I also totally agree with Kita. Home bakers pay licensing fees, have health inspections, and are generally treated the same as bakery bakers. I dont consider them a threat at all. In fact I applaud anyone with the courage to start up their own business, whether it is from their home or if they have the funds to open their own shop. We all have to start somewhere.
I dont usually get into pricing wars, because I can see both sides. I charge comparable to what others do in my area, a little higher actually. Some might argue that I dont charge enough and some might argue that I charge too much. Its a two way street. Only YOU can determine your prices and what your time is worth. If you want to pay yourself $10 an hour, awesome. If you only pay yourself $5 an hour thats great too.
(Let us not forget that you pros can decorate a cake a lot faster than some of the novices, so that might factor in a bit too.)
I say rock on Texas! I know there are some awesome home bakers out there that are just waiting to become legal so that way they can sell their cakes.