House committe on ports meets at TAMUG

State Rep. Joe Deshotel, chairman of the House Select Committee on Texas Ports, Innovation & Infrastructure, left, and members of the committee listen to testimony Monday, March 26, 2018, at Texas A&M University at Galveston.


A Texas lawmaker has proposed a solution to cover the cost of the under-funded Texas Windstorm Insurance Agency: build casinos in coastal counties and use the tax proceeds to cover the cost of insurance.

In a bill filed Friday, state Rep. Joe Deshotel, a Beaumont Democrat, proposed licensing casinos so taxes from them could provide money for residual windstorm insurance and flooding assistance.

The bill, HB 494, would give the Texas Lottery Commission the power to issue six licenses to operate casinos — one each in Galveston, Jefferson and Nueces counties, and three more to horse or dog tracks in Harris and Bexar counties.

The proposal also would create a gaming tax of 18 percent of a casino’s revenue, and apply some of that money to ensure the windstorm association has enough funding to cover its insured losses and operating expenses.

It also would send part of the tax to a flooding assistance trust fund the governor’s office could use for emergency assistance during disasters like Hurricane Harvey.

“Just like the lottery, where a portion of funds go to public education, this is a need that’s underfunded,” Deshotel said. “If the lottery helps education, we can help with the problem of windstorm, which is disproportionately paid for by the coastal counties.”

It’s not the first time Deshotel has filed a bill proposing that casinos pay for the windstorm association. He filed a similar bill in 2015 that was left pending in a house committee. New this year is the proposal to create a fund for flood damage.

Deshotel acknowledged his bill was a long shot with or without the connection to windstorm or flooding. Both Democrat and Republican members of the legislature have opposed legalized casinos over the years for reasons rooted in religious, secular social justice and economic arguments.

Deshotel expected that opposition to continue in the coming session, he said.

“It’s something we should do regardless of whether the funds are dedicated to those issues,” he said. “Every bordering state to Texas has legalized gambling. We lose millions of dollars in potential tax revenue to those areas. We have the consequences of gambling, but none of the positives.”

Legislators will discuss making changes to the windstorm association during the coming session. The association is facing a funding crisis in the wake of Hurricane Harvey, for which it paid out $1.2 billion after the storm, numerous observers, including members of the state’s Sunset Advisory Commission, have argued.

Texas Gov. Greg Abbott earlier this year blocked a proposal by the association’s board to raise commercial and residential rates by 10 percent.

Abbott wanted to give the legislature time to consider systemic reforms before a rate hike was approved, he said.

In November, the Texas Sunset Advisory Commission released a report offering a grim view of the association’s financial sustainability.

The association would need to increase its residential rates by 32 percent to cover the anticipated costs of claims and expenses, according to the sunset report.

The commission also recommended the association be restructured.

The association does not receive any general revenue or tax dollars.

As of Monday, no other bills regarding the windstorm association had been filed.

The Texas Legislative Session begins on Jan. 8. The deadline to file bills is March 8.

John Wayne Ferguson: 409-683-5226; or on Twitter @johnwferguson.


Senior Reporter

(20) comments

Don Schlessinger

Dumb, Dumb, DUMB!

Miceal O'Laochdha

Sorry to disagree but, I see this proposal as: Brilliant, Brilliant, BRILLIANT! Also, likely to be Doomed, Doomed, DOOMED!

Nick Garza

What is dumb is losing all the revenue to our neighboring states. What's dumb is forcing our senior citizens to get on buses to neighboring states just so they can play at casinos. Tell it to the senior citizens in Bastrop who were on that charter bus to some out of state casinos when it was hit by a train killing several passengers.

Stephanie Martin

It will never pass. As we all know, the Texas lawmakers receive millions from the Louisiana casinos to vote "no".

Matt Pace

Actually I did not know that, Stephanie.

JD Arnold

Stephanie, can you give us some examples please?

Rusty Schroeder

You are correct Stephanie, Galveston's hotels fought against this same type of proposal years ago when it benefited the dog & horse tracks. The island was against it if they couldn't have the same, but nowhere on the island does para mutual wagering exist, legally that is. And one would have to be as lost as Lafitte's treasure not to recognize those hotel owners have politicians votes at their request. Heck one owner owns the premier attraction on the island as well as the Kemah Boardwalk. Plus he owns casinos in Louisiana and Vegas, think he wants to level the playing field in Galveston?

Robert Waggoner

I for one would like to see legalized Casino gambling. I wouldn't go, but many others would and the revenue from it would stay here and not go to another state. The way the article is presented is misguided. The state representative presents it as a way to help provide money through a tax on the casino's earning for residential windstorm insurance and assistance. Who will get this money? TWIA to equally distribute or lower rates? The GM of the TWIA said in a recent article that they have the resources to pay claims and meet financial commitments. So then why is this proposal really necessary? The money raised from the tax will be used like the money from the Texas Lottery for education. Really? That went well. Then why are we always short on school finances state wide? In my opinion this is why this whole proposal looks dumb.

Carlos Ponce

This reminds me of the discussion prior to bringing dog racing to Galveston County. It's still there, not many live races, they use the huge parking lot for carnival rides.

