The specifics keep moving around, but House management still wants to see the tax and school finance bills on the floor for debate by March 7 or 8. That means the committees in control must move the bills next week.

They'll be looking at school reform and formulas on one hand — that's HB 2 — and general business taxes, etc. on the other — that's HB 3. Other legislation that's in the mix for that week would amend the constitution to cap increases in appraised property values, and to allow a state property tax.

Timing of some other pieces of the puzzle is less certain, including gambling, the budget itself, and various measures turned out by the LBB and the budget panels to save money or "enhance" revenues to make the whole thing balance without ruining the promise that school finance can be solved with no net tax increase.

The tax bit has been banging along, with Rep. Jim Keffer, R-Eastland, and the House Ways & Means panel that's holding seminars on different kinds of taxes while they work with real numbers and proposals in the background. They put out a bill and announced it dead in the same motion a few weeks ago, freeing them from defending any taxes or fees until they must.

Rep. Kent Grusendorf, R-Arlington, took a different path, introducing a school finance bill and defending it, a day at a time, while his Public Education Committee hammers away on details. Grusendorf hopes to get a bill out early next week, and spent part of every day this week with a new press conference explaining and/or defending some aspect of the bill. His riff: The bill pulls more kids into the so-called "equalized system" than anything in years. It puts $3 billion in new money into the schools (that's a huge arguing point between supporters and opponents of the bill). It's got some interesting features, too, like the idea that taxpayers should be able to sit at home and poke through their school district's financials, on the Internet or on paper, to see if they like the way every penny was spent. That'd be a revealing feature at any level of government, and one that doesn't appear to exist anywhere, unless you've got a lawyer and an armful of open information requests.

But detractors say the House plan doesn't really fix school finance if you include agreements to hold districts harmless for existing inequities. It increases the distance between the amount of money available for kids in most districts and those in a few very wealthy districts that, under a provision attributed to Rep. Dan Branch, R-Dallas, would not have to share more than 35 percent of the money they raise locally. Each district in the state would get a funding increase of at least three percent; opponents say inflation would quickly dissipate that amount and leave the districts where the courts say they are now, without enough money to meet the standards set by the state government.

Gov. Rick Perry joined Grusendorf in one press conference, calling the bill a good starting point and saying there's plenty of time to work on the details. He also called on the opponents to step up and offer proposals if they don't like this one; House Democrats indicated they'll make a proposal in the next week or so. Asked if he's still against a payroll tax, he sidestepped: "Any tax that stops the development of job creation in Texas is a bad idea. That's a broad and still a very true statement... There's a lot of time to go, and to try to blanket-statement what you're for and what you're against at this particular point in time, I think, is really kind of premature."

No Side Bets

It's hard to negotiate a finance bill with school districts that don't want to do anything in the Pink Building that jeopardizes the winning hand they've been playing at the courthouse.

The lawsuit filed by the schools back in 2000 is on its way to the Texas Supreme Court, which has set a schedule that probably won't allow oral arguments and/or a decision until after the current legislative session. A state district judge in Austin ruled last year in favor of the school districts — against the state — on just about every element of the suit.

The Supremes have agreed to take the case without intermediate appeals, but their fast track doesn't match the Legislature's. Lawmakers are trying to cobble together a school finance fix that will be in place when schools start next year. Some officeholders — the governor prominent among them — would like to have a school finance fix installed when it's time for possible opponents to make decisions about the 2006 elections.

The school districts are watching and they are apparently giving plenty of feedback to their local legislators. But their lawyers caution than no single district can make deals on behalf of the whole group, and the group as a whole can't negotiate while the case is pending. On the whole, the districts don't seem to like the legislation proposed by Rep. Kent Grusendorf, R-Arlington, because they don't think it puts enough money into schools to educate kids the way the state wants them educated.

But the frustrating bit for some House folks is that the districts don't seem willing — because of the promise held out for them by the courts — to come in as a group and work out a deal. Some lawyers for the districts say the Lege hasn't offered anything that includes enough money to provide an adequate education to each kid in the state. That makes it easier for the school folk to shake their heads. The attorneys are encouraging districts to keep watching and to make suggestions when they can, but say privately that they won't show up at the table unless more money is put into the formulas, and the formulas are jiggled to get more money to more schools.

Put another way: They haven't seen anything from the Legislature yet that's more attractive than what they think they might get from the courts.

More Money, Same Taxes

The Legislative Budget Board took over performance reviews from the Texas comptroller's office last year, and the easiest $1.5 billion of their recommendations is already folded into the state budget. The first run-through by Rep. Carl Isett, R-Lubbock, and his merry-band of efficiency seekers came up with almost $1 billion more. But that's not a solid list, and it's $2 billion short of the goal.

Isett and others on a subcommittee looking at efficiency and operations are trying to find the money to cover the difference between what the state spends on education now and what it wants to add. In the House, that number is $3 billion. The other stuff you hear about is the money raised by a state tax bill to cover the costs of buying down local taxes. The magic words are "no net tax increase" and that means new money has to come from something other than taxes. Fees are allowed. Gambling, if it's palatable to enough lawmakers, is allowed. Taxes are not allowed.

The biggest single item is a new "quality assurance fee" on nursing homes, which would raise $452.5 million in general revenue. The nursing homes aren't screaming outright because some of that money — about $100 million — would be used to draw federal money that would be used, in turn, to pay higher rates to nursing homes. The state would get more money and so would they. All that's needed is a go sign from the federal government, which has approved similar programs in two other states. Another proposal would require employees in state-funded skills development programs to pay half the costs themselves. Another would reduce the interest rate the state pays on overpaid taxes. They'd get $10 million from a new real estate "transfer fee."

