It's hard for cigarette companies to talk to lawmakers about sales they'll lose because of higher taxes, since that's one of the most popular arguments for raising the levies on smokes in the first place.  They do make the point, but move on quickly. To what? The companies are trying to slow down the tax hike by saying it's so big it will encourage smugglers to bring smokes to Texas from neighboring states with lower taxes. Phillip Morris USA says a $1 increase in the Texas tax would bring the price difference on a carton of cigarettes to between $8 and $16.50 when compared with neighboring states. And they hint that sales will drop faster than the state predicts, lowering expected state revenues.  

Gov. Rick Perry expanded the Legislature's agenda again, this time adding tuition revenue bonds and judicial pay raises to the things lawmakers can legally consider. Both issues almost made it during the regular session. Judicial pay raises -- which are a key variable in figuring the retirement pay of Texas legislators -- died in the crossfire of tempers between Rep. Terry Keel, R-Austin, and a couple of senators. And tuition revenue bonds -- issued to build new facilities at state colleges and universities -- were axed because House Speaker Tom Craddick and Lt. Gov. David Dewhurst didn't agree on how money set aside for the TRBs would be distributed.  

Lt. Gov. David Dewhurst ran into two lockups on the tax bill and cast a vote to settle one of them -- his first vote ever -- while letting the other die on a tie. The first killed a business tax disliked by the lobby and by Gov. Rick Perry and, probably, the House. Dewhurst's non-vote kept slot machines out of the tax bill.  The first vote was weird for a couple of reasons. For one thing, Dewhurst cast the deciding vote on an amendment that killed the expanded business tax he himself has been promoting. And he had to go out of his way to do it, talking Sen. Mike Jackson, R-La Porte, into changing his position to turn a loss into a tie, and then casting the deciding vote. Dewhurst wasn't in the chair at that moment -- Sen. Ken Armbrister, D-Victoria, had the gavel -- but it turns out he can vote as long as he's in the room. In fact, it appears at first look, that he has no choice. From the Senate Rules, we get this: Rule 6.18. If the Senate were equally divided on any question, the Lieutenant Governor, if present, shall give the casting vote. (Constitution, Article IV, Section 16). That raises a question about the second big tie on the tax bill. Senators voted 14-14 on an amendment that would have added video lottery terminals to the bill. Dewhurst was there, but didn't vote, and the amendment died. It turns out that the state constitution trumps the Senate's rules. From the Texas Constitution: The Lieutenant Governor shall by virtue of his office be President of the Senate, and shall have, when in Committee of the Whole, a right to debate and vote on all questions; and when the Senate is equally divided to give the casting vote. He can vote, but he doesn't have to. And when that vote took place between 3 and 4 a.m., nobody called him on it. 

The Senate sent judicial pay raise legislation to the House less than a day after Gov. Rick Perry added the issue to the legislative agenda. A little while later, the House followed with a slightly different version. Both versions would increase pay to $125,000 for district judges (from a base of $101,700 now), to $137,500 for appellate court judges, and to $150,000 for judges in the two statewide courts. Chief justices would get an extra $2,500. Local county officials can still supplement the state salaries, but pay for district court judges would be capped so that they'd always be at least $5,000 behind the judges on the higher courts. The state would do a report every year to show how the judges here are doing on their pay, as compared with judges in states of similar size and to lawyers in the state of Texas. That last bit means the State Bar of Texas will soon be doing a statewide survey of lawyer salaries for the report. Sen. Robert Duncan, R-Lubbock, also folded in an amendment from Sen. Rodney Ellis, D-Houston, that adds money to the state's fund to pay attorneys for indigent criminal defendants. That, like the pay raises themselves, would be funded with increased fees paid by people going to court in Texas. That's not in the House's version, which includes some appropriations language that isn't in the Senate's.
  The 23 percent pay increase for judges is also a pay increase for retired legislators, and for those who, voting now, will retire later. Their retirement benefits are based on a formula: Judicial pay multiplied by .023, multiplied by the lawmaker's years of service. Lawmakers have to serve at least eight years to qualify, and can start collecting benefits when they're 60. If they serve at least 12 years, they can draw the benefits after age 50. 

