#6 - Ryan Brannan: Beyond the Numbers: Texas Budget and Advocacy Strategies

Welcome back to Bills and Business. I'm your host, Laura Carr. And today we're joined by Ryan Brannan. Ryan’s the founder and principal of the Brandon Firm a highly respected government affairs firm. It means both experience in legislative and regulatory spaces. He's here to provide some insights on the session's challenges and priorities and Ryan serve Texas from multiple angles. As a three time gubernatorial appointee under both Governor Greg Abbott and Governor Rick Perry, and a former Worker's Compensation Commissioner, he's also an adviser to Governor Rick Perry on his budget policy.

And his expertise spans a broad range of issues, including appropriations, public health insurance, transportation, and infrastructure. So today, we'll be talking about Texas projected budget increase and how this additional funding could impact states priorities, including Ryan's client expertise. We'll also touch on the broader shift to the right that the Texas legislature has gone in, and how new legislators may influence the spending of these surplus funds.

Ryan, welcome to the podcast. I'm excited to have you here. And for those who don't know, we used to work together for two years, so it's always good to have a little reunion with you. It is. And thank you for having me. It's great to see you too, Laura. You know, it's funny you mention that. I enjoy working with you.

Now look at you. You're all grown up, like, proud POA moment over here was when I introduced you as a keynote speaker, one of my clients' conferences. So congratulations. And thank you. Thanks for having me. It's good to see you. I was so much fun. And it's always fun to, you know, be working with you again in any capacity.

So it's very good. So, Ryan, for those who don't know you, please tell us a little bit about yourself. Sure. So, Ryan Brandon, contract lobbyist. Been around the Texas Capitol since 2009 when I moved down to Austin. First career job was for Kay Bailey Hutchison in DC. We'll say a few years before that, and, just, really loving all the Capitol crowd and the people and representing clients, and it's, like, doing exactly what I wanted to be doing when I moved down here.

So it's pretty great. Awesome. What's an exciting time to be in Austin and around the capital and working in this field? We just had this amazing, kind of, you know, crazy election year. In general, we had a bloodbath in the primary. We had this, you know, kind of sweep in, this most recent election. So how's everything going with you on the business side?

It's going great. And you're. And you're right. It is. There's a lot going on right now. Right? We just had the election or have, they're filing bills now. So it's really here that we're coming back in January. And, you know, it's just there's a lot, a lot happening with that. Big budget surplus.

We have a new federal, presidential, administration, a lot of new faces in the Texas capital, some changes at the local level as well. So, a lot to keep, keep track of. Well, you mentioned the budget and projections in January, where it was going to be going up 23% this year, roughly. How is that going to start impacting you this session?

Yeah, we'll see how much it ends up going up by the time we get there. But projections are still holding us to what they were in January. Happy of how it will impact me, I think will depend a lot on what the legislature decides to spend those funds on. Last session, they did a phenomenal job, spending a lot of that money on one-time needs rather than ongoing needs that will be become new programs, new, new, ongoing expenses and appropriations for the state.

And if we don't have the surplus that we have this time, we had last time, that could then become a real problem for the state. So, they passed significant infrastructure bills, dedicating a lot of funding to all sorts of infrastructure transportation, including the ports, which was something they don't normally fund very well. Or have in, in the past, I should say, we had the they're still doing the broadband rollout.

There was a water fund. Done. Conservation fund. So really there's, there's a lot of infrastructure, much needed infrastructure, I should say to, a lot of the infrastructure too. I mean, I'll use the Port of Galveston, for example, later 200 next year. Wow. Pretty amazing. And, you know, they have some equipment out there that looks like it might have been here 200 years ago.

So, you know, the state funding the the port master plan is a part of it, allowed Galveston to fund two projects, three projects, two of which have already broken ground on and that's already creating jobs for economic development. And, you know, more tourism money, too. So those are just great things that you don't need to continue to spend on an ongoing basis in order to get really great results from the state.

