The heart of red-state America might be careening toward an unprecedented crisis of its conservatism.

On Tuesday, the Texas Legislature gathered to hear its version of North Carolina’s so-called “bathroom bill.” Senate Bill 6 would make it illegal for transgender people to use bathrooms that don’t correspond to their sex at birth.

For deep red Texas, which passed one of the most aggressive antiabortion laws in the nation (later struck down by the United States Supreme Court), transgender rights might seem a logical next target. November’s elections have given conservatives nationwide momentum to push their agenda further.

But the state is also home to the “Texas Miracle” – an economy that generated more jobs during the Great Recession than the rest of the nation combined. While experts debate the reasons for that, conservatives argue that Texas is Exhibit A for how their low-tax, low-regulation agenda can spur economic growth.

SB 6 could bring these core values – cultural conservatism and pro-business principles – into conflict, essentially forcing the state to decide which it holds more dear. “We have never seen anything quite like this before in Texas,” writes Houston Chronicle columnist Charles Kuffner.

That makes SB 6 a test, not only for Texas but for the nation more broadly. Since North Carolina passed its version of the bill last year, the business backlash has been intense. The law has hurt corporate expansion and led to the loss of lucrative college championship games and a National Basketball Association all-star game.

Yet bathroom bills have been filed in eight states this year, including Texas, according to the National Conference of State Legislatures. If Texas proceeds, despite having perhaps the most to lose economically, it could be a powerful statement of the wider conservative backlash to the expansion of rights for the lesbian, gay, bisexual, and transgender community.

SB 6 “is a test, because Texas is a deeply red state where the 2-to-1 tea party majority is quite real, but Texas also has a very powerful business lobby … which has always been able to derail these things,” says Cal Jillson, a political scientist at Southern Methodist University in Dallas.

The push, he says, comes as “Texas, like the country, is in the grip of a populist wave – but it’s even more powerful in Texas.”

The tea party avenger

The Texas effort is being led by Lt. Gov. Dan Patrick, a former sports bar owner and popular talk radio host who rode a tea party wave to victory in 2014. He has shown himself a capable politician. In the past two years, he has shepherded new laws that allow open gun carry on campuses, allow pastors to refuse to marry couples if it violates their beliefs, and beefed-up state border security and enforcement.

After the Obama administration warned states they could lose federal funding if they don’t let transgender students use the bathroom of their choice, Mr. Patrick retorted that President Obama “can keep his 30 pieces of silver, [and that] we will not yield to blackmail…”

Passing SB 6 “is going to be a tough fight,” Patrick acknowledged last week. But “you can mark [this] as the day that Texas is drawing a line in the sand and saying no. The privacy and safety is our first priority, not political correctness.”

The argument that such bills are about safety is flawed, critics say. Several investigations, including one by the Charlotte Observer, into transgender bathroom use have failed to find a single confirmed case of assault or sexual crime in the United States where the transgender person was the perpetrator.

The business backlash

The powerful Texas Association of Business warns of a $1 billion to $8.5 billion hit to the state’s gross domestic product if the bill is passed and expected boycotts materialize.

“This legislation will needlessly jeopardize jobs, investment, innovation and tax revenue for our state, and it sullies our reputation as an open, inclusive and welcoming state,” TAB President Chris Wallace says in a statement. “It is also wholly … unsupported by any public safety evidence, and will create situations that invade the privacy of Texans from all walks of life.”

In other states, such as Virginia and Kentucky, governors have suggested they would veto bathroom bills that might be passed by the legislature. Last year, Georgia Gov. Nathan Deal (R) vetoed a religious liberty bill that would have allowed Georgians with “sincere religious beliefs” to deny services to gay people, citing business concerns.

The same could happen in Texas, with Patrick rallying the base while others in government act as a firewall, says Professor Jillson.

“Patrick is a very prominent and influential politician in Texas, and right now he is busily signaling the business community that, ‘I’m going to talk about this incessantly, I’m going to rail about it, but not to worry – nothing bad is going to happen. You can depend upon Joe Straus, the speaker of the House, and Greg Abbott, the governor, not to let me do anything,’ ” he says.

What to watch for

What’s more, throwing political grenades into the start of the biennial session is not unusual, says former Texas lawmaker Sherri Greenberg, a Democrat. The first half of the five-month session tends to be roiled with controversy. Then lawmakers get down to business in the final days of the session.

That is when the bathroom bill may struggle.

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For one, Texas doesn’t have an income tax, meaning it relies on sales and business taxes to fill its coffers. The drop in oil prices means the energy-dependent state is facing a budget shortfall of as much as $5 billion.

“One thing likely to fuel the actual discussion over this kind of ‘potty politics’ is that, ‘Look, we’re having a tough time with the budget … why do something that could cause jobs to leave or companies not to come?’ ” says Ms. Greenberg, who is now a public policy professor at the University of Texas in Austin.