The Texas Association of Business has to let loose records of the corporations that contributed to its 2002 election efforts. The Texas Supreme Court, after sitting on the matter for almost 17 months, turned away TAB's request to keep the contributors' names and transactions secret. The trade group said the information was constitutionally protected; the court disagreed. James Sylvester of Austin, a Democratic House candidate who lost that year after being targeted in TAB mailers, filed a civil lawsuit saying TAB's campaign efforts against him were illegal. His lawyers asked for the records detailing how the group raised its money and from whom; the Supremes, after putting the matter on hold in January 2004, lifted its stay. TAB has to produce the information. That's the same election -- and one of the same groups -- under investigation by Travis County prosecutors and grand jurors for alleged violation of campaign finance laws. • Something called "The Marriage Alliance" has opened a website featuring a video of Gov. Rick Perry talking up the constitutional amendment banning gay marriage. The site was set up by Jim Ellis and John Colyandro, two GOP political ops allied with U.S. House Majority Leader Tom DeLay, R-Sugar Land, who are under indictment for their activities during the 2002 legislative elections. Neither man has gone to trial, and both have said they're innocent of any crime. They were indicted in connection with the same criminal inquiry that has included TAB's efforts to elect a Republican majority to the Texas House three years ago. The constitutional amendment on marriage is one of five amendments headed to voters, but it's far and away the draw on the ballot, both for supporters and opponents. On the video, Perry says Texans have a chance to "protect Texas families" with the constitutional amendment on Nov. 8 and says they can support the effort by going to the group's website (since it's on the website itself, the implication is that the ad could run on television). "Protect marriage from fringe groups and liberal judges that would undermine marriage to fit their radical agenda," Perry says in the video. "Join me in sending a message to them that marriage is only between one man and one woman." The website, at www.txmarriage.com, also has videos featuring Reps. Warren Chisum, R-Pampa, Linda Harper-Brown, R-Irving, and Phil King, R-Weatherford. • Some Texas school employees will get a pay raise after all. Teachers, full-time counselors, nurses, and librarians who are now paid the minimum allowed by the state will get more money during the next school year. The state changed some formulas for funding schools and triggered -- perhaps unintentionally -- pay escalators that were already in state law. It comes out to about a 2.8 percent increase in pay for those folks. Educators now making the minimum of $24,240 will get $24,910 next year. Those at the top-level minimum -- that is, experienced educators at the top step of the minimum pay level -- will see pay increase to $41,930 from $40,800 now. Most school districts in Texas pay more than the state minimums -- their employees aren't entitled to the automatic pay increase. By one estimate (from the Texas Federation of Teachers), the pay hike will affect about 8,000 teachers. • Former U.S. Rep. Chris Bell, the Houston Democrat exploring a gubernatorial run, says he raised $35,222 in a "grassroots fundraising drive" that was designed to raise $30,000. Of the total, about $2,500 came from 15 simultaneous "house parties" connected by a conference call last weekend. • Texas Agriculture Commissioner Susan Combs says she'll turn down a $32,000 pay raise that's included for some statewide officeholders in the budget. • Transportation legislation approved by the Legislature and eagerly signed by Gov. Rick Perry would, among a long list of other things, require local voter approval before existing roads could be converted to toll roads. That amends earlier legislation -- also signed by Perry -- that allowed conversion to toll roads without voter approval. In suburban areas, particularly around Austin and Houston, that quickly became a hot button. Even with the fix, it's likely to be an issue in the gubernatorial race, where Comptroller Carole Keeton Strayhorn is promising to talk about it, and in regional contests, like SD-3, where Transportation Commissioner Robert Nichols will be on the GOP ballot. • Here's a mouthful: The federal courthouse in Brownsville is on the way to being named the "Reynaldo G. Garza and Filemon B. Vela United States Courthouse" after two Texans who served as federal judges. That's passed both houses of Congress and is ready for the president's signature. • SurveyUSA, a polling firm, asked voters in all 50 states whether they approve or disapprove of the work their U.S. senators are doing. Barack Obama, an Illinois Democrat, has the highest approval rating in the Senate, with 67 percent, according to the poll. The worst? John Cornyn of Texas, with 40 percent approval. Kay Bailey Hutchison tied for 19th in the 100-member Senate, with a 64 percent approval rating. There's another way to look at it. The senator with the lowest disapproval ratings was Daniel Inouye of Hawaii, who has won the disapproval of 19 percent of his constituents. The highest: Rick Santorum of Pennsylvania, with 44 percent disapproval.