So, we'll we'll see what they do this time. But I think if they continue to keep a good eye on the funds like they did last time, I think the state of Texas will be a great and great shape to continue the economic dominance that they've been having. Right? So a few years ago, I remember, I was at a panel with several agency heads, and, and statewide leaders and, the conversation this was pre winter storm pre pre Covid I believe.

And the question presented in the Q&A at the and was why is everybody moving to Texas. Why are all these companies moved to Texas? Of course there's several different reasons for probably a myriad of reasons really. But I did it. And you did it. Yeah. Welcome. Welcome back to Texas again. And, the answer that came from the the officials was because they know we have reliable infrastructure that our electric grid works, that we have water.

And literally less than a year later, none of that was true. But the thing is, they're still coming. You have greater demand on a lot of that infrastructure. I mean,USLege AI right? I was using a lot of electricity or not yet, but, yeah, we'll have to start kind of looking at those things as we get bigger and scale for sure.

For sure. Well, sure. And of course not you, but AI in general, I general absolutely no, I'm sure you've got it all down because you've got the storage, cloud storage facilities and all that that are taking up tons of electricity. You know, that's going to stop anytime soon. So, you know, using those funds to make sure that we can keep our infrastructure in place and keep the economy humming, I think is one way that the legislature can really help the state.

Well, as a former commissioner of a state agency, how do you see this budget impacting those agencies and programs? Great question. And I think it depends on the agency. There are several agencies that are funded out of, you know, dedicated funding streams that probably won't have as much of an impact. But if you look at larger agencies, you know, you look at both.

Why we start with HHSC, they're the biggest one. So again, with the time, with the changes that are happening right now, not just at the state level, but the federal level, at the local level. You know, I think there's a potential anyway for some unprecedented change. So, you know, President Trump, president elect Trump on the campaign trail, talked about using block grants for Medicaid funding.

Well, that would free up the state to get very innovative with a lot of their approaches. And, and, which actually takes me to another way that the state can really help. And, you know, we're wasting billions of dollars in waste, fraud and abuse, different programs on that point to figure anybody. It's all over. But there are solutions out there to capture a lot of that.

That money before it ever leaves the state, particularly if it's federal pass-through funds, let's say the feds do. Let's just use Medicaid as an example. Again, not putting anybody. But if the feds do things, innovative things like block grants for the states and Texas receive those funds, then they can do new programs, new ways to prevent waste, fraud and abuse.

And and then you're not having to go chase those funds and try and recover them if they never leave the state in the first place. And that could save billions of dollars a year right there, which could then be used to fund some of the pet projects like the border wall or, you know, school choice or whatever state leadership decides to spend the money on.

And that would also reduce the burden, ongoing burden on the state government. So, I mean, those are two ways right away, innovative solutions without, looking at not spending waste, fraud and abuse money that's coming out of the state, spending those the funds they do have this time, on one time, things are ongoing. Things. And then you can look at it at a program level, too.

So another state agency, and I'm not thinking of anybody. These are just the two big ones. Agency. And then the next biggest one. But they, you know, they have programs that are designed to help school districts, supposed to be more of a last resort. Like if you can't find what you need on the private market, and you come to the state to get it, and we see it in a lot of insurance products.

But, this one is just an example. And what the state has done the last two cycles is actually, fund the school districts that are with the state or help shore up their funding, and not the school districts that aren't with the state that are getting their services from the private sector. So it's had a reverse incentive in the market.

You have more schools wanting to get those additional funds from the state. And by the way, may or may not be legal at our, not going there. But if I was one of the school districts that didn't get additional funds from the state, I I'd be upset. But really have the reverse incentive. Now, you're taking this program that was for the insurer of last resort, and you're convincing all the school districts to come get in because they're getting additional funds at reduced rates.

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But it's not real. It's being propped up. It's not smart, not market rate, when really the state should be trying to convince as many schools as they can to get out of that state insurance of last resort. And, you know, that's been done 10 to $20 million over the last two years. So on a grander scale, it's a lot smaller than the billions you're talking about with HHCC.

But you start looking around, combine all this stuff, and you can make some real positive changes for Texas. Talk about lowering your taxes as a result of that. Everything else. And it's obviously not just us, right? I mean, Elon Musk, it is what they call it Department of Government Efficiency and Efficiency. So I mean, the things they're looking at everywhere.

