What do you call the student who finishes last in medical school? A doctor. And what do you call legislation that passes by just one vote? A law, or one step closer to it. 

The House passed the tax bill to support its school finance package by one vote, after a recount, with House Speaker Tom Craddick voting, and with his floor folks throwing what weight they have left in a legislative body weary of voting on tax bills that don't seem to go anywhere. Final approval came a day later, and was, in comparison, a landslide. The bill passed by five votes.

That tax legislation isn't a law yet, but it moved the ball over to the Texas Senate, which will have it on a high-speed train by the time you read this. The legislation survived for a week after being passed by the House Ways & Means Committee, overcoming fears that it would be whittled to death by lobbyists and trade groups and taxpayers over the holiday weekend.

What came out of the House is pretty much what the committee approved. It includes:

• A one-cent increase in the sales tax, to 7.25 percent.
• An increase in sales taxes on motor vehicles and boats to 7.35 percent from 6.25 percent.
• Expanding the sales tax to include car repairs, bottled water, and certain types of computer programming.
• A $1 increase in the tax on cigarettes.
• A fresh attempt to close two loopholes that allow companies to avoid corporate franchise taxes by hiding most of their operations in partnerships and out-of-state affiliates.
• And a requirement that car sellers use Blue Book values when figuring taxes instead of whatever they claim the price to be.

All of that would buy a cut in local property tax rates. The money raised by the tax bill, supporters say, would allow them to cut local school property taxes to $1.23 per $100 valuation the first year and to $1.12 the second year. The current cap on those taxes is $1.50. If voters approve, it would also cover the costs of raising the state-mandated homestead exemption on those taxes to $22,500 from $15,000.

That's on its way to the Senate, which has different ideas. But there is more than a week left in the special session, and advocates of this "School Finance Lite" package say there's still time to get a smaller version of the reforms that eluded lawmakers during the regular session. 

School Finance, Oversimplified 

Lawyers for the state told the eight justices on the Texas Supreme Court that the Legislature — not the court — is the final arbiter of whether the state's schools are providing adequate educations to the children of Texas. The issue simply doesn't belong to the courts, and that's that. If the courts don't take the same position, the argument goes, they've left law behind and ventured into policy matters that are, according to the state's reading of the Texas Constitution, the sole discretion of the Legislature.

Lawyers who are suing the state say the Legislature has trapped schools between rising standards and tight budgets, denying them the ability to raise the resources they need to meet the goals that have been set for the schools. They said the state's accreditation system holds students accountable for test scores without holding school districts and the state fully accountable for the performance of the schools, creating the appearance of improvement without measuring whether the system is providing the "general diffusion of knowledge" required by the constitution.

The judges kicked that around, asking how bad the schools could get without judicial intervention, why they can't set a standard for adequacy just like they do in other areas, why the state says the school districts are asking the court to order lawmakers to spend more money, and whether the schools have to fail before legal remedies are available. They asked whether knowledge is being generally diffused when dropout rates are high and the state ranks near the bottom in the percentage of students who go on to college after high school. They asked whether the districts really have legal standing to sue, and why their side doesn't include any parents of school children or the children themselves. They wanted to know whether the school districts can ask for relief when the students — and not the districts — are possibly getting a raw deal.

The court asked the lawyers on both sides whether the state's cap on local property tax rates had become a de facto state property tax, which isn't allowed by the constitution. They asked whether removing the cap on property taxes would solve that constitutional problem even though it might be unpopular. They asked policy questions, pushing the school district lawyers to guess at whether their positions represent the views or desires of parents with kids in schools. They asked those lawyers whether evidence of steady progress on test scores is evidence that the schools have adequate resources to do their work. They wanted to know whether districts that are both small and poor would do better if they were merged into larger and richer districts.

The question with posting government records on the Internet is like the line in W.P. Kinsella's book Shoeless Joe (the movie was titled Field of Dreams): If you build it, will they come? A test: You can listen to the school finance arguments at the court's own website. Go to:

www.supreme.courts.state.tx.us/oralarguments/audio_2005h.asp.

The case you want is titled "NEELEY, ET AL, v. WEST ORANGE COVE, ET AL" and the audio link is reached by clicking on the case number you'll see on the left on that site.

Want something to read while you're listening? Case files are also online:

www.supreme.courts.state.tx.us/ebriefs/files/20050145.htm. 

