A week of Senate infighting closed with a unanimous vote on tax cuts, school finance and education that put Gov. Rick Perry's tax reform package close to completion. But there was something more — Lt. Gov. David Dewhurst got his ears pinned back by a group of (mostly) Republican senators who weren't willing to follow his lead on the key tax cut and education bill.

They've been grumbling for some time. They finally asserted themselves.

A week ago, a proposal to level education spending for more Texas school students split the Senate Finance Committee, prompting a walkout by a handful of Republicans who said it was unfair to districts with higher property values.

Sen. Florence Shapiro, R-Plano, led the walkout after trying to stop further changes. A surprised looking Sen. Steve Ogden, R-Bryan, wouldn't let her proceed, and she responded by leaving, followed by Sens. Kim Brimer of Fort Worth, Bob Deuell of Greenville, Kyle Janek of Houston, Jane Nelson of Lewisville, and Tommy Williams of The Woodlands. Ogden and Shapiro had stood next to Dewhurst a day earlier when the lieutenant governor told a press gaggle that stripping the legislation back to the House version wasn't an option the Senate would consider.

But Shapiro tried to do it anyway, removing everything the Senate had added the bill, including teacher pay raises, high school achievement money, uniform school start dates and a number of education measures. Ogden said he hit the brakes because he thought stripping the bill would kill it, and with it, the chance for a school finance fix in this special session.

(The walkouts included several of the Republicans who were angriest when 11 Democrats left for Albuquerque a couple of years ago to block congressional redistricting. The Republicans were careful to say they hadn't denied the committee a quorum and that work could continue in their absence. That differentiated them from the Democrats, for good and ill: They didn't stop the process, but they didn't stop the proposal they were against, either.)

Shapiro was trying to block an amendment by Sens. Robert Duncan, R-Lubbock, and Todd Staples, R-Palestine, which would have increased the percentage of students in what's called "the equalized system" to 96 percent from 90 percent. It would also have blocked richer districts from adding locally raised money to their own budgets until the poorer districts catch up with them. The poorer districts, in the meantime, would be allowed to use those local enrichment monies. That, according to Shapiro, was unfair. She told reporters she would rather kill the whole bill — including property tax relief and pay raises for teachers — than pass it with the Staples/Duncan proposal on board. And she said she had the votes, too. It turned out she did.

Janek said the bill that started the day treated all the districts fairly and that's why he opposed the changes from Duncan and Staples. Shapiro was blunter: "The purpose of this special session is to deliver property tax reduction and address the court's concerns; not create a personal piggy bank for certain members." She said the amendment created big state obligations in the "out years" — the years after the current budget is over, when more and more students are brought into the system. And she said it wasn't fair to restrict local funds in some districts while allowing them in others.

But after lunch, Shapiro's Half Dozen were back in their seats. The amendment they didn't like was added to the bill, and the committee voted to send it to the full Senate for a vote.

In the days that followed, the arguments — always behind closed doors, as is this Senate's habit — got increasingly personal. Dewhurst at one point wanted the Senate to give up its effort to lower property taxes to $1, saying it was too expensive and couldn't be done with a teacher pay raise; $1.15 was suggested as a doable number. He appeared to be on board with Duncan and Staples, and part of a group that was pushing Ogden to take HB 1 away from Shapiro and sponsor it himself.

But Shapiro had added seven senators to the six who walked out with her, and that Baker's Dozen held together while she negotiated the bill back to something she liked. (The new names included one Democrat, Ken Armbrister of Victoria, and six Republicans: John Carona of Dallas, Kevin Eltife of Tyler, Troy Fraser of Horseshoe Bay, Chris Harris of Arlington, Mike Jackson of La Porte, and Jeff Wentworth of San Antonio.

They wanted the $1 target rate left alone. They wanted to get rid of the bits in the Duncan/Staples package they thought were hard on richer districts. They wanted to shave the 96 percent equity number for fear of its future costs. And they wanted to reinstate the "high school allotment" meant to boost performance in secondary schools. And they got most of that.

As it passed, the bill still had the structural look of the Duncan/Staples package. But rich districts won't have to share any of the four cents they were raising for local "enrichment." Poor districts would get equalizing money from the state (instead of recapture) to make their local enrichment taxes more lucrative. Another two cents could be added to that local money source a year later, also without recapture from the rich districts. The 96 percent number got shaved, but not by much. And a little more than half of the high school money was put back in.

A shuttle diplomacy team led by Dallas oilman and Republican political funder Louis Beecherl and his advisor Bill Ceverha came in to keep the House and the Senate and the governor's office all on the same sheet, serving the same function Tom DeLay served on congressional redistricting a few years ago.

And when they were voting and the Senate's unanimity was again in bloom, we ran into one of Dewhurst's policy folks. He said he had the sheet music for "Kumbaya."

Math of the Future

The most important program in Texas state government is now local school property tax relief. The political promise to voters — a one-third cut in those taxes — is simple to understand and it has a due date. If property owners don't get the right report on the taxes due in January 2008, then the primaries in March 2008 could be bloody.

You can make an argument that Job One next session will be to make sure there's enough money going to that relief; other state programs will be in line.

The legislation originally proposed by the governor's tax reform panel was — in the opinion of the comptroller — out of balance because it raised less money in new taxes than it proposed to spend lowering local school property taxes.

What has already passed and what is well on its way to passing raises the same amount of money, more or less, as the tax reform proposal. But it spends more, on things like teacher pay raises, money to prop up high school performance, and equity between rich and poor schools.

That almost certainly means a bigger gap between spending and revenues.

The state surplus will cover the difference for now, so the politics of the comptroller and the Legislature and the governor's race and all that can be ignored. But watch the numbers going forward. The first real examples of what the new business tax will raise should become available early next year, after the comptroller collects data from the biggest companies in the state (ranked by number of employees, property value, gross receipts, and how much they pay under the current franchise tax).

Certified, with an Asterisk

The only hurdle remaining for Gov. Rick Perry's new business tax is Perry himself.

Comptroller Carole Keeton Strayhorn says the new business tax on its way to the governor doesn't have any math problems and doesn't require the state to spend more than it's got. But she added a note to her certification: "I am certifying the appropriation in this bill as required by the Constitution because it is within available revenue, but I believe portions of the tax enacted by this bill constitute a personal income tax and are unconstitutional."

The tax bill spends hardly any money. It kills the current corporate franchise tax and replaces it with a levy on adjusted gross revenues of corporations and partnerships in the state. Businesses can choose what they deduct — either their cost of goods sold, or their (most) employee compensation. Most would pay the state one percent of what's left after that calculation; retailers and wholesalers would pay 1/2 of one percent.

Perry and former Comptroller John Sharp, who headed the gubernatorial commission that came up with the tax, say it's not an income tax for the simple reason that companies would have to pay it even in years when they don't make money. Strayhorn and some lawyers say that the tax on partners in law firms and other outfits makes it a personal income tax. Perry and Sharp are relying on legal opinions that say the tax applies to the partnerships and not to the individual partners and dodges the bullet.

The attorney general's first assistant, Barry McBee, sent a letter making that argument to Perry's office. But Strayhorn has asked AG Greg Abbott himself to issue a formal letter opinion on the subject. That request is still pending.

Session Notes

While they were in their back rooms working out their school finance differences and calling each other names (lots of them commented on the words that were heard), Texas senators took a couple of politically dangerous objects off the field of battle. They won't rescind a $500 stipend for non-teaching school employees, and they made sure their version of HB 1 won't block purchases of math textbooks designed to parallel the state's required standard tests for public school students. Teachers got their full stipend restored; it's the last $500 of their $2,000 pay raise.

• The legislation sets the start date of the school year as the last Monday in August — with no waivers for districts that want to start earlier or later (an effort to push that start until after Labor Day fizzled, but you'll probably see it again).

• The governor added tuition revenue bonds for colleges and universities, and $34 million in hurricane help for the Lamar University System and the electric industry to the Legislature's list of legal actions during what's left of the special session. The schools want money to build new buildings and such, and would use tuition revenue to cover the debt, if it's approved. Lamar needs money to fix Rita damage. And the governor wants lawmakers to consider legislation that would allow electric companies to borrow or raise rates to pay for hurricane reconstruction.

• Hey, smuggling might be profitable. One of the arguments against a big increase in taxes on cigarettes is that the cancer sticks are cheaper on the other side of the Texas border, whether you're talking about the four U.S. states that border us or the four Mexican states that touch Texas. Sen. Eddie Lucio, D-Brownsville, laid out the business plan for the bad guys: "Currently, a carton of cigarettes costs $10 in Mexico; if this bill passes, a carton will cost more than $50 in Texas. A $40-per-carton profit is a pretty strong incentive for smuggling. A smuggler could clear over $1 million a truck." He calls it an unfunded mandate on local law enforcement on the border.

• A lobbyist who demanded anonymity was caught carrying around an "amendment" to SB 6 — the Senate's catch-all bill that started as an effort to fix errors in other bills. The amendment would strip the caption of the bill and replace it with this statement of purpose: "Relating to diverting attention away from HB 3 and giving the lobby a vote to satisfy their clients."

Rulemaking

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.

A Throng of Non-Voters

Comptroller Carole Keeton Strayhorn took petitions with 223,000 signatures to state election officials, saying she has far more than the 45,540 needed to get on the ballot as an independent.

And the number of signers aligned with Kinky Friedman is... 169,574. Friedman delivered his boxes to the Secretary of State a few hours before the deadline, completing the first phase of what we've been calling the Middle Finger Primary.

Our unofficial Spin of the Week award goes to Robert Black, a spokesman for Gov. Rick Perry's reelection campaign. His press release reacting to Strayhorn's numbers said she only managed to attract 1.9 percent of the voters eligible to sign her petitions.

The reason so many voters were eligible to sign petitions is because so few showed up at the primaries thrown by the two major parties. But so you'll have the numbers on hand to settle bar bets, Perry got 552,545 votes in his primary, and Democrat Chris Bell got 324,869 in his primary.

Friedman didn't turn in signatures until high noon on the day they were due. His operation didn't include any conventional media — television, radio, and newspaper advertising, or apparently, direct mail. But he had three Internet spots, a lot of free media (that's what political ops call news stories on campaigns), and he did a lot of traveling around to generate interest.

The campaign also had some serious infrastructure. They were already organized in 60-some-odd counties in December, before they were allowed to collect votes. Assuming all the signatures are valid, they got 3.7 signatures for every one they needed. Strayhorn got 4.8 for every one she needed. More importantly, the two candidates together brought in 392,574 — well over the number of votes Bell got in a major party primary.

Secretary of State Roger Williams now has the job of verifying that one or both of those candidates got enough legitimate names to win a place on the ballot. Williams is a Perry appointee, which raises the levels of paranoia in the independent camps. That led to federal court, but the courts stuck with Williams. The state can check names on petitions from independent candidates one-by-one if it wants to, according to U.S. District Judge Lee Yeakel. Strayhorn sued to force Williams to use sampling to check the petitions she turned in. It's faster, and it gets her back into the campaign and fundraising game more quickly (it's hard to raise money from people who are waiting to see whether you're really going to have your name on the ballot).

Williams said he wanted to look at each name on the petitions turned in by Strayhorn and Kinky Friedman, to be sure either or each has the needed 45,540 registered and otherwise uncommitted voters. The law gives him the option, and so did the judge.

Strayhorn claimed a partial victory. In court papers, Williams trimmed his estimate of how long it will take to make sure the names are valid to "several weeks."

Friedman did that one better; his filing with Williams included a CD with the data on his petitions already entered. All the SOS has to do is run that against its database (after making sure it matches the petitions).

• Strayhorn brought in another 5,800 signatures in a second batch on deadline day, but Williams wouldn't accept them. Under state law, the petitions have to come in with the application, and she brought in the application on Tuesday with the first 223,000 signatures. That'll get counted, but the late stuff won't. She'd have been able to include the 5,800 had she held all of her stuff until the deadline. It cost her to release them earlier, but there was an ulterior motive: She swamped the news that Democrat Chris Bell had outrun her for the AFL-CIO endorsement.

The 500 Club

It's hard to get on the ballot as an independent candidate for governor, but non-party candidates for other offices have fewer obstacles; it only takes 500 signatures to get on the ballot for a spot in Congress, for instance. So there are more of them, and with less hoopla.

The non-gubernatorial list, from the Secretary of State's office, includes U.S. Senate candidates Robert Belt and Arthur Willis Loux; CD-3 candidate Bob Hise (the incumbent is Republican Sam Johnson of Plano); and HD-17 candidate Harold Pearson (the incumbent is Democrat Robby Cook of Eagle Lake). The best-known name on the list is in CD-22, where former U.S. Rep. Steve Stockman will be on the ballot with former U.S. Rep. Nick Lampson, a Democrat, and a Republican to be named later in the race to replace Tom DeLay, R-Sugar Land, whose resignation will be official on June 9.

Labor Sticks with the Democrat

Democrat Chris Bell won labor's endorsement at the annual COPE convention of the Texas AFL-CIO. He had to fight to win it. Comptroller Carole Keeton Strayhorn courted the group for weeks and already has won support from some teacher and public employee groups. That wasn't enough. To get the endorsement, a candidate has to win support from two-thirds of the delegates.

Kinky Friedman also spoke to the labor reps; Gov. Rick Perry declined their request to speak at the convention. Bell's speech included some boilerplate, but its core was his first real attack on Strayhorn, who was, after all, his only real rival for labor's endorsement. He attacked her for a long list of recommendations she's made to privatize government services and said she backed several of Perry's proposals "as long as it suited her political plans."

• Land Commissioner Jerry Patterson, who's running for reelection, is the first statewide Republican to win the endorsement of the Texas AFL-CIO. All the rest of labor's endorsements went to Democrats. Patterson was the only Republican, apparently, to seriously seek the endorsement, though the labor folks say they invited everyone.

• Ready to think about November? Those elections are only six months away, and Texas Secretary of State Roger Williams has posted a side-by-side list of Republican and Democratic candidates in the November elections, with blanks for Libertarians, independents, and others to be named later. It's on that agency's website.

Political People and Their Moves

Tracye McDaniel's old boss lured her to the Greater Houston Partnership; she's leaving the economic development and tourism department in the governor's office to rejoin Jeff Moseley in Houston. Moseley was head of the state's economic development before he moved east. McDaniel will be GHP's chief operations officer starting next month.

Gov. Rick Perry appointed Welcome Wilson Sr., chairman and CEO of GSL Industrial Holdings and a real estate developer, and Jim Wise, managing member of Haddington Energy Partners III, as trustees of the University of Houston System. Both men are alums.

The Guv named Govind Nadkarni of Corpus as presiding officer of the Texas Board of Professional Engineers. He's vice president at Maverick Engineering and founder of Govind and Associates.

Perry appointed James Ratliff, a Garland appraiser, to the Texas Appraiser Licensing and Certification Board, and reappointed three others to that panel. The returning members are William "Rusty" Faulk, a Brownsville attorney, Larry Kokel, a Walburg appraiser, and Shirley Ward, an appraiser from Alpine.

Bells will be ringing: Democratic consultants Jeff Hewitt and Eleanor D'Ambrosio are getting hitched Saturday. He's still a consultant; she's now chief of staff to Rep. Donna Howard, D-Austin.

Deaths: Former state representative, movie star, and Aggie football sensation John Kimbrough of Haskell. He was 87.

Quotes of the Week

Sen. John Whitmire, D-Houston, after a fitful day with the Senate Finance Committee: "We're trying to get Iraq to go to this system."

Democratic gubernatorial candidate Chris Bell, speaking at an AFL-CIO convention: "Carole Strayhorn speaking to a labor convention is like Godzilla running for the mayor of Tokyo."

Lt. Gov. David Dewhurst, quoted in the Houston Chronicle when the session still had a week to go: "One of the problems we have is that we've got too much time remaining. When we get closer to a deadline, people work faster."

Roger Williams in the Midland Reporter-Telegram on whether he'll seek statewide office: "I love public service. I'm not going to close any doors if they're open."

Kinky Friedman, asked why Carole Keeton Strayhorn got more signatures than he did, quoted by the Associated Press: "Of course she got more signatures than we. She had all her ex-husbands sign."

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Texas Weekly: Volume 22, Issue 44, 15 May 2006. Ross Ramsey, Editor. Copyright 2006 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 (512) 302-5703 or email biz@texasweekly.com. For news, email ramsey@texasweekly.com, or call (512) 288-6598.

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.