The special legislative session is starting to look like a regular session; Gov. Rick Perry hit the reboot button to allow lawmakers to look at two more issues: Telecommunications and renewable energy.  Telecomm in particular locked up lawmakers during the session; the sponsors, Sen. Troy Fraser, R-Horseshoe Bay, and Rep. Phil King, R-Weatherford, couldn't come together on how to treat competition between phone companies and cable companies. The two industries are, respectively, sneaking into the other's camp -- phones want TV, TV wants dial tones -- and the Legislature is trying to regulate the fight. Cities are watching carefully to see whether statewide franchises for television erode local cable franchises and the perks that were included by the companies, like local programming and local access channels.
  And electric companies want a piece, too, as they perfect technologies that send Internet and television signals -- broadband -- over power lines. Houston-based CenterPoint, for example, just signed a deal with IBM to work on broadband over power line technology, called BPL for short, in a residential pilot project.
The renewable energy bit -- already passed by the state Senate -- pushes electric utilities to get a certain amount of their power from wind farms and other technologies and sets a goal for renewable energy for the whole state. 

A couple of polls show Gov. Rick Perry with some weaknesses among general election and, to a much lesser extent, with primary voters. But he still looks formidable going into the March 2006 Republican primary against Comptroller Carole Keeton Strayhorn. SurveyUSA is tracking how voters rate the work of the governors of all the states, and you can look inside their results for any state you choose. The results are summarized in one spot: http://www.surveyusa.com/50StateGovTrackingJuly2005.htm If you click on the name of a state, you'll see how voters there regard their governor's work. Perry, by SurveyUSA's numbers, was still underwater as of last week, with approval from 38 percent of those surveyed and disapproval from 53 percent (the question being answered: "Do you approve or disapprove of the job Rick Perry is doing as Governor?"). The pollsters talked to 600 people and say their margin of error is 4.1 percent. Perry's numbers were slightly better with men than with women, best with Texans between 35 and 54 years of age, better with Republicans than Democrats, Independents and "not sures," and slightly better in West Texas than in other regions of the state. His numbers were a little worse in July than in June. June's numbers were down a bit from May's. The pollsters threw in one number that's interesting, if statistically wobbly: The average governor is getting the thumbs up from 50 percent of voters and a thumbs down from 41 percent. Separately, Austin-based Montgomery & Associates did some polling and found Perry well ahead of his only announced GOP challenger, Comptroller Carole Keeton Strayhorn. By their reckoning, Perry has a two-to-one advantage in that contest. The firm -- which works for Democrats when it's working on political stuff -- polled 905 Republican primary voters during the five days ending July 1. Of that group, 54.8 percent said they'd vote for Perry in an election held now and 28.9 percent said they would prefer Strayhorn. More than half of the voters -- 50.9 percent -- said they had a "generally favorable" impression of the governor; 20.8 percent gave him a "generally unfavorable" mark, and only 0.2 percent said they hadn't heard of him. Asked what they think about the job he's doing in office, the numbers tightened up: 51.9 said Perry was doing a good or excellent job and 45.8 percent said his work was "only fair" or poor. Strayhorn left 34 percent of the voters with a favorable impression, and 20.2 percent had an unfavorable take on the comptroller; 8.5 percent said they hadn't heard of her. Her job rating was better than Perry's: 55.6 percent gave her excellent or good marks, while 22.4 percent graded her "only fair" or poor. 

Having a governor directly involved has made some difference in school finance, but the two halves of the Legislature are still locked up over some of the issues that doomed earlier compromises. They are closer than they were, particularly after the Senate fell on its sword on business taxes, but there's plenty left to fight over. A partial list of differences would include methods and amounts of compensation for teachers, caps on how much local money rich districts have to share, the percentage of school districts that have to get substantially the same amounts of money per student, whether kids should be tested at the end of each course they take, whether school board elections ought to be moved to November, and taxes. In that last item, you'd have to have a separate list of differences between the upper and lower houses: increased homestead exemptions (yes, no, and how much), new property tax rates (somewhere between $1.23 and $1.30, down from $1.50), sales tax rates (up between 1/2 cent and one cent), increased alcohol taxes (yes or no), how to close business tax loopholes, and whether to raise license fees for professionals who don't pay the corporate franchise tax. Lt. Gov. David Dewhurst says the Senate won't be considering anything coming out of conference committees until it's seen the reports on school finance and taxes. That means, with a few possible exceptions, that nothing would come out of the special session if school finance doesn't get done. "That's why we're here," he says. The asterisk, of course, is that either body of the Legislature could simply accept the work of the other body, which would send that work on to the governor.
  There's less than a week left in the special session. 