Gov. Rick Perry threw down the gauntlet Saturday, vetoing $35.3 in public education spending and calling a special legislative session on school finance beginning on Tuesday (June 21).He said lawmakers can redo that part of the budget and work on school finance at the same time, and said "we have plenty of time" to get a budget in place without threatening the start of the school year. "I'm not going to approve an education budget that shortchanges teacher salary increases, textbooks, education technology, and education reforms," Perry said in brief comments to the press. He also pointed to another $2 billion for education that slipped from the budget when school finance reforms failed during the regular session. Perry called the veto a "bold" move. Lt. Gov. David Dewhurst called it "disappointing," though he applauded Perry's call for a special session on school finance. And Carole Keeton Strayhorn, who announced her campaign for governor, said Perry's move was "irresponsible." "That is the most irresponsible act that this governor has taken and perhaps any governor has taken to hold our children hostage and veto those dollars for public schools," Strayhorn said. "You shouldn't even be discussing the possibilities that schools will not open." Perry outlined some of his cuts in a press release (get a copy here), and said the detailed version of the budget -- including his line-item vetoes -- would be available later on his website, at www.governor.state.tx.us. The veto raises the stakes for the Legislature, but won't directly force lawmakers to fix school finance. In fact, they now have two problems instead of one. First, they have to repair the budget. Second, they have to work on school finance. Those two things can be linked, but as lawmakers proved during the regular session, it's possible to write the budget without taking on property tax relief or textbook spending or teacher pay raises or school formulas. Public Education Budget Lawmakers have several options when they come back to work on the budget: • Reenact the public education spending vetoed by the governor; • Revise public school spending by moving money from what lawmakers approved three weeks ago to other areas -- like textbooks and teacher pay raises -- without tackling school finance reform and property tax cuts. • Go home and leave the mess for the governor and the Legislative Budget Board. That's not as far-fetched as it first sounds. Budgeteers included a provision saying money set free by vetoes can be budgeted by the Guv and the LBB without the help of the Legislature. In effect, Perry himself, along with the ten lawmakers on the LBB, is the safety net for this high-wire act. Here's the failsafe provision from the budget (in Article IX, for you wonks): "Sec. 13.18. Appropriation of Any Vetoed Funds. An amount equal to the sum of the General Revenue Fund and General Revenue -- Dedicated account appropriations contained in this Act that are vetoed by the Governor under Section 14, Article IV, Texas Constitution, shall be segregated by the Comptroller and is hereby appropriated for budget execution as provided by Chapter 317, Government Code." School Finance As for school finance, they'll start with some of the same problems they ended with three weeks ago. There were two bills: One on school finance reform and property tax cuts, the other a tax bill raising the money to pay for those cuts and those reforms. The House majority includes a faction of Republicans who want to limit what richer districts have to share with poorer districts. They want that "recapture" capped at 35 percent of the money they raise from local property taxes. That's an important sticking point for both those who want the caps and those who say they're unfair. As for taxes, the House generally leans toward bigger increases in sales and other consumer taxes, and away from higher business taxes, especially if that means expanding the corporate franchise tax to include partnerships and other business forms. The Senate prefers to broaden business taxes and rely less on consumption taxes. The differences sound simple, but they locked up the Legislature during the regular session. The governor had a plan last year but lawmakers put it in the shredder before moving on to their own ideas. Most recently, the governor and his allies have been pushing a smaller plan that, instead of trying to halve local property taxes or cut them by a third, would lower them between 10 cents and 25 cents, put more money into backordered textbooks, and make some available for teacher pay raises.

