Day Two Opening Keynote

Transcription:

Glenn Hegar (00:08):

Thank you. No, and I do really, really appreciate and if any of you ever have to introduce me, I like introduction like that. Just get to the point. Glenn Hager, and here we go. Nobody likes reading, much less listening to a bio. It's good to see all of you again. Welcome to those of you that do not call Texas Home or here in Austin. Welcome to Austin. Welcome to Texas. As I tell all of you, every single year, I think this is the 11th year that I have been coming to bond buyer because I've been in my current role for 11 years. And yes, I've been in and around the legislative process, either in the house representatives, the state senate, or now in this role for this is my, I think 21st year. So it was several years ago. I was up in New York with our credit rating meetings and I had gotten in an elevator with my team and we had talked about the state's finances.

(00:59):

We had talked about some of the budgeting issues, some of the hurdles and the mountains that Texas had to climb, the valleys, the issues to deal with. And so then we kind of got off on just all these odd and end questions. There was a question about this and a question about over here and a question over there. And we got in the elevator and I looked at my team and I remember it was kind of yesterday, and I was like, oh my gosh, I can't believe it just hit me. And they looked at me, they wasn't sure what to say. I hadn't been in the role very long. And they're like, Ooh, I don't know if this is a trick. Is he going to fire us? What are we going to happen? And then I kind of said it again, I said it again, and then finally I said, huh, what I didn't appreciate, I'm not the new guy around this process anymore.

(01:40):

I'm the one with the gray hair that have been through. I've seen when we had this issue or that issue. And the point was it was a good kind of free flowing conversation because sometimes when you've been around for a while, you've been through a few of these, you've seen a few of the bumps, you've seen a few of the bruises. I'll never forget, tell you a quick story. When I first got to the House of Representatives, I was a brand new member in 2003, I was sitting there in a committee and you're excited if all you can remember the first job you had. The first one that you were, so maybe not the first one you weren't excited about having. Maybe the first one you were excited about having. Let's distinguish between those two. So I was sitting there, somebody was testifying. It was a complicated problem and I thought, huh, this is kind of simple.

(02:23):

I got this figured out. But Glenn Hagar's nature is to just listen a little bit, not be too dramatic, not jump in too fast. And I had a lady who was sitting next to me had been in the legislative process for a very long time, and she leaned over to me. She still had, she was drinking her black, black, black coffee, had really awful, terrible that coffee smell was coming as she was talking to me. So I was waking up more than I was awake already. And she said, you know what? This issue's been around for decades. People think it's so simple, it's a little complicated. They either think it's A, it's B, or it's C is the answer and none of those work. And I thought, I'm so glad she said that. You know why? Because those are my ideas. And so the point is sometimes if you've been around the process, so while you gained a little bit of knowledge, we have worked with many of you.

(03:18):

As I look across the room, I see many faces that me and my team have worked with. I appreciate the work that we've had Texas. I tell people in my speeches and it's really kind of been astonishing just to kind of take a step back and think over the course of the last year, and many of you've heard me speak, I talk about economics, the numbers where Texas is at. And one of the points that I've made when somebody actually read the part of the bio and they got to the point that Texas is a state is the eighth largest economy in the world. And as I said and heard that, and then I walked up, I pivoted a little bit in my speech to make the point that when I got in this job 10 years ago, the first time that I came here to speak to you during that year in 2015, as I traveled around the state after legislative session, I used to boast and talk about how Texas as a state, the 254 counties, the 12 economic regions was the 12th largest economy in the world as Texans, we like to boast.

(04:16):

We're proud. I know that rubbed some of you wrong, we apologize. Not really. We like that part. But then I had to stop saying 12 because I had to move to 11, and then I had to stop saying 11 because I had to move to 10. And then I had to stop saying 10 because I got to move to number nine. And then sometimes people still reading the bio we're the ninth largest economy. And I think, well, sorry, we need to get you a new bio because now it's number eight and it's really phenomenal from my seat, from where I sit. And I imagine from the role that all of you sit in, your clients, your customers, the people that you work with.

