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Bathroom bill draws battle lines between GOP, business community


When Texas Republican state Sen. Lois Kolkhorst of Brenham and Lt. Gov. Dan Patrick announced the filing of the Texas Privacy Act in early January, they pitched it as a move to protect businesses and the privacy of Texans.

But as the Texas legislative session gears, up the state’s business community — which has come out in opposition to Senate Bill 6 — will go on the offensive to protect what it thinks will be harmed if some type of “bathroom bill” legislation is passed: its bottom line.

Kolkhorst and Patrick’s measure would require people in public spaces to go to the restroom of the gender listed on their birth certificate and would preempt local governments from enacting anti-discrimination ordinances for LGBT people.

Even before the bill was filed, some key voices in the state’s business community had made their opposition known.

In December, the Texas Association of Business released a study that estimated such legislation could cost the state between $963 million and $8.5 billion. Such a law, the study said, would lead to hundreds of thousands of lost jobs, losses in investment from big businesses and a barrier for recruitment of workforce talent to the state.

There is reason to be skeptical of those numbers. The estimated loss has a range of about $7.5 million and is based on extrapolations from three other states that attempted similar legislation, including one where the law didn’t actually go into effect.

Patrick, meanwhile, dismissed the TAB’s study as “speculation, misinformation, fake news.” The proposed bill, he said, “protects business from government interference.”

But some in the business community say they never asked for — or needed — that type of protection.

“There’s a lot of attention on this issue because of this unnecessary type of legislation,” said Chris Wallace, president of the Texas Association of Business. “There is zero evidence supporting the need.”

So why the opposition from big business? After all, the policy would not apply to private businesses, and don’t business interests and the GOP often see eye-to-eye on business issues?

In its economic study, the Texas Association of Business points to a significant shift in opinion in the country when it comes to LGBT issues.

Because of that, the study contends, there is less risk, and a significant potential benefit, for businesses to support LGBT protection policies. Conversely, there is also a risk to businesses that do not support these policies.

The study points to a survey of U.S. and U.K. businesses in which 48 percent of respondents said they were likely to boycott companies in countries with anti-gay laws. Fifty-two percent of respondents said they were unlikely to work for a company that does business in a country with such laws and 51 percent said they were unlikely to vacation in a country with these laws.

All of this hits home for Texas businesses. Texas has had massive investment from world-renowned companies like Facebook, Google, Toyota and Apple over the past decade. And tourism is one of the state’s leading industries.

Because of this, Wallace said, his group is going to oppose any legislation that puts businesses at risk, no matter what side of the aisle it comes from. For them, he said, it’s a practicality issue.

Take Austin’s signature South By Southwest Festival, which in 2016 generated an estimated $325 million for the city, according to the festival. Its organizers worry that if a “bathroom bill” passed in Texas, it would have the same negative impact it had in North Carolina. In November, Forbes estimated the law had cost North Carolina $630 million since its passage in March.

Last year, the NBA pulled its all-star game out of Charlotte, citing the bathroom bill law, and some in Texas fear the same could happen to San Antonio, which is set to host the NCAA’s basketball final four in 2018.

Opponents also say that creative businesses, which are at the heart of festivals like SXSW, wouldn’t want to come to the state and tourists would not feel welcome visiting.

“If Texas had a bathroom bill, we think fewer people will be interested in relocating here,” said Hugh Forrest, chief programming officer for the festival. “In order for Austin to retain its reputation as a progressive capital, we need these influxes of bright talent to keep our town moving forward.”

Technology companies like Apple and Google, which have major operations in Texas, are also supportive of policies that protect LGBT people. These companies rely heavily on millenial employees who are highly trained, highly paid and more supportive of LGBT issues than past generations.

Rod Favaron is the CEO of Spredfast, a social media marketing company with offices in Austin. His company, which has more than 500 employees with global offices, hires a majority millenial workforce, including some who identify as LGBT. If a bathroom bill passed, he said, he might lose out on job candidates.

“We would definitely be affected,” he said.

And it’s not that businesses oppose privacy protection, opponents of the bill say.

“It hasn’t actually been an issue at our workplace,” Favaron said. “It hasn’t come up and my guess it doesn’t come up. We’re talking about a very small percentage of people affected.”

At this point, it’s unclear how far Kolkhorst and Patrick’s bill will go. But the measure has drawn some very clear — and unusual — battle lines for the legislative session.

James Barragan covers the intersection of business and government for the American-Statesman. Contact him at jbarragan@statesman.com or 512-445-3645.



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