Vol 23, Issue 7 Print Issue

Tax Collector's Remorse

A state sales tax refund to "a large direct pay taxpayer" will cost the City of Stafford over $2.5 million — a stunning bit of news for a municipality with an annual budget of about $20 million.

The Week in the Rearview Mirror

Republican legislative candidates had more money on hand at mid-year than their Democratic counterparts, according to a compilation of campaign finance reports done by Republican consultant John Doner.

By his tally, 239 legislative candidates in Texas — that's just statehouse wannabes and not statewide or congressional or judicial aspirants — had $23,713,525 in the bank at mid-year. Within that group is a smaller group with opponents: 159 candidates who will face someone in November had $11,312,774 on hand at mid-year. That last number is another way of saying that candidates without November opponents are sitting on $12.4 million; unopposed candidates have more money in the bank than their colleagues who actually have contests.

It's entirely possible that the big bank accounts are what scares off the opposition. But a few candidate/officeholders have big accounts that skews the numbers a bit. Only three, for instance, were over the million-dollar mark, by Doner's count: House Speaker Tom Craddick, with $3 million in the bank, and Democratic Houston Sens. John Whitmire, at $2.5 million, and Rodney Ellis, at $1.5 million. Only seven have more than a half-million in the bank, including those three, Republican Sens. Jane Nelson of Lewisville, at $722,875, and Steve Ogden of Bryan, at $694,306, and Reps. Burt Solomons, R-Carrollton, at $630,450, and Patrick Rose, D-Dripping Springs, at $528,328. (Doner didn't rank them by balances, but we pulled those from his charts.)

Within those numbers, as you can see in Doner's introductory memo, Republicans have more money than Democrats, both in aggregate and on average. The biggest difference is found in the accounts of candidates with no opposition, as you'll see in his numbers.

Doner's stuff is in an Adobe Acrobat (.pdf) file you can get in the Files section of our website. Screen files follow (and you'll get the .pdf version by clicking on the images below).

Cash on hand report Cash on hand report Cash on hand report Cash on hand report Cash on hand report Cash on hand report

Former U.S. House Majority Leader Tom DeLay R-Sugar Land, is telling the Associated Press he won't seek office in November. That leaves Democrat Nick Lampson on the ballot, and frees the way for any Republican candidate to gin up a write-in campaign without worrying over splitting the conservative vote with DeLay. Write-ins aren't the easiest campaigns in the world, but a combination of lots of money and a fair amount of free media — meaning news coverage — could make this an interesting race going forward. Sugar Land Mayor David Wallace is probably in, and we're still waiting to hear from others who had been interested in the contest. Republicans hope to knock Lampson out of the way and hang onto the seat held so far by the GOP. Short of that, they'd like to deplete the Democrat's campaign accounts — he reported more than $2 million on hand at mid-year — so that if Lampson prevails this time he'll have less in his financial armory to defend the seat in two years. DeLay resigned from office in June and changed his official residence to Virginia to try to make himself ineligible for the congressional ballot. That turned out to be unconstitutional. A candidate can get off the ballot after winning a party primary, but can't be replaced by his (or her) party. The courts read the constitution to say you have to be eligible on Election Day and that, barring death or disability, there's no way to tell whether you'll be ineligible until that day arrives.

An open records request sent to the comptroller's office turned up four letters, among other things, that went to the local government entities mentioned in our tax story: Dallas Area Rapid Transit, and the cities of Dallas, Sherman, and Stafford. Each included a line about "a large direct pay taxpayer," the amount in question, and a couple of boilerplate paragraphs about setting up payment schedules for the refunds (the state generally gives local governments a number of years — at no interest — to pay these things back).

Dallas' letter put the locally owed refund at $13.8 million. DART's was $13.2 million. Stafford, as we reported last week, is on the hook for $2.6 million, and the state wants the City of Sherman to repay $1.8 million. Those obligations total $31.3 million.

Their tax rates vary. Dallas and DART each levy a 1-cent tax. Stafford's local sales tax rate is 2 cents. Sherman's is 1.75 cents. In all cases, the state's rate is 6.25 cents. If you back out the numbers, using the local tax refund due and the local and state tax rates, you can figure out what the state got back, based on what it's demanding from the locals.