And if you could start saving billions of dollars a year and you have billions of dollars in surplus, you can really start looking at some of these solutions. I don't want to say eliminate the property taxes, but, I mean, maybe government efficiency is definitely something we're looking into as well as we scale and helping with how we're working with state agencies and other other government organizations, it's going to be exciting to see how we can help.

I love what you're doing, the efficiency. Thank you. Well, you mentioned a lot here. One of the pieces that I want to kind of go back on is like aging infrastructure. You mentioned with just the ports specifically, I know that you work with them, but what role do you see? Kind of other special projects and infrastructure projects playing in this session in Texas future, as is it's a massive deal.

It's massive everywhere. And again, this is another cross-section of the different levels of government, right? So, they put in billions of dollars into infrastructure investment. And that's not just ports. I mentioned ports as example. The roads. I mean, it could be land ports two. Right. Like you look out at Laredo or El Paso, these are huge ports, trucks, people, everything else.

And especially with, again, with the federal focus on the border now coming at you today, announcing a lot of stuff. We'll see if that actually happens, what they're talking about doing. But, if they didn't, there's good. They're going to need some support there. And then the roads build roads. And I learned something recently. This is a little off topic, but, you know, you know me.

I'm such a policy nerd when it comes to this stuff. Local governments budget differently. There's, like you and I do with our project. So, like, if you buy streetlights, there's not an ongoing, depreciation put into place. And so over time, those assets diminish and they need to be replaced. And a lot of that is part of the infrastructure issues that we're facing all across the state.

So if you can use these funds that aren't in the budget, for one time, you know, you could have streetlights, for example, and that's what, 25, 30 years. So if you could fund streetlights, you just say, you know, 30 years worth of stuff. So I probably have the best examples, street lights. But but just to get the point across on how these funds can be used, but the again, looking at the, the, the tiers of government, federal, state and local, let's say you're funding, roads that go across, I don't know, crisscross across the state.

You know, how do you create those roads? Right. You got to have trucks, you gotta have concrete. You gotta have got to be able to get the concrete. You gotta to be able to get to the site. And there's a lot that goes on there. And, you know, if you've got a concrete plant here under one set of regulations, but then that particular plant is in a different places.

And their cost of doing business changes all those different, different places. And it's really hard to keep the cost low so that you could do more of these projects with the same amount of funds. And, you know, one example is, I heard about a, not a concrete plan, although they have a they have their own, kind of fight going on right now, which is probably why they came to.

Sure. But like, you know, there's, you know, a plant up in, it's not concrete, so they don't want to. I know, got to. Yeah. I don't want to call, you know, but these folks that live in, emergency services just voted to increase the tax base 2%. Well, all the marketing for that was this low cost.

The average homeowner, or $7 a year. Sounds sounds great. I want emergency services on fire. And if I going to pay seven bucks a year, I'll do it. That doesn't take into account businesses commercial. So that's $7 a year for you and me and our house, for this business. Might be as much as 40, 50 grand a month.

And that, really stymies economic development and growth. So, it's looking at all these different levels. Because of the legislators and the decision makers are doing the Lord's work, trying to trying to figure out the best way forward. And obviously, there's there's a lot of, stakeholder participation, but we're on the front end. You know, we got another six months to talk about this before the final budget comes out.

Before before they adjourned signing, I, so it'll be it'll be interesting to see. And it's very exciting. And luckily, I'll be able to track all those bills, because of your bill tracking service. But this I know it's awesome. And it's been great the last couple weeks of go filing. I love it. Well, you mentioned a lot in regards to stability and things that the government and the members can do.

You've mentioned six months. We've got like, yep, seven, eight more months, the discussions and and exciting time. So what do you think some things that you know, the legislature can do to promote continued economic stability. Yeah, I think there's a lot they can do. And, and hearing what I've mentioned like so examples of local government doing some things, but there's a lot of local governments doing.

