The Texas Report 5/29

The Texas Report 5/29

What’s Happening:

• Texas House impeaches Attorney General Ken Paxton (More here)

• End of the Regular Legislative Session (More here)

• Texas could lose billions in Medicaid funding under policy change by Biden (More here/ Paid)

On Saturday, the Texas House impeached Texas Attorney General Ken Paxton. In a historic proceeding and subsequent vote the majority of the House and Republicans decided the transgressions of Paxton were to significant to allow him to remain attorney general.

Additionally, today is the last day of the Texas legislative regular session, and marks the end of the 88th legislature. Many Capitol insiders expect that the Governor will choose to call “special” sessions in the near future to handle priority issues that didn’t make it across the finish line.

Texas House Impeaches Attorney General Ken Paxton

On Saturday, the Texas House took up resolution H.R. 2377 by Representative Andrew Murr (R-Junction) to impeach Texas Attorney General Warren Kenneth Paxton. The Texas House voted to impeach by 121-23-2, with most Democrats and Republicans voting together.

Paxton has faced well-documented legal issues and public scandals for years. However, until this point has faced few political consequences for his actions. This chain of events began when Paxton's office asked lawmakers to use taxpayer dollars to fit the bill of a $3.3 million settlement to whistleblowing staffers fired after reporting the Attorney General's conduct to authorities.

Following the request by the Attorney General's office, the House General Investigating Committee, led by Representative Murr, began an investigation into the request and the charges leading to the lawsuit. Much of the investigation and subsequent impeachment charges focused on the relationship between Paxton and Austin real estate investor Nate Paul.

Eight top deputies from Paxton's office reported him to federal authorities nearly three years ago, alleging he had misused his authority to help Paul with a lawsuit against Austin nonprofit Roy F. & Joann Cole Mitte Foundation. Investigators told the committee that Paxton had even hired an attorney at the behest of Paul who helped shield Paul from federal and state investigators while essentially subpoenaing various entities involved in the investigation.

Following the investigator's report to the committee, they unanimously decided to bring an Article of Impeachment against the Attorney General.

Saturday, the resolution's author and fellow committee members laid out the impeachment motion and described the various charges they were bringing against Attorney General Paxton. Leading up to the floor debate, Paxton released various statements decrying the proceedings as illegal and "plot by the "Austin liberal elite." Additionally, various conservative voices, including former President Donald Trump and Senator Ted Cruz, had weighed in on the proceedings. (Trump) (Ted Cruz)

Most of the voices against the proceedings didn't deny Paxton's actions, rather disagreed with the Texas House's approach or contended that this was against the will of Texas voters.

In support of the resolution, General Investigating Committee member David Spiller said, "No one person should be above the law," state Rep. David Spiller, R-Jacksboro, a House Committee on General Investigating member, told his House colleagues on Saturday.

"We should not ignore it and pretend it didn't happen," he said. "Texas is better than that."

After several hours of layout and debate, the House overwhelmingly approved the motion for impeachment, and now the Texas Senate will be responsible for holding a trial on the matter.

The Attorney General responded to the impeachment proceedings on social media and said, "My office made every effort to present evidence, testimony, and irrefutable facts that would have disproven the countless false statements and outright lies advanced by Speaker Dade Phelan and the Murr-Johnson panel he appointed." Paxton added that "I look forward to a quick resolution in the Texas Senate, where I have full confidence the process will be fair and just."

As mentioned, the Senate acts as a trial of sorts for impeachment proceedings, and it will be interesting to see what decision Attorney General Paxton's wife, Senator Angela Paxton, makes on whether she will recuse herself from the proceedings.

This story is far from over and will have extremely far-reaching impacts on the future of Texas politics, depending on the result.

Interesting things of note:

• Every legislator from Paxton's home Collin County voted for the motion to impeach.

• Multiple legislators said the Attorney General had called lobbying against his impeachment and threatening that those who voted for it would face significant political ramifications in the future.

• These threats were enough that Representative Eddie Morales sent a letter to his fellow House members requesting that charges be added to the impeachment resolution to include threats by the Attorney General.

Why this is important:

• First time in Texas History that the Attorney General has been impeached

• The Attorney General is the state's chief lawyer, and the Governor will need to appoint Paxton's replacement should the Senate support impeachment.

• This highlights a schism between ruling members of the Texas Republican party, and it’s leadership (Governor Abbott and Lt. Governor Patrick) have yet to take a stance.

More context:

Legislative Update

Today marks the last day of the Texas 88th Regular session. Over the last several days and even into the wee hours of last night, Texas House and Senate lawmakers attempted to find a compromise on a variety of major priorities. They were able to find agreement on legislation to strengthen the state's electric grid and renew a new economic incentive program that was a major priority by much of the business community.

Some of the major Republican priorities that didn't pass this session:

• Legislation establishing a school voucher system. S.B. 8 by Senator Brandon Creighton (R-Conroe) was the primary voucher bill and would've at one point created $8,000 "education savings accounts" students could use for public school tuition.

• Neither chamber was able to agree to a major border overhaul. H.B. 7 by Representative Ryan Guillen was a House priority that would've created new punishments for border trespass, established a new law enforcement unit focused on border protection, and funded a reimbursement program for property damaged by illegal immigration.

• Property tax relief was a major campaign issue for Abbott and most Republicans across the state. However, despite agreeing to a spending of $17.6 billion on property tax cuts, the two chambers were unable to compromise on the actual funding model.

• The major disagreement comes over a proposal supported by Speaker Dade Phelan (R-Beaumont) and the House to institute a cap on appraisals lowering the annual increase from 10% to 5%. (More here)

These were some of the major issues that didn't pass. However, many Texas politics experts believe the Governor will be calling special sessions to try and get some of this legislation passed.

Education and school vouchers were one of the hottest topics throughout the session, and due to a significant budget surplus, many legislators attempted to pass bills to increase teacher pay and public education funding. However, due to a late addition to the Senate that tied vouchers and teacher pay, no significant teacher increase or public school funding bill was able to become law.

Representative Ken King was the author of H.B. 100, which, as it left the House, would have added $5 billion in formula funding for things like the basic allotment and the small/midsize allotment. In a recent press release, he explains that the final amount of money set aside for formula funding and teacher pay was nearly $2 billion less than what many House members advocated for. Additionally, he said, "Teacher pay raises are being held hostage to support an ESA plan (education savings accounts/voucher)! Teachers are punished over a political fight."

The voucher fight isn't over and will likely continue playing out this year across the Texas Capitol.

Other bills of interest that passed:

• H.B. 12 by Representative Toni Rose (D-Dallas), which will allow Texas moms to have access to a full year of postpartum Medicaid coverage. This bill was passed with significant bipartisan support.

• H.B. 17 by Representative David Cook (R-Fort Worth), which establishes procedures for the removal of prosecutors.

• S.B. 28 by Senator Charles Perry (R-Lubbock), which will create a new "Water Supply for Texas fund" to provide financial assistance in addressing pressing water challenges facing the state. The legislature will be earmarking $1 billion to incentivize programs that upgrade the water infrastructure and increase the water supply.

Many of these bills still require the Governor's signature, and there will likely be several pieces of legislation he chooses to veto that we will keep yall updated on.

Texas facing a potential loss of billions in Medicaid funding

Under federal health care rules, states are allowed to tax hospitals to cover their share of Medicaid costs, entitling the states to matching funds from the federal government.

That money is subsequently distributed based on how many Medicaid patients a hospital treats. To get those with fewer Medicaid patients to participate in those tax programs, hospitals in Texas and many other states agree to pool their Medicaid payments in a central fund, guaranteeing no one institution pays more in taxes than it collects in Medicaid funding.

The concern is that without a guarantee of getting those taxes back, hospitals with larger shares of wealthier and insured patients will pull out of the program.

This comes when Texas hospitals are already facing steep drops in Medicaid funding, as the state health department has been reviewing its Medicaid rolls for the first time in years. More than 1 million of the almost 6 million Texans on Medicaid are expected to lose coverage.

The debate on the legality of Medicaid pooling has been around for years; however, in February, a deputy administrator for the Centers for Medicare and Medicaid Services wrote that such arrangements violate federal rules and "undermine the fiscal integrity of the Medicaid program."

That decree, similar to an effort by the Trump administration that was ultimately withdrawn, is now being targeted by Texas politicians on both sides of the political spectrum.

The Attorney General's office filed suit in the U.S. District Court in Tyler last month against the Federal Government. Seven Texas Democrats sent a letter to the Health and Human Services Secretary warning that ending the practice of pooling would likely result in a loss of services for Medicaid patients, "who already have limited access to care." (More here/Paid)