, is recognized as a courageous
 conservative by the Texas Conservative Coalition, is recognized as
 a top rated conservative by Texas Eagle Forum, has a 100% rating
 with Texans for Fiscal Responsibility, and has an "A" rating by
 the NRA;

 Whereas Representative Scott Turner has announced his intention to
 run for Speaker of the Texas House of Representatives when it
 convenes in January, 2015; and

 Whereas the Executive Committee of the Dallas County Republican
 Party wishes to recognize Scott Turner as being worthy of such an
 honor and capable of such a responsibility;

 IT IS THEREFORE RESOLVED that the Executive Committee of the
 Dallas County Republican Party hereby supports Scott Turner for
 Speaker of the Texas House of Representatives.

 Passed on this 17th day of November in the year 2014.

$41MM Medicaid Fraud in 2014

texas state emblem in capitolThe Austin American Statesman reported this weekend that the Texas Health and Human Services Commission Office of Inspector General is finalizing a deal with an Austin company for Medicaid fraud detection software.

The company involved, 21CT, is primarily a defense contractor and their “Torch” software that detects Medicaid fraud was only developed at the request of OIG in 2012 per the article.

The software will set back Texas taxpayers some $90 million dollars for three years of licensing.

OIG has been under the gun in both the media and the legislature because it only collected $5.5 million in the last year per the recent Texas Sunset Commission staff report despite claiming hundreds of millions of dollars of Medicaid fraud.

However, the Sunset Commission report looked at Torch and found that the software had only identified $41 million in Medicaid fraud so far for the fiscal year 2014 (pg 130 of the report).  This is a far cry from the hundreds of millions of dollars that OIG has been claiming is out there.  The report also finds that the implementation of the software is problematic due to OIG’s lack of priorities.

The report states:

“Additionally, the agency’s recent fraud initiatives for Medicaid provider investigations, together with a sophisticated new fraud identification system, Torch, compound the risk associated with a lack of priorities. Torch promises significant results for OIG, identifying $41 million in suspicious Medicaid payments for investigation in fiscal year 2014. However, the addition of such a substantial workload, without a demonstrated system for efficiently and effectively sorting and prosecuting cases in a way that maximizes monetary returns, jeopardizes the state’s return on investment for these significant, and expensive, fraud identification efforts.”

External Review of OIG Requested

THHSC buildingIn a letter to the Texas Sunset Advisory Commission, TDMR President Gregory Ewing has recommended, based on the testimony in the public hearings held last week, that all pending OIG cases be stayed for external review.

All pending cases should be stayed pending external review of case tampering

The letter in part reads:

After hearing the testimony of Ms. Arlene Wohlgemuth and the attendant comments from Sen. Hinojosa and Rep. Raymond, we believe there should be an immediate stay on all OIG cases and their legal proceedings pending external review by another suitable agency. If the Commission cannot do this, it should recommend the appropriate agency to do so.

If OIG investigators have been pressured by their superiors to change their investigative reports to include non-factual allegations to “get something” on providers, per Rep. Raymond [see YouTube video excerpt of comments during public hearing testimony], this taints all provider investigations and should lead to criminal charges against the perpetrators.

Providers should not have to spend their resources to defend against trumped up allegations.

Review prior OIG settlements

Ewing also suggests that previous OIG settlements, such as the $3.75 million obtained from Carousel Pediatrics of Austin,  be reviewed as well.

These allegations of possible criminal conduct within OIG also calls into question settlements which OIG has pressured providers to make, such as in the case of Carousel Pediatrics, so they could continue their practices.  So such an external review should also look at these settlements.

Providers may demand compensation for lost businesses

Lastly, Ewing suggests that if the state does not do something about this issue, affected providers may start demanding compensation.

If the state does not take action now, providers may start clamoring for restitution for the loss of their businesses.

A copy of the letter can be downloaded here – Sunset Commission letter 18 Nov14.

Economic Folly

For decades the power brokers in the City of Richardson have been wheelin' and dealin' real estate and doing their damndest to line the pockets of business tycoons and charlatans milking the public coffers of scarce funds.  Instead of paying off debt and lowering taxes on behalf of Richardson residents, the spendthrifts down town clammer for every opportunity to siphon money from any available government program.  Recently, the Ebola scare had city leaders offering up a sacrifice of our local hospital/social medical service to become a plague treatment center for the region.  If past corrupt deals didn't have the community puking blood already, the Ebola center would be sure to get the fluids flowing.  Here's a parallel story that should get everybody thinking about the merits of all the pocket lining deals Slagel, Keffler, Eisemann and sproulll shoved down our throats.  Pay close attention to the analysis at the end.

I read with much interest the story last week of the San Antonio City Council approving a direct investment of $1.75 million in city funds to move three startup medical device manufacturing companies to San Antonio.

And by “much interest” I mean the story made me want to stab my own hand with a sharp pencil.

I hate this sort of thing.