They're still kicking things around, but the menu they're working from is the LBB's performance reviews, available on that agency's website.

School Starts in June

The state's highest civil court will hear the school finance case, but not until the legislative session is over. The Texas Supreme Court moved an inch on school finance, with a notice of "probable jurisdiction" — another way of saying the court will accept the state's request for a direct appeal from district court, skipping the appeals in between. That was expected — the news here is in the timetable.

The court set a briefing deadline of 40 days for appellants, 40 days for appellees, and 20 days for replies. Attorney General Greg Abbott's office offers the English translation: The state's briefs are due March 30; the plaintiffs then have until May 9, and replies are due May 31. No date has been set for oral arguments. A point of reference: The regular legislative session ends on May 30. If the briefs come in on schedule, the court can't hear the case until June, after the regular session has ended.

The lawyer briefs on jurisdiction in the case are available online from the Supreme Court, and the filings will be available as they come in at this same location.

Other Courthouse News

While lawmakers edge closer to floor fights over school finance and how to pay for it next week, the third branch of government will be busy with election and First Amendment issues.

• The 2002 elections finally go to court Monday. The first of several civil suits related to Republican efforts to win a majority of the Texas House will go before an Austin judge; those subpoenaed to testify include House Speaker Tom Craddick, R-Midland. Several losing Democratic candidates are suing former Rep. Bill Ceverha of Dallas, who served as treasurer of Texas for a Republican Majority, a political action committee that helped win enough Republican seats in the Texas House to elect the first GOP speaker since Reconstruction. The lawsuits contend the Republicans illegally coordinated campaign efforts with those of third-party groups and used corporate money to pay for services and goods where corporate money is prohibited.

Travis County grand juries have been working for two years on related criminal charges; they've indicted three individuals and eight corporations and continue their work. Separately, prosecutors and three of the indicted corporations have negotiated agreements that trade the corporations' cooperation for dropping the indictments.

• Attorney General Greg Abbott is going to court next week, too. He'll personally go to Washington, D.C., to tell the U.S. Supreme Court why it's constitutional to have the Ten Commandments carved into a tablet-shaped chunk of granite on the grounds of the Texas Capitol. It's been there for 40 years, but the other side contends that the presence of that Biblical text on state property violates the separation of church and state.

The State of the Judiciary is... Broke

Wallace Jefferson, the chief justice of the Texas Supreme Court, spent the first half of his first speech to the Texas Legislature telling lawmakers they need to raise salaries or get used to high turnover and a lower grade of judges.

Jefferson, who left a San Antonio law firm to wear the black robes of a judge, said judges who leave the courts are leaving, in part, because the pay is so much better for private-sector lawyers than for judges. "... if we ask judges to sacrifice too much, Texas will be left with without the experienced judiciary that it surely deserves. Today, we are asking too much," he said. He said Texas ranked 5th in judicial pay in the 1980s, but has dropped to 39th now.

It's fair to wonder why a guy making $115,000 a year is griping about his paycheck. By way of comparison, the average resident of the Dallas-Fort Worth metro area made $40,915, according to the U.S. Department of Labor. But while top judges make almost three times what average Texans make, they say they could double or triple their salaries by leaving the bench for jobs in the private sector.

Comptroller Carole Keeton Strayhorn had her staff do some work on this for a report issued in December. The average judge on the state's top appeals courts — the Supremes, the court of criminal appeals and the 14 regional appellate courts — lasts less than one term on the job, according to the comptroller. She recommended a pay raise, but stopped short of blaming salaries for the high turnover and said lawmakers should get someone to develop "reliable data" on the reasons appeals judges don't stick around and to find out whether that's really a problem.

The National Center for State Courts did a survey in October 2003 and found the average judge at Jefferson's level was making $130,221; the low-high numbers were $95,000 and $191,483. U.S. Supreme Court Chief Justice William Rehnquist was making $201,000 at that point. And the pay in Texas was the lowest among the ten largest states in the U.S.; California was first, followed by Michigan, New Jersey, Illinois, and New York.

The comptroller looked at some other state jobs, too. The Texas chief justice makes less than 103 state psychiatrists, 10 agency commissioners, 66 doctors, 10 agency directors and executive directors, and six agency lawyers. But it's cheap at the top: Among statewide elected officials, only Gov. Rick Perry made more than Jefferson in 2004.

And then there are the lawyers. The average Texas lawyer made $117,870 in 2003, according to the Labor Department. A 2001 study done by the State Bar of Texas found private practice lawyers with 21 to 25 years of experience were making an average of $147,916 each year. At the time of that study, the average Supreme Court justice in Texas had been a licensed lawyer for 23 years. Big law firms paid the most, a median of $250,000. Average first-year salaries for grads of the University of Texas law school have been over $100,000 for the last several years.

Several bills have been filed to raise the pay of judges. Sen. Robert Duncan, R-Lubbock, and Rep. Vilma Luna, D-Corpus Christi, would raise state district judge pay to $125,000 by September 2006. Intermediate appellate judges would get 110 percent of that, or $137,500, and pay for top appeals judges would peg at 120 percent, or $150,000. They'd also unlink the retirement pay of legislators and the pay of district judges. Instead, the retirement pay of lawmakers would be pegged to the governor's salary.

The pitch for pay was part of Jefferson's first "State of the Judiciary" speech to lawmakers. His predecessor, Tom Phillips, used the forum to promote changes to judicial selection — reforms driven generally by the idea that it's unseemly for judges to run for office using money that comes in large part from the lawyers who argue before them. Jefferson didn't mention the subject.

After pay, he talked about technology, indigent defense and access to justice. He said he wants to increase public access to electronic court records and wants to make arguments in cases before the Supreme Court available on the Internet, through some of the same streaming video tricks that now make it possible to watch legislative proceedings. You can get a copy of the whole speech at this link.

Off and Running

The first two bills out of the House were all about two things dear to Texans: Cars and privacy.

The first, from Rep. Brian McCall, R-Plano, requires dealers to tell drivers if they're getting a car with a "black box" that monitors speed and other driving habits in a way that could be used by insurance companies and cops and lawyers later. The House likes the limits, sending the legislation to the Senate on a 142-0 vote.

The second, handled by Rep. Gary Elkins, R-Houston, would stop cities from using cameras to monitor compliance at red lights. Some cities have been using photos from those cameras to fine drivers who run the lights. They say it reduces accidents and makes money. The House tentatively voted 109-30 to kill the cameras.

A Threat to Secret Admirers

Issue ads funded by undisclosed corporate and private contributors would no longer be allowed under legislation pushed by a group of Republican and Democratic lawmakers and an array of public interest groups.

Reps. Craig Eiland, D-Galveston, and Todd Smith, R-Bedford, would narrow the definitions of which administrative expenses can be covered by corporate or union money and would bar them from contributing to PACs that aren't directly related to them. It would prohibit "issue ads" that attempt to steer voters to a particular candidate or away from another, but only during the last 60 days before a general election.

Other People's Work, Pilfered

This is a blatant rip-off from The Dallas Morning News, but you should watch this as the governor's race develops. That paper analyzed contributions to Gov. Rick Perry, U.S. Sen. Kay Bailey Hutchison, and Comptroller Carole Keeton Strayhorn and found some ulcer inducing situations. For instance, 40 percent of the people who gave to Perry also gave to Hutchison. They'll have to choose a favorite or hide under the bed if she runs against him next year. More than half of the contributions reported in Perry's latest disclosure filings came from 100 donors. Strayhorn is so far the lone member of that trio getting money from nontraditional sources: Ordinarily Democratic trial lawyers gave her $160,000 in the last report, for instance.

These sorts of things aren't unusual, but they're uncomfortable. The presidential match that featured George H.W. Bush and Ross Perot gave a lot of conservative Texans trouble picking between their friends. And there the partisan overlaps have been there before, too: An analysis of the 1990 elections in the late Dallas Times Herald showed a 25 percent overlap in voting support for Republican Hutchison and Democrat Ann Richards.

Stories That Don't Check Out

Kay Bailey Hutchison and Ben Barnes are not, not, not in political cahoots. Just ask 'em. Both deny rumors, traded among mostly Democratic political blogs, that Barnes is working on a Democrats for Hutchison effort that would assist in her effort to knock off Gov. Rick Perry in next year's Republican primary.

But Barnes says the rumors aren't true and that he hasn't talked to Hutchison for a couple of months. We get the same feedback from her end of the phone line.

Barnes speculated the rumor started in the Perry camp. The former lieutenant governor played a role in the recent flap that had Barnes saying he helped get George W. Bush into the National Guard to duck Vietnam duty back when Barnes was in state office and Bush's dad was a congressman. That story escalated and crawled up to CBS News, where a failure of fact-checking on other aspects of the story led to a humiliation for the network and an ugly ending to the career of Texan Dan Rather.

Barnes, to put it succinctly, would not be an asset to a Texas Republican candidate. The logic for the political pairing follows the adage, "The enemy of my enemy is my friend," but the two aren't working together.

Ring and Run

U.S. Sen. Kay Bailey Hutchison spoke at a Republican function in Houston, and while Gov. Rick Perry wasn't there in fact, he was there in force. Hours before the event, his political office released a list of Harris County supporters that included a mess of people in attendance.

The list from the Perry camp includes only two legislators, but it's fat with county Republicans and Houston's political contributor class is well represented, too. George Strake Jr., formerly campaign treasurer for Comptroller Carole Keeton Strayhorn, is on the list. So is Jared Woodfill, chairman of the Harris County Republican Party and thus, the largest Republican Party primary in the state. It's unusual to take sides in a family fight, but at the moment, Perry is the only declared candidate.

The names, as presented by the campaign: Peggy Hamric, State Representative; Beverly Woolley, State Representative; Michael Stafford, County Attorney; Charles Bacarisse, District Clerk; Jack Cato, County Treasurer; Paul Bettencourt, Tax Assessor Collector; Tommy Thomas, County Sheriff; Steve Radack, County Commissioner; Jerry Eversole, County Commissioner; Ron Hickman, Constable; Glen Cheek, Constable; Ned S. Holmes; Amy M. and James H. Lee; Philip L. Leggett, M.D.; Bill and Nancy McMinn; John L. Nau III; Lynden Rose; Mike G. Rutherford; Michael and Kim Stevens; H. Scott Caven, Jr.; Daisy and John White; James P. Wilson; Massey Villarreal; Pete Alfaro, former Mayor of Baytown; Dr. Juluette Bartlett-Pack; Larry Bowles; Bill Calhoun, Chair, Black Republican Council of Texas; Theresa Chang; Vickie Clements; Hector Delgado; Judith Ellis; Josh Flynn; Linda Gonzales; Kathy Haigler; Barbara Hauser; Jim Hotze; Dianne L. Josephs; Christy Kelley; Connie Sue Kelley; Sharon Martin; Charles Milstead; Jacob Monty; Clint Moore; Lilian Norman-Keeney; Dr. Jeffrey A. Ross; Marisa Olivares Rummell, Chair, Republican National Hispanic Assembly of Texas; Mike Stafford; Kenneth Stevens; George Strake, Jr.; Tim Turner; Leo Vasquez; Richard W. Weekley; Kaye T. Goolsby; Elizabeth Graham; James Graham; and Jared Woodfill, Chairman, Harris County Republican Party.