In the papers: Special session starting next Tuesday, following a veto of all public education spending in the new state budget.As Gov. Rick Perry enters the final weekend of his session-ending veto period, the Capitol is buzzing with rumors he'll kill public education funding to force lawmakers to confront school finance in a special session that will begin next week. That would force budgeteers to rescue the budgets for public schools before classes start in August and perhaps, in the process, to rewrite the state's school finance formulas. Perry will make a formal announcement clearing up the details on Saturday. In the meantime, the state's big newspapers are already scribbling: Perry to announce special session
By Christy Hoppe / The Dallas Morning News
AUSTIN -- Gov. Rick Perry has told state leaders that he is prepared to veto all funding for public schools, forcing them to tackle the thorny issue in a special legislative session he intends to call, starting next Tuesday. Perry considering veto on budget item
By Mike Ward, Laylan Copelin, Austin American-Statesman Staff
Gov. Rick Perry is threatening to veto the budget for public schools in Texas as a way to force lawmakers to agree on reforms to the beleaguered school finance system, as a prelude to calling the Legislature into a special session beginning Tuesday. Lawmaker: Special session on school funding next week
By David Koenig, Associated Press
PLANO -- Lawmakers will return to Austin Tuesday for a special session on school finance, state Sen. Florence Shapiro said today. Shapiro, a leader on the school funding issue, said Republican Gov. Rick Perry will announce the special session Saturday. Perry's office wouldn't confirm the announcement. Legislators may be back next week
Peggy Fikac-Chief, San Antonio Express-News Austin Bureau
AUSTIN -- Gov. Rick Perry has told legislative leaders he plans to call lawmakers into a special session to start next week, Capitol sources said Thursday. "Yeah, we're going back" to address school finance, said one source, who like others spoke on condition of anonymity. Hutchison will wait on announcement until after special session
By David Koenig, Associated Press Writer
PLANO, Texas -- U.S. Sen. Kay Bailey Hutchison said Friday she is near a decision on whether to challenge Gov. Rick Perry next year, adding that she has "prodded" her fellow Republican to do more about lowering property taxes and improving schools.

On the eve of his decisions on the state budget, there is some speculation that Gov. Rick Perry will use a heavy marker when he's vetoing lines in the $139.4 billion state budget.That could be a two-fer, buying the governor some political breathing room on what starts as a $22 billion increase in the budget, and, depending on what kind of cuts are made (state money or federal money), freeing up funds for some combination of property tax cuts, back-ordered textbooks, and teacher pay raises. He has to make his decisions about bills -- including line items in the budget -- by midnight Sunday (June 19). Sometime after that, Comptroller Carole Keeton Strayhorn will "score" the budget and announce a bottom-line difference between what's available for spending and how much of it Perry and the Lege promised to spend over the next two years. The Guv has several options with that marker, ranging from dramatic to operatic: • He can make simple line-item cuts, with the surprises coming from what programs get cut and from the amount of money that produces. Anything smaller than $1 billion would get limited headlines; even that amount would be dwarfed by the $21 billion increase in spending still left. • A previous governor used the veto pen -- or maybe it was a paintbrush -- to kill the entire second column in the two-year budget, approving one year of spending but forcing budgeteers to come back and rewrite the second year of the budget. Doing that would force a special session within the next year, but with school finance going to the Texas Supreme Court, chances of a session sometime in the next eight months is pretty good anyway.
-- Perry could also strike out an entire section of the budget, forcing lawmakers to come back to make repairs before things ground to a halt. For instance, the governor has the power to strike Article III in its entirety, which includes all the money to be spent on public and higher education. That would force a special session before the end of the fiscal year on August 30, but risks starting school years without any money. Remember when Congress shut down the Washington Monument?

Jeff Moseley, who runs the economic development department in Gov. Rick Perry's office, is leaving state employment to head the Greater Houston Partnership.That's the second time the Houston group has gone to North Texas for a chief. Former Denton County Judge Moseley moved to Austin after he was hired to run the old Texas Department of Commerce, a job that morphed into his current post. He'll replace Jim Kollaer, who's been at the GHP for 15 years and who, before that, worked in commercial real estate in Dallas. Moseley starts his new gig next month.