Let’s leave aside the obvious problem of “economic development” schemes like this, in which public entities give targeted incentives to a specific private company: You know, because individuals who benefit may feel quite “grateful” to their public sponsors. Public sponsors in turn — elected and appointed officials — may then have an incentive to direct public funds to private beneficiaries to keep the “gratefulness” cycle going.

That’s all obviously just straight-up corruption and not really what I’m aiming for here in my critique of city-directed “economic incentives” for private companies.

What I really hate about this is something quite different, having to do with three business concepts: selection bias, market efficiency and the structural short-run conflict between entrepreneurial goals and public policy goals.

Taken together, they greatly reduce the odds that this type of economic development works out for the public good in the long run.

I’ll address these in order.

1. Selection bias

Would you like your city (or state or county) to grow companies focused on wooing public investment and public incentives? Or would you like your city to grow companies that focus on profitability without a public subsidy or public investment? Because the way you attract companies to your city (or state or county) introduces a real selection bias to the pool of companies you end up with.

In my experience, the kind of startup company that takes public money — with all the attendant scrutiny, “job creation” requirements and “salary” minimums — is a different sort of company than one that achieves sustainability without that public money.

2. Market efficiency

Private investors constantly scour the market for small but growing companies that provide a reasonable chance of future profits.

Small but growing companies in turn often seek direct investments from angel investors or venture capitalists.

It’s not a perfect system, and market inefficiencies occasionally arise.

But when a company turns to public funds like this, what that signals to me is that private capital sources — the professional angel and venture capitalists — have already declined to invest in the growth of this company. That’s typically because they do not find the risk/reward profile of that investment sufficiently compelling.

Now, professional investors may be wrong to have overlooked the growth and profit potential of these medical device companies.

The angel investing market may be inefficient.

Who knows? Maybe the city’s economic development team may have a market-beating strategy for identifying a positive risk/reward formula that private investors have declined to take. I mean, it could happen, right?

But I doubt it. And I would never bet on it.

3. Short-run conflict between entrepreneurship and public policy goals

Look, here’s the biggest problem.

Public officials want to be seen as creating “jobs.” At “good salaries.” That’s fine.

But entrepreneurs don’t seek to create jobs. At any salary.

Entrepreneurs, at least the good ones, want to create the least number of jobs possible. I’m not saying this because entrepreneurs are inherently mean-spirited, but rather, because hiring people is expensive.

Successful small companies — and big ones, too — have to constantly try to eliminate jobs to make a company financially sustainable. The market is too darned competitive to survive when you’re burdened with too many people on the payroll. If public officials get the chance to dictate the number of jobs, and the salary minimums of those jobs, I guess I have my doubts about how that business is being run.

You show me an entrepreneur willing to be told by a city entity how many people to hire, when to hire them, and what to pay them, then I will show you an entrepreneur who isn’t going to make it in the long run.

A tangential, but I think illustrative, note: The biggest joke of Mitt Romney’s 2012 presidential candidacy was his claim to be a “job creator.” Romney was no “job creator.” On the contrary, he was one of the more successful job destroyers.

Because that’s what Romney’s firm Bain Capital is good at. They buy a company, wring out costs (all those good-paying jobs!) and then resell. In the short run, the more jobs you eliminate, the better. I’m not saying this to besmirch Romney’s record. I’m sure he was a fantastic capitalist. Cutting costs is what capitalists, and entrepreneurs, do, and often that means eliminating jobs. But Romney as “job creator?” Give me a break.

I mention this to illustrate the short-run differences in goals between entrepreneurs and public policy officials.

OK, now back to San Antonio.

I hope I’m wrong.

I hope to be completely wrong about this $1.75 million direct investment. Despite my misgivings, I will be thrilled when these three startup medical device companies spur innovation, trigger job growth, add to the “entrepreneurial ecosystem” and even generate a positive return on public capital.

It could happen! I hope it does!

But I would never, ever, choose to bet on it with my own money. And I’m sorry when the city chooses this for me.

Michael Taylor is a former Goldman Sachs bond salesman and now writes the finance blog You can reach him at This email address is being protected from spambots. You need JavaScript enabled to view it.. Twitter: @bankeranonymous

Loss of Confidence in OIG

“We Have Lost Confidence in Your Office” – OIG Under the Gun at Sunset Commission Hearings

sunset commission2The Texas Sunset Commission held public hearing both Wednesday and Thursday this week on the Health and Human Services Commission as well as its beleaguered Office of Inspector General.  Sunset and HHSC staff testified on Wednesday about the recent Sunset Commission staff report on HHSC which was scathing about the performance of OIG.  Public testimony was heard yesterday.

Loss of confidence

As reported both in the Texas Tribune and the Statesman, Sen. Charles Schwertner, member of the Commission and also chair of the Senate Health and Human Services Committee, summed up the legislative attitude towards the agency when he told Inspector General Doug Wilson that “we have a loss of confidence in your office.”

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