Vol 15, Issue 35 Print Issue

The Parlous Piñata Position

You have to take a deep breath to recite the full name of the newest organization in town: Gov. George W. Bush Presidential Exploratory Committee, Inc. It is up and running, with faxes and phones and all that stuff. Also well underway is the phase where the candidate gets fawning magazine, newspaper and television stories — the media equivalent of hanging up a piñata before the big party. It's nice, big, eye-catching, room-dominating, and the bats will come out as soon as everyone arrives.

Those bats usually are provided by other campaigns, which haven't really ginned up their opposition machinery yet, at least not visibly. That's the part Bush hopes to avoid, temporarily, by staying in Austin and worrying over state business.

This is also a period of crazy polling results. Every week features a new survey of the opinions of people who haven't really formed their opinions about Bush yet. One of the thinnest — and we're picking on them simply to illustrate the point — comes from Fortune Magazine, which is touting a poll of chief executive officers that puts Bush way out in front of other Republican candidates and wannabes. The governor may well be the most popular item since sliced bread, and might very well be the favorite of the vast number of America's chief executives, but don't rely on the Fortune poll for proof. The magazine talked to a grand total of 106 CEOs to get the result. So when they write — as they do — that 68 percent of CEOs prefer Bush to others on the GOP side of the line, they're actually saying 72 of the people they talked to prefer him to the others.

Now that you know the contents of the box, here are the results: Bush, 68 percent; Elizabeth Dole, 8 percent; Steve Forbes, Dan Quayle, and John McCain, three percent each. In a head-to-head with Vice President Al Gore, Bush got the support of 91 of the 106 chief executives. In the accompanying article, that magazine says flatly: "Barring a blunder that derails him, Bush has no real competition for the Republican nomination." Whew! Oddly, the same article predicts Bush will have problems meeting everyone's high expectations for him. That's the piñata part.

A New Political Medium — Free, But Tricky


Internet sites and email and tools that belonged only to nerds, engineers and hobbyists just a couple of years ago have all been added to the political arsenals. A little-noticed sidebar to Bush's formal exploration announcement was that the proceedings could be seen live on the Internet.

Political folk have been talking for a few years about how they use the Internet in their campaigns, but nobody has really figured out how to do it effectively. In fact, a lot of what's been said in the past was said to calm down the noisy promoters of the new medium, mostly males who don't get enough sunlight. But this is no longer a place populated by people of pallor. Regular folks use the Internet now and it costs nothing to talk to them if you can figure out how to do it. That's the stumbling block. For instance, if you bungle the online equivalent of a direct mail campaign, you get your head handed to you for "spamming" the audience you hoped to attract. One work-around that does work — and which could be effective in a national campaign — is to gin up a list of email supporters by having them come to the campaign and ask. Some commercial firms have been successful in publicizing their Web sites and asking visitors whether they'd like to get news and other info from the organization. They can quickly build mailing lists of people with a proven interest.

Bush is well aware of the new medium: A question about whether he'll use the medium was one of the few inquiries the governor answered in detail when he first announced exploratory plans.

Charter Schools & Vouchers: Two of a Kind?

We've encountered considerable disagreement on this, but some of the folks watching public education see the lines between charter schools and vouchers disappearing, or at least blurring. With a couple of important distinctions, it's becoming harder to tell them apart.

On paper, charter schools are public schools with one distinguishing characteristic: They're not owned by the public school system. Vouchers, on the other hand, would allow parents to send their kids to private schools and use public school money to pay the tuition. Vouchers would tend to go to existing private schools, while charters are schools that come into existence only with state approval.

Rep. Mike Krusee, R-Round Rock, sees the differences as relatively small. Krusee is one of a half-dozen House members who serve on the boards of various charter schools (He's on four). He's also the sponsor of legislation that would abolish state limits on the numbers of such schools, sees both charters and vouchers as ways to introduce competition into public schools. And both involve private entities. His schools, for instance, are all non-profit organizations that are chartered by the state. But the non-profits contract with an outside firm that comes in and actually runs the schools rather than operating the schools themselves. Another wall that's coming down involves size. Most charter schools are pretty small. Krusee and others are pushing charter schools that have campuses the size of normal public school campuses, with equivalent numbers of students.

Some important differences remain. Krusee notes that charter schools can't teach religion, while churches run many private schools. Schools that accept vouchers would be more accountable to the state in than earlier proposals. Voucher schools, as proposed by Gov. George W. Bush, Krusee, and Sen. Teel Bivins, R-Amarillo, would have to administer standardized tests to measure the progress of their students against students in public schools. But charter schools have to supply the state with the same detailed stream of information about students and teachers that public schools supply, and they're bound to public school curriculum and graduation requirements.


Property Values and Public Schools Revisited

The Equity Center does, in fact, want the state to patch up its property value studies to help out school districts with declining values, but we overstated their enthusiasm in our item on that subject last week. Their particular gripe is that districts with declining property values are more hurt than most by the state's use of year-old property values in its funding formulas.

The state figures what a district will raise from its own taxes before it figures how much Texas will send that district. The property values used in those formulas are from the previous year. In stable times, that doesn't matter. And if a district's property values are rising rapidly, it actually works to the district's advantage (they raise more money locally than the state figures, and they get their state aid based on the previous year's lower numbers, which means more state aid). Districts with declining values get hit on the head, however. Since their current property is worth less than the state assumes, they raise less money than the state assumes. The state pays its aid on the assumption that local taxes are bringing in more money than is actually the case. Craig Foster et al at the Equity Center want the state to use current values for those districts, which would cost $40 million to $60 million annually.

That said, they're not pushing for the state to pull all districts up to current year values. Numbers on that are hard to come by. But we talked to some folks about it and they estimate it would cost less (to the state) to bring all of the districts up to the current year values than it would cost to just take care of those districts with declining values. But the same thing that makes that first option cheaper also makes for gnarly politics: Using current values would send more state money to districts with declining values, but would send far less to districts with rising property values. The state would come out better, but districts with stable enrollment and rising property values would get whacked.

An Emergency Response Within Just 58 Days

The session's two emergency bills finally got to the House floor and finally passed, which means there was finally a House calendar. And now that the bill-filing deadline has whistled by and there are 80 days left, it is safe, finally, to say that the legislative session has started.

Money and the state budget haven't seen much ink of late, but that will change as soon as House Appropriations and Senate Finance finish up their spending plans. Once that's done, legislators will know exactly how much money is on the table for tax cuts and new programs and such.

Then the game will begin: The spending discussion, held at the intersection of state and presidential politics, could define this session. Gov. George W. Bush long ago laid out his plans for the extra money, saying the state should put some of it into education, where it could be used for things like teacher pay raises, and into cuts in state and local taxes. Senate Democrats have staked a claim, outlining what they call a "Kids First" agenda that would put tax cuts behind teacher pay raises, student remediation and retention programs, college scholarships, and children's medical care.

The Senate version of the oil severance tax moratorium — the noisier of the two emergency bills — got out of the House unscathed after a little drama in committee and an unsuccessful attempt on the floor to amend away any benefits to big oil companies. The final bill gives $45 million in relief to owners of wells that produce less than 15 barrels a day. The deal's good only for the rest of this fiscal year, and the tax break applies only while oil prices are below $15 per barrel.

An ill-fated committee substitute would have extended the tax break through the next biennium, and now that the emergency bill has passed, some members would like to pursue the longer-term idea. They are logically stuck, however. One faction, which at last check included the state comptroller's office, takes the line that oil prices will recover by late summer. If that proves to be true, there's no need for a moratorium on severance taxes. And if prices recover, any bill passed now to give a break to oil folk in hard times would have zero cost, since the low prices are what triggers the relief. Supporters of an ongoing relief package use that logic to show that extending the moratorium would have no cost to the state. But, but, but, but.... If the price is going to be higher, where's the need for relief? The number-crunchers say that if prices remained below that $15 per barrel trigger for two years, and if the state extended the moratorium, the price tag would be in the $300 million range.

Dastardly Plotting and Ethical Hair-Splitting

Just because you're paranoid doesn't mean you're wrong: One theory moving about the Pink Building had the Democrats plotting to chisel away at the governor's plans for the budget surplus by tripling the size of his oil tax break. We couldn't find a fish to take that bait, but the fact is that the oil lobby stuck with its original deal with the governor, ignoring a substitute offered in House committee which would have made the deal worth $154 million over the next two years.

At one point in the House jousting over the oil severance tax moratorium, the sponsor, Rep. Tom Craddick, R-Midland, said several members had asked him whether he has any interests in oil and gas wells that might be affected. Yup, he said, and so do several other members. And he said some of them had asked the Texas Ethics Commission whether that presented any legal problems for members who might want to vote on the bill. And he said the answer was "No, no problem."

Here's a run-down. The state constitution requires members to disclose their personal and private interests in particular bills, and to refrain from voting on those. Interpretation of that provision is left to the state's attorney general. The Ethics Commission interprets laws, and the law on this is worded differently from the Constitution. The operative statute prevents members from voting on bills that directly benefit specific business transactions of business entities in which those members have controlling interests. A controlling interest is taken to be ownership of more than 10 percent of a business, membership on the board, or employment as an officer.

Without knowing all of the details, it's impossible to know who is affected and how they are affected. When the issue was up for a vote in the Senate, four of the 31 senators declined to vote.

Another Notch in the Sun Belt

The U.S. Census Bureau already predicted Texas will have more than 20 million residents by mid-summer. And new figures put some Texas locales among the top ten in growth nationally. Take notes, because this is probably going to be a question in some future version of Trivial Pursuit.

The U.S. has 3,142 counties. Of those, 2,426 have more than 10,000 residents. And of those, two of the fastest growing in the country are in Texas: Collin, north of Dallas, which grew 6.9 percent from 1997 to 1998, thus ranking fifth in the U.S.; and Williamson, north of Austin, which grew 6.2 percent over that time period and ranked ninth nationally. (Georgia had four counties in the top ten and Colorado, like Texas, had two. Forsyth County, near Atlanta, grew 13 percent.)

When you ignore percentage gains and look at sheer numbers, Texas got three counties into the nation's top ten in growth over that one-year period. Harris County (Houston) added 52,953 residents, ranking fifth in the country. Dallas County ranked ninth, with 30,245 new bodies, and Tarrant County (Fort Worth) ranked tenth, with 29,229 new residents. (Los Angeles added 97,027 residents and ranked first; California had four entries on the fast-growth list.)

The top ten counties on both growth lists were all in the Western or Southern U.S., and all were in or near metropolitan areas.

Two Numbers Control This: $26 Million and .08

Back-to-back, literally, on the fax machine last week: 1) A press release from the American Beverage Institute proclaiming that lower blood alcohol limits do not translate to fewer drunk drivers, and 2) a press release from Gov. Bush's office saying he supports lowering the alcohol limits to make streets safer. Both pieces of paper landed during an emotional press conference at the Capitol in which people affected by drunk drivers told their stories.

ABI's press release says the new limit would make it illegal for a 120-pound woman to finish two glasses of wine in two hours before getting behind the wheel. That group says the lower limits unfairly target social drinkers. But they've got an uphill fight: The .08 limit is at the top of the agenda for Mothers Against Drunk Drivers, and few legislators have vocally opposed it. That said, some lawmakers, notably Sen. Eddie Lucio, D-Brownsville, (who killed the lower limit bill last session) say the state should concentrate on tougher penalties for people with higher blood-alcohol levels.

So it goes on the war's PR front. Another factor driving this issue is that the state has to lower the blood alcohol limit to keep federal highway dollars from being diverted to safety programs, the result of a federal mandate to force states to crack down on drinking and driving. The amount in question totals $26 million. The money would still come to the state, but would be directed specifically to safety programs, as opposed to other highway and transportation spending.

Political Declarations and Explorations

The pending retirement of U.S. Rep. Bill Archer, R-Houston, has brought another candidate out of the woodwork. Houston businessman Peter Wareing, who is a native of the district, says he'll run for the job. Wareing was a co-founder of Lone Star Overnight and has been involved in banking and oil and gas ventures. One of his opponents in the primary will be state Rep. John Culberson, R-Houston, who has had his eye on that seat for quite some time.

Wareing isn't the only Houstonian considering politics. John Poindexter, a 54-year-old Houston businessman with ties to West Texas, is considering a run against U.S. Rep. Henry Bonilla, R-San Antonio. He's got Veroga & Rice, a Houston-based political consulting firm, looking at Bonilla's voting record, at the district's voting histories, and at his own past to decide whether he should challenge the incumbent. Poindexter says he'll have an idea sometime next month whether he should pursue the idea or drop it. His business, J.B. Poindexter and Company, makes truck bodies, oilfield equipment, packaging materials and caps for pickup trucks. Bonilla is doing some exploring, too, but not on his own behalf: He's one of the people on Gov. Bush's presidential exploratory committee.

Electric Avenue

An old joke: A veterinarian and a taxidermist go into business together. Their sign says simply, "Either Way, You Get Your Dog Back." Consumer groups say that logic could be applied to the latest version of the Senate's electric industry deregulation bill, which would allow some electric companies to recover the costs of expensive plants at the same time it would allow others to charge higher-than-market rates for low-cost plants.

The current version of the Senate's electric industry deregulation bill — like most legislative proposals made in the last two or three years — allows electric companies to recover what they call "stranded costs." Those costs are the difference between what the companies have invested in plant and equipment, and what that plant and equipment would be worth in a competitive or semi-competitive marketplace. The companies want to recover those investments before their service areas are fully opened to competitors.

The utilities contend — and many legislators and other state officials seem to agree — that the company shareholders should not be forced to take big losses just because of legislative changes in the way the industry operates. They note that the high-cost plants were built under the watchful eyes of regulators and say the state made a deal, in effect, to allow the companies to recover their investments. Most proposed legislation would protect the utilities from being low-balled by competitors who don't have the disadvantage of those old, higher-cost plants.

The Senate version of electric dereg allows those companies to recover, but goes a step further. It would allow utilities that didn't build high-cost plants to keep their costs up as their markets are opened to competition. The short form: A company that built a high-cost nuke can keep rates up until it recovers the costs above market price of that nuke. Conversely, a company that kept costs down below market levels would be allowed to charge customers at the market rate, realizing a tidy profit for their good decision back in the plant-building days.

Consumer groups are crying foul, calling this a "Heads you win, tails I lose" deal. But lawmakers who support the idea say it's fair. The companies with stranded costs shouldn't be punished for doing what regulators allowed them to do, since regulation was set up in the first place to simulate competitive forces. And the companies that came out on the other side? Those lawmakers say those companies should be allowed to keep the fruits of their good decision-making.

Random News and Stray Items

Last week's quickie hearing on the legality of eight-liners happened at a good time for the operators of those machines. Sen. David Sibley, R-Waco, zipped legislation to a committee and suspended the rules to allow a hearing the next morning. As it happens, the Amusement and Music Operators of Texas — those are the folks who operate a lot of these machines — were in Austin for their convention. The bill's still pending, and here, in a nutshell, is what this is about: AMOT contends its members' machines are legal because the prizes offered are so small. They say, for instance, that the same machines would be illegal under the state's gambling laws if the prizes were bigger. And they've formed a group called Fair Amusement Industry Regulation, or FAIR, to argue their side. Sibley, on the other hand, headed an interim team that did a report on gambling in Texas. They concluded that eight-liners are illegal, and his bill aims to clearly outlaw them.

ï These things happen, and from our fun-loving standpoint, thank the Lord they do: The governor's potential campaign put out a press release saying his official announcement — the one the national press was allowed to cover — would be broadcast live on the Internet. But the release went out five hours after the event was over. And the balancing faux pas? Vice President Al Gore sent a "Stand by my side" letter to one George W. Bush of Austin, Texas.

ï Sibley pulls off a hat trick with legislation creating investment tax credits and giving franchise tax breaks for research and development and for certain kinds of job creation. The job and ITC breaks are targeted to distressed areas, and Sibley starts the process with Border lawmakers on his side.

Political People and Their Moves

Does this sound explorational to you? Karl Rove quietly sold his 18-year-old political consulting and direct mail business at the end of February to give his full time to his main client, one George W. Bush. The buyers are Todd Olsen, a political consultant who used to work for Rove, and Ted Delisi, who is currently the chief spokesman for Attorney General John Cornyn. Rep. Dianne Delisi, R-Temple, is Ted's mom; his wife is on Lt. Gov. Rick Perry's staff. Neither will be involved in the political business. Rove's "cultural" business — work he's done for years for arts and non-profit clients — is going to Mae Daniller, formerly of the National Wildflower Center. Two things will not go to the new owners: They can't use Rove's name on the business, and they can't have the phone number he's spent so many years getting into so many Rolodexes. Both Olsen and Delisi will stay at their current gigs until at least the end of the session. When they take over Rove's operation, they'll concentrate on direct mail... Mark McKinnon, the former Democratic consultant who did Bush's television ads during the last gubernatorial campaign, will soon go on leave (again) from Public Strategies Inc. to work for the Bush campaign... Other names have started to float around in Bush presidential chitchat: David Beckwith, former press secretary to Dan Quayle (and known to Texans as the spokesman for U.S. Sen. Kay Bailey Hutchison) is signing on, and Joe Albaugh, the governor's chief of staff, will go the campaign at the end of the session... Former U.S. Speaker of the House Jim Wright, a Fort Worth Democrat, will have part of his jaw removed for cancer... Deanna Rodriguez, Entergy's Austin lobbyist, will soon move to New Orleans as the company's new vice president of corporate contributions... Bush re-appointed two members of the Texas Turnpike Authority. Returning, if the Senate says okay, will be Sam Barshop of San Antonio, and Alan Johnson of Harlingen.

Quotes of the Week

From Gov. George W. Bush, on his current temperature: "I've gone from warming to the task to getting pretty hot."

From Rep. Tony Goolsby, R-Dallas, on legislation that would make it easier for adopted children to find their birth parents: "You might save a life. Would it be painful? Probably. This would certainly prove to be an imposition on some people, but I don't know of any laws that please everybody."

From Heidi Cox, general counsel to the Edna Gladney Center, a Fort Worth adoption agency, on the same legislation: "People have told me that if abortion is the only confidential choice they have, that is the choice they will make."

From former Lt. Gov. Bob Bullock, on Bush's chances of delivering the package of goodies he laid out for voters: "Everybody talks about the tax cuts. If he gets any tax cut, he'll be fortunate."

From Rep. Robert Talton, R-Sugar Land, on legislation to end race and gender preferences in state hiring, contracting and college admissions: "I would be surprised if we get a hearing. But we have to start the debate somewhere."

From state education commissioner Mike Moses, on financial problems in an unnamed handful of charter schools: "What really bothers me is when we send them money and their teachers write me letters and tell me they haven't been paid."

From Pam Hatcher, owner of an historic home in Plano, on a proposed state law that would exempt religious organizations from some zoning and historic preservation laws: "We're afraid of what this law could do in neighborhoods if there are no restrictions about where churches can locate."

From Martin Wickliff, a Texas Southern University regent, on being told by a state auditor that TSU's financial reports could be ugly: "We want integrity or else our heads are in the sand. I don't have a problem with it being bad news as long as it's accurate news."

From Irma Zandl, president of a research company in New York, on the shift in advertising to focus on teens: "Baby boomers are over. Time to get over it. Youth has won — it always wins."

Texas Weekly, Volume 15, Issue 35, 15 March 1999. Copyright 1999 by Printing Production Systems, Inc. All Rights Reserved. Reproduction in whole or in part without written permission from the publisher is prohibited.