You've Got Mail

The Republican Governor's Association, a satellite of the national Republican Party, is throwing its support to Gov. Rick Perry in the next governor's race.

In a letter signed by Gov. Kenny Guinn of Nevada and Gov. Mitt Romney of Massachusetts, the chairman and vice chairman, respectively, the group praises Perry for an "immensely successful term of office" and for his efforts in education and job creation. At this point, Perry doesn't have any primary election opponents, but U.S. Sen. Kay Bailey Hutchison and Comptroller Carole Keeton Strayhorn are scratching around on the GOP side and former U.S. Rep. Chris Bell is officially exploring a bid from the Democratic side. Kinky Friedman, the only other declared candidate, plans to run an independent campaign.

Even so, the letter, written to Texas Republican Party Chairwoman Tina Benkiser, ends with this: "We would like to assure you that the RGA is committed to supporting Governor Perry's reelection in every way possible in both the primary and the general election."

RGA's funding comes from the RNC. People donate to the national party, which can then funnel the money to the governor's association. And that has an added twist: While the RNC reports the sources of its money, the RGA doesn't. Contributors who earmark their RNC contributions for the governor's group (or to a similar group for GOP attorneys general) don't get tagged as donors to the smaller organizations.

Political People and Their Moves

Geraldine "Tincy" Miller of Dallas will chair the State Board of Education for two more years if the Senate goes along with Gov. Rick Perry, who reappointed her for that job. She's been on the SBOE for 20 years...

Lynn Switzer of Pampa will be the new district attorney in that part of the Panhandle, replacing her old boss, Rick Roach, who pleaded guilty to drug-related gun charges in a plea deal that got drug charges against him dropped. He could face up to 10 years in prison. Switzer was an assistant district attorney in his shop.

The Guv named Mark Borskey and Victoria Ford deputy directors of his legislative division, backing former Sen.-turned-lobster-turned-aide Dan Shelley in efforts to get the Lege to sync up with the governor. That's a new title for both, and a new role for Ford, who'd been in the governor's policy shop.

Perry named three men to the Texas Commission on Jail Standards, including two who were already on that panel. Taylor County Commissioner Stanley Egger of Tuscola, who's also a bank director, is being reappointed, as is Dr. Michael Seale, an assistant dean at the University of Texas Health Science Center and the medical director for the Harris County Sheriff. The new appointee is Albert Black of Austin, a business and community relations coordinator for Child, Inc.

And he named four people to the board of the Lower Colorado River Authority: Ida Carter of Marble Falls, secretary and treasurer for an architectural firm, got reappointed; Woodrow Francis McCasland of Horseshoe Bay, managing director of Highland Lakes Bank; Linda Raun of El Campo, co-owner of Lowell Farms; and B.R. "Skipper" Wallace, the boss at Storm-Wallace-Helm, Inc., in Lampasas.

The Legislative Study Group reelected Rep. Garnet Coleman, D-Houston, as chairman. The rest of the brass: Jessica Farrar, D-Houston, and Lon Burnam, D-Fort Worth, vice chairs; Elliot Naishtat, D-Austin, treasurer; Rafael Anchia, D-Dallas, secretary; and Dora Olivo, D-Missouri City, legal counsel.

Meanwhile, in sports news: Lt. Gov. David Dewhurst, riding CDs from Heaven, finished 91st in his division in the National Cutting Horse Association World Finals in Amarillo. He blamed a badly behaved bovine for ruining his second-round time... and Gov. Perry ran in — and finished — Austin's Freescale Marathon, making the 26.2-mile run in 4:06:54...

Deaths: Ted Powers, a retired Associated Press photographer whose 48 years on the job included 17 years of shooting in, around and about the state Capitol. He was 83 and had his family include this in his obit: "Preceded in death by many, he will be followed by all of you."

Quotes of the Week

House Speaker Tom Craddick, in the Fort Worth Star-Telegram, on polling: "If you ask, 'Do you want more money for education?' and they're going to say 'yes'. But if you ask if you ant more taxes to pay for it, they'll say 'no'."

Rep. Kino Flores, D-Palmview, quoted in the Austin American-Statesman on his efforts to expand gambling in Texas: "Would you rather have the opportunity to go play a game of chance and let the state keep $5 worth, or would you rather the state force you to give it five bucks?"

Midland City Councilman Bill Dingus, when told by The Dallas Morning News that the Texas Legislature doesn't record each member's vote on each issue: "I was unaware they didn't. I think that sounds kind of hillbilly."

Rep. Craig Eiland, D-Galveston, asked if he and others can pass a campaign finance bill without help from Speaker Craddick: "I think we can pass it without his opposition."

Two from Hunter S. Thompson, who shot himself last weekend: "When the going gets weird, the weird turn pro." And this: "Call on God, but row away from the rocks."

