Vol 21, Issue 47 Print Issue

The Week in the Rearview Mirror

And so, gentle reader, we come once again to that point in the legislative session where lawmakers scrounging for money go to the comptroller, who controls the numbers, seeking favor.But the tradition of sweet-talking comptrollers for more smack stopped pretty soon after Carole Keeton Strayhorn became comptroller; instead of flowers and chocolates, lawmakers came steaming in with proposed legislation to take the tax courts away from the tax collector. "We had the feeling we were getting slow-played... so we moved the hearings over to SOAH," said Rep. Warren Chisum, R-Pampa. "As soon as she woke up over there, she started sending these little missles over here... saying she'd lower her estimate [of state revenue] if hearings were pulled out." In a meeting attended by at least 10 people from the House and the comptroller's office, the House contingent -- led by Reps. Chisum, Jim Keffer of Eastland, and Brian McCall of Plano -- said they had hoped to raise another $1 billion from their tax bill than the comptroller says it would raise. At this point, accounts vary (excuse the double meaning, but it works for us). The comptroller said taking away the tax courts -- an administrative law system that sometimes ends in settlements and sometimes at the regular courthouse -- would force her to lower her overall revenue estimate, whether or not the tax bill passes. The comptroller's number-crunchers said the House folks would have to make a few changes that have already proven unpopular, bringing more businesses into the franchise tax than they proposed and charging a rate higher than they proposed. Change those things, they were told, and they'd get another billion out of the tax bill, and consequently, greater cuts in local school property taxes. The Housies said they would leave hearings in the agency if she would raise her estimate of the revenue produced by the tax bill. "We'd rather have our money," Chisum says. "We'd sell out for the money." Chisum says Strayhorn's staff gave a bigger number to Sen. Kim Brimer, R-Fort Worth, last year, but that she now says the proposals were different. The comptroller's office is putting together a side-by-side comparing the old Brimer proposal to the current House proposal so they can see whether and where they've got a hole in their pocket. Chisum asked Strayhorn to get that done by Tuesday afternoon, since the clock is winding down on the session. If you're following that on your home calculator, they left the meeting at least $1 billion apart, and potentially more. This is strikingly similar to the battle during the last regular session and the special session last spring, when spats over state finances led the comptroller to temporarily threaten not to certify that the state budget was balanced. In the special session a year ago, the Legislature responded to that (and other battles) by stripping Strayhorn's office of school and state agency performance reviews. The comptroller's estimates of what the tax bill would raise would leave the House with enough money, we're told, to lower local property taxes to $1.35 from $1.50 in the first year, and to $1.10 in the second year. The House wants to cut the local property tax by 50 cents; the Senate by 40 cents. Chisum says that Strayhorn's estimate would put the cut in the 25- to 30-cent range. Even if they get numbers they like from Strayhorn, the tax bill has trouble of its own -- the House and Senate haven't yet signed off on it, and its fate is linked to the public school finance and education bill, which is also on hold in a House-Senate conference committee. The people watching the session clock say lawmakers need a deal within about 72 hours to make it work. In truth, if they get a deal before the session ends, they'll figure out a way to make the rules work.

A special election, a new firm, and a most interesting opinion on open meetingsGov. Perry sent the special election to replace the late Joe Moreno, D-Houston, in the Texas House, for November 8. You can read that to mean he has no intention of calling a special session before then that would require representation for people in that part of Houston. Meanwhile, some of the powers that be have gathered around Ana Hernandez, an attorney with Conoco Phillips who is active in Democratic politics, a former intern for state Sen. Rodney Ellis, D-Houston, and a former chief of staff to Rep. Jessica Farrar, D-Houston. Moreno, before becoming a state rep, was Farrar's chief of staff. • ViaNovo is the name of a new public strategery firm in Austin that includes three semi-recent honchos at Public Strategies Inc. Blaine Bull, Matthew Dowd, James Taylor and Tucker Eskew are the principals in the new firm. All four have solid political chops; Dowd and Eskew were most recently working for George W. Bush's reelection campaign, Dowd as a strategist and pollster and Eskew as a spokesman. Bull and Taylor have been officed together since they left PSI a little more than a year ago; they and Dowd will be based in Austin, and Eskew will remain in Washington, D.C. • The following doesn't apply to the Texas Senate, and that's a real shame for anyone who'd like to know what's going back there in the private conference rooms all the time. But Attorney General Greg Abbott recently issued an open meetings opinion aimed at non-legislative officials in city, school and county government that includes this summary: "Members of a governmental body who knowingly conspire to gather in numbers that do not physically constitute a quorum at any one time but who through successive gatherings secretly discuss a public matter with a quorum of that body violate section 551.143 of the Open Meetings Act. This section is not on its face void for vagueness.