The magazine's list of the ten best and ten worst legislators is out.The Best
Rep. Dianne Delisi, R-Temple
Sen. Robert Duncan, R-Lubbock
Rep. Dan Gattis, R-Georgetown
Rep. Charlie Geren, R-Fort Worth
Rep. Fred Hill, R-Richardson
Sen. Steve Ogden, R-Bryan
Rep. Jim Pitts, R-Waxahachie
Rep. Mike Villarreal, D-San Antonio
Sen. John Whitmire, D-Houston
Sen. Judith Zaffirini, D-Laredo The Worst
Sen. Gonzalo Barrientos, D-Austin
Rep. Dwayne Bohac, R-Houston
Rep. Mary Denny, R-Aubrey
Rep. Al Edwards, D-Houston
Sen. Mario Gallegos, D-Houston
Rep. Kent Grusendorf, R-Arlington
Sen. Chris Harris, R-Arlington
Rep. Terry Keel, R-Austin
Rep. Phil King, R-Weatherford
Rep. Robert Talton, R-Pasadena Dishonorable Mention
Gov. Rick Perry
Lt. Gov. David Dewhurst House Speaker Tom Craddick

Kimbrough returns to the AG's office; McClellan leavesJay Kimbrough, deputy chief of staff to Gov. Rick Perry, has moved back to the offices of Attorney General Greg Abbott, where he's the director of "special investigations." That's an office that handles criminal investigations and prosecutions (most of which are done in conjunction with district attorneys whose legal turf includes criminal matters). He's hopped around state government, heading the Texas Commission on Alcohol and Drug Abuse, then the Guv's criminal justice division, then to Abbott's office to head criminal justice, then to the Guv's office to head Homeland Security, to "senior advisor" to Perry and then to deputy chief of staff. He rejoined Abbott as the legislative session ended. Bradley McClellan, who heads the workers comp section for Abbott, is leaving that job for a post in the private sector. He's not saying what that post might be, but his last day on the job is Friday. His mother, meanwhile has asked Capitol Police for permission to block off Congress Avenue north of the Pink Building on Saturday. Her name is Carole Keeton Strayhorn.

East Texans, treated to a hot race when SD-3 was open in 2000, are about to get another one just like it.David Kleimann jumped into the SD-3 race with swats at Austin and the lame duck incumbent, Sen. Todd Staples, R-Palestine. Kleimann, who's been considering the race for months, says Staples called him and asked him to bow out: "He said he and the powers that be in Austin have decided who the next senator should be." The call got Kleimann's blood up, and he says he will be on the Republican ballot next year. The Willis businessman, who grew up in Montgomery County, says Staples' call riled "the little bit of John Wayne spirit in me," and he's making the Austin push for another candidate his issue. Staples, according to Kleimann, is supporting Robert Nichols, a Palestine businessman who is currently on the Texas Transportation Commission and who is a political confederate of Gov. Rick Perry. The senator's consultant, Bryan Eppstein of Fort Worth, dismisses that in four words: "It's ridiculous. No comment." Staples hasn't officially endorsed anyone, but Nichols is apparently the management favorite, which can help sometimes and hurt sometimes. Staples himself got into the Senate after drubbing homebuilder Les Tarrance in a GOP primary. Tarrance was the Austin favorite, had most of the lobby money, the governor's advisors and pollsters and advertising wizards, and vacuumed up a whopping 18 percent of the vote. Staples refrain then was that Austin shouldn't pick the candidate for East Texas. Bob Reeves, a Center businessman, has been considering a race for at least a full year and has been talking off and on to Staples during that time. He plans to officially declare his candidacy next week. He calls Staples a friend and says he won't divulge what might or might not have been said in a private conversation, but says he did get a call from Staples in the same time frame as the Kleimann call. He leaves it at that. Austin consultant Todd Smith will be working on Reeves' campaign. And Frank Denton, who ran and lost a mayoral race last year in Conroe, is planning to run (apparently with consultant Bill Tryon running things). Rep. Roy Blake Jr., R-Nacogdoches, has lately expressed interest; his father was in the Senate. Neither he, Denton, or Nichols returned calls before this was written.
Nichols was reappointed to the transportation board a year ago by Gov. Rick Perry (he was first appointed by then-Gov. George W. Bush). Earlier this year, he lent his name to Perry's reelection campaign for a list of people who will serve on the governor's campaign finance committee.

