Winning and Losing, Simultaneously

High gas prices cost the state money, but pump a huge windfall into the treasury, too.

Record high gas prices force government agencies to cope with rising costs of transportation, utilities and other necessary expenditures. But revenue from royalties and taxes has greatly increased, too. The result is a mixture of concern, "green" creativity, and a huge wad of new cash in the state's pocket.

Rising oil and gas royalties have provided a huge boost to state revenue. Oil royalties have grown by 60 percent and raised $33.8 million more than in the previous fiscal year, while gas royalties have gone up 30 percent, with a revenue increase of $36 million. That's $69.8 million extra that the state has received this fiscal year.

Even greater is the amount of revenue the state has received from oil production and natural gas taxes. The Comptroller predicted in 2007 that oil production taxes would raise about $1.6 billion for the biennium, but that was based on oil at the (now) bargain price of $58 a barrel. So far this fiscal year (through May), the tax has brought in $961 million, and if it stays at its current rate, it could bring in $2.56 billion for the biennium — $963 million more than was projected.

The natural gas tax has produced a hefty $1.78 billion over the past nine months, a 29 percent increase over the same time period in 2007. The tax, if it remains at its same rate, could bring in $4.76 billion for the biennium.

If prices hold, the state budget could gain an unexpected $2.17 billion bonus during this two-year budget cycle.

But this isn't all about billion-dollar gains. The state spends a fair amount buying gas as well, and government agencies have been "feeling the crunch" as the costs of transportation, utilities, mileage and other energy expenditures have been steadily increasing.

TxDOT, which operates quite a few vehicles, has seen average regular fuel costs increase to $3.80 from $2.29 in the past year, while its average diesel costs have gone to $4.18 from $2.36. TxDOT seems more concerned about the growing cost of materials like petroleum-based asphalt and concrete, whose prices have risen 60 percent in the past two years.

"We have been adjusting our budget as more has been eaten up by transportation project costs," said Mark Cross of TxDOT.

To deal with the construction supply costs that are devouring their budget, TxDOT has been conducting meetings and employee trainings by teleconference, in an effort to reduce the high cost of transportation and mileage.

Compared to costs in 2004, fuel expenses for Texas Parks and Wildlife's Fuel nine divisions (which include Wildlife and game warden departments) have increased by 68.2 percent, while natural gas costs have risen 47.7 percent.

"We've had to look very carefully at creative ways to costs," Texas Parks and Wildlife's Tom Harvey said.

In an effort to "creatively" manage growing expenditures, TDPW has created a "Green Team," which sends email recommendations to employees about recycling and conserving energy. Last week, TDPW announced plans to create an Energy Conservation Strategy.

However, Harvey acknowledges that high energy costs are not really affecting the agency’s performance.

"To my knowledge, escalating costs are a serious concern, but they haven't undermined our basic mission,” Harvey said. "I am nervous about continuing to ignore rising fuel costs."

The Texas Department of Public Safety is also feeling the heat of rising fuel costs. The bulk of its energy expenses are spent on fueling patrol cars and Tela Mange of the DPS acknowledges that despite rising fuel costs, plenty of citizens are "still speeding."

The DPS received $7.18 million for fuel for the fiscal year, but by the end of this April had already spent $8.5 million. To cover rising fuel costs, the DPS has been compensating by not filling its employee vacancies.

"We just wish people would slow down," Mange said.

— by Hannah Lewis

The Court of Judicial Opinion

State Sen. Kim Brimer is suing to knock his Democratic challenger, Wendy Davis, off the ballot. A group of firefighters tried the same challenge earlier this year — saying Davis didn't resign from the Fort Worth City Council in time to qualify for a Senate race. They were tossed out when judges said they didn't have proper legal standing to sue.

Now Brimer is suing in state district court in Tarrant County, making essentially the same charges the firefighters made — that Davis isn't eligible to challenge him. A copy of his lawsuit is available in our Files section. In it, he names Davis and the chairs of the Tarrant and Texas Democratic Parties, respectively.

Davis' campaign dismissed the Independence Eve filing as a political ploy by an incumbent trying to get out of a tough race.