For instance, if Stafford, with a 2-cent sales tax, owes $2,557,340, then the state, with a 6.25-cent rate, over-collected $7,991,690. Texas Instruments' refund from that piece of this tax case, including the state and local sales taxes, was $10,549,031. The total for Sherman, figured up the same way, is $6,297,627. Dallas and DART present a particular problem: They overlap. Figured separately, the Dallas number would be $99.8 million and the DART number would be $95.6 million. Not all of DART is in Dallas, and vice-versa, and the comptroller's office didn't have those numbers handy when we called (they're working on it).

In the interest of caution, we kept the local sales tax number for the City of Dallas in our totals, but tossed the state sales tax number for the moment. Just assume, for now, that the DART collections for the state involved the same dollars collected for the city, and only count them once.

Without that Dallas number, the state owed Texas Instruments $96.7 million, in addition to the $31.3 million owed the company by the cities and DART. That means the state refunded TI at least $128.0 million, then went to the four local governments to get their share of the refund.

Sometimes you luck out. It happened to us in late June, when we pointed out a handful of congressional districts likely to change as a result of the U.S. Supreme Court's decision on Texas congressional maps. Our luck was borrowed — we conferred with smart people before writing "Five to Watch." In that article, we said the districts occupied by U.S. Reps. Henry Bonilla, R-San Antonio, Henry Cuellar, D-Laredo, Lloyd Doggett, D-Austin, Ruben Hinojosa, D-Mercedes, and Lamar Smith, R-San Antonio, were most likely to be redrawn in the courts. That turned out to be on the mark. The judges' order says candidates can file by August 25 to run in special elections in those five districts that'll be held on November 7, along with the general elections already set for that date. Those are open elections, with the possibility that more than one candidate from each party will show up, along with independents and third-party folk. Runoffs, if needed, would follow a month or so later. • Of the five, Bonilla, in CD-23, is most threatened by the map that came from a three-judge federal panel, but it would go too far to say he's cooked. It'll depend on the opponent, money, etc. His new district has a higher percentage of voting age Latinos, which answers the specific issue raised by the U.S. Supreme Court when they said the old map was illegal. It's also less Republican. In the 2002 gubernatorial year, Republicans got an average of 56.8 percent of the vote in his old district. Those same candidates in that same year got 49.3 percent of the votes in his new district. He added voters in his home of Bexar County, but lost Bandera, Kendall, Kerr, Real, and Webb counties. • Cuellar's CD-28 now includes all of Webb County, less of Bexar County, loses Comal and Hays, and adds Jim Hogg, Starr and part of Hidalgo counties. His territory is slightly more Democratic in gubernatorial years; his old district voted 58.9 percent Democratic in 2002 statewide races and the new one voted 63.4 percent. • Doggett, who would have been paired with Smith in the state's map, has his own district and it no longer connects Austin with the U.S.-Mexico border. It's significantly less Hispanic, and less Democratic than his current district. Democrats in statewide contests got 52.9 percent of the votes in 2002 in his new district, as against 69.8 percent in the old one. We've already heard speculation about whether a more conservative Democrat could mount a credible challenge in 2008. He lost the southern end of his district and got more of Travis County and some counties west of it. Drop Duval, Hidalgo, Jim Hogg, Karnes, Live Oak, and Starr. Add some or all of Bastrop, Colorado, Fayette, Hays, and Lavaca. • Hinojosa, in CD-15, won't visit four counties in his old district: Bastrop, Colorado, Fayette, and Lavaca. And he'll be adding three: Duval, Karnes, and Live Oak. The percentage of Latino voters in his district rises to 73 percent, and the new map is more Democratic than the old one; in the last gubernatorial election year, 2002, statewide Democrats got an average of 55.7 percent in his old district. In the new map, the Democratic percentage that year was 61.3. • Smith's district no longer will include Hays County, and has less of Travis. But he adds turf in Bexar and Comal, and picks up Bandera, Kendall, Kerr, and Real counties. Prefer a graphic look? See below or look in our Files section. The new congressional map The old congressional map

We have hold of a pollster's memo from Democrat Chris Bell's campaign and we'll start this by sharing two rules we like to follow when we get our mitts on such a thing, for whatever reason and from whatever source.1. Take it with a grain of salt. 2. Hurry up and read it. Bell's pollsters have Gov. Rick Perry at 38 percent, Bell at 18, Carole Keeton Strayhorn at 16, Kinky Friedman at 11 percent, and libertarian James Werner at one percent. What's more, they say everybody but Bell (and Werner) are dropping. Strayhorn dropped in every demographic, they say, "including her vaunted 'Grandma' demographic." She's running fourth in Austin, according to the Democrat's pollsters. Voters who've seen Bell's ads have him in a tie with Perry. Almost three in five give Perry a negative rating. Two in five, they say, give Friedman a negative rating. And they have some grains of salt of their own, pointing out that liberals and some Democrats are "tossing wasted votes to Strayhorn and Friedman." Perry himself, the pollsters say, "wins 17 percent of Anglo liberals." They close with a variation on what Bell's been telling Democrats since their state convention — that if they stick together and vote, they'll have the numbers to beat Perry. There's a money pitch in there, too, which addresses Bell's biggest hurdle at the moment. That campaign is running well behind Perry and Strayhorn in the finance department. The memo notes the "discouraged Democrats" in the donor community and suggests they're ignoring a change to knock off the incumbent.

Kay Bailey Hutchison told a couple of reporters in Austin that she'll debate Barbara Ann Radnofsky, but only once. That's a mirror of Gov. Rick Perry's acceptance of a debate in Dallas set for several weeks from now. He'll do it, but that's it. Perry's got the easier gig: More candidates on the dais means the time will fly. In an hour, each of the four candidates will get 15 minutes or less, and that'll be that. Three Senate candidates given an hour would split the clock into 20 minute segments.

No date has been set for the Senate candidates. The gubernatorial candidates will meet on October 6 in Dallas — that's the Friday night before the Texas-OU game, if you haven't got your calendar handy. Libertarian James Werner won't get in; the debate supervisors apparently think his visible support is too small to merit including him. The challengers in both races want more than one debate; the incumbents want to limit their exposure.

• The Financial Accounting Standards Board says the state's new business tax is, as far as accounting is concerned, an income tax. That's maddening to state officeholders who got it passed earlier in the year, which is fun, and it continues a war of definitions that began in the early 1990s when the current state franchise tax was enacted. It has an income component, too. This is safe: Neither is a tax on bottom-line income, and both can be owed by companies that have net losses in a given year. But the FASB pronouncement opens the door for political shots at the new tax.

Kinky Friedman wants Travis County prosecutors to investigate whether Comptroller Carole Keeton Strayhorn has used state employees or equipment to generate materials for her campaign. The official answer to these things is generally, "After the elections." Friedman's letter to District Attorney Ronnie Earle followed news reports about state-generated work finding its way into Strayhorn's political talks.

Gov. Rick Perry's campaign, meanwhile, generated a video that attacks Strayhorn for some of the same things, adding an allegation that she took a ride in a state vehicle to a campaign event. You can view it at www.rickperry.org/cks/OfficialBusiness.wmv. The comptroller's campaign, in response, said she hasn't abused state resources. They're not sure she took a state vehicle to the event in question, but say that if she did, "it's because she was doing state business on the way." That's known as spin, friends.

The two-and-a-half minute video itself is a curiosity; in showing that Strayhorn was making a political speech, the Perry camp left in a lot of her words. Blasting the Perry campaign.

• Here's a rule of thumb from the world of political spin: If it's good news, it comes from the officeholder/candidate. If not, not. Attorney General Greg Abbott's office argued for bigger redistricting changes that the federal panel was willing to draw. They didn't lose, exactly, but didn't win, either. And when it was over, the final statement came from... Jerry Strickland, who works in Abbott's press office.

• The newest Rasmussen poll has Gov. Rick Perry at 35 percent — that's apparently a low point in that particular survey — followed by Chris Bell, Carole Keeton Strayhorn, and Kinky Friedman all at 18 percent. That's a five-point gain for Bell, a small slip for the others, and a continuation of the trend in most of these polls; the three challengers are still splitting the anti-Perry vote into more or less equal shares.

Karl Rove is the draw for a funder for the Associated Republicans of Texas, a group that knew him when. And the names on the invitations include all but a couple of the state's non-judicial statewide officeholders. The cheap seats are $200; tables go all the way up to $25,000 for ten. That's a Saturday night deal.

• From a Republican whose name you know comes an idea to get Tom DeLay off the ballot in a way that Republicans could replace him: Get Gov. Rick Perry to nominate him to a state office that disqualifies him as a congressional candidate. A Democrat whose name you know has a different way to the same end: DeLay would be disqualified and could be replaced by another Republican on the ballot if he would plead guilty to a pending felony indictment in Travis County.

The state's big newspapers had very different takes on school test scores.Here are headlines from the websites of several Texas daily newspapers — the Fort Worth Star-Telegram, the Dallas Morning News, the San Antonio Express-News, the Austin American Statesman, and the Houston Chronicle — reporting on the recently released results from the Texas Assessment of Knowledge and Skills, or TAKS. 1. "Texas schools make gains in TAKS" 2. "State rankings give 28 percent of public schools two highest marks" 3. "... area schools soar in ratings" 4. "More Texas schools rated unacceptable" 5. "More... schools get top rankings" Obviously, four of those papers like to look at a glass as half full while the other definitely sees it as half empty. From the following information, can you match the headline with the newspaper? There was a dramatic increase in the number of Texas public schools earning the two highest rankings of "recognized" or "exemplary." The increase from 2005 was more than 50 percent, from 2,213 schools last year to 3,380 this year. There was also a slight increase in the number of schools rated "academically unacceptable," from 264 in 2005 to 321 this year. It should also be noted that the requirements for achieving "acceptable" status increased significantly for 2006. According to the Texas Education Agency, less than 5% of Texas' 4.4 million public school students attended a school rated academically unacceptable. Obviously that number must be reduced to 0%. In Dallas County, the Dallas Independent School District maintained its academically acceptable rating while the Richardson district received a recognized rating and the Highland Park district was rated exemplary. The DISD had 80 schools rated recognized or exemplary, an increase of 31 from the previous year. In a recent Newsweek survey, DISD had two high schools ranked among the top ten in the country. DISD's Talented and Gifted Magnet was ranked number one, and its Science and Engineering Magnet came in at number eight. In Bexar County, which includes San Antonio, twenty-one campuses were rated exemplary compared to just one in 2005. North East and Northside ISD's each earned recognized ratings. North East, which had four campuses rated unacceptable in 2005, had none in that category this year and had 31 schools rated recognized. Houston ISD, the state's largest district, more than doubled its recognized and exemplary schools. The district had 14 exemplary campuses compared to only 6 the year before and 61 recognized campuses compared to the previous year's 29. HISD's number of unacceptable campuses increased slightly from 31 to 33. Austin area districts also contributed to the list of high-performing schools. AISD had 6 exemplary campuses, 2 more than last year, and 23 recognized schools compared to 17 in 2005. Round Rock ISD had 70% of its campuses rated recognized or exemplary. The Fort Worth Independent School District more than doubled its number of recognized and exemplary schools from the previous year, going from fourteen in 2005 to thirty-two this year. How do the headlines match up with their respective papers? 1. "Texas schools make gains in TAKS" — Fort Worth Star-Telegram 2. "State rankings give 28 percent of public schools two highest marks" — Austin American Statesman 3. "S.A.-area schools soar in ratings" — San Antonio Express News 4. "More Texas schools rated unacceptable" — Dallas Morning News 5. "More HISD schools get top rankings" — Houston Chronicle It doesn't take a Pollyanna to see at least a little improvement in academic performance by Texas school children. Why does the Dallas Morning News choose to see the glass as half empty? Hopefully, any business executive thinking of relocating to Texas missed the Dallas Morning News' enticement.

Ken Zornes is a former Dallas ISD board member who now lives in Austin. You can reach him at kzornes13@hotmail.com.

Texas Weekly's Soapbox is a venue for opinions, spins, alternate takes, and other interesting stuff sent in by readers and others. We moderate submissions to keep crazy people out, and anonymous commentary is ineligible. Readers can respond (through the moderator) to things posted here. Got something to submit? We're interested in everything from full-blown opinion pieces to short bits to observations or tidbits that have escaped us and the mass media. One rule: Your name goes on your words. Call or send an email: Ross Ramsey, Editor, Texas Weekly, 512/288-6598, ramsey@texasweekly.com.

The poll of the minute has U.S. Sen. Kay Bailey Hutchison leading Democratic challenger Barbara Ann Radnofsky by 30 points. Rasmussen Reports has the Republican at 61 percent and Radnofsky at 31 percent. That's a survey of 500 voters done August 3. Hutchison's better known than her opponent, and has higher favorable ratings with voters (43 percent vs. 8 percent). A July poll by Rasmussen had Hutchison ahead by 27 percentage points.

Political People and their Moves

The Texas GOP can't replace Tom DeLay on the November ballot, according to the 5th U.S. Court of Appeals.Three judges from that court agreed with federal judge Sam Sparks of Austin: DeLay can't be replaced with another candidate unless he's ineligible on Election Day. They ruled after this week's newsletter went to bed. The opinion, in full, is in the Files section of the website (click on Files in the bar at the top of the screen). Texas Democrats crowed over the ruling. In a written statement, Republican Party of Texas Chair Tina Benkiser said the GOP will appeal the ruling to the U.S. Supreme Court. UPDATE: The U.S. Supreme Court won't hear the appeal. Justice Antonin Scalia turned it down, leaving in place the ruling of the 5th Circuit. DeLay can take his name off of the ballot, but the GOP doesn't have the constitutional grounds to replace him with another candidate. Another candidate can mount a write-in campaign and try to win that way. Or DeLay can mount a real campaign, hoping to prevail over Democrat Nick Lampson. If DeLay could win that contest, he could always refuse to serve, setting up a special election that might be more agreeable to a fresh Republican face. But Lampson's the best-known candidate still in the race without any flies on him. DeLay wanted off the ballot for fear that his own political troubles could hurt him and other Republican candidates.

Tom DeLay's former mayor is running for the former House majority leader's seat in Congress. Update: He won't be alone.

Sugar Land Mayor David Wallace will run a write-in campaign, hoping to best Democrat Nick Lampson in November.

He'll be joined in that contest by Houston City Council member Shelley Sekula-Gibbs, who announced she'll also pursue a write-in effort.

That's daunting, at the least. They must to file with the Texas Secretary of State by August 29, either paying a $3,125 filing fee or submitting the signatures of 500 bona fide registered voters in the district on petitions by that same date. The names of eligible write-in candidates are posted at polling places and in the booths where people vote. As for misspellings and such, the election judges count anything if the voter's intention in clear. "M. Mouse" would likely count as a vote for Mickey Mouse, if he'd paid his fee, and so on.  

The write-in door is open to almost anyone. It's not open, however, to candidates who ran in the primaries and lost. That rules out three Republicans who ran against DeLay in March.

Steve Stockman, a former congressman who tried to get enough signatures to get on the ballot as an independent earlier this year — when DeLay was still in the hunt — apparently remains eligible as a write-in candidate. If he can get the signatures or the money together by August 29, he can get on the ballot.

Two House members — Reps. Charlie Howard, R-Sugar Land, and Robert Talton, R-Pasadena — were interested in taking DeLay's spot on the ballot. A spokesman for Texas Secretary of State Roger Williams said initially that candidates on the ballot for other offices would have to drop out of those races to file as write-in candidates in CD-22.

But lawyers for the SOS are taking another look at that issue.

If the SOS rules to their advantage, they'd be able to run as write-ins while also seeking reelection to the jobs they have now. Otherwise, they'd have to give up their reelection races to get into the congressional contest.

David Weber, until now the special counsel for policy development at the Texas Department of Insurance and before than an aide to House Speaker Tom Craddick, signed on with Gardere Wynne Sewell in that firm's legislative and regulatory affairs shop.

Brian Todd Hoyle of Longview will join the 12th Court of Appeals for the rest of the year (until the elections). He was in private practice until Gov. Rick Perry tapped him for that spot. Diane DeVasto left the court to go into private practice, and Hoyle's got her spot.

The Texas Apartment Association named Wendy Wilson their new general counsel; she's been general counsel for state Sen. John Carona, R-Dallas. And David Mintz, the outfit's chief lobbyist, will remain there but is also taking on new clients, starting with the Texas Institute of Building Design.

John O'Brien, the acting head of the Legislative Budget Board, is the new president of the National Association of Legislative Fiscal Officers, or will be next week when that group convenes.

Sen. Jeff Wentworth, R-San Antonio, is the new vice chairman of the Southern Legislative Conference, a group of lawmakers from 16 southern states.