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Texas Weekly: Volume 21, Issue 35, 28 February 2005. Ross Ramsey, Editor. George Phenix, Publisher. Copyright 2005 by Printing Production Systems, Inc. All Rights Reserved. Reproduction in whole or in part without written permission from the publisher is prohibited. One-year online subscription: $250. For information about your subscription, call (800) 611-4980 or email biz@ texasweekly.com. For news, email ramsey@ texasweekly.com, or call (512) 288-6598.

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Texas Realtors are replacing radio ads blasting new state taxes with radio ads supporting the House's new tax bill, but the old ad ran for at least a day-and-a-half after the new bill was out.Lawmakers' conversations about real estate transfer taxes -- basically a sales tax on homes and other properties -- set them off. But no such tax made it into a House committee's bill, and with House leadership trying to build support in the lobby and in the House itself for the legislation, the ads stuck out. The Realtors say they weren't really hitting hard, but one line jumps out of the ad because it echos the "not net tax increase" line issuing from the Capitol: "Some ideas claim to lower property taxes, but they just swap old ones for new ones. Sure, they're called something else, but homeowners are still on the hook. And these plans to further tax real estate drag down the economy, eliminate jobs, and prevent thousands of Texas families from realizing their dream of homeownership." The target, apparently, was the idea of paying for cuts in property taxes with a tax package including fees on real estate transfers. The new tax bill still raises some taxes to lower others, but a spokesman for the Realtors says they support that one. They're trying to drive traffic to a website showing off their viewpoint. It's at www.truthabouttexastaxes.com. They're more explicit there, with a section called bad ideas that lists both the transfer tax and extending the state sales tax to services like those offered by real estate agents. The new ads, which should be in place as lawmakers head home for the weekend to talk to constituents about the tax and public ed bills, take a whole new tack: "Truth is property owners have been paying more than their fair share for far too long. Texas Legislators now have a plan to fix this problem. House Bill 3 cuts school property taxes by one-third. That's not only good news for property owners -- it also means great things for the state's economy. This property-tax decrease attracts business to Texas, creates more than 28,000 new jobs, and increases personal income in the state by one-point-five billion dollars. So your property tax goes down, more Texans can afford homes, and the economy gets a big boost. That's the truth about Texas Taxes." The ad doesn't mention any of the specific taxes in the new bill.

Republican consultant John Doner, who cranked out a list of the top 500 political action committees here a couple of weeks ago, has now unveiled a list of 500 political campaigns ranked by contributions.The new list is topped by Gov. Rick Perry, whose sack-dragging produced $11.4 million in contributions during the two years that ended at the end of 2004. Lt. Gov. David Dewhurst was second on the list, bringing in $9.6 million. Those were among the eleven campaign committees that brought in more than $1 million during those two years. The rest: Carole Keeton Strayhorn, $6 million; Tony Sanchez, $4.6 million; Greg Abbott, $4 million; Tom Craddick, $2.9 million; Susan Combs, $2 million; Kevin Eltife, $1.7 million; Victor Carrillo, $1.6 million; Paul Sadler, $1.6 million; and Patrick Rose, $1.1 million. The listings don't cover loans taken out by candidates, and so don't reflect the full amounts some of them had on hand to spend for their elections (those who had elections, that is). The campaign list is at this link:
www.texasweekly.com/Documents/Top500Campaigns.pdf And if you missed it the first time around, the list of the biggest PACs (also ranked by revenues) is here:
www.texasweekly.com/Documents/Top500GPACs.pdf

If Rep. Kent Grusendorf, R-Arlington, were up to bat, the education establishment would be on the mound throwing baseballs at his head.What he calls the "most equitable school finance bill" in recent state history, they say "jeopardizes the education of our children in the name of tax relief." He sees the state trying to add $3 billion to public education spending; they see the state ignoring testimony in a school finance lawsuit from its own experts, who said it would cost almost $5 billion to reach a minimal standard for an "adequate" education. As a general rule, the educators think they'll do better in the courts than in the Legislature if House Bill 2 is the standard. "HB 2 in its present form is the worst thing to happen to Texas school children since chicken pox," said John Cole, the president of the Texas Federation of Teachers. Others were running their engines at a lower temperature, but moving in that same direction. The opposition of the Coalition to Invest in Texas Public Schools -- an umbrella group made up mainly of various education associations -- is interesting because of the membership. That organization and its allies include trade groups for school boards, for administrators, community schools, rural schools, the state's four biggest teacher groups, the PTA, and principals. As Grusendorf was readying his public education panel for a vote on the school finance bill, they were blasting it as a flawed and failed effort. Their main attack: It's not a long-term solution, and it doesn't restore cuts made to education two years ago when the state's budget was running red and lawmakers were determined not to raise taxes. What new money is in the bill would be used, in part, to meet new state requirements, they say. And the $1,000 stipends for school employees, reduced two years ago, aren't fully restored. What restorations are made would come in part from the new $3 billion in the bill, the educators say. The gap between the richest and poorest districts would widen, partly because taxes that pay for "local enrichment" wouldn't be shared between districts, creating some distance between the amount spent per student in poor and rich areas of the state. Dawson Orr, the superintendent at Wichita Falls ISD, said HB 2 is more about property tax relief than education -- that's his quote up there in the first paragraph -- and said the bill doesn't satisfy the principles his group laid out last year: providing adequate funding to all districts, equalizing funding for at least 90 percent of schools, building in funding capacity for growth, "respecting" local control, and providing for facilities. "If the Legislature is willing to raise $11 billion for local property tax relief, surely it can raise more than $1.5 billion for public education," he said. In spite of their opposition, Grusendorf's committee voted to send the bill to the full House, where it's expected to come up for debate next week.

