New Braunfels Herald Zeitung (Newspaper) - March 4, 1987, New Braunfels, Texas
State's savings & loans are in dire need of help
WASHINGTON (AP) - A quick muKt-billion-dollar cash transfusion and a revamping of the regulatory system are needed to save the ailing savings and loan industry, two panels of Texans told a House subcommittee.
In testimony before the subcommittee on financial institutions Tuesday, Roy G. Green, president of the Federal Home Loan Bank of Dallas, said money for the Federal Savings and Loan Insurance Corp. is needed to breathe new life into the ailing industry
FSLIC is the fund that insures savings and loan association deposits. A General Accounting Office report released Tuesday said the fund is technically insolvent and estimated at least 825 billion was needed to head off a disaster in the industry, which could include runs on deposits.
The majority of the industry’s problems were brought on by a downturn in oil and agriculture over the past 18 months, which provoked a deterioration of real estate values and a consequent crisis in the SAL industry.
When an SAL is judged insolvent, government regulators have the authority to liquidate loan collateral, which in the case of real estate means “fire sale” prices.
Green said that of 490 thrifts in a five-state area under his jurisdiction, as many as 28 are so far gone financially that they should be cast off.
Another 33 percent of the Southern thrifts were classified as in financial trouble but capable of surviving. The five states in that region are Texas, Mississippi, Arkansas, New Mexico and Louisiana.
Green praised a bill submitted by Rep. Steve Bartlett, R-Dalias, that would negate the effect of the drop in real estate values by permitting institutions to assess property values over a multi-year cycle rather than at current market rates.
The Barlett bill would disallow participation of those thrifts seen to have taken advantage of deregulation in the industry during the early 1980s to make quick profits through high-risk loans
“Undeniably, there are institutions in the states in question that
are dead or dying of self-inflicted wounds,” said Walter McAllister, president of the Texas Savings and Loan League.
“Nevertheless, it is also undeniable that there are a great many institutions now experiencing financial problems in these distressed states that are quilty of nothing more than failure to predict the inherently unpredictable ... and that have the managerial resources, given the time, to work their way out of their current problems.”
McAllister joined Green and a panel of Texas regulatory and industry officials in calling on the committee to accept a program of recapitalization for FSLIC and forbearance on real estate assessments.
“Essentially what is being asked is that there be a regulatory policy which allows otherwise healthy savings and loans to survive despite sharp downturns in areas such as Texas and the agricultural communities,” said Rep Fernand J. St. Germain, chairman of the subcommittee on financial institutionsState tax extensions set for House debate
AUSTIN (AP) — Measures that would stretch the life span of "temporary” tax hikes that were supposed to die in August are ready to undergo full House debate this Thursday.
The House Ways and Means Com mittee approved the two proposals by an il l vote Tuesday that would extend sales and gasoline tax increases put in place in 1986.
The tax-writing committee also ap proved a state income tax prohibition in a surprise 7-5 vote. No date has been set for the income tax debate. an old controversy dating back many years.
“This is just another revenue enhancing measure.” Rep Stan Schlueter. D-Killeen. committee chairman, said when asked if the tax extensions were part of Gov Bill Clements’ program.
“This tax package is not related to anything else. ’’ said Schlueter “This is just dealing with the deficit I just want to get the ball rolling and get ic out of center court. ’ ’
Schlueter s bills would produce $2.9 billion in 1988-89 by continuing the tax increases that were passed as tem porary” by the 1986 special session to expire on Aug 31
The 1986 sales tax increase was from 4 125 to 5 25 percent and the
gasoline tax from IO to 15 cents per gallon.
In response to questions from Rep Tom Craddick, R Midland. Schlueter said the $2.9 billion from his bills coupled with other revenue measures recommended by Clements, if passed by the Legislature, would total $3 6 billion, the revenue figure set by the governor Rep Gerald Geistweidt. R Mason, head of the House Conservative Coalition, asked Schlueter to delay the vote for at least a day. saying he wanted to gauge the feeling of his coaalition “I’d rather not do that." Schlueter said. “We need to get this on the floor by Thursday ’ ’
Geistweidt asked about Clements recommendation that state taxes he restructured, particularly by broadening the sales tax base “I am told the bill on the Commis sion for Tax Equity will be laid out in the House next week and it should be passed promptly by the Senate ”
Rivers panel considers long-term regional water use alternatives
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Representatives of a recently formed regional water resource study said Tuesday it is time to actively pursue long-term alternatives to the region s water supply and urged governmental entities to work together to develop those solutions
Members of the citizen's advisory task force to the study, co-sponsored ’ by the Edward's Underground Water District and city of San Antonio, spoke to New Braunfels' Rivers Advisory Group Tuesday The groups tallied about alternatives available and New Braunfels' role in relation to the five-county region which depends on the Edward's Aquifer as its main water source
“The study reaffirmed what most of us know all ready Given the grow mg demands on water needs, we must plan for our future water needs or run the risk of losing the quality and quantity of this valuable natural resource,” said San Antonio rattail native John Smartt Jr . who cmsired Mayor Henry Cisneros' cHtaom advisory panel
“There are few problems more important to the future of each of us and there is no problem which involves so
many competing interests, none of which has taken any effective leadership to get you and me off the dime and moving toward developing a long-term solution.” Smartt said
The Edward s Plateau in the Hill Country supplies surface water to more than l l million people in Hays. Comal. Bexar, Uvalde and Medina counties Some 500.000 acre feet of water is pumped annually to meet the agricultural, urban, industrial and recreational needs of the area
The study, using population growth projections which are expected to tri pie in the next 50 years, said such an increase in demand will run the spr ings dry by the year 2040
Dr Glenn Longiey of Hays County and representing the Eastern coun ties. including Comal said droughts of the same or lesser intensity as the one experienced here in 1984 could dry up the springs before that time
"It is going to behoove us par tubularly in the Eastern area, to watch very closely to see how water conservation planning is set up to see that it will adequately ensure our continued spring flow,’’ Longiey said. adding. “Recharge averages are just that Averages It is a sub ject of vital concern ”
According to the regional survey
in order to sustain spring flow, pump mg levels between 425.000 and 450,000 acre feet annually must be maintain ed If pumping levels exceed that amount for any extended period, the springs will be lost
The survey projects that by the year ‘2040 demand on the springs would increase to 900.000 acre feet per year with 85 percent of that con sumed by Bexar County Annual recharge amounts average 600.OU) acre feet
“The time has arrived to develop a solution A drought of lesser intensity and shorter duration (than the 1984 drought) will achieve the same disastrous results we achieved in the IO-year drought that ended in 1956." Longiey told the rivers board
The fact of the matter is. if nothing is done, the burden will total Iv shift to the Guadalupe River basin and this can not be allowed to occur "
Longiey said that the Eastern counties have been given “inadequate” consideration as to concerns for recreation and downstream Mater rights though he said they have been considered to some extent
We’ve made good movement in finding logical solutions so that we don t have to have court ordered solutions imposed on us " he said
Three alternatives for future Mater supplies given by the survey are con Nervation. wastewater reuse and development of reservoirs or sur face Mater Feasibilitv and im plementalion of using any or all alternatives are discussed Mithm the survey as well as proposed cost sharing by entities in the region San Antonio reported!) favors con junctive use of surface and ground Mater which Mould require higher costs Reuse of wastewater is deem ed as the least expensive though its use is precarious due to health arni environmental considerations Smartt said it is up to the people to develop future Mater supply alter natives
We in Texa-- do not have .» *•<:»• at government standing arni Milling to bear some significant share of the iJuo million to $2 billion price lag which our solution in the K l*aru s Aquifer area Mill cost he said langley noted that the possibility of had Mater intrusion looms as a big ger problem for Ne* BraunfeI and San Marcos than it does lot san \n tonio New Braunfels ha a vers narroM reservoir area The city s wells are located close to the had water lim* and intrusion of had water is possible it water levels ate drawn below historic levels
Schlueter said “I would hope we would get a report from the commis sion sometime this summer and if we are still in session we can act on it then ’’
Clements endorsed extending the temporary taxes at his Tuesday new s conference, but said he hopes a task force will come up with recommen dations for overhauling the sales tax to more fairly spread out the burden Geistweidt voted present” on both the tax bills and Rep Larry Evans. I) Houston voted against them Immediately after the tax bill vote Geistweidt moved that the commit tee vote on a proposed constitution amendment outlawing a state in come tax. either personal or cor porate
The measure had been left hanging about two weeks ago when an at tempt was made to send it to a sub committee arni Schlueter abrupt!) adjourned the committee without a vote
? I « K
Clements raps lawmakers, urges income tax ban
AUSTIN (AP) — A proposed ban on personal or corporate income taxes is on its way to a debate in the Texas House, and Gov Bill Clements is urging lawmakers to approve it “I certainly stand behind these bills,” Clements said Tuesday, ad ding that either type of tax would damage the Texas economy Any form of an income tax would be disastrous for us in Texas in my judg
Legislation to enact such a ban was introduced in the Senate by Sen Blier Brown. R Lake Jackson, and in tbs House by Rep Stan Schlueter. D-KUleen Schlueter’s House Ways and Means Committee endorsed the ban Tues day, and the lawmaker said he ex pected debate in the full House on Thursday During his weekly news con ference. Clements said Texans can believe that his opposition to an in come tax remains firm, although some critics say he flip flopped on a campaign promise against renewing the current temporary state sales tax increase.
Clements this week voiced support for keeping the sales tax levy at 5*4 percent for two more years “The best course of action would be to continue the so-called temporary taxes That has nothing whatsoever to do with my stand with regard to either a corporate or personal in come tax." Clements said “I am not only opposed to such < income) taxes, I would immediately veto any such tax that came to my desk, ” he said The governor also scolded the Legislature for failing to enact legislation that would give him socalled “budget execution authority “ That power would allow a governor and legislative leaders to make spen ding adjustments when the Legislature isn’t in session by transferring money between state agencies Voters have approved a constitutional amendment that would permit such new powers, and Clements said they should be heeded by lawmakers even though the Senate last week voted down efforts to bring the propose! up for debate “I am amazed that the Legislature la being obstinate about this and tak
ing an adverse view.’’ Clements said "Contrary to some views. that is not a dead issue The people of Texas have spoken in this regard They have overwhelmingly said that they want budget execution authority I do not think that this Legislature will thwart the will of the people,”’ he said
On other issues, Clements said He remains a supporter of capital punishment The death
penalty will go forward I'm in favor of the death penalty I always have ”
Texas has a good chance of lur mg the $6 billion, high energy physics research project called a super conducting supercollider
There is no question that we will be a serious contender for this pro Ject Clements said. adding that
Texas chief competition appears to tie California and Illinois We are
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