(04:55):

I was here in Austin and there was some folks that, not with this group, but pretty close in the financial industry that I was given a speech somewhere and then it was Q and A period. And after the Q and A kind of period, somebody said, Glenn, I heard you say that there's roughly about 1200 more people that call Texas home every day. And I make that point in speech after speech after speech that when you wake up today, there's another 12, 1300 tomorrow you wake up on Wednesday, there's another 12 to 1300 Thursday, Friday, Saturday, Sunday. And the point being in a seven day period, that's a pretty good sized town. Half of those are moving here, half of those are natural growth, half of that is burst minus death. So it's a combination and it's people from all over the rest of the country all over the world.

(05:37):

And the point being is at the end they said, well, I've got a question. At what point is there too many people? And I thought, that's a great question. And so I said, well, would you like me to answer your question as Glenn Hager, the Texas controller or the CFO for the state? Or would you like me to answer that question? Is Glenn Hager, the sixth generation Texan, whose family, as I boasted earlier, had been here since the 1840s. And I said, I tell you what, why don't I answer it as a sixth generation first? And they looked at me like, whatever, just answer the question. And so I said, my family has a saying, it started around 1900, could have been 1905, but it was sometime around that time. There were too damn many people in Texas already. Well, the joke is we have continued to grow in population as the CFO.

(06:32):

It's important that we continue to grow as an economy. And I look in my role as what do we need to do in Texas from a financial standpoint in a two year budget? Because as you know, we budget on a two year cycle. What is it that we need to do in a 5, 10, 15, 20 year cycle? Because as a growing state, we have a lot of issues. Yesterday I was talking about water issues. Water issues have been important to me for a very long time, the infrastructure of Texas. And so therefore, the point is we have a lot of new capacity that needs to be built and we've got a lot of old antiquated systems as well that need to be refurbished and built. And so the point is, as we're continuing to grow as a state, whether it's pension issues, and the legislature several sessions ago got really tired of me hearing about employee retirement, teacher retirement, that we need to do more of a commitment from the state level to ensure our pension systems.

(07:33):

I used to use my friends in the credit rating agency that continued to highlight that issue over and over and over. And it didn't matter if it was my Republican friends, my democrat former colleagues, my friends on either side of the aisle is that you know what the blame is at your feet. You know why? Because you're on the train. While this is happening. And we've been able to overcome that hurdle and whether it's trying to invest more money in water infrastructure, road infrastructure, whether it's investing in our university systems. I think last session, as many of you heard me as I was leading in, I was trying to figure out what do I tell the legislature that they're about to have if you took our two year budget and they don't do anything different, they're about to have 30 some odd billion in a cash carry over balance.

(08:19):

I mean, oh my gosh, maybe 30 something billions, not a lot to you, but it is to me, it is to the state of Texas. And I mean that is just historical, as you heard me say, it's unprecedented. It was once in a lifetime. And then now as we get here in this position, the legislature has a budget that paid for pretty much everything. Normally we don't pay for all the Medicaid, we wait until we come back, which obviously it's hard to calculate those numbers and the economy changes. But the point is everything is paid for. They gave record amounts of adding more money in the public school system, which lowers the property tax rates because of the marriage between the state and the locals, whether they added money into, as I said, into water infrastructure where they added money into broadband infrastructure, university systems, all these are park system, all these different buckets of one-time funding.

(09:14):

And still we have in our general treasury about 19 billion leftover as a cash carryover balance. And that doesn't include the rainy day fund or the economic stabilization fund that as we sit here, you sit there today, it has 19 billion in it. Now, if this was a different crowd, which it's not, if it was somewhere across the state of Texas and it was only Texas people, I would normally ask people at that point in time if I was delivering that comment in a speech. And I usually always make the comment about those numbers that while we're not back at that historical, while we're not back at that once in a lifetime, I don't know about you, 19 billion in cash carryover is pretty phenomenal. That is pretty phenomenal. Not mentioning the economic stabilization fund. So Texas as a trajectory still is pretty bright, even though we have a significant number of issues and hurdles that we have to address as a very fast growing state. And it is normally if it was a different crowd, I would normally throw in the common at that point, well, now that I told you the financial house of the state of Texas, let's do a compare and contrast. If I was in a different crowd, if I was out that different crowd, I would say, Hmm, let's compare and contrast, I don't know Texas to, I don't know, one of the other 49 states. You can pick the state. Oh, you don't want to pick 'em. Okay, I will California.