Texas Democrats trying to fix school finance say they'd spend the same amount of money as their Republican colleagues in the House, but they wouldn't spend it the same way. That gives them the same bottom line, more or less, at $14.1 billion, and it answers critics who said the Democrats should offer a plan of their own instead of whining about management's plans.But while the totals are the same, the details are significantly different. They'd give a bigger tax break to homeowners and divert $2.2 billion from business tax breaks to teacher salaries and other education spending. The Democrats claimed that owners of average homes in 135 of the state's 150 House districts would see lower school property tax bills under their plan than under one offered by Rep. Kent Grusendorf, R-Arlington, and passed by his Public Education Committee this week. That bill would cut local school property taxes from a high of $1.50 to a high of $1, a cut that would apply to business and residential property owners alike. The Democrats would cut those taxes to $1.25, but would triple the homestead exemption to $45,000. Businesses would share in the lower tax rate, but wouldn't get the exemption. Put another way, Republicans would give business property owners twice as big a tax break. But the Democrats would give a bigger break to most homeowners, and would have $2.2 billion left over for new education spending, all without raising any new taxes the Republicans in House leadership weren't already planning to raise. There's some artful terminology involved here. House Speaker Tom Craddick and other House leaders have said over and over that they won't support a net tax increase. Another way to say that: Every dollar raised in new state taxes would be used to lower local or state taxes by a dollar. They want to spend $3.2 billion in new money on public education (not including what they're spending to keep up with enrollment growth), but hope to raise that money with cuts, efficiencies, better use of federal matching programs, and other budgeting measures. The Democrats' plan would use the same pot of money, but wouldn't use each new tax dollar to lower local property taxes. Most would go there, but that $2.2 billion freed by replacing lower tax rates with higher homestead exemptions would become new education spending. They'd also use the $3.2 billion Grusendorf is counting, but in different ways. The big-ticket items: $2.5 billion to bring Texas teacher salaries to the national average; $650 million to reinstate a health insurance stipend for school employees; $600 million for technology and textbooks; $1.3 billion to fund compensatory and bilingual education programs; and new spending on school facilities, transportation, and other programs. The Democrats wouldn't change current formulas for distributing funds, but claim the influx of new money would bring "virtually 100 percent" of the state's students into so-called "equalized districts." The Democrats offered a chart comparing the effect of their plan on the average-priced home in each legislative district to the effect the Grusendorf plan would have on those same average homes. In all but 15 districts, they said, their plan is better for homeowners. The break point is around $165,000. Homes worth more than that would get a bigger tax break from HB 2, Grusendorf's bill, than from the Democratic alternative. Below that, they'd do better with the alternative. And in all but 15 districts, the average home is worth less than $165,000. Nine are in and around Dallas. Three are in and around Houston, two are in Austin, and one's in San Antonio. You can download the Democrats' chart here.

It's usually best to take your medicine fast, in one ugly gulp, like mom used to say. But House leaders, apparently confident they can pass a major tax bill and an ambitious rewriting of the state's school finance system, decided to let both measures sit unprotected over a long weekend.That gives opponents more time to work on the 150 people who'll vote on the two measures. The House expects to start debate next Tuesday on the school bill, then to work on the tax bill that funds it. Those two bills form the centerpiece of the legislative session. Lawmakers tried to fix school finance two years ago, failed, then came back in special session last spring, and failed again. A state district court has since ruled the current system unconstitutional, and the state's appeals of that ruling now rest in the Texas Supreme Court. The tax bill, in particular, is open to snipers. A key component -- a 1.1 percent tax on payrolls designed to replace the state's broken corporate franchise tax -- is similar to a tax denounced by Gov. Rick Perry ten months ago as a "job-killer." Perry's holding his cards close this time, saying legislation is subject to change as it moves about; ironically, the day after the tax was approved by a committee, Site Selection magazine presented him with its Governor's Cup for nailing down more job creation announcements than his counterparts in other states. In recent history, lawmakers haven't passed tax bills until after they've passed their two-year budgets. But this one isn't intended to fund the budget. It's supposed to be a dollar-for-dollar exchange for cuts in local school property taxes. Democrats have proposed an alternative that puts more money into schools, one of several proposals that will compete with next week's school finance bill. If the plans hold together, the House will send its two major bills to the Senate by mid-month, and the Senate is supposed to send over a state budget by the end of the month.

In a party-line vote that followed a fulsome attack from administrators, school board members, teachers and others, the House's public education committee sent its school finance bill to the full House for a look next week.Before voting on Rep. Kent Grusendorf's education and finance package, they changed a provision that limited wealthy districts' contributions to the state finance system, but only slightly, phasing in something that had been planned for immediate effect. Other provisions of the Arlington Republican's bill were left pretty much intact. Even so, the committee members had to vote without seeing a fiscal note toting up the costs of the legislation, or a "printout" detailing the effect the bill would have on each of the state's 1100-some-odd school districts. They had a printout in hand, but quickly decided the numbers were buggy. Grusendorf asked his committee to disregard it and not to pass it on to others. He's got the Legislative Budget Board staff working up a new version. Under current law, some districts get more money from the state to make up for their smaller local tax bases. Districts with bigger tax bases have to send money to the state. The idea is that kids in public schools get similar amounts regardless of where they live. In Grusendorf's original bill, the amount of money "recaptured" from those wealthy districts -- Highland Park ISD has become the poster child -- would have been capped. Where they now share from all of the money they raise from local taxes, he proposed having them share only from the first 35 percent of what they collected from local taxpayers, allowing them to keep the rest. Rep. Dan Branch, R-Dallas, who represents that district, argues that it's not fair to share from 100 percent of the local pool, and championed that provision. Doing that would leave a lot more money in the hands of around two dozen school districts, but also would increase the distance between the amounts of local money available to students there as opposed to what's available to students elsewhere in the state. The local example: Money to the Dallas ISD would have increased 3 percent while Highland Park's take would increase more than 40 percent. The fix: Highland Park will still get the money, but it'll be phased in over four years instead of changing right away. The Democrats on the panel weren't appeased, and all three voted against that change, then alone against four Republicans in favor of a change to kill the 35 percent provision, and finally, against the bill itself.
Grusendorf said he hopes to get the bill to the floor on Monday.