A key player in the GOP's 2002 successful effort to take control of the Texas House failed to report $613,433 in campaign contributions and $684,507 in spending and must pay damages to the losing Democrats, according to a state district judge in Austin. Judge Joseph Hart didn't say whether the contributions and expenditures themselves were illegal, but said the Texans for a Republican Majority political action committee, known as TRMPAC, failed to report the money it raised and spent as it should have done. He said former Rep. Bill Ceverha of Dallas, the treasurer of TRMPAC, is personally liable for damages totaling $196,660.An attorney for Ceverha said wants to appeal the ruling. "We feel strongly this decision is wrong. We will vigorously appeal this ruling immediately if Judge Hart allows us to do so," said Terry Scarborough, Ceverha's lawyer. "We feel confident that Judge Hart will sever this decision so that it can be appealed. Our client was exercising his constitutional rights of freedom of speech and freedom of association. These are the most fundamental constitutional rights that we, as citizens, enjoy and cherish." TRMPAC was the brainchild of U.S. House Majority Leader Tom DeLay and a key aide, Jim Ellis, who wanted to help Republicans win a majority in the Texas House. That majority, once elected, redrew congressional districts in Texas and the gains to Republicans in Congress in last year's election were completely attributable to the Texas map. Each of the seats added to the GOP's congressional majority is occupied by a Texan. But questions were raised soon after the 2002 elections about the use of corporate money on the Republican side and whether it was used for administrative expenses of TRMPAC and other groups -- that's legal -- or for electioneering, which isn't. Travis County District Attorney Ronnie Earle and a string of grand juries have investigated. Three people, including Ellis, John Colyandro, and Warren RoBold, have been indicted, and eight corporations were named along with them. Several of those companies have signed cooperation agreements with prosecutors in return for having the indictments against them dropped. Colyandro and Ellis are fighting their indictments in criminal court; Earle wouldn't comment on Hart's ruling, but in a statement said his office is making arguments similar to those in Hart's ruling in its arguments in the criminal cases. "Judge Hart's ruling reaffirms the importance of full disclosure to our democratic society," he said in the statement. Ceverha's is the first civil trial stemming from the elections. Hart found TRMPAC didn't report $532,333 in corporate contributions that were used for campaigning, and another $81,100 in non-corporate contributions that should also have been reported. The PAC didn't report $684,507 in expenditures that should have been reported. Five Democrats who sued will each get double the amount that was raised and spent against them but not reported. Hart took that to mean the amounts that were specifically spent on each candidate, a conservative reading he reached partly because of a section of state law that gives the state the right to go after TRMPAC for a much bigger penalty. In his ruling, Hart said the state is entitled to three times the total amount of contributions and expenditures that weren't reported, or $3,893,820. Attorney General Greg Abbott would have to seek that amount from TRMPAC and Ceverha; a spokeswoman said the agency is looking at the ruling and hasn't decided what it will do. A separate civil case alleges another group -- the Law Enforcement Alliance of America -- didn't report its donors, contributions and expenditures for television ads that attacked Democrat Kirk Watson, Abbott's opponent, while boosting Abbott's campaign. Andy Taylor, the lawyer for the Texas Association of Business, which was involved in the efforts to elect a GOP majority, and which has said it wasn't engaged in direct campaigning for or against any candidates, said Hart's decision doesn't upset TAB's case. "During the 2002 state election cycle, TAB used corporate funds to create and disseminate 86 public information mailers about candidates to the general public, he said in a written statement. "None of these ads used words of express advocacy." Hart said in his ruling that "'Express advocacy' is a constitutionally imposed protection for individuals and groups other than political committees... such protection is not necessary for organizations like TRMPAC, 'the major purpose of which is the nomination or election of a candidate.'" TAB, in Taylor's argument, doesn't fit that definition. You can download a copy of Hart's decision at this link: www.texasweekly.com/documents/HartRuling.pdf.

It's dangerous in the last days of a legislative session to say anything is surely dead. But some things are starting to smell very funny.• Several agencies that went through sunset this year might be up again in two years. The Public Utility Commission, the Lottery Commission, the Board of Medical Examiners and the Texas Alcoholic Beverage Commission were among the agencies still in the air in the last days. • Lawmakers averted a standoff on workers compensation insurance reform, folding the stand-alone agency that regulates that industry into the insurance commission, setting up a managed care system some businesses wanted, and trying to push injured workers back to work sooner. Unlike most states, Texas still doesn't require companies to carry insurance for injured workers, and as they did with the last reforms in 1989, state leaders said their reforms and market forces would keep the workers and the economy healthy. • Video Lottery Terminals, or VLTs, or slot machines, had one last chance at a Senate vote -- their popularity depends on whose vote you're counting and whether you trust that senator -- but got sunk when a legislative deadline passed. The House is unlikely to go along anyway. • Publicly funded vouchers for private schools got fried on the other end of the building. The House ran over proponents including Speaker Tom Craddick to nix these, which are opposed by a weird coalition of liberals, teachers and others who don't want the money leaving public schools, and conservatives who think regulation of church schools would follow state money through the doors. The senator in charge of the education bill in question had promised not to bring vouchers back for a Senate debate. • A big fix to the state's water planning, and the money to pay for it, also ran out of time. Sen. Ken Armbrister, D-Victoria, took a run at water regulation, including a water tax that would pay for it. The tax came under immediate attach, and omnibus legislation addressing water rights and regulations stalled in the lower chamber.

The formula here is just as it was at the beginning of the session: Failure to get results on school finance and property cuts would be horrible news for Rick Perry, less troubling for David Dewhurst and Tom Craddick, and of very little political consequence to the average member of the Texas Legislature.Those average members only narrowly approved school finance and its companion tax bill in the House and their squeamishness is one reason why the tax bill remained in grave condition as the last weekend of the session approached. Broadly speaking, if the House would go along with the Senate's package of business taxes, or the Senate would go along with a one-cent increase in sales taxes that's more popular in the House, this might end with a deal. It's a staring contest that neither side wants to lose and that neither side particularly wants to win. Meanwhile, the governor, snubbed by lawmakers on his requests to build up the economic development "closing fund" and for a new $300 million state fund he could direct to "emerging technologies," continued to complain about the size of the budget, telling lawmakers they were spending too much and that they needed to make last minute cuts. Perry's staff started making noises about state spending a couple of weeks ago -- well after the House and Senate had done the lion's share of work on the budget. It's a potential political problem. Lawmakers wrote a $117 billion budget two years ago and are putting the final touches on two-year budget that totals around $139 billion, an increase of $22 billion that does not include any repairs to school finance or any buy-downs of local property taxes. That apples-to-apples comparison gets close to a 20 percent jump (if it becomes a political issue, you'll see the apples compared with lemons and oranges; more on that when the Legislature leaves town). If the session's signature issue passes, it'll add $11 billion or so to state spending while cutting that same amount from local school budgets. Someone looking only at the state budget would see a spending jump of nearly 30 percent. That squabbling stalled printing of the budget pushed some of the Legislature's heavy lifting toward the close of the session on Monday. It'll be a long four days.

Publicly funded vouchers to pay for private schooling locked up the House for five hours before that issue -- and the bill to which it was attached -- was killed on a technicality.The House twice voted to a 72-72 tie on a limited voucher program in urban school districts, both times on provisions that would have stripped them from sunset legislation for the Texas Education Agency. After the bill was up for a final vote, but before the votes were taken, House Speaker Tom Craddick issued a ruling on seven "points of order" that had been called earlier in the day by Rep. Jim Dunnam, D-Waco. Five were overruled, but the last two stuck, and the bill was dead. Rep. Kent Grusendorf, R-Arlington, who authored the bill and captained the floor fight that started late in the afternoon and went into the evening, thanked the House for the debate (and was applauded for grace in defeat) and that was that. A bipartisan band of Democrats and renegade Republicans, led on the floor by Carter Casteel, R-New Braunfels, Charlie Geren, R-Fort Worth, and Sylvester Turner, D-Houston, turned an evenly split House slightly but decisively against vouchers. For House Speaker Tom Craddick, R-Midland, it marked a rare defeat. He voted with voucher supporters all night, and allowed Dunnam's point of order to kill the bill only after voucher provisions had been stripped from it. That ending followed a long, heated debate -- for connoisseurs, it was a terrific evening of legislative theater -- and then a few minutes of tension and surprise. Geren convinced a narrow majority to remove Dallas schools from the pilot voucher program and replace them with the Arlington schools in Grusendorf's district, which hadn't been included in Grusendorf's version of the bill. That same group of members, more or less, then helped Geren add a change allowing a student to transfer out of an unacceptable school, but only to another public school -- not by taking a publicly funded voucher to pay for a private school. That gutted the voucher provisions. Grusendorf asked for a vote on the bill. Rep. Trey Martinez-Fischer, D-San Antonio, asked for "strict enforcement" of the vote. In laymen's terms, that kills leniency in the voting, preventing members from voting for absent friends, for instance. It didn't appear that Grusendorf had enough voucher supporters on the floor to carry the day, and after a minute or so he went to the microphone to ask for a delay in the vote -- the better to collect some Ayes. But the vote had already been called, and Rep. Senfronia Thompson, D-Houston, angrily yanked the microphone away from him and said she wanted to call a point of order. They were at the front mike; she then went to the back mike and called a point of order that, if sustained, would have killed the entire rest of the calendar, including the school bill. Craddick ruled against her, but chose that moment to rule on the foul called earlier by Dunnam. That killed the bill, and the House lumbered on into Monday night. The Senate, which already approved that sunset bill, had extracted promises from the sponsor, Sen. Mike Jackson, R-La Porte, that he would not bring the bill back to them with vouchers in it, so the issue was in grave trouble anyhow. Nothing's ever dead while lawmakers are still assembled in Austin, but the House vote against vouchers and the Senate's lack of enthusiasm make a resurrection unlikely.