"This is the same baseless claim that has been tried numerous times in numerous forums," said Matt Latham, Davis' campaign manager, in an email. "The truth is that Kim Brimer does not want to have to face the voters at all. He is willing to try every politician's trick in the book, several times over, to avoid answering to the voters for his failed record of leadership. This desperate attempt to distract the voters from the real issues at stake is as transparent as it is wrong."

On Second Thought

Two of the big dogs in Republican money circles — John Nau and Bob Perry, both of Houston — have switched candidates in the SD-17 race. They'll both be supporting former state District Judge Joan Huffman in that special election in November.

Both Nau, a beer distributor, and Perry, a homebuilder, had initially supported Austin Furse III. Furse also has the support of Sen. Kyle Janek, R-Houston, whose mid-term resignation from the Senate opened the seat. A spokesman for Perry said the builder thinks Huffman "will be a very strong candidate and a very good senator." He didn't say what led to Perry's change of heart.

Finance reports from the candidates aren't due until mid-month, though the reporting period ended June 30. Huffman has said she put a "substantial amount" of her own money into her campaign coffers; it's not clear how much Nau and Perry gave to either or both of the two candidates.

Rumors that Texans for Lawsuit Reform have endorsed Huffman aren't true, according to a spokeswoman, who says the group hasn't yet named a favorite in this race.

Candidates have to file by August 29 and the special election will happen on the same day as the general election, November 4. But the field is open to candidates from both parties and unlike the general election, will require a runoff if nobody gets more than 50 percent of the vote.

In addition to Huffman and Furse, Republican Grant Harpold has said he'll be in the race. On the Democratic side, former congressmen and Houston City Council Member Chris Bell is "leaning toward running," but hasn't declared or filed.

Bell's presence is one of the arguing points being used by Huffman's supporters, who contend she's more likely to beat him than any of the other Republicans, including Furse. Another Republican who thought about jumping in — former Rep. Brad Wright — decided not to make the race and is backing Huffman. And some Republicans have accused Janek and his consultant, Allen Blakemore, of trying to anoint the senator's successor, arguing that Furse ought to be rejected on those grounds alone.

One other Democrat's name surfaced in rumors about the seat, but attorney Jim Sharp, who's running for a spot on the 1st Court of Appeals in Houston, says he inquired about the partisan numbers in the district because it overlaps with his own — not because he wants to run for Senate.

• That'll be one of two special elections on November 4. The election to replace the late Rep. Buddy West, R-Odessa, will also be that day, and the filing deadline, set by Gov. Rick Perry, is also the same: August 29. The senator elected that day in SD-17 will serve the remaining two years of Janek's term. The House member elected then will serve only until January, when the winner of the regular election in HD-81 will take the oath of office.

The Landlord Thing

State Rep. Hubert Vo let out a long sigh when asked whether rough publicity over the condition of his East Houston rental properties will damage his chances for re-election in November.

The Houston Democrat has been at the center of stories this year in the Houston Chronicle detailing run-down conditions at apartments he owns across town from his southwest Houston district. Missing balcony railings, rats and exposed electrical wires were among the items a long list of the problems.

"I hope that my constituents will look at the work I have done in the Legislature and the work I have done in the district, and I hope I have the support," he said. "In terms of whether it will hurt my campaign, I don't know."

But his sigh is telling. He knows it could be a huge issue as he battles to keep his seat from Republican challenger Greg Meyers.

Vo's consultant, Kelly Fero, said he thinks voters will forgive the Vietnamese immigrant-turned-millionaire who's earned a reputation as someone who helps the downtrodden. Vo immediately fixed everything the city said was problematic after the stories ran, and then made additional repairs on his own, Fero said.

"People get, well, here's a guy who did the right thing when he was asked to," Fero said. "In the community that supports him in that district, I think they viewed that for what it was — this is a man who did the honorable thing."

But Meyers said the apartment problems speak volumes about Vo. "He's made the issue," Meyers said. "And by him continuing to profess that he's for public safety and quality of life, I think it's somewhat hypocritical."

Republicans think the district is ready to move back into their column. Appropriations Chairman Talmadge Heflin lost to Vo in 2004 by just 33 votes and then by a larger margin in 2006. But Heflin is the only Republican who's lost any race in that district in the last four years, said Matt Welch, who is Meyers' consultant.

"We thought Greg could do it even before this whole apartment thing," Welch said. "We were confident of that even before this gift from the Chronicle that keeps on giving arrived on our doorstep."

You'll hear from Meyers about education. He's a Houston ISD trustee and has two kids in school there. He wants to improve dropout rates, and he said he likes giving families choices about where to send their kids, the way the Houston district does with magnet schools.

He said he's for "creative solutions to educational challenges." He won't go near the word "voucher." And he won't say whether he supports using taxpayer dollars to pay for tuition at private schools.

"Right now, I'm looking at both sides of the fence," Meyers said. "It's not a silver bullet, vouchers, but I'm open to looking at all kinds of solutions."

Meyers said he'll talk about problems he sees with Vo's leadership. He doesn't think Vo has done enough to curb crime in the district, he said.

Meyers, who owns a dental-products business, has taken money from Texans for Lawsuit Reform and said he wants to make sure recent limits on damages and other reforms stay intact. His consultant, Welch, is the former director of the TLR PAC.

Vo will talk about his goal to find ways to lower homeowners' insurance rates. He also wants to tweak the rules of the new business tax so more small businesses would be exempt, he said.

Like his opponent, Vo has an education to-do list. He wants to make it easier to transfer credits among colleges and universities, improve dropout rates and beef up job-training programs.

"We need to retain jobs here, and we need to compete with other countries," Vo said. "And we need to have programs where people who are not college-bound can find job training."

Both candidates have planned summers of grassroots campaigning. Meyers has personally visited 3,500 homes since February and his consultant said he's raised roughly $50,000 so far, including many small-value donations.

Vo said he's had campaigners block-walking and he'll join them later in the campaign. His people were still tallying gifts from a fundraiser on Monday, but expect to report that he's raised somewhere around $70,000 in all.

Heflin, the former lawmaker, said the race will be won by the man who can excite his respective base. "It's one of the top ones for being, I think, ripe for returning to the 'R' category," Heflin said.

Fero agrees. But he doesn't think Meyers and John McCain are going to excite people to get out and vote. Any negative publicity form the apartment snafu could be offset by a bump from Barack Obama, and from Vo's good reputation among Asian-Americans, as well as other communities in the district, Fero said.

"I know that it's very easy for us smart people to sit around in Austin and say, 'Oh my God, he's toast,' and 'How can you overcome these headlines with this apartment thing?'" Fero said. "But those people in the district are very loyal to him."

Welch said Meyers already has support of many in the Asian-American community. He's working to capture voters who want Obama but not Vo.

"I'm not saying we're going get a lot of traditional Democratic support," Welch said. " There's going to be a lot of split-ticket voters and we're hoping to get in there and get to them."

— by Elizabeth Pierson Hernandez

A Familiar Battlefield

Republican State Rep. Tony Goolsby has held onto his District 102 seat for 19 years. His opponent, Carol Kent, wants to pry his fingers off of it.

The Democrats need five seats to take the House back from the GOP. This northern Dallas County district is one they think they can win, and one they probably have to win to take control of the House. Republicans, with a couple of scary elections in the district behind them, think they can hold the seat.

Winning ten election cycles means Goolsby is a household name up there. Kent is, too: She's been a Richardson ISD trustee since 2004 and is also the director of the Baylor University Women's Network. This is her first partisan campaign, but she's well connected politically.

The Democrats say the district's demographics are changing — more minority votes should help them. And there's the familiar argument that Democrats will have a better turnout in November, that Texas Republicans may not be as thrilled about their presidential candidate. Four months out, Kent's supporters are banking on those assumptions, plus they're confident education is heavy on the minds of voters and that her school board experience is an advantage.

From the Republicans: Goolsby and his people are holding onto the raw numbers — HD-102 is still a Republican district. The Republicans aren't convinced that demographics will play to Kent's advantage. They didn't two and four years ago, when Democrats made the same arguments on behalf of a different challenger. Plus, the theory that McCain isn't rallying much Texas support may not hold in Dallas County, where Republican voters learned from their low turnout in the last election. Only three Republican seats in the Texas House have more Democratic voters in them, but Goolsby's last two fights against strong challenges have strengthened his political base.

"He's [Goolsby] not on the offense yet, but he's not sitting back and taking her for granted," says Lena Webb, president of the North Dallas Texas Democratic Women and also Kent's treasurer.