Right. And there's a lot of local governments that want to do it right. And, you know, Austin is always the easy one to point out, right? But, with at a time when the state and literally the rest of the country moved in one direction, Austin doubled down the other direction. They only had one city council member that was pushing for any kind of government accountability.

She was voted out of office. And another district, they had an avowed, socialists for the Democratic Socialists of America win. So the city of Austin, their city council, took a hard political turn. And, Kurt was of God bless. And they do the Lord's work, and they're just trying to hold the thing together. I mean, there was a song that came out during Covid that is called, God Bless the people trying to hold this town together.

Every time I hear. Yeah, we're all we're all rooting for you. But, you know, there there are one of the reasons why there were a lot there's a lot of bills filed at the legislature, to rein in some of this. There's no control. Of course, there's always a bad apple that rules and for everybody. And a lot of times, you know, that's the case.

Yeah. Mentioned Austin. I'm sure it's not always them, but for every one of them there's 100 people doing it. Right. And so it's, it's yeah. Trying to work through all those very complex policy issues. But obviously the decision makers have gotten gotten it right so far. I mean, I'm sure there'll be steps through there, but I mean, you look at all those trophies behind the governor's desk.

There's, the governor's trophies, the Governor's Cup, those for the state that created the most jobs in the year before. I think there's I'm guessing with like 15 or 16 in or out. I mean, it's we're doing something right. And so it's just making sure that we can keep up with with what we're doing. How do you keep up with I know you track local, state and federal.

How do you keep up with all that during session? Well, I have a, a couple great apps. One of them is called us Live Studies. I don't know if you've heard of it, so. Okay. Yeah. And that's a good question. And I'm glad you asked that, because I used to have you to help me, keep track of all that stuff.

And then. And then it looks like you found a virtual assistant to do all that. I just did what I didn't want to do. It was so annoying at frustrating. Absolutely. All empty as well with the local side, because that's very hard to find transparency and do. And it's the area we're looking to go into. So, it's just a lot to keep track of the now new administration and the federal level.

So curious. Yeah. What else you what else you do. Yeah. Yeah, it depends on obviously I get hired to represent my client's best interests, and what they're trying to get accomplished. So, I, I think they're the best. And what they're trying to get accomplished is just best for the state of Texas. I'm sure other people don't see you the same way.

But the best part about our process is you can get together and try and navigate the best way forward. And that's true at every and every level. I mean, we just actually had my neighborhood, just had their local elections and switched over the board because the previous board disagreed with what our neighborhood was trying to do. And that went to an election.

91% of the neighborhood voted, for this to happen, and I was following along with that one. You were helping me out with that. So I try to I try to bring that stuff to you were help me out with. We have a speaker series. We do. You know, I think, I don't want to predict, I certainly don't want my name predicting that's a game.

But you know, that that has the potential for a lot of change as well. And we have a lot of new faces anyway, there are a lot of them came in on a wing of change, in the primary, particularly over the border. A couple of other issues. School choice was, was one that was turned into a primary issue.

And so, you know, I think a lot of them are very hungry to get started with, making these changes. Certainly some of them have more experience than others. I think there's one that runs a bunch of different businesses. You could probably be a great person who like that on some of these appropriations issues. And so I think whenever there's new faces, a lot of it's education.

But, you know, when you first came on, started a lot of years of education there. Just so same with them. And I know a lot of the, a lot of the legislators in the House were just here for a bunch of workshops and things like that. And so they're learning, and it's focusing. So, you know, the first day of bill filing, this time there's more bills that were filed than any other session.

Yeah. And that doesn't include these new people because they can't file goes yet today until they get sorted. And so usually when new members come in they have a lot of ideas and some of their ideas are good and some of them, aren't. But nobody ever wants to hear their babies ugly. So that's, you know, so we'll see.

I think, you know, it's properly focused. I think the new energy, could be something that is really beneficial for the state. I think, you know, if, if the house devolves into bomb throwing and, name calling and everything like that, I, I don't think that helps anybody. So hopefully we can we can we can pull everybody together and get what needs to be done to keep Texas Tech.

I love it. So you've mentioned that there's going to be a new shift. We know there's a lot of new faces this session. So how do you see this new cohort of people influencing priorities this session, if at all? That's a great question. And I think one that everybody that is observing, this election cycle is wondering, I'm actually kind of advising my clients to temper expectations for the moment as to what can get done in this environment.

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But there's a lot of grass on the field between now and when they gavel in. And so there's plenty of time for a lot of these issues that are perceived to work themselves out. And, and I think they will do it, I think I think we'll get there. We have, some great statesmen that are and, solid staff positions, leadership changes, within, the governor's office appear to be good, although I'm not saying the previous guys.

And in fact, I'm friends with several of them. Don't step aside. Yeah. And you know that we had some changes, turnover in the speaker's office, too. And a lot of those people have worked together in the past, which I think is going to help. Again, I'm not saying that they're better or worse in their job.

I think everybody is doing a great job. But I think it does help that there's prior relationships and working, experience with each other. We'll see if that stays. Obviously, you have a lot of the new faces or, ran primaries against, do you come into the group for, the speaker? But I do think, we got a couple months to figure it out.

At the end of the day, fresh fruit, refreshment. No offense to the freshmen, but, you know, it's, it's hard to pass legislation in the state at all, let alone if you're still trying to figure out where the bathroom is in the building. And there's a lot to learn. And, so I think there's a, I think there's a great opportunity to get some really good things done for Texas this session, hoping that, that comes to fruition and we'll find out what happens on them.

And they javelin. First, two things they do or pick a speaker in the House and pick the House rules. So, lots of unknown the next couple months there are and again, thank you to your original point. That's why it's such an interesting time right now with a lot going on. There's just a lot I know we got the holidays.

I don't know how we are going to be able to do it. It's an exciting time. I will say. I know you said there's a lot they have to learn. You mentioned just knowing which which way to go to the bathroom. Where's the where's the speaker's office. Right. They have to learn all those things. Oh, you never your first few times and again it's no, no, it's the same I can't imagine for a new member.

And I know there's been a lot of talk of reform and transparency. And do you think that that's kind of, you know, we're seeing on the federal level and nationwide this government efficiency? Are you seeing that trend in Texas, too? Yes, yes, I think so. I know there's a big push for the, especially on on the local level.

It seems like there's really I mean, you had the Death Star bill last session. Love it or hate it, no comment, but it is. It was designed to, kind of level the patchwork quilt of regulations that I mentioned earlier. And with the different areas having, you know, different tax rates, different regulatory requirements or anything like that, to, to make it easier for businesses.

So do they continue forward with that? Do they kind of say, well, maybe we went too far over here remains to be seen. But those are definitely issues that they're looking at. I know there's been a lot of discussion on property tax and, property tax reform. There's some discussion on special purpose districts. And, you know, this is a they're gonna create all these taxing entities, and then they kind of forget about them, and they just keep raising taxes on everybody.

And so, you know, ultimately, it's finding ways to reduce the tax burden on Texans so that they can continue to live in prosperity. And I think we've outlined several great ways that they could do that. But I one time expenditures on things like infrastructure, looking at reducing waste, fund fraud and abuse and the current expenses and and then also additionally, you know, reducing some programs that aren't supposed to be big in the first place.

It's not just federal or the states definitely looking at those things. And I think if they can do that again, they've got a real shot at reducing the property tax burden on Texans. And then, you know, really, CDL would be great. It would be great. You mentioned kind of local government, mixed in with state government and how kind of what role do you see the state playing in addressing some of the local issues we're seeing?

You know, less funding for the police and law enforcement and issues at the border, all that. Well, that's a great question. And, I say the obviously these things are real issues, right? It it's really the federal government's job to secure the border. I mean, it's one of the three things the government really has to do, and is with, and so the state ended up having to pay a lot of those costs, which, you know, doesn't help with the budget.

But when a lot of these funds are, they're not supposed to pay for out of the general revenue or scraped are from wherever the funding mechanism was. Goes, goes to those places. So, you know, in Austin when, all of that was going on with our police department and the reduction and, troops and the defund the police and the state government to come in and patrol parts of the streets of Austin, which, you know, I was glad to see recently that the, the Police Association was able to get a contract with the city again.