Rep. Kent Grusendorf, R-Arlington, let loose the printouts showing what his school finance bill would do in every district in the state.The delay in getting good "runs" on the effects of the bill moved consideration from Monday of next week to Tuesday, opening the legislation to more sniping. But legislators just won't vote on education bills without seeing what'll happen locally. Click here for a copy of the printouts .

Our quick take on the campaign finance trial currently underway at the Travis County Courthouse goes something like this.Plaintiff lawyer: Legislator-turned-political consultant Bill Ceverha was at the center of an illegally coordinated, illegally funded effort to elect a Republican majority and then a Republican Speaker to the Texas House. Defense lawyer: Legislator-turned-political consultant Bill Ceverha was a bit player in Texans for a Republican Majority, a political action committee that did nothing wrong in its efforts to upend the Democratic majority in the Texas House. The lawyers for five Democrats who lost in the 2002 elections to TRMPAC-backed Republicans contend the PAC used corporate money illegally, for more than administrative expenses. Ceverha's team says the corporate money wasn't used in particular races and so was used legally even when it went to pay for polling and phone banks and other political chores not directly linked to particular candidates. There are thousands of details, but that's the gist. And the import? It's the first court test of some of the ideas and legal arguments that are sure to surface if and when three other Republican consultants and possibly some corporate donors go to trial on criminal charges handed up by Travis County grand jurors last September. • We noted last week that House Speaker Tom Craddick was subpoenaed to appear in Ceverha's trial. It turned out he wasn't critical to the deal, and the plaintiffs dropped their request to make him appear. A couple of witnesses testified without entering the courthouse at all, instead getting their version of events into the court record via videotaped depositions edited by the legal teams on either side. • Meanwhile, Houston lawyer Andy Taylor was hired by Ceverha's boss and six other prominent Texas political financiers to work on revising the state's campaign finance laws to make them more clear. He said he'll be working on a variety of changes, but pointed specifically to laws governing the use of corporate money in campaigns. He said the experts brought forth by the two sides in Ceverha's trial couldn't agree on what the law says. That, according to Taylor, is an indication the law isn't clear enough, and he called the trial "exhibit A" in his case that the state's campaign finance laws are too confusing for the participants. Travis County District Attorney Ronnie Earle responded that the law governing corporate and union contributions has been clear "for roughly 100 years," and said Taylor's call for clarity "should be viewed with alarm by every Texan who is not one of Mr. Taylor's seven." Those seven backers, according to Taylor: oilman Louis Beecherl, whose political advisor is Ceverha, banker Charles McMann, real estate broker Vance Miller, developer Walter Mischer, homebuilder Bob Perry (lately the most prolific giver in Texas politics), real estate developer Michael Stevens, and oilman Fred Zeidman. Texans for Public Justice, a campaign finance reform group, said the seven contributed $5.5 million to candidates in Texas during the last election cycle. ? A new campaign finance bill would limit contributions from any one person to $100,000 per election cycle. That would have affected about 114 contributors during the last cycle, according to the sponsors, Democratic Reps. Mike Villarreal of San Antonio and Mark Strama of Austin. Fifteen of those gave more than $500,000. Lt. Gov. David Dewhurst said the limit on overall gifts might not fly: "That probably wouldn't be constitutional. The Supreme Court has ruled that's free speech."