U.S. Sen. Kay Bailey Hutchison told supporters in an email Friday evening that she will run for reelection in 2006 instead of challenging Gov. Rick Perry in the Republican primary.She's been flirting with a race for governor for months, and told reporters at a Friday luncheon in Plano that she would make her decision known within a few weeks and that she wouldn't announce anything until after an expected special legislative session on school finance. But just a few hours later, she fired off the email telling supporters that she'll run for reelection instead. That message said she would announce her reelection bid on June 27, and would explain her reasoning then. A win next year would give her a third term in the Senate; when she first ran in 1993, she told supporters she'd serve no more than two terms there. This is the second time Hutchison has seriously considered a run for governor and backed down. Texas Republicans who were tangled up in efforts to get a second term for President George W. Bush four years ago asked her not to stir the pot. That would have been a free run, since she wasn't up for election in 2002. This time, she faced the prospect of running for reelection -- expected to be an easy contest with few, if any, serious opponents -- or coming home to run against Perry and Comptroller Carole Keeton Strayhorn, two of the strongest campaigners in GOP politics. With Perry on the verge of calling a special session on school finance and Strayhorn on the eve of announcing her bid for governor, Hutchison bowed out. That came as a terrific surprise to people who've been watching the pre-election posturing for the last year, and was as unexpected as another big moment in Hutchison's career, when Texas Travis County District Attorney Ronnie Earle folded his ethics case against her in open court in 1994. Hutchison, by most accounts, was ahead in private polls of the race. It's too early for those to mean anything in terms of Election Day, but her camp considered the numbers in a race with Perry and/or Strayhorn promising. And other politicians were queuing up in anticipation: U.S. Rep. Henry Bonilla, R-San Antonio, hoped to run to replace Hutchison; several politicians were lining up to replace him in that instance. Cocktail party speculators wondered if Lt. Gov. David Dewhurst would run for her spot, and whether Attorney General Greg Abbott and perhaps Strayhorn would then turn their attentions to replacing Dewhurst. Lawyers were lining up to look at Abbott's job. Agriculture Commissioner Susan Combs, betting early that Strayhorn would move on, is already running for comptroller. Never mind all but that last race -- Strayhorn is saddling up for a run at the only elected state office that comes with free housing. Perry's prospects improve immensely with Hutchison out of the race. She's one of the state's most popular politicians, right up there with the president -- who'd want to run against her? But the governor isn't off the hook yet. Strayhorn's getting in. Kinky Friedman is putting together an independent campaign for governor. Democrat Chris Bell, a one-term congressman and former Houston city councilman, is exploring a run. And a few other Democrats -- insurance exec and former U.S. Ambassador Lyndon Olsen of Waco, former Comptroller John Sharp of Austin, and advertising exec Roy Spence of Austin -- have all talked about it. One last bit of sand to throw in, however unlikely it might seem: There's nothing here to prevent Hutchison from deciding to run for governor after all. She's got the money to run, especially if she were to run a short race instead of a long one. The political filing deadline is after Christmas, and for a politician with solid name identification, there's no need for a "get to know me" campaign. Sitting out the next six months means six months with no attacks to tear down the positive numbers. If things look nasty for Perry in December, Hutchison could always reconsider and get back in the race.

Bill Kenyon, who's been flakking for the Texas Secretary of State, abruptly left that agency after finding "difference of philosophy of communications with the governor's office."Kenyon was on board when Texas Secretary of State Roger Williams took office, having worked for SOS Geoffrey Connor for a few months before that. He joined the SOS, and came into Gov. Rick Perry's political sphere, after working for Comptroller Carole Keeton Strayhorn. They met working on Clayton Williams' ill-fated gubernatorial campaign in 1990, and Strayhorn brought him back to Texas from a political consulting practice in California. Kenyon says he's thinking about hanging out a consulting shingle in Austin.