By the Hairs on their Chinny Chin Chins 

The lowest reelection percentage turned in by a state senator last year was 57.1 percent -- nothing to worry over. And those senators aren't up for election again until 2008. But several House members won close races and could be called "Most Likely to Have Fine Reasons to Look Over Their Shoulders" while the Legislature is messing around with taxes and school finance. 

We pulled together a list of members who got elected after either a tight primary election and/or a runoff, a tight general election, or both. Rep. Charles "Doc" Anderson, R-Waco, had tight contests in March and November, for instance. So did Rep. David Leibowitz, D-San Antonio, who won a primary runoff and then, like Anderson, went on to beat an incumbent in November.

A couple of caveats before you hit the list. The first is our version of the stockbroker's national anthem: Past performance is not necessarily related to future results. The second: Some of the races on the chart appear to be blowouts; in every such case, you'll find that the owner of the big number squeaked into a runoff and did well, but not without breaking a sweat. And one more: Some of the 2004 elections noted here were downright weird and probably won't be repeated. Several of the Democrats on the list were in tight races because they were running against incumbents. In the future, presumably, most of them won't start the next election cycle as underdogs. On the other hand, the elections were only seven months ago, and school finance is one of those touchy issues that's both important to voters and politically treacherous to solve.

A New Deadline 

The state borrows money every year on Wall Street to cover its cash needs while it's waiting for tax money to roll in. The state also pays the money back quickly; it's strictly a cash flow loan. The instruments are called TRANs — Texas Revenue Anticipation Notes. Bond firms lend the money for a short period, the state makes its payments to schools and employees and all that on time, and when the tax money gets here, the state pays off the notes. It's not a big drama, but it is a lot of money — $6 billion to $7 billion.

The borrowing usually takes place on September 1, and Comptroller Carole Keeton Strayhorn sent a letter to other state leaders telling them the bond folks will want to know the outcome of the school finance budget by August 1. In the letter, addressed to the governor, the lieutenant governor and the speaker of the House, she says the bond rating agencies have told her office they won't provide ratings for the TRANs until they've seen a final state budget, including education. Without the ratings, the notes can't be sold. Gov. Rick Perry's veto of the public education budget, she says, makes it appear that the state has more than $30 billion in its purse, an amount that makes it difficult to justify borrowing a bunch of cash.

Strayhorn says the borrowing can be delayed, but that a delay might raise the costs of the TRANs issue for this year. State leaders hope to finish the special session, and the budget and school finance with it, within the next two weeks. 

The Other Courthouse 

Two men indicted by a Travis County grand jury last year on money-laundering charges have been re-indicted because prosecutors wanted to change the wording of the charges against them.  

John Colyandro and Jim Ellis are accused of illegally converting corporate money, which can't be used in elections, into money that could be used in elections. The indictments say the two, working for Texans for a Republican Majority PAC, or TRMPAC, sent $190,000 to the Republican National State Elections Committee, when then sent checks totaling that same amount to Texas candidates supported by TRMPAC. The word "check" in the original indictment is now replaced with references to "funds."

Another campaign operative and eight corporations were also indicted last year, and four of the companies have gotten their charges dropped in return for telling what they know and also by contributing to an ethics program at the University of Texas that has become a pet project of Travis County District Attorney Ronnie Earle. Representatives of one of the indicted companies, Westar Energy of Kansas, were quoted in The Dallas Morning News saying the company gave the money to TRMPAC to gain access to its founder, U.S. House Majority Leader Tom DeLay, R-Sugar Land. According to the paper, Martha Dickie, an attorney for the company, said in an Austin hearing that Westar hoped to win DeLay's help with energy legislation in Washington.

That grand jury, by the way, is a holdover. It was commissioned at the beginning of April to work on this and other cases for three months. Prosecutors say the term was extended for 90 more days, or through the end of September. That might turn out to be the last grand jury in a long procession that began with the 2002 elections. Prosecutors and grand juries have been working for more than two years on their suspicions that business and trade groups illegally coordinated their efforts with almost two dozen campaigns, and that some of those organizations, and their consultants, used corporate contributions in ways that are prohibited by state election laws. Most of the laws they're relying on carry three-year statutes of limitations, prosecutors have said, and so the deadlines fall between now and November.  

Bell's "New Mainstream" 

Texas Democrats need to shake off the "Austin insiders," stop trying to "out-Republican the Republicans" and make education the centerpiece of their campaigns, Chris Bell writes in a speech prepared for a party meeting this weekend.  

Bell, a former congressman and city councilman from Houston, says the State Democratic Executive Committee needs to try something new: "First, we can't afford another two years in which the people in this room are treated like props while Austin insiders pick our nominees like they're casting another sequel to Cannonball Run."

He takes a couple of swipes at Gov. Rick Perry, and says the Democrats should take in moderate Republicans who Perry "is trying to kick out of the [Republican] Party" and "independents who are getting scared about what's going on."

Bell, who's exploring a gubernatorial race but hasn't decided whether he'll run next year, takes a whack at "test-driven" education and suggests putting "principals and teachers back in control of schools and classrooms, give them textbooks that aren't censored by partisan ideologues, the materials they need to teach, [and] the technology needed for kids to learn."

And he saves some harsh words for his own party: "We've tried to out-Republican the Republicans, and all we've gotten for it is a demoralized base, demoralized donors, demoralized activists, and demoralized leaders... our struggle is to build a majority party that articulates a positive vision of the future that unites the majority of Texans, and we do this by talking about Democratic values, not abandoning them at the first report of gunfire."

He apparently plans to make a decision about whether to run within a month.  

Wiring Around the Establishment 

A new website — www.stepuptexas.com — is trying to attract Democrats who'll nominate, endorse, and promise to work for candidates for Texas offices from the county level to the U.S. Congress. The name on the effort is Trei Brundrett, who's identified as an Austin software developer. They let visitors nominate and endorse candidates after providing contact information, and encourage those endorsers to pledge time and money to the people they support. In early returns, Chris Bell had a three-to-one lead over John Sharp in the small sampling of "votes" in the governor's race (others with mentions: Lance Armstrong, Kinky Friedman, Paul Hobby, Ann Richards, and Roy Spence). The handful of Democrats who've shown up so far have put four names in the column for U.S. Senate, four more for Lite Guv, three for attorney general, two for comptroller (including Republican Carole Keeton Strayhorn, the incumbent). 

Run. Shake It Off. Repeat. 

Austin attorney Diane Henson, a Democrat, got 48.4 percent of the vote running for the Austin-based 3rd Court of Appeals last year. Republican Bob Pemberton, the incumbent, won that contest. Henson is taking another shot, this time for the seat that'll be left open when Bea Ann Smith opts against a reelection bid. Henson and Smith used to work together in an Austin law firm.

Taking the Organization Private 

The state's Health and Human Services Commission will close 99 offices and fire 2,900 people over the next 16 months in an attempt to save $646 million it now spends delivering services to people on Medicaid, CHIP, TANF and other state and federal programs. 

Much of that estimated savings — a five-year number, by the way — is supposed to come from privatization. A private company, Accenture, will run four call centers that will handle client traffic over the Internet, by phone, by fax, by regular mail, and in person.

Add Midland — hometown of House Speaker Tom Craddick — to the list of three locations for those centers. Two will be in central Texas — in Austin and in San Antonio — and another will be located in East Texas. The location of that East Texas center is still up in the air, though, according to officials with HHSC. Accenture and the agency are looking at three places: Longview, Athens, and Kilgore.

In addition to the four statewide call centers, HHSC will have 167 fulltime offices around the state and another 44 "satellite" offices open only during certain days of the week. But 99 offices are closing and their employees will likely have to relocate to keep jobs with the state or as private sector workers for the new state contractor.

The employee math works like this. HHSC has 5,800 people working in eligibility jobs for programs like Medicaid, Children's Health Insurance Program, and long-term care. About half of them — 2,900 — will lose their state jobs. Accenture is hiring 2,500 people, most of whom will work in the new call centers, and the company, according to HHSC, is giving hiring preference to the displaced state workers. The state, meanwhile, is looking for about 2,500 new people for adult and child protective services. Those hires weren't in the original plan, but after the state understaffing and lax enforcement led to abuse and deaths of elders and children, lawmakers poured in money and ordered the agency to beef up its army of caseworkers.

Whether either of those hiring options is viable for current employees is an open question. But it's not an immediate question. The "transition" starts in January, and will last about 10 months. It's entirely possible that someone working for the commission now will still be there in a year even if they're not in line for a job in the newly reorganized agency.

The workers' median tenure is 12 years, and HHSC plans to keep people partly on the basis of seniority and partly on the basis of whether they're willing to do whatever job is offered to them.

The agency has a website that shows what's happening in every region of the state, so you can see what's changing in a given area. The address: www.hhs.state.tx.us/maps/listing.shtml. 

Matters of Size 

Only California has added more people than Texas since the 2000 census. The U.S. Census Bureau says there were 22,490,022 here on July 1, 2004, or 1,638,232 more people than four years earlier. For a little perspective, try this: If those people had created a new city for themselves instead of sneaking in here and there, it would be the second-largest city in Texas. It's enough to populate more than two congressional districts (at their current sizes), or 11 statehouse districts (with the same asterisk). California added 2.0 million. Florida grew by 1.4 million. No other states added more than a million (or were even close) and two places — the District of Columbia and North Dakota — lost population during the first four years of the decade.

But those new Texans didn't form their own city. Three Texas cities were among the 20 fastest-growing cities in the country. San Antonio added 84,978, and ranked fourth nationally. Fort Worth added 61,988 residents — ranking it fifth on the fast growth list. And Houston added 55,743, enough to get it to sixth place on the national list. The top three were Los Angeles, New York City, and Phoenix. Dallas and Austin each added about 21,000 people — about the same as Brownsville and behind places like El Paso (+28,442), Arlington (+26,505), Laredo (+25,812), and Plano (+23,397).

Last on the numbers beat, the ten biggest cities in the state: Houston (2,012,626), San Antonio (1,236,249), Dallas (1,210,393), Austin (681,804), Fort Worth (603,337), El Paso (592,099), Arlington (359,467), Corpus Christi (281,196), Plano (245,411), and Garland (217,176). 

Quotes of the Week 

House Speaker Tom Craddick, asked whether bills under consideration by the Legislature would remedy the school finance lawsuit pending in court: "As far as a total fix I think, that was your question, I don't think it does that. It fixes some pieces of that, I don't think it's a total fix."

Craddick again, in a written statement sent to reporters after his first comments caused some of his colleagues to throw vases at the walls: "I have been asked whether I think HB 2 and HB 3 will cure all the problems in the lawsuit. I want to emphasize that I am not lawyer. Nevertheless, I do think that together the two bills will establish a fair and constitutionally sound school finance system, and we hope that it will pass muster with the courts."

Clayton Downing, director of the Texas School Coalition and a former school superintendent, in The Dallas Morning News: "Nearly everybody I know has given up on the Legislature and is ready to take our chances with the Supreme Court."

Sen. Mike Jackson, R-La Porte, talking about the special legislative session on school finance in the Houston Chronicle: "I don't think people are overly enthusiastic about being here. The mood I sense is everybody's pretty skeptical about being successful, and that creates the mood of, well, I hope we're not just here wasting our time."

Sen. Jane Nelson, R-Lewisville, in the Fort Worth Star-Telegram: "If the lieutenant governor, the speaker and the governor had gotten together... worked out those kinks [and] called us back, we could have been through in a week."

President George W. Bush, on U.S. Attorney General Al Gonzalez, a former justice on the Texas Supreme Court: "And all of a sudden this fella, who is a good public servant and a really fine person, is under fire. And so do I like it? No, I don't like it. At all."

Gubernatorial candidate Kinky Friedman, talking to a crowd about immigration at a book signing and quoted by the San Antonio Express-News: "We divide 679 miles of border into five jurisdictions. To each jurisdiction we appoint a Mexican general. To each of them, we hold $1 million in a bank account ... And we withdraw $5,000 every time we catch an illegal alien coming through his jurisdiction."

Kurt Wimmer, a media lawyer, in The New York Times: "When the Supreme Court says there's nothing wrong with forcing reporters to testify and go to jail, other lawyers are looking at that and saying, 'Why shouldn't I subpoena a reporter?'"

Political scientist Richard Murray of the University of Houston, asked about term limits by the Houston Chronicle: "The Legislature might be slow or even dumb, but they are not going to start limiting their own political futures in that way." 

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Texas Weekly: Volume 22, Issue 6, 11 July 2005. Ross Ramsey, Editor. George Phenix, Publisher. Copyright 2005 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 (800) 611-4980 or email info@texasweekly.com. For news, email ramsey@texasweekly.com, or call (512) 288-6598.

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: