Skip to comments.Want To End Crony Capitalism In Texas? Repeal Prop 4
Posted on 04/01/2014 4:57:19 PM PDT by thetallguy24
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Crony capitalism is very similar to the seven-headed Hydra of Greek mythology. Politicians, if and when they do decide to tackle the issue, may cut off one slush fund, but two (or more) slush funds end up replacing it. To destroy crony capitalism, its not enough to cut off the head; you have seal the body off from growing any more heads.
The Texas Constitution was originally designed to be sealed off from such voracious heads springing up from the body of government. In the mid-19th century after the Civil War, many states like Texas were prone to corrupt Legislatures who were giving away public lands and resources to builders of railroads, canals, and other internal improvements. This became extremely unpopular among the people, so, when the post-Reconstruction Texas Constitution was written in 1875, explicit rules were included prohibiting the giving of public money for private purposes. The most notable of those rules were Sections 51 and 52 of Article III. Section 51 prohibited the state government from giving money to private individuals, groups, or corporations, and Section 52 prohibited local governments from doing the same. For 111 years after the ratifying the Constitution of 1876, this was the law of the land. In 1987, that all changed.
Many of you may recall how hard Texas economy was hit in the 1980s by the oil bust and the Savings & Loan Crisis. In response, Gov. Bill Clements and the 70th Texas Legislature created a New Deal-esque package, called Build Texas, of over $1.5 billion in public and private works projects (remember the Super Collider?) in an attempt to stimulate the Texas economy. These projects required a Constitutional Amendment election, but Sections 51 and 52 also stood in the way. In prime FDR-style, another amendment was added to sidestep the Texas Constitution. It was called HJR 5 or Proposition 4.
In the name of economic development, Proposition 4, now known as Article III, Sec. 52-a, offered a vague and broad exception to our Constitution without actually removing the prohibition. It allows the Legislature to use your tax dollars for practically any purpose, private or public, or as the law puts it, for development and diversification of the economy of the state, the elimination of unemployment or underemployment in the state, the stimulation of agricultural innovation, the fostering of the growth of enterprises based on agriculture, or the development or expansion of transportation or commerce in the state. Proponents of Prop 4, such as then- and still-State Senator Judith Zaffirini, stated the amendments passage would benefit the overall Texas economy. Opponents reiterated the original intent of the Texas Constitution, calling Prop 4 an attempt to circumvent one of the pillars of the Texas Constitution. They also warned its passage was fiscally irresponsible and would permit a limitless amount of public money to be used to finance the business schemes of individuals and private corporations, while taxpayers would be holding the bag if those projects failed. In a Constitutional election that saw a record 27 amendment propositions on the ballot and 2.1 million voters (compare that to 2013s paltry 1.1 million), Proposition 4 narrowly passed by less than 70,000 votes.
Because of Proposition 4, the flood gates have been opened for crony capitalism. Tax abatements, loans, grants, and more are now available and billions have been given away through CPRIT, the Texas Enterprise Fund, the Emerging Technology Fund, and the Texas Events Fund. As we have shown, a great many of these people and companies receiving this money are very well connected politically and have givens millions in campaign contributions. To alleviate any doubts about this quid pro quo, one just has to look back at one of Prop 4s original backers, the international law firm Vinson & Elkins. Since 2000, they have made over $5 million (source: Texas Ethics Commission) in political contributions in Texas. They also happen to be a continuous provider of services to the State, having received tens of millions in contracts and legal fees from state agencies (source: Texas Comptrollers Office), including the Governors Office, University of Texas System, CPRIT, General Land Office, Comptroller, Department of Agriculture, Department of Transportation, and Texas Higher Education Coordinating Board. It seems pretty obvious why they testified in favor of the amendment.
Last year, our (potentially) next governor Greg Abbott stated that he is against cronyism and wants to get out of the business of picking winners and losers. If he is serious about the issue, and I hope he is, cutting the programs will not be enough. Even if the current programs are eliminated, it is not guaranteed a new administration and legislature in the future will not attempt to revive crony programs again. The longest lasting option (it previously survived 111 years after all), the best way to kill this crony capitalism Hydra, is to repeal Prop 4. Unfortunately, Texas does not have an initiative process, meaning the residents of Texas cannot put an amendment for repeal on the ballot by petition. It has to go through the Legislature, so, if you want to return Texas Constitution to its original intent of safeguarding your tax dollars from corruption, abuse, and special interests, petition your State Representative and Senator and tell them to place a full repeal of Prop 4 on the ballot in 2015.
Not sure if it would end crony capitalism completely, but I can see why Texas originally put this in our Constitution.
I'd vote for repeal.