Three new or promoted judges: Pena, Moore, and HancockGov. Rick Perry named Horacio Peña Jr. of Mission to the 92nd Judicial District Court in Hidalgo County. He's currently a municipal court judge in Mission and a private attorney. Dan Moore of Athens is Perry's pick for a court seat in Henderson County. He's a municipal court judge in Gun Barrel City and the city attorney for City of Athens. Perry named district Judge Mackey Hancock of Lubbock to an open spot on the 7th Court of Appeals in Amarillo, an appointment triggered when the governor named that court's Phil Johnson to the Texas Supreme Court. The governor next gets to pick Hancock's replacement.

Take Roy Blake Jr. off your list of candidates seeking to replace Sen. Todd Staples, R-Palestine.The Republican state representative from Nacogdoches says he looked at it but has decided to seek a second term in the Texas House. Frank Denton of Conroe, David Kleimann of Willis, Robert Nichols of Jacksonville, and Bob Reeves of Center all say they're definitely running. Staples has announced that, later this summer, he will announce his candidacy for Texas agriculture commissioner.

Texas Comptroller Carole Keeton Strayhorn is expected to announce her candidacy for governor in Austin this Saturday, June 18.Her staff -- and her husband, Ed Strayhorn -- have been calling around to ask supporters to show up for an event this weekend. The comptroller, who's been giving Gov. Rick Perry fits for the last two years, is going to stop long-running speculation that she would challenge him. U.S. Sen. Kay Bailey Hutchison is also considering a challenge, and 2006 could see the first competitive GOP primary for governor since 1990. Strayhorn asked Capitol Police for permission to block off Congress Avenue, on the north side of the Pink Building, for several hours on Saturday. That's a slow time of the week in that area, and the stretch of road between the Capitol and the University of Texas only gets really busy six or seven times a year -- when the Longhorns are playing football at home. The permit allows up to 500 people, and will let Strayhorn erect a stage to announce her political plans with the dome of the state government's coolest building as a backdrop. The timing is clever. Perry has until midnight Sunday to sign legislation, veto it, or allow bills to become laws without his name on them. Strayhorn is jumping that by a day, beating any other candidiates -- including the incumbent -- to a formal announcement. On Monday, after the deadline for bills is over, state officeholders are free to raise political money (a prohibition begins a month before the legislative session and continues until the veto pen is put down). Strayhorn's advisors hope the earlier announcement will give U.S. Sen. Kay Bailey Hutchison pause and will allow the comptroller time to get some traction for the March primary. If Hutchison decides to run -- all signs are that she will run -- and looks like the favorite, Strayhorn could always hop to another race. You'll find people who say that's not a good idea, but well-timed changes of course can get candidates out of impossible races and into competitive ones. For instance: Attorney General Greg Abbott was a candidate for lieutenant governor in 2002 before switching to the AG's race. Democrat John Sharp ran for lite guv in 1998, losing narrowly to Rick Perry, after openly considering a run for governor against George W. Bush. It's hard to find solid information about Hutchison's plans, but the received wisdom from her campaign is that she'll decide soon and then make an official announcement sometime between now and August. Choose your poison: That's either a long wait that gives Perry and Strayhorn too much time to set up, or it's a smart move that lets them throw knives at one another while Hutchison stays above the fray -- and out of throwing range -- for a few more weeks. A political graybeard might remind us that nobody pays attention to politics during the summer anyway, and that voters' eyes and ears aren't available to candidates until school starts. And the start of school gives the candidates a peg for arguing school finance. If the Legislature squeezes out some solution in a special session, Perry might have something to brag about when the kids get their new haircuts and put on their backpacks. If things remain as they are now, the start of school will give challengers a chance to point out the failure to solve what might be Texas government's most persistent problem.