(10:41):

If it was a different crowd, then I would tell you, I mean look, I wouldn't be very Texan if I didn't pick on, I dunno, California. So I'm not going to bore you with that today. I'm going to skip over that. It's not the right crowd to bring California into this discussion. But you know what? Every day when I wake up, part because I'm a sixth generation Texan part because my wife and I are blessed to raise the seventh generation and you knew if any of you have heard me ever speak, you're not going to get out of here. We go out Glenn Hagar talking about the Hagar kids in some shape, form or fashion. Somebody earlier said, I've never met your kids, but I feel like I know 'em. I've heard you talk about 'em for 20 years now. So the oldest one is 19. She's a continuing student at that great university Bill. Where's that university in college station? Which one is that called? Oh yeah, A and M. That's right. And the twins, I do need your prayers because yes, last month they turned 16 and they got a driver's license.

(11:45):

I got my bill, my premiums renew on May the fifth. I got my bill, has Glenn on it has Dara, my wife Claire, my 19-year-old. It doesn't have Julia and Jonah. I got it right before they turned 16. So I've called the insurance company, I said, they're 16, I got to add 'em to the policy. And they said, okay, we're adding 'em to the policy and I need your prayers. If you hear that Glenn Hager, even though he's 53 that sometime in the next week he has a heart attack, it is because he got the bill for his twins being added to his insurance here later this week. Oh my God. And yes, if you do drive in and through Katie in the next few weeks and you see a silver Q five Audi, that's the same car they learned to drive in. And I would go the other way.

(12:32):

They are better drivers than when we started, but they're not quite there yet. My wheel the other day, we were driving to my wife and I at a college station. We went to an event for one of my nephews, one of his fraternity deals, a men's club, and my in-laws were in the car. My father-in-law was up with me and we were talking and I let my youngest daughter drive for 30 minutes one day. The next day we drove 45 minutes. The rural part going that direction. We had to go up there for something. And then when we got to one of our highways, I said, I tell you what, why don't you pull over and dad can drive unless you want to drive. That was stupid because at the time my 15 10-year-old looked at me and she goes, well, if you think I can, what dad in their right mind is going to look at their 15-year-old daughter and say, no, I don't think you can.

(13:27):

So we drove and as we were driving there's a barrier. You know how some of obviously y'all have been in Texas, the barriers are kind of tight. We got lots of road construction and it was really, really tight. And I'm looking at that barrier and we're getting closer and I'm thinking us in the concrete are about to become one true story. I've never done this, but I did. One time I leaned over and I almost grabbed the wheel, but before that you have to set the stage. I mean she hadn't been driving long. One minute we're driving 52, it's a 70. And I said, I tell you what, why don't we speed up a little bit? I know it's kind of a lot going on, speed up a little bit. She said, oh yes, yes. Then that next thing we know we're driving 83. The person that passed us, we passed them.

(14:18):

When they passed us. I thought about waving but I didn't. And when we passed them, I smiled and waved and they're like, who is this dude? And then guess what? Wasn't long. We're driving 49 again. And they went by us and this time I waved and then I said, oh sweetie, we need to speed up a little bit. And guess what next name? We'd drive about 85. And so yes, so that was what I was dealing with. And then the barrier. And we got to where we were going to pick her twin brother up. I texted my wife, I said, we made it. I let Julia drive. Yes, I'm not sure if I should have done it, but I did it. I'm here. And I damn near told her to take me to the liquor store before we got here because I don't know about you.

(15:05):

I needed a drink really bad, but we made it. So my point to you is this, if any of you have not taught your kids to drive, it is a very rewarding experience for your grandkids. But I will warn you that first two to three minute hours in the car is the most terrifying moments of your entire life. Now that has nothing to do with anything, but I had 15 minutes left, so I need to deviate on something and usually that gets the crowd woke back up and that's the update on the Hager family. But back to the point being that compare and the contrast, and here's where I'm going with that is when I wake up, I do thank God I get to call Texas home. I'm very blessed. My family has been very blessed. But also in part of that, and some of you have heard this story, and I've thought about this almost every single day since this time happened, back in that time called Covid, when the world was shut down, the world was upside down.

(15:56):

Nobody knew what was going on. And some of you've heard this, but that day when I was at home back where we live in Katy, I was making lunches for the three kids I was working. I had my earbuds in listening to a conference call, the other 49 Treasures. We were all on a conference call and people were panicked and obviously set the stage. As you know, so many of these states are income tax states and those income taxes were paused just like the federal income taxes. And so therefore they weren't having these flows into their treasury that they typically balance their books on and need the funds immediately to be able to cashflow. And they weren't coming. And so it wasn't just the economic foundation of the state at that time, but it was this financial cliff that was coming. And so the point being is my number two, you've heard me say this sometimes, some of you, she sent me a text and when somebody sends you a text, they send you an email, they send you a voicemail, but you've worked with them forever and they sell you just a few words.

(16:51):

But it's almost as you're reading the words, you're hearing the words in the voicemail, you can hear them saying so much more. You can almost see their facial expressions because you've worked with them so long that you actually know what they're saying. I mean, you feel like you're in the room right next to the person. And all Lisa wrote was, I'm not saying a word. I'm not saying a word. And I wrote back, yeah, me neither. And the reason is because although I gave video call after video call, some of you were on it, some across people wanted to know where did we think the state was going? Where was the direction of the economy? What was the economy doing statewide, nationally, globally. The point is like so many people, the honesty, we didn't know, nobody really knew. But what I could tell people with 100% certainty, the foundation of the financial house was strong that I could say for without a certain while, I didn't know exactly what was going to happen.

(17:52):

I had faith from the basic foundation that we were going to make it through this. And the point coming to that call is the panic and the concern and the voices of many of the other people, they weren't so certain. And that crystallized in my mind that yes, while for example, I was on a panel discussion with other legislators, I had told the group, just put me on the panel. I don't need a separate time. The legislators spoke first. Some Republicans, some Democrats, folks I've known for a while, it was after a legislative session, it was after special session, after special session. They were in bad moods. They haven't got to go home, they haven't seen their families, they haven't been able to work. They were really bad moods. And let me just tell you, the bad mood came out. They grumbled. We didn't put enough money into water.

(18:40):

We didn't do enough for public education. We didn't do enough for higher education. We didn't do this, we didn't do this. And they took out after almost every elected official they were mad at, we listened to this for a while, you could see the crowd was like, oh my God, we didn't know this was an intervention session. And finally I raised my hand. They said, yes, Glenn, would you like to say something? And I said, yes, I really would. Thank you for asking me and letting me be here. Number one, I don't invite the speakers, but if I was the person that invited and if we were ever in a situation where we have a special session after special and special again, I would highly suggest don't ever invite these son of a bitches ever again. That is the words I used. And the members looked at me and they were like, you said what?

(19:23):

And then I started laughing and I said, number one, they're my friends, but number two, y'all need some therapy. And number three or four, whichever I'm on, the fact is yes, we should have put more money probably into water infrastructure. Yes, we could do more money for broadband, which is important to me because as you know, I run the broadband office. Yes, we have this and that. And I went through several of the issues that we have as a state with growth. But I also pivoted and said to this group, this trade association, I said, I got one question for you.

