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The Fundamentals for Reopening Houston Safely

Published Apr 29, 2020 by Sophia Guevara

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Texas has started the gradual process of reopening the economy with the announcement this week of Governor Abbott’s Report to Open Texas. To prepare for the region’s reopening, the Greater Houston Partnership convened over 80 Houston regional business and community leaders through a series of working group meetings between April 23rd and 27th to define how Houston can reopen the economy safely, sustainably and successfully. The working group members represented businesses both large and small, from across the region and spanning key industry sectors.

Eight working groups were organized:

  • High Touch / Customer Facing: Restaurant/food services, Retail, Entertainment
  • Industrial: Energy, Power, Construction, Manufacturing
  • Office Workers / Knowledge Workers: IT/Information, Finance Accounting, Legal, Investment, Professional Services
  • Health Care
  • Logistics / Transportation: Trucking, Rail, Port, Transit, Warehouse
  • Small Business
  • Education: K-12, Higher Education
  • Social Services/Child Care/Faith Community

Before the groups met, the Partnership surveyed business owners to gauge their needs to reopen. Key results are available here.

The key takeaways from the Reopen Houston Safely working groups were:

  1. Set a Balanced Tone: A phased increase in economic activity must be balanced with public health considerations.
    • Throughout this crisis, state, local and business leaders have been led by public health considerations, and it is clear those considerations are still paramount.
    • The State’s announcement of the formation of a statewide testing and tracing program is encouraging. As local public health authorities begin standing up an enhanced testing and tracing program, it is important for the state to provide a coordinated framework and support.
  2. Recognize Houston’s Economic Diversity: Houston will reopen safely across industries, business size, and risk profiles of work environments through strategies appropriate to each sector.
    • May 1st will mark the start of a gradual reopening.
    • Essential Businesses have continued operations throughout this crisis and have learned how to implement necessary measures to protect their employees and customers.
    • Small Businesses and other employers granted permission from the state to reopen may begin to return to work, however, many will monitor the performance of other industry members, COVID-19 infection rate reductions and improvements in testing, before returning to work.
    • It is unlikely that Office / Knowledge workers, particularly those who operate in Industrial or Essential Businesses, will return to work in the first phase of reopening, because they are productive at home.
  3. Acknowledge the Role of Business: Now that Phase One of the State’s reopening plan has been announced, there is urgency within the business community to adopt Work Safe measures and building employee and consumer confidence.
    • The business community understands that working safe is critical to ensuring employees’ and consumers’ confidence as Houston reopens.
    • Across all working groups, employers expressed a responsibility to enact safeguards, including those related to sanitation, PPE, and to support testing, tracing and isolation.
    • There is an opportunity for Essential Businesses who have operated safely, sustainably and successfully to provide key learnings for high touch businesses, small businesses, education and social services regarding accessing supply chains to procure resources needed to comply with official safeguards. Much of that coordination is ongoing.
    • There is an incredible motivation for the Houston regional business community to “get it right” and reopen safely so that the economy can continue to recover.
  4. Make Coordination a Priority: Between all stakeholders, working group members identified the importance of speaking with a unified, clear and consistent public voice.
    • As Houston works to build employee and consumer confidence, a unified, clear and consistent public voice will help the economy recover safely. The Partnership is committed to working on behalf of the business community and other stakeholders to develop resources for businesses and to provide policy recommendations focused on the steps needed to reopen Houston.
  5. Consider Access and Equity: Working groups considered access and equity for all Houstonians and prioritized considerations related to vulnerable populations.
    • While Social Services have operated during this crisis, their budgets and fundraising efforts have been stressed while the community’s needs for their services have increased.
    • Most employers’ decision to return employees to work will be impacted by access to child care and education. Reopening child care will occur in phases, and educators must address challenges related to parents’ and teachers’ safety, PPE and sanitation supplies, and social distancing.
    • In Higher Education, the transition from online to in-person classes will be gradual and will focus on COVID-19 risk and vulnerable populations.
    • In Transportation, employers recognized that employees not only need to work safe but also travel between work safely. As Houston reopens, COVID-19 mitigation measures must address increases in public transit ridership.
  6. Prepare for the Long Term: Working group members recognize the “new normal” in which Houston will operate until a vaccine is available.
    • A successful Phase One of reopening will reduce infections, maintain Essential operations, drive small businesses’ return to work, and ensure consumer and employee confidence.

