Forging a more resilient Lone Star State
This is a preview of our Texas 2036 newsletter where lay out a data-rooted agenda for building a more resilient Texas. To receive this weekly look at our work, sign up here.
Our data-rooted approach to building resiliency
Our future is marked by uncertainty. But uncertainty doesn’t mean we can’t be prepared. In fact, it’s in moments like these that data becomes our most powerful tool for building resilience.
This week, we present a data-centered resiliency agenda for: budget, workforce, droughts, floods, electric grid, workforce and cybersecurity.
Building resiliency into the state budget
Pension reform could save taxpayers $40B over next 30 years
Pension reform may receive little fanfare, but legislation from 2021 (Senate Bill 321 by Huffman/Bonnen) addressing the state’s $14.7 billion unfunded liability in the state employees retirement system was arguably the single most important fiscal reform undertaken by the Legislature that year.
Unlike what’s happening in Illinois or New Jersey, Texas legislators have prioritized taking steps now to ensure we fulfill our obligation to support state workers in their retirement and to taxpayers by cutting future interest payments.
Presented a record revenue surplus in 2023, budget writers appropriated $1.2 billion to maintain its commitment to SB 321’s implementation, saving the state $33 billion in future interest payments.
And budget writers went even further, appropriating an additional $900 million to more quickly retire the state employees pension fund’s debt, saving the state an additional $5.2 billion in future interest payments.
Lawmakers also took it upon themselves to address unfunded liabilities in two other state pension funds, dealing with law enforcement and the judiciary, saving the state another $1.4 billion in future interest payments.
Did you know? In 2021, lawmakers merged the two Permanent School Fund investment pools under a new entity: the Texas Permanent School Fund Corporation (Texas PSF Co.).
The move was originally expected to bring an additional $100 million in annual investment returns for Texas schools. However, the Texas PSF Co. said this week the new structure and approach to managing the fund are now projected to increased investment returns by an estimated $250 million annually, and potentially hundreds of millions more as recent changes are fully implemented. Increased returns translate directly to increased distributions to the Available School Fund, now projected to reach $4.8 billion next biennium.
What we are doing to help… Texas 2036 supported budget writers’ efforts in 2023 to make generational one-time investments in crucial infrastructure, reduce long-term liabilities and secure Texas’ leading role in technology.
Texas 2036 talks ‘The Road Ahead’ at TribFest
SVP of Policy and Advocacy John Hryhorchuk took part in a talk with Harris County Commissioner Rodney Ellis and El Paso County Chief Administrator Betsy Keller on the future of Texas infrastructure at this month’s Texas Tribune Festival.
A resiliency agenda for droughts
Source: Sam Craft/ Texas A&M AgriLife Marketing and Communications
Texas took a good first step in 2023 toward addressing future droughts by investing $1 billion in the Texas Water Fund. But that’s barely a start toward covering the $80 billion in needed water supply projects over the next 50 years.
Of that $80 billion, the state may need to underwrite $47 billion in financial assistance.
Source: Sam Craft/ Texas A&M AgriLife Marketing and Communications
“We lose about a farm a week in Texas, but it’s 700 years before we run out of land. The limiting factor is water. We’re out of water, especially in the Rio Grande Valley.”
— Texas Agriculture Commissioner Sid Miller in an interview with WFAA’s Inside Texas Politics.
Did you know? According to the State Water Plan, Texas faces a long-term water supply deficit of 6.9 million acre-feet in 50 years if we do not expand our water supply and are hit by another long, severe drought.
What we are doing to help… Texas 2036 is focused on establishing a dedicated funding stream for the Texas Water Fund, similar to how we finance new roads, to establish a firm financial basis for this crucial infrastructure fund.
Electric grid resiliency and drought
Electric demand will increase from 85 GW to 150 GW by 2030.
The resiliency of the electric grid has been top of mind for Texans as far back as Winter Storm Uri in 2021.
One thing that people aren’t talking about is the connection between drought and the resilience of the grid. We do know, though, that not having enough water will negatively affect the power generation that supplies the grid.
ERCOT, which manages most of the electric grid in Texas, is monitoring the effect of drought on the state’s capacity to generate electricity.
Why’s that? Three-fourths of Texas’ traditional electric capacity, such as natural gas, coal or nuclear, relies on reservoir water, and projected extreme droughts could disrupt about one-fifth of that generation capacity.
What we are doing to help… Texas 2036 has focused on drawing attention to the twin effects of more intense drought and more intense rainfall as these will eat into the capacity of the state’s reservoirs.
A resiliency agenda for flooding
25% of Texas’ land area (66,831 mi²) is in a flood hazard area
Increased frequency of unpredictable extreme weather events, like flooding, imperil our safety, economy and quality of life.
A resilience agenda should include funding to begin addressing the $54.5 billion for needed flood mitigation projects identified in the new State Flood Plan, which would protect homes and businesses from worsening floods.
The future growth of Texas will put more people in harm’s way for flooding. Land in a 100-year floodplain will increase by 11 percent. Also, 2.6 million more people and 740,000 more buildings will be in a 100-year flood risk area.
Source: Courtney Sacco/Texas A&M AgriLife
What we are doing to help… Texas 2036 has focused on a resilience agenda for lawmakers to take a proactive stance in addressing challenges presented by the increasing frequency of extreme weather events.
Did you know? “Texas employment in July was impacted by Hurricane Beryl as the state lost around 14,000 jobs,” said Luis Torres, Dallas Fed senior business economist in August. “The Houston region bore the brunt of Beryl’s winds and rain, which caused widespread power outages and contributed to the loss of 7,000 jobs.”
Building an AI-resilient workforce in Texas
Photo created with AI
56% of Texas businesses use or plan to use AI by next year
What do the newest breakthroughs in generative AI mean for today’s workforce who are both intrigued by the power of AI to make aspects of their work easier and fearful of AI’s power to make their jobs unnecessary?
Indeed’s Austin-based CEO, Chris Hyams, said at TribFest last week that the jobs most at risk from generative AI-driven changes are those where 80% of the skills can be done at a “good” or “excellent” level by generative AI.
- That translates to nearly 20% of jobs, he said.
For all the talk about AI, though, only about 2-3% of job postings contain AI-related terms. Job postings referring to generative AI skills make up an even smaller share — 0.2% — but are on a sharply upward trend.
“While policymakers are highly focused on the impact of AI,” Indeed’s Alexandre Judes & Jack Kennedy write, “they should not forget that there are still many people who don’t have elementary digital skills, shutting them off from opportunities and limiting talent pools available to employers.”
What we are doing to help… Texas 2036 has focused on making attainment of these in-demand digital skills easier for Texans, starting in high school.
Building resiliency against hackers
In 2023, 47,305 Texans lost $1.02B to cybercrime
Governments are frequently maligned for employing IT systems that rely on outdated technology. Many reasons factor into why this is so but it does mean they are less safe in this era of rampant hacks and cyber crime.
The news is filled with examples of nefarious actors looking to exploit weaknesses in governmental IT systems. Here’s where that’s happening:
🔋 The state power grid
🚰 Municipal drinking water systems
🧑💻 Companies’ user and customer information
Ripped from the headlines… A Texas House select committee tasked with countering cyberthreats from foreign actors had a livestream of its field hearing in Tyler hacked this week.
Want better AI? Invest in a more secure cloud.
Patrick Ryan, a D.C. managing partner for KPMG, told an Axios panel on AI and the workforce this week that ensuring enough people are working to advance AI technology hinges on a secure cloud.
Startups “will be crowded out if you don’t have access to a secure cloud,” he said.
What we are doing to help… Texas 2036 has focused on supporting lawmakers’ efforts last session to upgrade agency technology, adopt AI-based tools and address cybersecurity risks.
What our founder has to say about resilience…
Texas 2036 founder Tom Luce once posed a critical question: Where will Texas be if we keep following the same path without adapting to these emerging challenges?
The answer, grounded in data, is clear: we must act now to safeguard our future.
How resilient is Texas in the face of future challenges?