Campaign finance reports have started trickling in (good results often get announced before the filing deadline, so as to avoid being obliterated by other news from other campaigns). Comptroller Carole Keeton Strayhorn says her reports will show she raised $1.5 million in the last ten days of June, bringing her cash on hand to $7 million. Details, like who gave and how much, won't be available until she has filed her full report. Meanwhile, Agriculture Commissioner Susan Combs, who's running for the spot currently occupied by Strayhorn, raised $838,421, bringing her piggy bank's balance to $2.4 million. She also offered no details. The reports -- and the ones you'll see after the filing deadline passes -- reflect fundraising between the end of the legislative fundraising blackout on June 19 and the end of the month. Federal candidates and state candidates who weren't in state office during the legislative session aren't subject to the blackout. • Jimmy Evans, son of former state Rep. Charlie Evans of Fort Worth, says he'll run for the House. He's looking at an open seat in Austin, where Rep. Terry Keel, a Republican, is preparing a race for the Texas Court of Criminal Appeals. Evans, also a Republican, ran for the House in 1996 in his father's old district but lost to Todd Smith, R-Euless, who still holds that seat. Evans is one of several people talking about HD-47, but he'll be the first we know of to file his paperwork and actually get into the contest. • Gina Benavides, a McAllen lawyer, says she'll run for the 13th Court of Appeals, a Corpus Christi-based appeals court that hears cases from 20 counties in that part of the state. Benavides will be running against an incumbent, Errlinda Castillo, in the Democratic primary. • Gov. Rick Perry went on The O'Reilly Factor to defend the state's laws on child abuse after the host of that show, on a crusade to make all 50 states bring their penalties for child abduction and battery to the level of the toughest states. In the midst of all the interruptions that pass for conversation on television, Perry said he'd encourage the Legislature to look into it when they're back in session. They're in session now and will be for another week, as Carole Keeton Strayhorn quickly pointed out. 'Tis the season. • Department of Corrections: The chart on close races in our last edition originally referred to 2002 elections when it should have said 2004... In some editions last week, we mistakenly put Rep. Terry Keel and Judge Robert Francis into the race for 3rd Court of Appeals in Austin. The two are running for the Texas Court of Criminal Appeals. Sorry, sorry, sorry. 

The tax bill working through the Legislature is regressive, according to the Legislative Budget Board, a state agency headed by the lieutenant governor and the speaker of the House. And the most recent House version would be a net tax hike, even when property tax cuts are figured in. That's been well-reported by the big papers; you've heard the line about the bill being a tax increase for everyone making less than $140,853 annually, for instance. But the LBB's analysis also says the tax swap touted by state leaders is, in fact, a net tax increase for the average Texan. The last equity note done on the bill -- when it passed out of the House -- said the legislation would produce a 1.25 percent increase in taxes, from $54.4 billion to $55.1 billion. That high-income group mentioned above would get a 1.52 percent cut, but Texans in lower income brackets would see increases ranging from miniscule (0.07 percent) to substantial (4.1 percent). The equity notes, or "tax incidence studies" include the state taxes being increased and the local taxes being cut and attempt to measure the financial impact on Texans in each of ten income groups, or deciles. For the ten percent of Texans making $22,833 to $31,735, the House's last version of the tax bill would mean a 4.1 percent tax hike. The Senate voted out a tax bill without an equity note -- Sen. Steve Ogden, R-Bryan, the Finance Committee chairman, doesn't think they're accurate or useful -- but the House won't vote on a final conference committee report without one. Members there made an equity note a requirement for the final bill. 

The ten-day race to raise money for the gubernatorial contest. We knew a radio station manager once who had previously worked in a high pressure sales job. Every month, there were 11 employees sent out to sell, and every day, they were ranked by sales to date. At the end of the month, the top ten sales people got to keep their jobs and a new number 11 was hired. True story, even if it does sound like a David Mamet job. Anyhow, we wondered what the chalkboards would have looked like at the two GOP gubernatorial campaigns during the short fundraising rush that took place during the last ten days of June. Gov. Rick Perry outraised Comptroller Carole Keeton Strayhorn by about $760,000. And both of them got busier as the deadline approached. The chart shows money raised each day for each campaign, followed by the percentage of their total raised on that day.