I think Kirk's doing the Lord's work is they're trying to trying to, keep that town together, as the song goes. But, you know, and it's not fixed, and it's up to us. The police department is down. 300 policemen. Morale is all time low. You know, so I think there's places like that where. Yeah, the state could look at.

Why is morale? Why? Why? You know, what's what one of the underlying causes of this that we can fix. And, you know, but the problem with the state is, typically, anyway, unless you can figure out different ways than they are possible. But as a general rule, the state has a hammer, not a scalpel. So, if one municipality is to doing something they shouldn't be doing, chances are a lot of other municipalities that aren't doing anything wrong, are going to get caught up in that.

So it's finding that balance and figuring out where the state can come in. That makes this whole process so exciting, right? You know, you take all the ideas from all over the state, all the experts, all the different stakeholders and interested parties, the taxpayers, the citizens. And you roll them into the ball and you stick them in one building for five months and see what comes out.

And, you know, they don't always get it right. We do have clean up bills and things like that, but for the most part, the process works and it's been working in the state for a long, long time. Well, that makes me happy to hear the faith in the system. I love that that makes me very happy. Well, Ryan, you have given so much expertise to us today and your insights and the budgets, predictions for the legislative session, what's happening, local state government talking a little bit about, you know, Medicaid and opportunities and challenges you're dealing with.

Any final thoughts or, you know, anything unique you'd like to add about the session coming up? I just wanted to say, you know, thank you for the Oracle email or I learned everything I know about lobbying from working with you. So, it's been a great pleasure. Well, you could definitely end with a tale. What was your favorite experience working together and shared years ago?

My favorite. Yeah. Your favorite story? Oh, man, how do I how do I narrow it down to one favorite experience? There was a there was a cacophony of experiences, Laura, that were all wonderful in their own unique ways. I want to jump right now is when we were talking about. I think it's pretty early on.

You may be able to the question. So the back backstory of what was going on in your life at the time, but, you and, you come in and we were talking about, maintaining professionalism, and you were saying that you were going to be, you know, focusing on that and making sure that you, you presented yourself in a professional manner.

And then, we walked outside and you showed me your new license plate. It said p a r t a y. And, as I read it, you looked over, you know, potato just like that. And, that one. And that was a good 30s you could not stop loving. And then I got you love about it.

I mean, you mentioned my number one. Yeah, that. No, that's a really good one. And I remember it because there's so many stories about that license plate. But all right. Especially now that I know how party ended up. Yeah. Our happy party wagon. The party with the Capitol grounds. I can't keep it a secret, Ryan. People found out.

That's why I'm not ashamed to tell the story. Okay. Because I'm glad I picked that story. I I'm glad you did, actually, because so many people, one person I didn't even know in the capital goes to me. Oh. Yeah. I heard about your car, and I just thought, no. So anyone who doesn't know I totaled my car in the capital grounds.

Is there anyone separate that picture? Yes, I'll include it in there. I will just say be careful when you badging, guys, and that's not always going to protect you. That vehicle had a lot of stories that it did. Yeah. I remember for years we were driving back from an event, in the Fort Worth area, and it was you were driving and it was pouring down rain and.

Yeah. So I had to get back for something. So we pulled over and I drove and I get all the way back to Austin, and pull up next to the Capitol, and, I start getting phone calls. Said, is that your car parts? Hey, I'm like, of course. So said a lot of mileage in that vehicle.

And it was, a lot of road trips. And we did a lot at Texas, where I went for the World Wide Texas tour or my Texas tour. Good times. Right. Oh, well, thank you for joining. And would you like to shout yourself out where people can find you if they need a fabulous lobbyist like yourself? Happy to do so.

Thank you. Laura. Yeah. Ryan Brannan, Brandon Elle.com, office just around the corner from here at the Capitol. But if you need me over the next five months, just knock on the front door of the Capitol and I'll open it and let you in. Thank you, Ryan, I appreciate it. And make sure to subscribe to.

Stay tuned. Thanks so much. Thanks for.

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