(20:01):

Ask your counterparts in other states and would you rather be doing your job here in Texas or would you rather have their job fill in the blank and you should have seen their face? And later on they came back and they said we needed that injection. And here's the point. The point is, yes, we have a lot of issues in the state of Texas. Me and my team are going to continue to highlight that we need to invest in our infrastructure, we need to invest in our education. We have a growing population, we have a youthful population. We have 10% of all the youth in the entire United States is here, which is positive for our growth, but we have a lot of things on the horizon and we need to continue to focus on those. And yes, I know that everybody wants me to address at some point in time where is Texas going with all of these lists?

(20:50):

They want to have these attestations that Texas wants to have. And I have spent more time on those issues, whether it's the oil boycott list or firearm attestation or any of that. I got other stuff to do. People, we got the treasury to run. We got taxes to collect. I've got broadband office to run. I've got opioid billion plus dollars to distribute for a very real crisis in Texas. The new office, my team, the legislature has given me in a council to figure out, oh my gosh, they put me in charge later today, my second board meeting. My second task force is in charge of trying to figure out what do we do with organized retail crime. Now how does that fit in the controller's office? You know how it does, the legislature asked me to do it. They passed a law. So we're going to have a task force meeting again on that very real issue that obviously people want to have safe communities.

(21:51):

But here's where I'm going. We spent a lot of time on those issues. And I guess here's the thing, I'm going to go back to one of the things that I've said several times, and I've thought about this a lot, I thought about a little bit this morning. I think what's really important is as we are trying to address whatever that public policy issue, whether you're in a red state, whether you're in a blue state, whether you're in a purple state, this room is full of really smart people. Some of y'all I have worked with personally, a lot of you, my team has worked with. There are a lot of smart people in this room. That is one of the first things I thought about when I woke up this morning to make this address. There's a lot of smart people. And so my point to you in challenge is let's all make sure that whether it's in your role, in your job, in your lane, or whether it's just you as a person individually, think about the next question, think about the next question.

(22:57):

So we can be intellectually honest, intellectually honest, and we can tell the full story. And I think if we can do that, then you know what? Obviously these issues are still going to be there in red and blue states. They're going to continue to happen for a while. That's the political dynamic that we're at. But I think the biggest thing is just where are people at? Be intellectually honest. And the fact is, at the end of the day, we're going to get through all of this. We're going to try to continue in my office to, hopefully you can agree or disagree with our process of how people get on or how people get off. But we are going to be open. We are going to be transparent and we are going to let you know this is the test upon how you got on it or how you get off of it.

(23:39):

And my point in that is I'd hope that you and the ability that you have to challenge other states and other offices to set that bar where you know stand, then we can disagree on the merits of how you get on or how you get off. And I think what's important is being intellectually honest. And if we can be intellectually honest with people, then we can have a real policy discussion. Because I can tell you whether it's companies on my anti oil and gas, my boycotting list, the fact is whether it's people who are not on the list or people who are on the list, I have conversations with a lot of them. And you know what? I want universally with all of them to do business in Texas. That's what I want. I want you to engage in Texas. I want you to be involved in Texas because you know what the reason we moved from number 12 to 11 to 10 to nine and eight, and the reason that probably before the end of this term, I'll be able to boast that we are the seventh largest economy.

(24:45):

You know how we got there? People like you in this room, people like businesses across the state of Texas. I can sit here and boast, oh, we've got more Fortune 500 companies than any other state in the nation. And we've had that for several years, or we've won the Governor's Cup for 12 years in a row. But the thing that doesn't quantify economic activity, everybody wants to talk about the big companies, but you know what drives the basis of an economy? It's the small ones. It's the little businesses, the mom and pop shops. It is that creativity and that ingenuity. And my point is, who do they need more than anybody else? They need you and your capability to be able to function and to operate and grow. And so I want all of y'all to engage in Texas. I want to say thank you for what all you do.

(25:39):

I hope that lastly, any of you that are leaving back out of town, before you leave, I need you to do me a favor. I need you to go buy something if you haven't remembered. We are a sales tax state and I need you, even though we have a nice cushion. You know what? You never have enough. So I need you to spend a little bit more today while you're here in Texas, and thank y'all for letting me be here. It's good to see all of you and God bless you and God bless Texas. Thank you.