 

The comptroller takes a pass on a pay raise. The first take on pay raises from Comptroller Carole Keeton Strayhorn was that she'd take the extra $33,000 per year included in the budget by lawmakers and approved by Gov. Rick Perry. But Perry's political office was critical, saying in essence that the governor's fellow Republican isn't worth the money. She decided not to take the money after all, but did thank the governor for signing the bill that would make it possible. Non-judicial statewide officeholders other than the governor all got raises in the new state budget. So far, Strayhorn and Agriculture Commissioner Susan Combs have turned down the money. It's a nice raise, taking them to $125,000 annually from the current $92,000. That's $33,000 a year; the average starting school teacher in Texas gets a total annual salary of $32,894, according to the American Federation of Teachers.  

James Steinberg, the deputy national security adviser to then-President Bill Clinton, will be the new dean of the LBJ School of Public Affairs at the University of Texas. He's replacing Bobby Ray Inman, who's been the interim dean since Edwin Dorn left the job last year. Both Inman and Dorn remain on the school's faculty. Charla Ann King is the new COO at the Texas Racing Commission. She's replacing Paula Flowerday, who's been at the agency for years and is leaving to move to North Texas, in the agency's words "due to family commitments." King had been an aide to Texas Workforce Commissioner Ron Lehman, and also did tim at the State Bar of Texas and the Texas Sunset Commission. Robert Shepard is the new chairman of the Texas Higher Education Coordinating Board, replacing Jerry Farrington in the middle seat. Farrington will remain on the board. Shepard, a George W. Bush appointee who was reappointed by Rick Perry, had been vice chairman. Trey Trainor is leaving the House -- he's the chief of staff to Rep. Phil King, R-Weatherford and clerk of King's Regulated Industries Committee -- to become general counsel at the Secretary of State's office. SOS Roger Williams is also from Weatherford, so there are local ties all around (Trainor is from there, too). He'll replace Ben Hanson in Williams' office. Press corps moves: This item is ridiculously late, but Brandi Grissom, who worked for the Associated Press in its Austin bureau during the legislative session, is the new Austin Bureau for the El Paso Times. Gary Scharrer, who held that job for years, moved earlier this year to the San Antonio Express-News. Steve Taylor, who had been doing the "Border Buzz" section of the Quorum Report, has started his own electronic newsletter, focusing on government and politics from the perspective of Texans who live and work on the state's border with Mexico. The Rio Grande Guardian can be found at www.riograndeguardian.com, and combines original reporting and newspaper clippings. 

Put Republican Rich Phillips on your list of people who'd like to succeed Terry Keel, R-Austin, in the Texas House. We warned you that HD-47 would have more names, and so it does. Phillips, a self-employed management consultant, was once the public affairs director for the Reason Foundation, a libertarian think tank, and he worked in George H. W. Bush's reelection campaign in 1992. Click here to check out his website. Jimmy Evans, a lawyer who's also seeking to replace Keel, has also filed the initial papers to run for that seat. 

Comptroller Carole Keeton Strayhorn said earlier in the week that she raised $1.5 million for her challenge of Gov. Rick Perry in the GOP primaries next March and that she had $7 million in the bank at the end of last month.  Now the details are coming in, as you can see from this list of people and organizations that gave her $10,000 or more during the truncated fundraising season that began on June 20 and ended June 30. Some notes are in order to fill in blanks you'll see below. Ryan & Co. is a tax consultancy in Dallas that employs, among others, former Comptroller John Sharp. AtlanGroup of Dallas is a dental practice owned and operated by David and Martha Al-Ameel. Scooter Griffin, described by the campaign as an old friend of Strayhorn's, is the name behind MML Ventures and Family Land Heritage Trust of Kilgore.

 

Gov. Rick Perry raised $2.3 million during the last ten days of June, but his campaign got confused about how much money they had in the bank. After first reporting cash on hand of $8.4 million, they revised the number a few hours later to $8.8 million. The goof, according to campaign manager Luis Saenz, was made when someone double-counted a radio advertising buy and somehow managed to record it as an expense in June and in July. It was in July, he says, and the campaign added $400,000 to what it had first reported as money in the bank. Perry's list of big supporters is a few lines longer than the comptroller's, as you can see below: