Cruz Offers Nuanced Views on "Dark Money"

A congressional committee hearing in Washington, D.C., on Wednesday and a legislative hearing held in Austin on Thursday took up the same topic: the growing influence of "dark money" on elections.

Another common link: U.S. Sen. Ted Cruz, who weighed in on both and offered opinions that, at first glance, seemed at odds with each other.

Cruz attended a federal hearing Wednesday looking at the growth of dark money in political campaigns across the country. Cruz criticized a system that allows Super PACs to spend as much as they want as long as they don’t coordinate directly with campaigns.

“A far better system would be to allow individuals unlimited contributions to candidates and would require immediate disclosure,” Cruz said. The comment raised some eyebrows, as many Republicans in Congress had come out against mandated disclosure measures.

A day later, ahead of a hearing of the Texas House State Affairs Committee on dark money, Cruz took to Facebook to post his views on whether politically active nonprofits should reveal their contributors.

“Today the Texas Legislature is holding a hearing on requiring outside groups to disclose their donors to engage in political speech,” Cruz wrote. “That would be a disastrous policy that would unconstitutionally chill free speech.”

Cruz also compared the proposal being considered in Texas to efforts by “President Obama and U.S. Senate Democrats” as well as the IRS at the federal level.

“The Texas Legislature should not enact these pernicious laws at the state level,” Cruz concluded.

So how does Cruz favor political disclosure at one hearing and argue against it a day later?

Spokeswoman Catherine Frazier said Cruz’s remarks must be considered in the context of the issues at each hearings.

“Disclosure of direct contributions to candidates would allow the public to see exactly who is giving money to candidates and shine light on any possible quid pro quo corruption,” Frazier said in an email. “In contrast to direct contributions to candidates, independent expenditures to engage in political speech are completely different.  There is no possibility for quid pro quo corruption when outside groups spend money — on their own, not coordinated with any candidate — to engage in political speech. So there is no reason to require disclosure of the donors for these outside groups. Any proposal to require disclosure of those donors is simply an effort to stifle their speech, which is antithetical to the First Amendment."

Runoff Races Start to Heat Up

We are now less than four weeks out from primary runoff day and things are heating up out there.

Not surprisingly, the biggest blows are being traded in the GOP race for lieutenant governor. The Dan Patrick campaign kicked off the week with an ad that said the incumbent David Dewhurst’s “lies won’t hide a failed record on illegal immigration.”

That drew a response from the Dewhurst campaign that said voters “can’t trust” Patrick because of a bankruptcy declaration in the 1980s and an unrelated name change. And in a bizarre touch, the Dewhurst ad featured a picture of Patrick wearing a suit coat and tie but no shirt underneath.

Even the release of three years’ worth of tax returns by Democratic lieutenant governor candidate Leticia Van de Putte over the weekend — which included the revelation that her husband, Pete, is not a particularly accomplished gambler — became fodder in the Dewhurst-Patrick war. The Dewhurst campaign seized on Van de Putte’s action to demand that Patrick do the same.

*****

Democrats, meanwhile, would seem to prefer a face-off between Van de Putte and Patrick in the fall.

The Texas Democratic Party launched a social media campaign on Tuesday that featured a website, MountainDewhurst.com, that targets the incumbent as “anti-immigrant” and “anti-women.”

Democrats would doubtless use those labels for both Dewhurst and Patrick, but as the Tribune’s Morgan Smith noted, “Some political observers have suggested that Patrick, a more polarizing figure, might inspire better turnout among left-leaning voters in November — which could explain the party's attack against Dewhurst in the runoff.”

Dewhurst responded to news of the website positively, choosing to portray it as a “badge of honor” that proved his “strong conservative record.” Patrick has also tried to portray himself as a bane of Democrats, saying in his April 15 debate with Julián Castro that “I am the one candidate all Democrats fear.” That spurred Castro’s rejoinder, “Actually, you’re our meal ticket back in.”

*****

Groups are no doubt cognizant of the fast approaching runoff elections with this week’s sizable group of endorsements proof of that.

•    The tort reform group Texans for Lawsuit Reform announced endorsements of SD-10 candidate Konni Burton and HD-66 candidate Matt Shaheen.

•    Former state Rep. Norma Chávez, who is trying to win election to represent El Paso in the House again, received the endorsement of the Texas Association of Business.

•    GOP attorney general candidate Ken Paxton has won the endorsement of the Texas Fraternal Order of Police. The announcement came a few days after the Texas Municipal Police Association, a supporter of Paxton’s runoff rival, Dan Branch, called on Paxton to answer questions about his failure to register as an investment adviser representative.

•    Lt. Gov. David Dewhurst announced endorsements from a couple of Tea Party groups — the Battleground Tea Party of Texas and the Pearland Tea Party.

•    Republican railroad commissioner candidate Ryan Sitton announced the endorsement of the Tarrant County 912 Action PAC.

*****

On the heels of a U.S. district judge’s decision to dismiss its federal case against the Texas Ethics Commission, the conservative activist group Empower Texans asked a state district judge to say whether the court can review subpoenas issued against it.

The subpoenas were issued as part of an investigation into complaints filed by a current and former lawmaker as well as a Capitol lobbyist against Empower Texans and its president, Michael Quinn Sullivan.

Empower Texans has said repeatedly that the subpoenas would expose the group’s donors to harassment and is refusing to comply. The ethics commission has said the subpoenas are necessary to get information from the group, which has thus far refused to cooperate with the investigation.

*****

Bo Delp, the deputy communications director for Democratic gubernatorial nominee Wendy Davis, resigned on Tuesday. He was the campaign’s chief communications director until about two months ago, when the campaign hired Zac Petkanas, a former communications director for Senate Majority Leader Harry Reid, D-Nev., to lead the communications shop.

Delp told the Tribune on Thursday, “I did the best I could with the resources I had available to me.” Delp added that he is considering “a number of options” in Texas Democratic politics

*****

Tuesday is the last day of early voting in the SD-4 special election.

Newsreel: Attack Ads, BLM Issue, EPA

This week in the Newsreel: Lite guv candidates ramp up their attack ads, a Texas-Oklahoma border dispute pits landowners against one another and the BLM, and SCOTUS knocks down a challenge to an EPA rule on cross-state pollution.

Inside Intelligence: About Those Tax Appraisals...

Tax appraisal notices are going out to property owners across Texas, so we asked the insiders in government and politics this week about the state of that system.

Most — 77 percent — said taxable properties in Texas are not correctly appraised. Only 10 percent said commercial and industrial properties are correctly appraised, while 58 percent said those appraised values are lower than the properties’ fair market values. About a third said residential properties are correctly appraised, but 35 percent said houses are on the books for more than their fair market values.

Are the resulting taxes fairly balanced? Homeowners pay too much, according to 59 percent of the insiders, while 8 percent said businesses pay too much and 20 percent said the shares paid by the various types of property owners are about right.

We gathered comments along the way and a full set of those is attached. Here’s a sampling:

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Are taxable properties in Texas correctly appraised?

• "Surprise! Texas has, by far, the best property tax system in the nation. The Peveto bill reforms of the late 1970's are still a distant dream in other states. Anger at the appraisal system is inaccurate and misplaced. Although voters may not understand it, the real source of almost all of their anger is one or more of: 1) the Lege's decision to rely too heavily on funds from the property tax (thus making the bills too high), or 2) misinformation (intentional or not) from elected officials about how the tax works, or 3) hatred of any property tax."

• "Without mandatory sales-price disclosure, appraisal districts are flying blind. It's easy to find out what subdivision homes are selling for, but high-end residential and commercial/industrial get away with murder."

• "Give us a sales tax rather than a property tax. Having the government hold sway over property at any level is bad. Property taxes artificially inflate home values and means the government essentially owns my property with me"

• "Wide variations from place to place. Commercial properties are often under-assessed because owners can afford to hire professional help to reduce assessments."

• "Business property, especially at the top end, are under appraised. That's what it means to be a business-friendly state."

• "Goldilocks - some too high, some too low, some just right."

• "Very few people would be happy about selling their property for what it is valued at on the tax rolls!"

• "Why not sales price disclosure on all transactions?"

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Are commercial and industrial properties on the tax rolls at their fair market values?

• "It's amazing what a tax attorney can debate with the right funding."

• "This is a flawed question. We do not appraise all commercial property at FMV. The better questions are: 1) whether the methodologies we use to appraise commercial property are appropriate, and whether those methodologies are applied across the state in a consistent manner."

• "Commercial properties are definitely under-appraised, shifting more of the tax burden onto homeowners."

• "Appraisal is a process and not a judgment etched in stone. Chief Appraisers have substantial tools to value these properties--and residences, as well; all taxpayers have constitutional guarantees that properties will be appraised at value and that values across the spectrum of taxpayers are equal and uniform. This is the best process we have developed to assure 'correct' values."

• "If they were even appraised at construction value we'd add billions to the tax base."

• "Way too high."

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Are residential properties on the tax rolls at their fair market values?

• "Residential properties are low but they are consistent and proportional, i.e., both legal and fair. Cannot over emphasize that appraisal is NOT the issue. Appraisals are SOLELY a method for ALLOCATING taxes among payers. The AMOUNT of the tax is determined by the government collecting the tax (and not the appraisal district). If the tax seems too high, change the rate."

• "This varies widely from county to county."

• "Average middle-class homes are probably fairly accurately appraised, but high-end residences are undervalued because an appraisal district has no way to get the sales price when those houses turn over."

• "Compared to what--comparable houses in other states? Speaking from experience, Texas residential property taxes are extremely high, especially when compared to those in other states. But while other states have lower property taxes, they nearly all have state income taxes. I guess it balances out in the end, right?"

• "It really varies. No appraisal district does the same kind of job as another. Therefore, there is wide disparity in what are supposed to be equitable values."

• "The vast majority of homes are fairly appraised but the most expensive homes are undervalued because (1) as unique items they are difficult to value; (2) their owners can afford to contest valuation effectively; and (3) those owners have a great deal to gain by contesting valuation."

• "Each market is so different. But it's a slippery slope. High property taxes can drive homeowners from their homes particularly in markets that have had huge increases. It seems unfair that a tax district can price you out of your home."

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Based on their appraisals, do residential and commercial/industrial property owners pay their fair share of property taxes?

• "Homeowners in the major urban areas of the state are being gouged. Valuations increase rapidly, while other areas of the state remain flat, and city dwellers carry more and more of the tax burden."

• "Generally yes, but the C&I 'equity' appeals are an abuse. Will more businesses rush to use this loophole? Widespread equity appeals will make the property tax voluntary like the old franchise tax was. In that case, because of the way school funding works, all of that lost tax revenue will hit the state's balance sheet much more than the local ISDs. By the time the problem gets large enough not to ignore, it will also be big enough to be very painful to fix."

• "Since commercial/industrial are on for a fraction of their true market value, the burden shifts onto residential. But protecting homeowners with lower appraisal caps or over-65 freezes just throws the system even more out of balance. You can't run a system that relies so heavily on property taxes without sales-price disclosure, then expect it to be fair."

• "Some do and some don't. Again, the emphasis needs to be on equity. All $10,000 properties need to be on at $10,000; all $1,000,000 properties need to be on at $1,000,000. Then everyone will be paying their FAIR share."

• "There is always a tension in the system in assuring equity. The 'dirty secret' in Texas is that the legislature has over-relied on property taxes for education and local government finance and that over-reliance has substantially increased the tension. The legislature can force increases in local rates by inaction on other financing sources and underfunding mandates --and then blame local governments for the increases."

• "Homeowners are subsidizing the tax break business gets."

• "I'm a homeowner, not a business owner - of course I think homeowners pay too much."

• "All property taxes are too high. Until we go to a pure consumption tax we will just be paying taxes based on people's opinion"

• "They're both undervalued, but who can say for sure which side is paying too much?"

Our thanks to this week's participants: Gene Acuna, Cathie Adams, Brandon Aghamalian, Brandon Alderete, Clyde Alexander, George Allen, Jay Arnold, Charles Bailey, Tom Banning, Dave Beckwith, Andrew Biar, Allen Blakemore, Tom Blanton, Chris Britton, Kerry Cammack, Marc Campos, Thure Cannon, Snapper Carr, Elna Christopher, Harold Cook, Beth Cubriel, Randy Cubriel, Curtis Culwell, Denise Davis, Hector De Leon, Nora Del Bosque, Glenn Deshields, Holly DeShields, David Dunn, Jeff Eller, Jack Erskine, Jon Fisher, Norman Garza, Dominic Giarratani, Bruce Gibson, Stephanie Gibson, Eric Glenn, Kinnan Golemon, Daniel Gonzalez, John Greytok, Clint Hackney, Wayne Hamilton, Bill Hammond, Ken Hodges, Steve Holzheauser, Laura Huffman, Deborah Ingersoll, Richie Jackson, Cal Jillson, Jason Johnson, Mark Jones, Robert Jones, Richard Khouri, Tom Kleinworth, Ramey Ko, Nick Lampson, Pete Laney, Dick Lavine, James LeBas, Luke Legate, Ruben Longoria, Matt Mackowiak, Steve Minick, Mike Moses, Steve Murdock, Keir Murray, Keats Norfleet, Pat Nugent, Todd Olsen, Nef Partida, Gardner Pate, Jerod Patterson, Tom Phillips, Wayne Pierce, Allen Place, Royce Poinsett, Kraege Polan, Gary Polland, Jay Propes, Ted Melina Raab, Patrick Reinhart, David Reynolds, Carl Richie, Grant Ruckel, Jason Sabo, Andy Sansom, Jim Sartwelle, Barbara Schlief, Stan Schlueter, Bruce Scott, Robert Scott, Christopher Shields, Nancy Sims, Jason Skaggs, Ed Small, Martha Smiley, Larry Soward, Leonard Spearman, Dennis Speight, Tom Spilman, Jason Stanford, Bob Strauser, Colin Strother, Michael Quinn Sullivan, Sherry Sylvester, Trey Trainor, John Weaver, Ken Whalen, David White, Darren Whitehurst, Woody Widrow, Peck Young, Angelo Zottarelli.

The Calendar

Monday, May 5

  • The Texas Tribune Festival On the Road presents a one-day symposium on STEM Education; University of Texas at Dallas (8 a.m.-2:30 p.m.)
  • Tejano Democrats and Harris County Democrats' Cinco de Mayo celebration, featuring lieutenant governor candidate Leticia Van de Putte; 502 Highland St., Houston (5-7 p.m.)

Thursday, May 8

  • TribLive: A Conversation With Rep. Dan Branch, Candidate for Attorney General; The Austin Club, Austin (8 a.m.)
  • Texas Water Foundation's Rainmaker Award Dinner honoring state Rep. Allan Ritter; Bob Bullock Texas State History Museum, Austin (6:30 p.m.)
 

The Week in the Rearview Mirror

In the wake of this week's botched execution in Oklahoma, it was reported that Texas has a stockpile of the same drug — midazolam — that has raised questions about the Sooner State's procedures. Texas does not currently use that drug in its executions, but nothing in the law prevents a switch at any point in the future.

State officials have begun to weigh in on the Texas-Oklahoma land dispute with the U.S. Bureau of Land Management. Lt. Gov. David Dewhurst and Land Commissioner Jerry Patterson joined other lawmakers for a press conference on the border this week.

Gov. Rick Perry quietly rededicated himself to his faith by being baptized sometime in recent weeks in the same creek in which Sam Houston was baptized in 1854. The only spectators were Perry's close friends and family.

UT System Regent Alex Cranberg acknowledged that he recorded discussions during an August closed-door meeting of the board of regents. After the recording activity was reported, Cranberg later explained he was trying to "be better able to discuss these remarks later with my fellow Regents (and eventually even University historians)."

Democratic gubernatorial nominee Wendy Davis this week proposed a reduced emphasis on standardized testing and focusing more on local control when it comes to accountability measures. The campaign of her GOP rival, Greg Abbott, responded that the proposal was like Abbott's but "lacks any substance or detail."

The head of the Democratic Governors Association downplayed his party's chances of winning the governor's race this year in Texas. That spurred a feisty pushback from the Davis campaign against what it described as "uninformed opinions of a Washington, D.C., desk jockey."

In the month running up to a deadline to get coverage under the Affordable Care Act, the number of Texas enrolled in the federal health insurance marketplace more than doubled — from 295,000 to 733,757. That growth was the largest in the nation.

Texas' largest power company, Energy Future Holdings, filed for Chapter 11 bankruptcy as it tries to deal with some $40 billion in debt. But the move is not expected to affect the electric grid.

Disclosure: The University of Texas is a corporate sponsor of The Texas Tribune. Energy Future Holdings was a corporate sponsor in 2009 and 2011-12. A complete list of Texas Tribune donors and sponsors can be viewed here.

Political People and their Moves

Guy Bailey has been named sole finalist for the position of president of the newly formed University of Texas Rio Grande Valley. Bailey is a former president at Texas Tech University and the University of Alabama.

Elizabeth “Christy” Jack of Fort Worth was named chairwoman of the Office of Violent Sex Offender Management Governing Board for a term to expire at the pleasure of the governor. Jack has been a board member since Sept. 1, 2011. In addition, Katie McClure of Kingwood was named to the board for a term to expire Feb. 1, 2015.

House Speaker Joe Straus appointed 11 members to a joint interim committee that will study the effect of recent changes to the Texas Open Beaches Act. Rep. Joe Deshotel, D-Beaumont, will co-chair the panel. Members of the House Land and Resource Management Committee will also sit on the committee, as will Reps. Greg Bonnen, R-Friendswood, and Geanie Morrison, R-Victoria.

Susie Strzelec, general counsel for state Sen. Royce West, is leaving for state Sen. Jane Nelson's office, where she will serve as general counsel and finance staffer.

Martin Golando is stepping down as chief of staff for state Rep. Trey Martinez Fischer to serve as general counsel for the Mexican American Legislative Caucus and to start his own legal practice focused on legislative procedure and election law. He has been chief of staff for the San Antonio Democrat since 2008.

Travis Considine, formerly of the David Dewhurst campaign shop, has hired on as deputy press secretary for Gov. Rick Perry.

Matt Glazer has been hired as the new executive director for the Austin Young Chamber of Commerce. Glazer is a former editor of the Burnt Orange Report and former executive director of Progress Texas.

Deaths: Robert Heard, who was one of the people shot in the 1966 UT tower shooting while covering the event for The Associated Press. He also covered Texas state government and sports for the AP and later was a Capitol correspondent for the San Antonio Express-News. He was 84.

Pete Snelson, who represented Midland in the Texas House in the 57th Legislature and the Texas Senate in the 59th and 61st through 67th Legislature. He was 91.

Quotes of the Week

Texas is where they think they can learn more about what big truck buyers want in their vehicles.

Auto industry analyst James Rubenstein on Toyota's decision to move its sales and marketing headquarters to suburban Dallas as part of its "Southern" strategy

It was a ‘glad to meet you’ kind of thing, and if he in the end comes back to New Hampshire, he knows he has a place he can stop by for a free cup of coffee.

Former New Hampshire Gov. John H. Sununu on his meeting with U.S. Sen. Ted Cruz, R-Texas, who was visiting the Granite State for the second time in April

The uninformed opinions of a Washington, D.C., desk jockey who's never stepped foot in Texas couldn't be less relevant to what's actually happening on the ground.

Wendy Davis campaign manager Karin Johanson, pushing back against a less-than-rosy assessment of the candidate's chances given by Democratic Governors Association Chairman Peter Shumlin

Our problem here in Texas is that we’ve had too much water. We’ve had so much water that we’ve learned to waste it.

Bastrop County Judge Paul Pape on the growing conflict among counties for water resources

Sen. McCain laughed heartily.

U.S. Sen. John McCain, R-Ariz., describing his response to his colleague Ted Cruz's suggestion that U.S. Secretary of State John Kerry should resign over remarks that Israel was headed toward being an "apartheid" state