The bills from the state's new business tax won't come due for two years -- in May 2008. But, assuming Gov. Rick Perry signs HB 3 into law, some companies will pay that tax based on the business they do next month.And the state tax collector's rulemaking process will start up right away, a development that makes practical sense. But it also puts the political people on high alert. Every business paying the new tax will be paying at the same time, but not all businesses work on calendar years, and a few are already in their fiscal versions of 2007, the first tax year of the new legislation. That's at least part of the rationale for setting the wonks at the comptroller's office loose on the tax bill right away, even though they're working for a comptroller -- Carole Keeton Strayhorn -- who won't be in that office after the first of the year. Taxpayers with an interest in the rules could get stuck between the outgoing comptroller, who's running for governor, and the incoming comptroller -- either Texas Agriculture Commissioner Susan Combs, the Republican, or former state Rep. Fred Head, the Democrat in that race. They want to be involved in the process -- definitions and interpretations are everything in tax law -- but they have enough trouble without choosing sides, or appearing to. They'll play, on eggshells. A spokesman for Strayhorn, Mark Sanders, says she'll have the rulemaking process up and running in a couple of weeks. Comptroller staffers are already talking about how to set up the new tax, how to collect it, how to explain it. But first, they have to write the rules that'll put the law into operation. Republican political types, already off the Strayhorn brand since she declared as an independent against Perry, are urging Combs to say she'll review or rewrite all the rules if and when she's elected. But the bill doesn't even have the governor's signature yet, and she's staying out of it for now.

Take your finger off that trigger; the House joined the Senate after hours of gab to overwhelmingly vote for a bill that combines property tax cuts with pay raises for teachers. There's probably some ice cream in there, too.The House voted 136-8 in favor of the legislation, which earlier won unanimous Senate approval. All that's left is the approval of Gov. Rick Perry, who asked for it in the first place. The Legislature is still working on differences in the tobacco tax and the lockbox bills, and will be around next week to trim the size of tuition revenue bond legislation from $3.8 billion approved by the House to something closer to $1.4 billion, where Perry's office wants it to land. And Perry opened the agenda to legislation that would keep war protesters away from military funerals. It looks like the session might not end until it must, on Tuesday.

Finally, an interim. Lawmakers reached compromise, finished their work a day early and adjourned Sine Die. Normally, that would be considered a success. However, when it comes to the Legislature, few people in the blogosphere are going to jump up and down and shout "hooray." If someone is out there shouting "hooray," please direct us to the blog in question and we'll try to find out what's going on with them.* * * * * Rites of Passage Eye on Williamson County believes future legislatures will be plagued with problems because of the property tax cut. It says, "The Republican leadership passed a plan and the public schools will not close. For that, they deserve credit. They still have not done what needs to be done. They left that to future leaders." Rep. Aaron Peña, D-Edinburg, writing a Sine Die good-bye on his blog, A Capitol Blog, "The struggle between the forces of limited government and those that would like to see excellence in the administration of public services will undoubtedly continue." "Squawkboxnoise," posting at the Lone Star Times, notes that "Robin Hood is not dead. He is just relaxing in Austin's Sherwood Forest that's all." Going through the Supreme Court opinion that led to the special session, comparing it to what actually passed and what lawmakers said on the floor, Vince Leibowitz at Capitol Annex offers an analysis of whether the bills will appease the Court. At Burnt Orange Report, Phillip Martin was not impressed by the Senate's unanimous passage of HB 1 days before the session ended: "The Senate voted to pass out an incredibly twisted piece of legislation today after three days of secret meetings behind closed doors. The vote, which was unanimous and confirms that the "private club" of the Texas Senate is more important than the entire population of Texas, now sends House Bill 1 back to the Texas House." Nate Nance of Common Sense summed up the attitudes of many bloggers with this: "Just because the Lege is happy doesn't mean the rest of us are. Actually, when they are happy, the rest of us are pretty pissed off." Lobby Duck wished lawmakers a "fond" farewell: "May the wind always be at their back, may their various law practices and other business endeavors thrive and may they stay the hell away from us until, at least, January." (Don't anybody say a word about the U.S. Supreme Court and congressional redistricting. Please.) * * * * * Voted Most Likely to Succeed "The Hotline" — the National Journal's daily briefing on politics — put out its list of up-and-comers in Texas politics, flattering everyone from Attorney General Greg Abbott, R-Austin, to state Rep. Patrick Rose, D-Dripping Springs. * * * * * Immigration Reform After the president's address on immigration reform, John Hinderaker of Power Line, a conservative blog based in Minnesota, believes President Bush "…keeps trying to find the middle ground, on this and many other issues. But sometimes, there isn't a viable middle ground. This is one of those instances." Right of Texas is more supportive, saying, "While this issue is polarizing, I think it is ultimately a GREAT issue for Republicans... here's my reasoning. I have spoken with many average hard working legal Latino families. Many are just as angry as non-Latinos about the porous border. They are angry that they went through proper channels to come here, while others are breaking our laws." Rightwingsparkle of Houston says, "I predict that Bush's poll numbers will rise after tonight's speech." Earlier in the week she tried to explain why conservatives are angry at Bush. "We conservatives are so busy dispelling the myths and the lies of the left we can't even express our anger over the immigration mess, the spending, the compromises, the lack of the veto pen, and the blank check the government seems to want to give to all those things to do with Katrina." Red State does a valuable service by compiling "some basic statistics on Mexico, the US, legal immigration, and illegal immigration" in hopes of starting a rational discussion. Some 195 people had responded when we looked — most in a rational manner. The idea of putting National Guard troops on the U.S.-Mexico border led SuperWow at Pink Dome to create a recruitment poster that will never be used. * * * * * Rove Rumors Reviewed In case you didn't hear, because most legitimate news outlets don't deal in unsubstantiated rumors, Jason Leopold at TruthOut claimed a major "scoop" over the weekend — that the President's right-hand-man Karl Rove had been informed he would be indicted for perjury in the Valerie Plame case. Mick Stockinger of UNCoRRELATED followed what happened as the rumor spread, "Pandemonium reserved for your team winning the World Series, the lottery, a war against alien invaders--all for an announcement that Karl Rove had been indicted. The implications of this are simply remarkable — Rove has become the boogey-man, a voodoo priest of electoral disappointment for the Democrats; Lex Luthor with a trunk full of Kryptonite." Even before posting the questionable story about Rove, Leopold's credibility was called into question, busting a book deal he had on a separate subject. We think Wonkette, one of the most popular blogs in Washington D.C., captured the absurdity best in its headline: "Karl Rove Indicted, Everyone With a Blog to Get Their Own Unicorn." * * * * * Dateline DeLay First name-only Greg, a Republican precinct chair in CD 22 who has a blog called Rhymes With Right, is upset Rep. DeLay chose June 9 as his resignation date because the state GOP Convention is June 2-3. "I had hoped to see the party's new standard-bearer announced and given a rousing launch to his/her campaign. Instead, the formal selection process cannot even begin for a week after convention ends," he said. Charles Kuffner of Off the Kuff has some information on a documentary featuring Rep. DeLay called "The Big Buy" that premieres this Friday in Houston. * * * * * Story Time Another Texan in D.C., H.U.D. Secretary Alphonso Jackson, is the subject of much blogging, starting with Think Progress, after he told a Dallas audience a story — aides now say it wasn't true — about a contractor who lost a deal for not supporting the Administration. It says the secretary may have violated federal law by canceling a contract to a Bush non-supporter. Joshua Micah Marshall of Talking Points Memo is intrigued, posting several articles on the subject (example 1, example 2, example 3). Secretary Jackson's spokesperson, Dustee Tucker, is now caught in the middle for defending her boss. See Wonkette for an example. * * * * * Fun on the Net From the ever-witty John Cornyn's Box Turtle at In the Pink Texas, "A dispute over Robin Hood by GOP senators nearly stopped passage of the bill. Shapiro and five other GOP senators said that Kevin Costner was the best Robin Hood while the rest of the Senate said Errol Flynn was better. A compromise was reached when all agreed that the Bryan Adams song from the Costner movie was horrible." And finally, Pink Dome creates a lasting image of Sen. Florence Shapiro, R-Plano, who had to use a little muscle to make school finance acceptable to her constituents.

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Robyn Hadley cherry-picks the state's political blogs each week, looking for news, info, gossip, and new jokes. Robyn, a veteran of both journalism and the state Capitol, is the owner of Capitol Crowd, a networking site for people who work in and around state government. The opinions she quotes belong to the bloggers, and we're including their links each week so you can hunt them down if you wish. Please send comments, suggestions, gripes or retorts to Robyn at robyn@capitolcrowd.com, or to Texas Weekly editor Ross Ramsey, at ramsey@texasweekly.com.

The new setup for school finance would be familiar to any sharecropper, but lawyers on both sides think it might suit the courts, for now. Local school districts are the farmers. The state owns the land. And the state gets 97 percent of the crops.That's not a made-up number: The state is putting up enough money to lower local school property tax rates to $1.33 the first year, and telling districts they can raise 4 more cents locally for local spending. Anything above the four cents would require voter approval. If it stays at four, the state would get $1.33 out of every $1.37, or 97.1 percent. That's skinny, and lawyers for the school districts will be watching those numbers for a couple of years to see whether this new setup works. The courts, you'll remember, said the old system was out of whack because the state's requirements of schools used all the local money and forced districts to raise taxes. That, in effect, turned the local school taxes into an unconstitutional state property tax. The districts have to have what the courts call "meaningful discretion" over their own taxes for the system to be legal. The state is hoping the infusion of new state money to lower local property taxes, and the freedom to add on four cents for local spending, will give the districts enough say over the taxes they levy. Early reviews from the school lawyers -- they're still talking to the districts they represent and this could change -- is that the legislative fixes should be okay for now. As this evolves, one of their attorneys, J. David Thompson, says they'll be watching two things. First, whether the state lays on any new education requirements without funding them. Once the districts have their rates down to $1 -- the legislative target for January 2008 -- that's supposed to match the state's requirements. If it takes more than $1 to do in schools what the state requires, then districts will have to return to raising local "enrichment" money to pay for what are supposed to be basic expenses. Thing two is related. As costs rise from inflation or enrollment or whatever, will the state fund the increases or force districts to get into their local enrichment funds for basics? That's part of what got the state into its current fix in court. Thompson and others say it'll be one of the indicators of whether this is working over the next few years. Those lawyers are also meeting later this week with lawyers for the state to talk about whether the legislation takes care of the courts for now or whether there's something more to debate. Dallas lawyer George Bramblett Jr., whose West Orange-Cove group actually won the injunction forcing the Legislature to do something, says he thinks the Legislature's fix is both commendable and short of a real resolution. But, he says, it might do for now. "This is still temporary... in the long term, it's still not a comprehensive review and change of the school finance system. All they did was take an old structure and tweak it around," he says. Bramblett points to the adequacy of the state's funding for schools as a possible issue of future contention. The state argued that the courts should stay out of whether the schools do an adequate job of educating Texans and how much that should cost; the Texas Supreme Court, among others, rejected that idea. If state funding in the future doesn't measure up to that standard, Bramblett and others say the fight could be rejoined. He's not for suing again -- he says he had hoped to get this far without a lawsuit — but he says only two things drove lawmakers to act this time: The June 1 deadline imposed by the courts and, to a lesser extent, the fact that the Public Education Chairman in the House, Rep. Kent Grusendorf, R-Arlington, lost a Republican primary election where school finance was part of the argument. That's never happened before, and he thinks it helped focus lawmakers.

Republican comptroller nominee Susan Combs says she'll review any rules on the new tax bill that are cooked up by the current comptroller.The tax wonks who work for Carole Keeton Strayhorn started working on rules and collection and startup issues before the tax bill was even out of the Legislature. That's their job, but it made some political brows furrow at the idea that one of Gov. Rick Perry's challengers was tinkering with his new business tax. Combs isn't saying she'll change anything if she's elected to succeed Strayhorn, just that she might.

From the back, it sounded like a question hatched after Democrats waylaid the school finance/tax reform package. The question itself was half-audible, but Gov. Rick Perry's answer was clear: "I'll be signing that piece of legislation gladly and with great joy." But the question wasn't about criticism from the Democrats -- it was about the Harris County GOP's vote demanding that Perry veto a central portion of his legislation.The executive board of the governor's party in the biggest county in the state is against his tax plan. That's not necessarily meaningful; opposition from conservatives didn't do much to slow the passage of the five-bill legislative package through the Legislature during the special session. But it's a pesky noisemaker inside the tent, and Perry is busy trying to gather his base together to fend off challenges from four candidates. One of those wannabes, Comptroller Carole Keeton Strayhorn, is running as an independent but holds office because of the support of some or all of the same people who put Perry in office. The Perry spin is that Strayhorn has lost all Republican support and won't profit from this. Strayhorn's is that Republicans and others looking for an alternative to Perry will look first to her. Democrat Chris Bell will tell you a split on the elephant side looks good to a donkey. The Harris County resolution didn't even make the Harris County GOP's website, at least not immediately. But anti-tax activists Steven Hotze and Norman Adams, who couldn't find any traction in the Legislature, is having more success at home ginning up the ire of reflexively anti-tax activists.

School tax cuts will cost cities and counties some money.Budgets for county appraisal districts are funded with money from the cities, counties, school and other districts that levy property taxes. Each local government's share of the costs is related to its relative size on people's property tax bills. The drop in school property taxes brought on by the Lege's new school finance package will cut what schools have to pay the CADs, but will increase the amounts paid by the cities, counties, hospital districts and others that aren't lowering their rates. The CADs don't save any money, so their budgets won't drop. But the price will shift from the schools (which will still likely pay the most) to the others. The Texas Municipal League estimates the average city will see a 6.7 percent increase in its CAD funding in year one of the tax cuts, and another 16.5 percent in year two. That's an average increase of 24 percent by 2008.

If tax bills were lions and senators were acrobats, that would have been a helluva circus.Play it back: The Texas Legislature, in just 29 days, passed the biggest tax bill in state history, talked and spent away the largest budget surplus in state history, unknotted (for now) a school finance problem that has bedeviled them for years, cut local school property taxes by as much as a third, increased teacher pay for the first time in six years, and did it all without inciting the sort of mob action that often attends these things. It didn't seem possible a couple of months ago. Conservatives began this exercise saying they weren't interested in raising taxes, especially when the comptroller said the state had $8.2 billion on hand. Actually, they were raising those objections when the estimate of extra money was merely $4.3 billion. Rep. Warren Chisum, R-Pampa, originally gave voice to that idea. And he was the sponsor, ultimately, of the bill that used the surplus for the first part of the local tax cuts and for the first round of teacher pay raises. Democrats were opposed to the idea of focusing on property tax cuts instead of increasing education spending, but most came on board when a $2,000 teacher pay raise was added. Business groups complained at the size of the tax bills, but ultimately put a sock in it and played along. The tax bills that passed — three of them, which will bring in $4.7 billion a year in new money when they're up and running — will fund some of those costs in future years. And there's argument over whether the money raised during the session will match up with what was spent. Time will tell. But in the meanwhile, it's worth noting that state lawmakers, faced with court deadlines, election threats, a business tax proposal that didn't arouse significant opposition, got the job done. Some program notes are in order. House Speaker Tom Craddick led the House without bossing it this time, setting up the five bills in the package so that nobody on his side was forced to make a "gut" vote of the type that marred previous sessions. The legislation was arranged so that the mostly Republican House members could vote with management and without voting against their local interests. The Texas Senate, either by design or accident, is starting to see the rise of strong senators after a few sessions where they often acted as middle managers under Lt. Gov. David Dewhurst. That's closer to the upper chamber's tradition, where a group of strong personalities sometimes stampedes, but it's new for this bunch. They still ended up with a 31-0 vote somehow, but there were more hands in the pie, on all sides. Gov. Rick Perry finally got a win, after breaking off his long estrangement from former Comptroller John Sharp and combining his own public skills with Sharp's inside skills. Perry's tax reform commission came up with a business tax that raises almost $6 billion a year (that number gets reduced by $2 billion because of the repeal of the current corporate franchise tax that raised that amount). And they got it passed with almost unanimous support from business groups that usually fill the Capitol to kill new taxes. Some questions remain. • Don't be surprised if there's a lawsuit challenging the new business tax on the grounds that, for some people in partnerships, it looks and feels a lot like a personal income tax. If courts agree, that would make the tax unconstitutional. • It's hard to tell for sure how much the new business tax will raise. Several thousand big businesses have to file informational returns at the end of the year so state tax experts can get a peek at real numbers. • Lots of businesses stayed quiet during the special session so they wouldn't get chewed up in the politics of this thing and because they have plenty of time to ask for changes before the tax comes due. The first tax returns aren't due for almost two years — May 2008 — and there's a regular legislative session between now and then. A Senate bill that was supposed to carry loads of fixes died under its own weight, but watch for "corrections" next January. • There's an election in November. Sometimes, those things change people's minds about what ought to be in the law. For instance, at least gubernatorial candidate wants to repeal the new tax law. At least two of the five candidates want a bigger pay raise for teachers. And so on.

Kent Sullivan is giving up his robes to be first assistant to Texas Attorney General Greg Abbott. Sullivan, a state District Judge in Houston, was a private practice attorney for 21 years before that. He'll replace Barry McBee, who's leaving to join the University of Texas System. Edward Johnson, at the tender age of 29, is the new executive director of the Texas Building and Procurement Commission. A former House aide, he's been at that agency for three years. He's been the interim ED since January, and the board made it official this week. ERCOT chief Thomas Schrader is leaving that agency. He came on in the wake of a scandal that ended with criminal charges against several ERCOT execs. He'll be replaced in the short term by Sam Jones, who'll be in the top spot until the board finds a new CEO for the power agency. Former state Rep. Patricia Gray, D-Galveston, is joining the University of Houston's Law Center as director of research and external relations; she'll also teach a course there on legislating health policy. Steve Robinson, the former head of the Texas Youth Commission, is joining the Austin office of MGT of America. That consulting firm also employs former Texas prison chief Wayne Scott in its criminal justice practice. Maybe you didn't about the Advisory Board of Athletic Trainers, but the state has one, and it has two new members. Gov. Rick Perry appointed Dr. David Schmidt of San Antonio and David Weir of College Station to that panel. Schmidt has a sports medicine practice and is the team doctor for the Spurs; Weir is a trainer at Texas A&M University. Perry named Dr. Mark Mayberry of Abilene to the Texas Medical Board's district three review committee, and Noe Fernandez of McAllen to the district four panel. Those committees make recommendations on investigations of medical practice and competency. David Allex of Harlingen will stay on the Cameron County Regional Mobility Authority; Perry reappointed him. Perry reappointed Samuel Loyd Neal of Corpus Christi and James Maloney of El Paso to the Texas Military Preparedness Commission. And Perry named McKinney attorney Michael Puhl to the Texas State Board of Examiners of Marriage and Family Therapists.