Goolsby says he has to campaign even harder than his opponent — not the usual attitude of an incumbent.

"I just work as hard as I can no matter who my opponent is," says Goolsby. "I consider any opponent scary and difficult. People make fun when we say how important the individual vote is, but we see people who get beat by one or two votes."

In the last two cycles, Goolsby's opponent crept up on him. In 2004, Goolsby only beat Miller by 2,576 votes. In 2006, when voter turnout was at 25,000 in HD-102, he only won by 1,553 votes. Miller was better funded the second time around.

"We're definitely building on Harriet's momentum," says Kent.

It's hard to keep up with Goolsby in the financial arena — he's got about $420,000 in campaign cash at the moment. Goolsby is hooked up with big business — some of his big donors include Texas Friends of Time Warner and the Texas Auto Dealers Association. Kent didn't register and start fundraising until Jan. 2 of this year. But, she says her campaign has exceeded their initial goal already, bringing in just over $160,000 as of June 30 (official reports are due with the Texas Ethics Commission in mid-July).

Democrats think Kent has a lot to her advantage personally, aside from the overall increase in Democratic enthusiasm.

"You have an outstanding candidate with an extraordinary record who's very rooted in the community," says Ed Martin, consultant and former chairman of the Texas Democratic Party. "More and more growth in the minority population in that district and the potential for Democrats to really turnout votes."

Martin adds that Kent's school board experience will resonate in the minds of voters, who he says have seen Republican leadership, "push local schools to the brink. You have districts running deficits everywhere."

The down-ballot issue should really help Kent in this district, which is growing in middle-class African American families, he says.

"Tony Goolsby was worried enough even two years ago to make spurious claims against his opponent," Martin says, in reference to a libel suit brought by Miller against Goolsby and former Dallas County Republican Chairman Kenn George. "He obviously sees he's in trouble."

The lawsuit likely won't be resolved until after the election, and Goolsby's keeping his lips zipped about it for now. He, George and a few other Republicans filed a voter fraud complaint on Miller and she's calling it libel. Martin brought it up, but Kent won't, saying voters are tired of "the usual mud slinging."

The meager GOP voter turnout in 2006, and Goolsby's near loss in 2004, will hyper-motivate Republicans in Dallas this year, according to GOP Chairman Jonathan Neerman.

"We can't take any race for granted," he says. "When you stay home, you're giving your vote to the Democrats, and we saw that firsthand. That's motivated our voters... they've been waiting two years to get back on their feet and vote."

Neerman isn't convinced of a significant shift in the demographics of the district, either. "It's hard to tell if it's really a shift, or just people that were already here coming out to vote now," he says.

Goolsby, however, is convinced. When his kids attended Richardson ISD, he says, it was about 10 percent minority and now it's about 60 percent. Still, consultant Marc DelSignore with Austin-based Baselice & Associates says HD-102 is still a Republican district and will likely stay that way in this race.

"Even with all the caveats, this is still a district that should elect Republicans," DelSignore says. "A lot can change in four months, the presidential process is still unfolding, but I'm more concerned with historical vote trends than what's going on the ground today."

— by Karie Meltzer

Dingus On the Ballot

An Austin judge says Bill Dingus is eligible to run against House Speaker Tom Craddick after all. The Republican Party of Texas sued in federal court to knock Dingus off the ballot, saying he didn't get off the Midland City Council in time to run for the HD-82 spot occupied by Craddick. That fell short, and the Texas Democratic Party sued him — as a friend, see — to make sure he'd be on the ballot. District Judge Margaret Cooper ruled he's eligible, and said along the way that a mention of the issue in a federal judge's opinion on another matter has no weight.

Air Wars on Independence Day

The American Medical Association is starting an ad campaign in Texas and five other states to pressure senators who voted not to stop a Medicare rate cut. They say the ads and other efforts are aimed at turning the vote around during the July 4 recess.

That follows last week's news that the political action committee attached to the Texas Medical Association detached itself from U.S. Sen. John Cornyn, withdrawing its political support after he voted against that doctor-favored bill.

The ads (you can see one version at this link) say "a group of senators voted to protect the powerful insurance companies at the expense of Medicare patients' access to doctors" and urges viewers to call their senator.

Cornyn — along with U.S. Sen. Kay Bailey Hutchison, the state's senior senator and a prospective gubernatorial candidate — voted against a Democrat-backed bill that would have blocked a cut in payments to doctors with Medicare patients. The bill failed by a single vote.

Such a cut would ripple through the medical economy, since many insurance companies take their cues for rates from the federal government and would presumably follow a cut in government reimbursements with one of their own. Aides to Democrat Rick Noriega — Cornyn's challenger in this year's elections — said Cornyn's vote was good for insurance companies but bad for Texans.

Republicans characterized the legislation as a partisan ploy designed to pit them between doctors and constituents who want to get a leash on federal spending. "There is no good reason for Medicare beneficiaries and their physicians to endure this uncertainty, hardship and inconvenience," Cornyn said after the vote. "But that is apparently what the majority party wanted, for their own political ambitions."

The 10.6 percent rate cut — initially set for July 1 — was delayed 10 days to give everybody time to sort things out. In a press release, Hutchison echoed Cornyn, saying she's not against the docs: "Physicians have no greater supporter in Congress than me, and I remain fully committed to passing a fix that protects seniors' access to health care and Medicare reimbursements to doctors."

TEXPAC — the name of the TMA's political committee — pulled its month-old endorsement of Cornyn, but didn't endorse the Democrat. Their three-paragraph letter to Cornyn, signed by Dr. Manuel Acosta, the PAC chairman, was blunt: "There is talk and then there is action. We expect our elected officials to show leadership and do the right thing. Absent that, TEXPAC has rescinded our endorsement of your candidacy."

TMA is an important and influential lobby group, but less effective as a political force, especially at the statewide level. Gov. Rick Perry won his 2002 election against Tony Sanchez Jr. with TEXPAC on the Democrat's side, for instance. And the political action committee's decision to support one candidate or another doesn't bind individual doctors; that can dilute the power of the endorsement.

An Asterisk Worth Noting

Are Texans changing their political labels without changing their philosophies?

Check these numbers. In a Texas Lyceum Poll done earlier this month, 23 percent identified themselves as Republicans, 36 percent as Democrats (we're not including leaners, who'd have made those numbers 32 and 44, respectively). That's from a pool of voters chosen to match the general population of the state and not just the voting population.

In the same poll a year ago, 28 percent called themselves Republicans and 27 percent identified themselves as Democrats, about an even split.

But they haven't changed ideological labels.

This year: 42 percent conservative, 34 percent moderate, 19 percent liberal.

Last year: 41 percent conservative, 32 percent moderate, 19 percent liberal.

The group also did some political polling — that's the part where they said McCain is five points up on Obama and Cornyn is two points up on Noriega. That part of the poll is filtered to include only likely voters, and the Democrat-Republican split there is 50-50.

Fantasy Politics

You already knew this, or suspected it, but U.S. Sen. Kay Bailey Hutchison is the most popular name, as of now, on the list of people who might be running for governor in 2010.

The Texas Lyceum Poll read 1,000 Texans a list of names and asked which one would get their vote if the next governor's election were held now.

The Republicans, in order: Hutchison, 35 percent; Gov. Rick Perry, 22 percent; Lt. Gov. David Dewhurst, 4 percent; state Sen. Florence Shapiro and Railroad Commissioner Michael Williams, 2 percent each. Undecided: 20 percent. Nobody on this list: 16 percent.

The Democrats, in order: former U.S. Rep. and gubernatorial candidate Chris Bell, 13 percent; Houston Mayor Bill White, 10 percent; former Dallas Mayor and U.S. Senate candidate Ron Kirk, 8 percent; former Comptroller and Lite Guv candidate John Sharp, 7 percent; and former comptroller candidate Paul Hobby, 2 percent. Undecided: 42 percent. Nobody on this list: 17 percent.

The pollsters asked about two head-to-head matchups, and the Republicans led both, with Perry beating White in a fantasy race by 32 percent to 29 percent, and Hutchison beating White in the same sort of contest 34 percent to 25 percent. Two in five voters were undecided about either contest.

The numbers might be even worse, at this point, for the Democrats. This part of the poll didn't include a partisan screen — the sample was designed to match the actual population, which is different from the voting population. The party split in that big group is 32 percent Republican and 44 percent Democrat, and it's probably safe to assume that Republicans would do even better in a poll that had a fairer party mix.