Introducing a tax bill is a little like sponsoring a skeet shoot, and the House now has the role of host. The tax bill designed to finance the school funding bill includes a payroll tax, an increase in sales taxes, a cigarette tax and an extension of the state's levy on telecommunications.The plan, forwarded by Ways & Means Committee Chairman Jim Keffer, R-Eastland, would kill the current franchise tax, lower local school property tax rates to $1, and automatically sweep a portion of growth in state revenues each year to be added to the state's share of public education costs and a corresponding cut in local taxes. • Businesses would pay a 1.1 percent tax based on payroll, limited to $880 per employee per year. They'd pay quarterly on the first $20,000 of each employee's pay; workers making $80,000 or more each year would cost their employers the maximum amount, while those making less would cost less. For instance, a company would pay $275 in tax each year for a $25,000-per-year worker, or 1.1 percent of their gross pay. All companies with employees would pay the tax, except for nonprofits. Insurance companies would pay the new revised franchise tax, but could deduct their premium taxes first. Doctors and other Medicare and Medicaid providers would get a health care credit against the new tax. And it's strictly an employer tax; though they could figure in the costs when they're setting salaries and wages, businesses wouldn't be allowed to deduct it from employee pay. Businesses that don't pay would lose their privilege to do business in Texas; they couldn't sue, and their directors and officers would become personally liable for any debts or liabilities incurred by the companies. • Sales taxes would increase to 7.2 percent from 6.25 percent, and would be broadened to include bottled water, vehicle repair services, car washes and billboard advertising. • The tax on car and truck sales would increase to 7.35 percent from 6.25 percent, and that rate would be applied to an average sales price set by the state unless the buyer could provide evidence of the real price. • Sales taxes on boats and motorboats would also increase to 7.35 percent from 6.25 percent. • The state would add $1 to its 41-cent tax on each pack of cigarettes sold. Taxes on cigars would go up 344 percent (not a typo -- it's the same percentage increase as the cigarette tax), and the state would increase the tax on other tobacco products to 40 percent from 35.213 percent now. • The telecommunications infrastructure fund (called TIF), originally set up to wire schools and libraries and such -- and to expire after ten years -- would have its life extended for two more years and the money would go to the general fund. The tax was supposed to expire after it raised $1.5 billion for its original purpose, but it's easier for lawmakers to extend an existing tax than to create a new one. Keffer's bill would also lower the rollback rate for cities and counties and other government entities -- other than school districts -- that depend on property taxes. The idea, apparently, is to keep increasing taxes from those governments from negating the cuts being made in school property taxes. They'd have their rollback rates cut to 3 percent from 8 percent; increases of more than 3 percent, in other words, would require voter approval in automatic rollback elections. It would require the state comptroller to take 15 percent of the growth in non-earmarked state revenue each year and send it to school districts to buy down their property tax rates. That would continue until the rates are down to 75 cents in each district. If you hear somebody saying the House wants to cut school property taxes in half (eventually), this is the provision they're talking about. To help keep appraisals in line with reality, the bill would require Texans to report the prices they pay for real estate; sales prices would have to be filed with county appraisal districts within a few days of each sale. But unlike price disclosures in other states, the documents would be secret -- not available for public inspection. In fact, the bill makes it a class B misdemeanor to show the disclosure forms to unauthorized persons. That's tougher than the penalty for not reporting in the first place; lying on the forms would be a crime, but people who don't file the disclosures aren't open to criminal penalties. Appraisers can get courts to order compliance, but can't call in prosecutors. Update: Ways & Means voted the $11 billion tax bill out, setting up a floor debate on taxes next week. The school finance bill approved a day earlier doesn't take effect unless this tax bill also passes. Debate on that bill is also expected early next week.

State officials can't raise money during a legislative session, but they can solicit other kinds of support.In his continuing effort to show fellow Republicans that resistance is futile, Gov. Rick Perry announced a statewide steering committee for his 2006 reelection campaign that includes more than 450 people, including some named earlier as part of his state finance committee and another campaign effort announced earlier in the year. Perry is so far the only Republican who has announced he'll run. U.S. Sen. Kay Bailey Hutchison and Comptroller Carole Keeton Strayhorn are openly considering gubernatorial campaigns. Independent Kinky Friedman announced he'll run, and Democrat Chris Bell of Houston formed a formal exploratory committee while he considers a run against Perry. Perry's list includes about half the members of the State Republican Executive Committee, the 62-member advisory board of the state GOP and seven of the nine non-judicial statewide elected officials; he didn't list himself, and Strayhorn's not on it. Elizabeth Ames Jones, the San Antonio Republican who left the Texas House to accept Perry's appointment to the Texas Railroad Commission, is on the list. She was sworn in two days after the list came out. The curious can download a copy of the list "five pages long, two columns wide -- by clicking here.

The fundraising dinner for the Sam Attlesey journalism scholarship at the University of Texas is sold out, and the organizers are trying to steer people to donating to the fund itself.The scholarships were created to memorialize Attlesey, the late political reporter for The Dallas Morning News. The fundraiser should bring the balance in that account to more than $160,000, and they're trying to push that into the $175,000 range. The scholarships are for journalism students who've shown strong interests in covering politics and public policy. There's more information online at this University of Texas at Austin website: http://communication.utexas.edu/support/scholarships/Attlesey.html.

Quirk, Jones, Pemberton, Jonas and a new lobster tankAfter four years, Ann Quirk is leaving Comptroller Carole Keeton Strayhorn for greener-pastures-to-be-detailed-later. Strayhorn, who is considering a run against Gov. Rick Perry, will have to wrun those waters without one of the most experienced political hands in her shop. Quirk is well-known around the Pink Building and in Republican circles, having worked for several legislators and on a zillion campaigns, both in San Antonio, where she started, and statewide. Texas Railroad Commissioner Elizabeth Ames Jones, sworn in officially several days ago in a move that filled the RRC spot and formally ended her hold on her spot in the Texas House, has now been sworn in ceremonially. Gov. Rick Perry did the honors after former San Antonio Spurs center David Robinson did the invocation. ERCOT General Counsel Margaret Pemberton resigned but plans to stick around for a month to give the agency time to hire a replacement. She's been at the agency for eight years. James Jonas III has signed on with the San Antonio office of Holland & Knight, a dinky little law firm with 1,250 lawyers in 26 offices around the country. He left former congressman Tom Loeffler's firm last year (Jonas was a name partner there), saying he wanted to be closer to a family business founded by his later father-in-law. He'll work on regulatory and legislative issues in San Antonio, Austin and Washington, D.C. Three lobbyists with ties to the state's top three officeholders are joining up for some but not all of their clients. Walter Fisher, Bill Messer, and Mike Toomey are working together for the Texas Association of Realtors and SBC. Fisher's the former Senate parliamentarian, close to Lt. Gov. David Dewhurst. Messer is close to former House colleague turned Speaker Tom Craddick, and Toomey was Gov. Rick Perry's chief of staff until last year.