Rusty Schroeder

The dog racing industry collapsed, I don't see Vegas or Lake Charles downsizing anything casino related. Naskilla Gaming outside of Livingston has recently expanded, and is packed throughout the week. That should be done with Gulf Greyhound, it would be a huge economic boom to La Marque. Make it the premier dog track facility with restaurants and slot machine gambling. Magical Winter Lights would be moving across the freeway.

George Croix

Casino gambling to fund windstorm insurance.
Sounds great.
The logo for that would be a pix of Lucy holding the football for Charlie Brown to kick...............

Carlos Ponce

I remember when Texas LOTTO was passed to provide more money for teachers. That was a lie. But those working in government jobs in Austin, Texas got a hefty raise. It took the removal of Granny Annie to remedy the situation.

Jim Forsythe

Some people may confuse the old law with the new law. The new law says that after 1997 that Texas schools became a specific beneficiary of the money. The breakdown of the dispersing of lottery winnings.
63 percent is paid to lottery winners
27.1 percent funds Texas education through the Foundation School Fund
5.4 percent goes toward retailer commissions
4 percent goes to the lottery for administrative costs
The remainder, about 0.4 percent, funds the Veterans Assistance Program and other state programs
The commission announced in September 2016 that it had earned more than $5 billion in sales for the 2016-17 fiscal year Of that $5 billion, roughly $1.3 billion was allotted to the Foundation School Fund, which is administered by the Texas Education Agency. The money is used for expenses such as teacher salaries, bilingual education and special education. TEA officials said the Foundation School Program should be thought of “as a huge pot of money” with lottery revenue being just one contributor to the pot
Since the change in the law in 1997, how much money has go to education? According to the Texas Lottery’s website, the lottery has contributed $20 billion to the Foundation School Fund since 1997.

George Croix

And that ENTIRE 20 billion since 1997 has been totally eaten up and a LOT more spent just providing taxpayer funded education for illegal alien kids and anchor babies of illegals, if any of several articles on the subject can be believed.

Of course, that would also easily pay for a border wall, to greatly reduce the problem, but the left tells us 'Walls don't work', which makes one wonder why they work in other countries that have them, why they work on houses and buildings, why they work on the property and homes of the very people saying they don't work......

There's a reason for their mendacity.....

Jim Forsythe

The taxpayer funded education for illegal alien kids goes back to the 1982 Supreme Court decision prohibited states from denying students free education on basis of immigration status. If it was not for the lotto that amount would have to be made up from Texas education funds. To change this, the Supreme Court ruling would have to be reversed.
The 27.1 percent funds from lotto for Texas education goes through the Foundation School Fund and can not be used for a border wall, unless the law is changed.

George Croix

I know what it goes back to, Jim....I'm concerned with where it goes from here.
And mystified by all of the folks who advocate or make excuses for illegals while B'g about school funding....
Seems like a bit of a conflict, there......
Not an unfixable one, but pretty close.......[smile]
SCOTUS in '82, per Justice William Brennan, decided that Texas had failed to prove that educating illegals was a substantial burden on the states education system.
Evidently, Texas had the worst attorneys in history arguing for them, or, more likely, simply could not overcome the ever growing SCOTUS turn in the direction of ideology as a driver.
Be interesting to see if SCOTUS would make such a determination now about a lack of burden...with straight faces, I mean.....

Jim Forsythe

George, I do not think that anything will change until big money is taken out of the equation.
I know you may disagree, but I do not see the wall being built anytime soon. They are still in court trying to acquire the land from the time that Bush was in office and that was for a small amount of land, that the wall would require..
About the funding for schools, it's like when I asked a preacher in town how do you make sure that the people that needs food, get it and not the ones that do not need it. His answer was, all must be severed to make sure that the ones that really need it, are taken care of.

Carlos Ponce

"I do not see the wall being built anytime soon."
Here's the website on US Customs and Border Protection Border Wall and its construction. The wall is being built. The litigation is only over what price will be paid for private property, not possession of the property. And that litigation is being fast-tracked.
Note the following articles on that website from 2018:
Border Wall Gate Construction Project to Begin in Texas
Border Wall Contract Award in Arizona
Border Wall Contract Award in Rio Grande Valley, Texas
Border Wall Construction Project to Begin in Texas
El Paso Border Wall Project to Begin
Border Wall Construction Project Starts in San Diego Sector
Santa Teresa Border Wall Replacement Project to Begin
Border Wall Construction Underway
Border Wall Replacement Project Starts Near Downtown Calexico

George Croix

Eventually we either cease to be a country, or finally make a move to see to it that legal citizens and residents are not being out BILLIONS yearly paying for people who are not supposed to be here, by whatever means it takes to get that started....another SCOTUS ruling, wall, Jurasic fence, prison time for anyone hiring them...whatever, just stop the insanity.
If the Left wants more future voters so badly, then stop killing them by the millions just for 'mom's' convenience...
But, it's unlikely I'll ever see any of that.....but its a shame my grandkids wll be so badly screwed over by it all.............

Jarvis Buckley

George I agree with you 100 percent.
Jim the wall will be built.

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