Texas Republicans Face Trump's Wall and Trade Uncertainty

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DALLAS – As President-elect Donald Trump lays the groundwork for a "great wall" on the Mexican border, Texas' Republican lawmakers are facing a $1 billion bill to monitor activity along the Rio Grande amid a reduction in state revenues.

Such a barrier is also causing concern for Texas border communities that have invested heavily – including through municipal bond issues – in trade with Mexico.

The state's Republican leaders who for eight years have bitterly complained about border security under President Obama while devoting an unprecedented $800 million of state taxpayer revenue to supplement federal enforcement over the past two years.

In the upcoming session of the state Legislature this month, the Texas Department of Public Safety is asking lawmakers to increase appropriations for border activities to more than $1 billion.

The request for 250 additional state troopers, hundreds of cameras, aerial balloons, shallow-draft boats, helicopters, airplanes and other equipment along the Rio Grande comes after Gov. Greg Abbott asked state agencies for a 4% cut from proposed spending for the next two-year budget amid falling revenue.

However, it was Abbott's own request for 500 state troopers along the border that led DPS to seek higher funding. Abbott and Lt. Gov. Dan Patrick, chairman of Trump's Texas campaign, must decide whether the new austerity measures can co-exist with a border security program that has produced questionable results.

According to one analysis of 31,786 DPS enforcement actions along the border from late June 2014 through September 2016, drunken driving accounted for the largest share of arrests at 29%, followed by arrests for small amounts of drugs at 28%. DPS has claimed its largest target is drug cartels operating in Mexico, but no major results along those lines have been reported.

"The goal of this data-driven, multi-agency operation in high-threat areas for a sustained period of time is to deny Mexican cartels and their associates the ability to move drugs and people into Texas between the ports of entry, as well as reduce the power of these organizations, whose success depends on their ability to operate on both sides of the border," DPS Director Steven McCraw said in releasing his first report on the border program dubbed "Operation Strong Safety."

Some political analysts dismissed Trump's promised border wall as little more than a campaign gimmick, but the president-elect keeps talking about it.

Trump revealed his latest wall-funding plan in a tweetstorm Friday. It does not involve the upfront funding from Mexico he implied during his campaign.

"The dishonest media does not report that any money spent on building the Great Wall (for sake of speed), will be paid back by Mexico later!" Trump tweeted.

After his election on Nov. 8, Trump operatives came to the Rio Grande Valley to begin scouting the best sites for beginning the wall along the more than 1,200 mile border between Texas and Mexico, according to Rep. Henry Cuellar, D-Laredo.

Cuellar, like most elected representatives along the border, opposes the proposed wall, especially in Laredo, the largest port of entry on the Texas-Mexico border. Of Texas' total international trade in 2015, $356 billion, or 56%, crossed the Rio Grande, with the Laredo port of entry accounting for nearly 58% of the cross border trade, or about $204 billion.

Many of the Rio Grande border crossings are locally bond-financed toll bridges. So, any reductions in traffic could affect those bonds.

Based on the Texas Comptroller's analysis, the net benefit of trade associated with the Laredo port of entry contributes an estimated 363,000 net jobs to Texas and a minimum of $52 billion in gross domestic product to the Texas economy.

Thus, many Texas Republicans are reluctant to embrace Trump's threat to renegotiate the North American Free Trade Agreement or to abandon it altogether if Mexico does not agree to his terms. Trump's recent success in convincing Ford Motor Co. and air conditioner manufacturer Carrier to abandon plans for plants in Mexico means those products will not bring jobs to Texas or other southwestern states when they cross the border.

Across the river from Eagle Pass, Texas, the world's largest brewery, operated by Constellation Brands produces Budweiser and Modelo beer for export to the U.S. The toll bridges are the U.S. point of entry for the product. Continued increases in trade with Mexico could lead to construction of another bridge between Eagle Pass and Piedras Negras, Mexico, said Sandra Martinez, executive director of the Eagle Pass Chamber of Commerce.

Each year, the two towns hold a joint event called "Abrazo" where citizens meet on the bridges and embrace one another. Creating another barrier, Martinez said, would lead to hurt feelings and possible economic damage.

"We all have a very unique to different way of life that up in northern states, they really don't understand," Martinez told The Bond Buyer. "Decisions are made by legislators who really don't understand the way we live."

Another politically risky factor for Republican lawmakers would be the need to condemn private land in order to build Trump's wall along much of the Texas border. Some of the state's largest and wealthiest ranches border the Rio Grande, and owners of the property are unlikely to willingly cede access to the river.

Abbott, who has made no official statements about the wall, told one newspaper that the only area where he opposed the structure is in Big Bend National Park. A controversial gas pipeline is under construction through the park, and local residents have strongly opposed building a barrier through the scenic park.

Trump in August promised to begin work on Day One in office "on an impenetrable, physical, tall, powerful, beautiful southern border wall." However, Rep. Pete Sessions, R-Dallas, dismissed the Trump wall as an "analogy."

Environmentalists have strongly opposed the wall and the existing fence between the two countries as a threat to species that live on both sides of the river, but environmental issues rarely gain much traction in the conservative state. With Trump in control of the EPA, the oil industry and others that exploit the environment are expected to face less federal intervention, as well.

In December, U.S. Sen. John Cornyn, R-Texas, visited the Rio Grande Valley and the Anzalduas international toll bridge without mentioning Trump's wall proposal. Instead of seeking new barriers, Cornyn was promoting his own success in gaining passage of a bill allowing companies to finance swifter border crossings.

Cornyn's legislation gives U.S. Customs and Border Protection and the General Services Administration authority to enter into partnerships with local governments as well as the private sector to spur cross-border trade. The measure is touted as a way of reducing taxpayer expense on the border.

Cornyn is not alone in maintaining a wall of silence about Trump's wall.

A survey of Texas' 38-member Congressional delegation by the Texas Tribune showed that none offered unqualified support for Trump's wall.

Several members of the Texas delegation told the Tribune that they supported new policies on the border, including fencing and walls in some places. They also expressed support for beefing up security in other ways such as employing new surveillance technology and adding more federal agents. Several Tribune requests for comment drew no responses. Similarly, Gov. Greg Abbott and his secretary of state did not respond to The Bond Buyer's request for comment on the wall proposal.

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