• According to that same poll, the number one issue in Texas is oil and gas prices, followed closely by immigration. The prices at the pump were the top issue for 21 percent of the Texans in the survey. Immigration was number two, at 20 percent, followed by the economy, 17 percent; education, 12 percent; and leadership, politics and gridlock, 7 percent. A year ago, in the same poll, the list looked like this: Immigration, 22 percent; education, 21 percent; prices, inflation, gas prices, and cost of living, 7 percent; health care, 4 percent; and crime, drugs, and violence 4 percent. Only 2 percent listed the economy as the top issue in Texas 12 months ago.

Details: The Texas Lyceum surveyed 1,000 Texans by phone during the June 12-20 period. The margin of error is +/- 3.1 percent. The full poll is online at the Lyceum's website. And we'll repeat the disclosure on this made elsewhere: Our editor helped kick around the questions that were asked in the poll and wrote the Lyceum's poll summaries to explain all of those numbers that resulted. Now you know.

Political People and Their Moves

Carey Cockerell, commissioner of the Department of Family and Protective Services, is retiring this year. He was director of juvenile services in Tarrant County until taking the DFPS job three years ago, after scandals in child and adult protective services led to legislative attention, budget increases, and rebuilding efforts there. But the agency's latest misadventure shadows his resignation: DFPS is the agency that removed 400 children from a religious compound in West Texas earlier this year, an action the state's courts ruled was unlawful. Agency officials say his resignation and the raid aren't related. Cockerell leaves at the end of August.

Mary Katherine Stout is Gov. Rick Perry's new director of budget, planning and policy, sort of replacing Mike Morrissey, who'll now be a senior advisor to the governor. He'll still be in the mix on the budget, we're told. Stout comes to the job through the Texas Public Policy Foundation, a conservative think tank based in Austin.

Rep. Fred Hill, R-Richardson, isn't seeking reelection. So he's giving up his spot on the Legislative Budget Board to open a spot for someone who's at least got the possibility of coming back for another session. The newbie? Rep. Dan Branch, R-Dallas. House Speaker Tom Craddick wanted another Dallas-area lawmaker in Hill's place.

Jennifer Ahrens has joined the Texas Association of Life and Health Insurers as Executive Director, replacing Mike Pollard, who'll stick around as "senior advisor" until the end of next summer (after the coming legislative session). Ahrens was most recently at the Texas Department of Insurance, but previously worked for Gov. Rick Perry, and as a Senate staffer before that.

Jay Dyer jumps from the Secretary of State, where he was general counsel, to the Texas Attorney General's office, where he'll be special assistant and special counsel to AG Greg Abbott.

Mike Berger, director of the Wildlife Division at the Texas Parks & Wildlife Department, is retiring after 40 years at that agency. He ran that division for the last five years, and plans to leave in August.

Quotes of the Week

Sen. Dan Patrick, R-Houston, talking about the state's steroid testing program in the San Antonio Express-News: "I don't want to diminish the seriousness of steroids, but you can't take a sledgehammer to kill a gnat. Spending $1.5 million per kid is ludicrous."

Kerr County Judge Pat Tinley, telling the Kerrville Daily Times that Schleicher County shouldn't have to pay $7 million in bills resulting from the state's raid on the FLDS compound in Eldorado: "It wasn't their party, it was the state's party. The state opted for the party and they ought to pay for it. Plain, pure and simple."

Yvonne Renee, a high school freshman who's thought about someday running for office, quoted by the Brownsville Herald after watching a raucous city council meeting: "I don't know if it's for me. I'm not that disrespectful."

Rep. Jim McReynolds, D-Lufkin, quoted in the Lufkin Daily News about an ongoing court fight over the proposed Fastrill Reservoir in East Texas: "We're proud of our natural resources, but we don't want to be paying Dallas a nickel to drink our own water."

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Texas Weekly: Volume 25, Issue 26, 7 July 2008. Ross Ramsey, Editor. Copyright 2008 by Printing Production Systems, Inc. All Rights Reserved. Reproduction in whole or in part without written permission from the publisher is prohibited. One-year online subscription: $250. For information about your subscription, call (512) 302-5703 or email biz@texasweekly.com. For news, email ramsey@texasweekly.com, or call (512) 288-6598.