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While the Legislature was adjourned this week, the major news out of Austin came in the form of the budget. In keeping with the tradition of alternating which chamber produces the budget, the Senate Finance Committee released Senate Bill 1 on Thursday. The base budget bill proposes $119.7 billion in general revenue spending for the 2022-2023 biennium, a 4% growth in general revenue. This is greater than the $112.5 billion that Comptroller Hegar announced last week will be available to lawmakers for general revenue spending. Senator Jane Nelson (R-Flower Mound), Chair of the Senate Finance Committee, stated the goal is to protect the investments towards supporting public education and vulnerable citizens in 2019. The Economic Stabilization Fund (ESF), also known as the Rainy Day Fund, is expected to reach $11.5 billion by the end of the 2022-2023 biennium. It is possible the Legislature could tap the ESF to balance the budget. It is also not unusual for the Legislature to utilize creative accounting maneuvers to allow funds to be spent beyond those outlined by the Comptroller. Public Education With the Senate budget bill filed, we have our first look at how the Legislature may fund public education. The base budget includes an increase in overall funding for public education by over $9 billion. This increase accounts for statewide population growth and the automatic tax rate compression requirement passed during the 2019 legislative session, which requires property wealthy school districts whose property tax values increase by over 2.5 percent to compress their tax rate or go to the voters with a tax ratification election. In addition to the overall increase in funding, legislators fund most of the critical programs and formula elements included in House Bill 3, the landmark school finance package passed last session. Some of those programs include math and literacy academies, career readiness programs, the educator quality and leadership program, and early childhood learning. However, legislators cut funding for a majority of the programs outside the formulas by 5 percent, which is consistent with the state leadership’s directive for the majority of state agencies to cut 5 percent across the board. The state budget sustains all elements of the formula funding system for the next biennium. We believe the base budget reflects the Partnership’s Executive Priority of maintaining a well-funded and equitable public education system that serves all children and protects high-impact programs. Health Care Total funding for the Health and Human Services agencies is $91.6 billion. This is a decrease of $4.1 billion from the previous biennium. The decrease reflects $1.8 billion in one-time federal appropriations directly tied to COVID-19 pandemic response, and a decrease of $1.3 billion in the federal share of funding for Medicaid and Children’s Health Insurance Program (CHIP) guaranteed under the federal 2020 Families First Coronavirus Response Act, which is set to expire currently in 2021. Additionally, the budget reflects agency-identified reductions for the 2022-2023 biennium. In 2019, the Legislature prioritized resources to address mental health, specifically childhood mental health. Funding continues for these programs in the proposed budget with a projected $8 billion for mental health, including an increase of approximately $20 million to operate the Texas Child Mental Health Consortium and $145 million to continue community mental health programs. The proposed budget also maintains funding for Graduate Medical Education formulas, projected caseloads for the Medicaid program, and enhancements for post-partum care services and Maternal Mortality and Morbidity safety initiatives. Transportation The Senate Texas Department of Transportation budget includes a 7.5 percent decrease, from $32.8 billion last session to $30.3 billion this biennium. This does not threaten or delay the state's commitment to the State Highway Fund, serving transportation needs, and TxDOT's reductions primarily reflect the loss of one-time funding sources. Higher Education Funding for Higher Education totals $21.3 billion for the 2022–2023 biennium, a decrease of $3.3 billion, or 13.6 percent from the previous biennium. Formula funding appropriations are maintained for the biennium. With formula funding intact, the Partnership will support policies that advance Houston regional higher education institutions' development of the future workforce. Economic Development Economic development appropriations are reduced, compared to the current budget. Historically, early budget drafts appropriate fewer incentive dollars compared to the final version, and the levels allocated in Senate Bill 1 are similar to amounts initially proposed in 2017 and 2019. The Texas Enterprise Fund is funded at $100 million. The Texas Enterprise Fund decreases by $50 million, from $150 to $100 million. Skills Development Fund dollars, used for workforce training, are reduced by $5.3 million, to $54.7 million. Monies allocated to the Governor for broad economic development efforts are reduced from $121 million to $37 million. The Governors University Research Initiative, which is designed to lure top-tier academics to Texas universities, increases to $40 million, up from $23 million. To learn more about this week of the 87th Texas Legislative Session or the Partnership's priorities, check out Houston.org/txlege. 
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