Political People and their Moves

Answer: Scott Brister, Paul Green, Harriet O'Neill and Dale Wainwright. Question: Which Texas Supreme Court justices, along among that nine-member robed gang, won't be on the election ballot in 2006?A majority of the justices will face voters next year. Justice Priscilla Owen's confirmation to the 5th U.S. Court of Appeals in New Orleans opens the ninth spot on the Texas court, but not another spot on the ballot -- her term was up next year anyhow. And it's a lifetime appointment: She might be appointed to a higher court someday, but she won't have to run for election to keep her robes. After her confirmation vote by the U.S. Senate, Owen issued a statement saying she'll remain on the Texas court until current business is out of the way; she's got to finish writing any opinions she is writing, and the court might or might not have other cases to finish in which she's part of a narrow majority. Gov. Rick Perry will get to appoint her successor, who in turn will have to run in next year's elections to hold their spot on the state's highest civil court. Whoever that is will be the sixth member of the court to start there as a Perry appointee. That gives Perry an opportunity to put another judge on the panel before the appeal of the school finance lawsuit is decided (and maybe, if everything happens quickly, before it's argued in the first week of July). The court doesn't have to rule before the March primaries, or for that matter, the November general election next year, but could rule on the constitutionality of the state's public school finance system as early as this fall. And a new judge doesn't have to be on the court when the arguments are held to be involved in the decision; a judge named after the hearing still gets to vote on that decision. The trial court ordered the state to fix the system by October; the Supremes can move that date whether they rule before then or not.

Secretary of State Roger Williams will chair the Base Realignment and Closure (BRAC) Response Strike Force, set up to respond to the U.S. Defense Department's plan to close or "realign" ten military facilities in Texas. Gov. Rick Perry created the task force and also appointed Williams to run it. Former Texas Insurance Commissioner Jose Montemayor will be managing partner of an Austin-based merchant bank that specializes in investments in the insurance industry. He'll start next month at Black Diamond Group LLC. The governor hasn't named Montemayor's replacement at TDI; if he does that after the Legislature adjourns, the appointee won't have to get Senate confirmation until the next time lawmakers convene. The Guv put these six people on the Texas Historical Commission: Sarita Armstrong Hixon of Houston, chairman of the San Jacinto Museum of History Association; Diane Bumpas of Dallas, a reappointee; Earl Broussard Jr. of Austin, president of TB6 Planners; Donna Carter, president of a design business in Austin; Tom Phillips of Bastrop, former chief justice of the Texas Supreme Court; and Marcus Watson of Dallas, the "heritage preservation officer" for the City of Plano. Perry reappointed Chris LaPlante of Austin and Maria Pfeiffer of San Antonio to the Texas Historical Records Advisory Board. LaPlante is the state archivist (at the Texas State Library and Archivists Commission; Pfeiffer is a preservation consultant and historian. Kate Linkous, assistant press secretary to Lt. Gov. David Dewhurst, will leave for Washington, D.C., when the session is over -- she'll be the new speechwriter for U.S. Senate Majority Bill Frist, R-Tennessee. Sarah McLallen, described by co-workers as some sort of whiz-bang political-op-in-the-making, is leaving the Texas Republican Party to go to college. She worked in the GOP's communications office under the last three spokespeople there. Danielle Allen, who worked for former U.S. Rep. Max Sandlin, D-Marshall, is joining the Austin office of Edelman public relations. She'll be working mainly for Lone Star Infrastructure, the developer of State Highway 130. Dick Davis, regional director of the National Fish & Wildlife Foundation and for years a conservation journalist (broadcast and print), is the new executive director of the Texas Parks & Wildlife Foundation. That's a private foundation, but it's a satellite of the state's Parks & Wildlife Department and raises private money to support the state agency's work. Recovering: Andy Sansom, former executive director of the Texas Parks & Wildlife Department, after an automobile accident that left him with a badly broken leg and other painful but not -life-threatening injuries.