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The 2023 TX Legislative Session Kicks Off Today. What Does That Mean for Business?  

Jackie Padgett

Texas State Capitol

Today marks day one of the 88th Texas legislative session. While it primarily consists of pomp and circumstance as members are sworn in, the laws produced in the next 140 days will have a big impact on people and businesses across the state.  

So, what are the legislature’s priorities this year, and how will they impact your company? Well, the answers depend on your company’s industry, location, focus, customer base, and culture.   

While we don’t yet know exactly what will be covered during this year's session, experts believe these are the top legislative issues business leaders should follow: 

Budget Surplus 

Business leaders are buzzing about the big news recently released by Texas Comptroller Glenn Hegar -- Texas has a record-breaking budget surplus of at least $27 billion. Some estimates are closer to $35 billion, but what’s a few billion dollars? Passing a balanced budget is the only thing the Texas Legislature is constitutionally required to do when it meets every other year; therefore, how the surplus is spent will be a major focus for lawmakers. But it’s important to note: not all excess money is up for grabs. Spending caps limit how much legislators can spend. Additionally, portions of the budget are reserved for highway funds and the state’s “Rainy Day” or Economic Stabilization Fund.  

Tax Relief  

CFOs around the state are also closely monitoring proposed changes to tax law. A hot topic around the rotunda is Chapter 313, a major corporate tax break program that expired last year. Many businesses are advocating for an alternative. Additionally, the Republican leadership seems united in wanting to reduce property taxes, which impact all homeowners in the state; however, the specifics are up for debate.  Governor Abbott campaigned on the promise to deliver “the largest property tax cut in the history of the state,” but Lt. Governor Dan Patrick warned doing so would exceed the legislature’s self-imposed spending cap. Of course, the current legislature could vote to change that cap.  So, we must stay tuned to what happens in this early conflict.  

Infrastructure 

Infrastructure is another key imperative for business leaders in 2023. After losing hundreds of millions of dollars when the grid failed two years ago, many manufacturing businesses are voicing support for grid and infrastructure improvements. Dade Phelan, who was again elected as House Speaker, floated the idea of using some of the budget surplus for infrastructure spending. Unlike the recurring cost of property tax relief, infrastructure improvements are a one-time cost. This topic is also one of Lt. Gov. Patrick’s legislative priorities, so we may see consensus between the House and Senate chambers.  

Public Education & “Parental Rights” 

High-quality education is paramount for employee recruitment, retention and workforce development. In this legislative session, business executives and education advocates are calling on the legislature to use some of the budget surpluses to support public ed, especially as school financing remains a hot-button issue and teacher shortages are at an all-time high. Republicans put “parental rights” at the center of their education agenda, arguing that parents should have more control in their children’s education, “whether it be the school they attend or the books they read.” Gov. Abbott and Lt. Gov. Patrick expressed interest in supporting school choice legislation, which would allow parents to use taxpayer dollars to send their kids to private schools. Experts expect some pushback on school choice among Republicans in rural areas, whose constituents often don’t have alternatives to the public school system. Additionally, lawmakers have filed a number of bills that would restrict which materials students can access in school libraries. According to PEN America, a nonprofit that advocates for free expression, 22 Texas school districts have already banned hundreds of books from school libraries, most with content on race and racism, abortion, and LGBTQ+ issues.  

Women’s Healthcare  

Since the Supreme Court’s reversal of Roe vs. Wade last summer, Texas business leaders have many outstanding questions, and opinions, on the state’s abortion laws. Prior to the 2022 midterm elections, a handful of Republicans were open to creating exceptions to the state’s abortion ban for victims of rape or incest; however, after the party dominated the midterms, the state’s leadership does not seem politically motivated to revisit the issue. One of the most important issues for companies to watch is potential bills designed to push back on businesses that help employees get access to reproductive care. Whether or not those bills make it all the way to the governor’s desk is to be determined.  

LGBTQ Equality  

In 2017, a broad coalition of business leaders pushed back against the so-called “bathroom bill,” which would have required people to use the restroom that matches the sex on their birth certificate. But since then, despite pressure from business groups, Texas lawmakers passed other legislation targeting LGBTQ+ people. In addition to banning books focused on LGBTQ+ issues in public schools, lawmakers have already filed around three dozen bills targeting LGBTQ people, varying from restricting drag shows to criminalizing gender-affirming care for children. This session, expect to see business leaders and employee resource groups at large companies come out to advocate for the LGBTQ+ community. 

Border Security  

Businesses in specific industries and those located in border towns are paying close attention to the crisis at the US-Mexico border. In 2021, Governor Abbott launched Operation Lonestar which sent thousands of state troopers and National Guard members to the border. But as the number of migrants trying to cross into the US continues to climb, lawmakers will have to decide if they want to continue spending billions of dollars on the program or try to address it another way. 

Cities vs. State 

The final pain point government affairs professionals are watching closely is local control. From plastic bag bans to abortion access, cities have tried (often unsuccessfully) to pass local ordinances to counteract policies passed by the state. Experts expect to see the tug-of-war between typically democratic-leaning major cities and the more conservative state leadership continue this year. However, according to Austin American-Statesman state politics reporter Niki Griswold, there may be room for consensus on some issues: “At the end of the day, I think the Texas legislature also prides itself on allowing for more bipartisan cooperation than you might see in D.C. So, I think there is some overlap in terms of interests for both parties.”  

What Happens Now?  

This week, each chamber adopts its rules, and by late January, the House Speaker and Lt. Gov. will name lawmakers to committees. Those committees begin hearings on bills, and in early February, Governor Abbott outlines his priorities during his State of the State speech. In April and May, the pace of the legislature will quicken as lawmakers rush to pass legislation. Below is a list of key dates to remember.  

2023 TX Legislative Session Key Dates: 

  • Jan. 10 – 1st day of session 

  • Mar. 11 – Unrestricted bill filing deadline 

  • Mar. 29 – Sine die (last day of session) 

  • June 18 – Last day Governor Abbott can sign or veto bills 

  • Aug. 27 – The day most bills will go into effect if they didn’t pass with more than 2/3 of votes (bills with more than 2/3 of votes can go into effect earlier) 

Interested in following what’s happening at the Capitol, but not sure how? Our friends at the Texas Tribune put together a Texas Legislature 101 guide with helpful information to get you started. 

 As always, if you have questions about how to get involved in addressing public policy issues that align with your business objectives, we’re here to help! IGC specializes in helping companies in Texas navigate social and political issues to reduce risk and seize opportunities.  

 

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