Texas Bill To Ban Taxpayer-Funded Lobbying Faces Fierce Fight

Texas Bill To Ban Taxpayer-Funded Lobbying Faces Fierce Fight

Despite the public seeing lobbyists as ethical swamp dwellers with too much power, they still wield considerable influence in U.S. legislatures. Texas is no exception.
Chuck DeVore
By

A few years back, Gallup polled Americans on which social entities they thought had too much power. Lobbyists came out on top with 71 percent, beating big business, banks, the federal government, and even labor unions.

Gallup has also over the years asked Americans which professions they trust most. Nurses and military officers usually come out on top. At the bottom of the public’s list for having the lowest levels of honesty and ethical standards are: members of Congress (11 percent), car salespeople (10 percent), and lobbyists (8 percent).

Despite the public seeing lobbyists as unethical swamp dwellers with too much power, they still wield considerable influence in the halls of Congress and the 50 state legislatures. Texas, unfortunately, is no exception.

Let The People Vote

In response to overwhelming voter anger with rapidly increasing local property taxes in Texas, lawmakers proposed giving the public the right to vote to approve or deny the hikes if they exceeded a certain amount. The property tax revenue trigger bill that eventually passed was Senate Bill 2 by state Sen. Paul Bettencourt, a Houston Republican.

At the first hearing for the bill, Bettencourt and other members noted that of the 30 people who testified in person against the bill, all were either lobbyists—many of whom were paid to be there with taxpayer funds—or government employees. Unsurprisingly, not one witness in opposition was an average Texan seeking to have his property taxes increase without limit.

Recalling the effort to reform limit property tax increases in Texas, Bettencourt said, “It took three regular sessions of the Texas legislature to pass property tax relief in the face of entrenched taxpayer-funded lobbying. I know we had finally won the fight when at the last hearing on SB 2, no regular citizen testified against the property tax relief bill, only elected officials—and paid lobbyists!”

Taxpayers Paying Lobbyists to Fight Taxpayers

The fight for SB 2 sparked a growing concern among lawmakers over taxpayer dollars being used to hire lobbyists who worked to increase local governments’ ability to tax and regulate more. This fueled the passage of Senate Bill 65 that same year. SB 65, by state Sen. Jane Nelson, required local governments to post the contracts they award for lobbying services.

But more consequential bills in the Texas Senate and House by Sen. Bob Hall and Rep. Mayes Middleton, respectively, that sought to ban taxpayer funds from being used to hire lobbyists failed. Lobbyists played a prominent role in the bills’ defeat.

Lobbying is big business nationwide. In 2006, a comprehensive study found 40,000 lobbyists across America, five lobbyists for every lawmaker.

In 2017, I spent several days reviewing 8,800 lobbyist filings for the state of Texas. I found that as much as $376.6 million was spent to influence state policymakers that year, of which up to $41 million was spent by local governments to influence state lawmakers and executive branch officials.

Much of this effort was aimed at influencing how the Texas budget would be spent. For perspective, about $3 was spent in lobbying for every $1,000 of state expenditures.

Lobbying has a direct link to our form of representative democracy and the Constitution’s First Amendment with its right to “petition the Government for a redress of grievances. While lobbyists have a general constitutional right to lobby, the courts have found that some restrictions on lobbyists’ activities are legal. For instance, the U.S. Court of Appeals for the Fourth Circuit found that, “Any payment made by a lobbyist to a public official, whether a campaign contribution or simply a gift, calls into question the propriety of the relationship.”

In both Alaska and California, the state supreme courts upheld restrictions on lobbyists’ ability to contribute money to lawmakers’ campaigns. The Alaskan jurists noted that lobbyists have a “special role in the legislative system” combined with a powerful incentive to contribute to large numbers of lawmakers “in position to introduce or thwart legislation and to vote in committees or on the floor on matters of professional interest to the lobbyist … creates a very real perception of influence-buying.” This, the court observed, can “create special risks of actual or apparent corruption.”

Lawmakers Gut Bill to End Taxpayer-Paid Lobbying

Lobbyists’ “special role in the legislative system” was clearly evident in the Texas Capitol on May 14 when SB 10, one of Lt. Gov. Dan Patrick’s priority bills, was heard in the Texas House Committee on State Affairs. When the bill arrived in the House from the Senate on April 15, it prevented cities or counties from using taxpayer dollars to “directly or indirectly influence or attempt to influence the outcome of any legislation pending before the legislature.” The bill exempted government employees and local elected officials.

But, in an astounding turn of events, SB 10 was gutted and replaced with language that exempted lobbyists who are lawyers from any restrictions on lobbying, and freed them from Texas’s requirements to report their lobbying activities. The rationale given was that such work was confidential under attorney-client privilege.

The amended bill also repealed Section 2254.030 of the Government Code. This section, enacted in 2019 by SB 65, caused great consternation among many of Texas’s thousands of political subdivisions—so much so that many simply refused to comply with the new law. As a result, Middleton sent out two rounds of 3,000 letters to school districts, cities, and counties asking them to disclose how much they spent to lobby.

Should SB 10 ultimately pass the Texas House in close to its original form, Texas will be one of the few states with meaningful restrictions on the use of public funds to lobby, a reform supported by 86 percent of registered Texan voters.

Lawmakers Don’t Want to Cut Themselves Off

A final note about how an issue as popular with the voting public as preventing their hard-earned tax dollars from being used to lobby against their interests could nonetheless be blocked in one of the nation’s more conservative legislative bodies. Texas lobbyists pull in hundreds of millions of dollars a cycle from businesses, associations, and local governments. Many lobbyists then tithe generously, churning a portion of their fees back to lawmakers’ campaigns.

This cash influence can be both large and consequential. For instance, a review of Texas Ethics Commission reports showed that one of Texas’s more focused recipients of tax dollars to lobby on behalf of local governments received some $800,000 over the past few years. Over the same time, this entity contributed about $80,000 to lawmakers’ campaigns—in effect, an unintended form of public financing of campaigns.

On the receiving end of lobbyists’ donations, it’s not uncommon for longtime incumbents to rely more and more on lobbyist donations as well as the corporate and special interest donations they control or advise—and less and less on donations from constituents in their own districts. Some members’ financial reports show that from 80 percent to as high as 95 percent of the dollars they raised to get reelected came not from their districts, but from lobbyists and special interests.

Texas might yet see consequential reform limiting local government from using tax dollars to pay for lobbyists—but the victory won’t be easy.

Chuck DeVore is vice president of national initiatives at the Texas Public Policy Foundation and served in the California State Assembly from 2004 to 2010.

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