We're not sure where the rumor of a special session started, but we checked our Dear Diary entries for the last couple of legislative sessions, and the rumor is right on time. Time is running out, people are starting to worry about their legislation, and some desperate souls are starting to talk about the need for a special session if such-and-such isn't dealt with during regulation play.
For Gov. George W. Bush, there is an upside to a special session, but the downside is huge. The good part is that a special session would buy the governor another 30 days of what the national press is calling the Yellow Rose Garden strategy. While the Legislature is in session, the governor can tell the rest of the country that, while he'd love to visit with them and debate his opponents, he's really busy right now with taxes and teacher pay raises and stuff. The garden of yellow roses is scheduled to wilt on May 31, and the governor has already scheduled national road trips for June.
The talk usually comes in conjunction with conversation about tax cuts, teacher pay raises and education -- in other words, the issues the governor underscored as important at the beginning of the session. Since it's too early to know whether anything will jump the rails, it's also too early to talk about how to put the train back on the track.
Some Republicans in the House of Representatives are encouraging the rumor. Their theory -- and don't take this as a consensus from the right side of the aisle -- is that the Democrats in the House are making the governor and others look bad on taxes and education. It's true that the current talk would leave the governor with less than half what he sought in property tax relief, and that some of the leaders on the left side of the aisle have been making sausage of his education package. A special session, according to that small group of GOP members, would show voters who's really for what.
But it would be a high-risk endeavor for the governor to call a special. Those one-shot sessions focus attention on a particular issue, and cast a hard light on the winners and losers at the end. To call a special session on taxes and education would benefit Bush by directing attention to his efforts on two popular issues, but there's no ready-made bad guy. The legislative fight is over the balance of the two issues; we're not aware of anyone who is against putting more money into education or cutting taxes.
Special sessions also push chief executives into the kind of quibbling over details that Bush has masterfully avoided during his four-and-a-half years on the job. His M.O. has been to define big issues and let lawmakers worry about dotting I's and crossing T's. A special session on taxes, if it followed form, would force a question-a-day on this provision and on that one, eventually reducing a big issue to a battle of wills over the last point of disagreement.
Almost exactly ten years ago, for instance, the big issue of skyrocketing workers compensation costs was reduced to then-Gov. Bill Clements rally cry of "No trial de novo!" Most people, thankfully, don't remember or never knew what that was all about, but it did force two special sessions and shook up the next elections. Finally, unless they are called in response to a crisis of some kind (and sometimes even then), special sessions begin with a taint of failure, i.e.," the government failed to do such-and-such, and so has to come back to finish its work."
Neither Lt. Gov. Rick Perry nor House Speaker Pete Laney seems to be taking the talk too seriously, at least at this date. There is, after all, at least three weeks to go before you can reasonably put a major bill on the critical list. Oh, and what about the official word? The governor's aides aren't saying yes or no to a special, but say they didn't start the rumor.
Tax Cuts: Permanent or Temporary?
Remember all that hoo-hah at the beginning of the session about how the state should be responsible with its budget windfall, spending one-time money carefully and not creating ongoing programs that would require funding in future budgets?
Not everyone in the Pink Building remembers that, but some do. The budgeteers who worked on the incoming cash from the state's tobacco settlement, for instance, put the proceeds into funds that will, in turn, produce a steady stream of money. Generally speaking, the folks who planned to be careful with the budget surplus seemed to forget about their early comments on moderation.
Now there is a push to put time limits on sales tax breaks and credits for job creation, capital investments, and research and development. You won't likely see a final tax bill out of the House's Ways & Means Committee for another week, and they're still fiddling with numbers (And it's probably instructive that this is being talked about without anyone out front in support). But some in the House are talking about adding sunset language to two major tax bills that would keep any tax cuts passed this session from rolling into eternity. Some version of this could be in the committee's bill.
House Republicans, you'll remember, were talking several weeks ago about ditching all of the other consumer stuff in favor of a one-quarter penny cut in the sales tax rate (to 6 percent from 6.25 percent). Everybody else stopped talking about it, but the members didn't. That plan is still cruising around, as is the idea of boosting the sales tax cut to a full half-cent. Just so you won't need your slide rule: Each quarter-cent cut costs the state (or saves taxpayers, depending on where you stand in this deal) about $965 million in revenue. The GOP move, if there is one, will be on the floor.
Pick a Limit: Two Years? Four? Ten? None?
One plan would limit sales tax cuts on medicine, diapers and back-to-school clothing to two years. The next Legislature could reinstate the breaks if the money is there and if lawmakers are so inclined.
Companies that want to take tax credits for research and development could accumulate credits for up to ten years and would have to use them within 20 years, under the current scheme; another version would limit the R&D break to six years. The push for that tax break was started by Texas Instruments and others in the hardware business, but the 10-year/20-year structure is designed to accommodate biotech firms that typically begin with years of high R&D investment and no income, followed by (if they're lucky) years of income with relatively little R&D investment.
Credits for really large investments in plants and equipment -- a plan pushed by Intel Corp., which wants state help in building a plant near Fort Worth -- would last for ten years under that same scheme. The same limits would apply to the job creation credits that were added to the bill to lure votes from lawmakers along the Texas-Mexico border who would otherwise have little reason to vote for the R&D and investment tax breaks.
As with R&D credits, some lawmakers want to limit the investment and job creation credits to four or six years. Lawmakers could renew the deals if the money is available, and kill them if it's not. That's a "no excuses" deal for lawmakers, because they could raise the state's revenues without voting on a future tax bill. Need more money? Just let some tax breaks expire by taking no action.
Companies trying to win the breaks don't like that idea, saying it would force them to make long-term decisions without long-term assurances of a favorable tax climate. Their argument is that the tax breaks in question (forget about diapers and medicine for a second) are used by businesses that are planning future expansions and relocations and the like. Putting a time limit on a tax break just tells those companies to locate their operations in a state without a time limit, they say. And if the state's economy goes into the ditch like it did in the middle of the last decade, they argue, everybody will understand when the Legislature starts "reforming" taxes in a bid to raise money.
A Pitch for South Texas
The more people you talk to about this, the more versions of the story you'll hear.
House Ways & Means Committee Chairman Rene Oliveira, D-Brownsville, held a breakfast meeting the other morning. The order that went out was that he wanted to talk to decision-makers in companies and not to their lobbyists. A couple of lobbyists went anyhow, but that's a side story.
Business people flew in from all over for the meeting with Oliveira and with representatives from the Texas Association of Mexican American Chambers of Commerce. Most of the people who attended have a direct interest in Oliveira's tax bill, which would create tax breaks for companies that create jobs in certain areas, that invest in big plants or that invest in research and development. That bill is pending before the Ways & Means panel. Up to this point, most of the stories are the same.
Some of the attendees thought they were getting strong-armed. One left the meeting with the impression that the businesses were called in to hear that they were expected to do some business in South Texas. That impression comes, in part, from a flyer handed out by TAMACC that asks businesses to detail what they're doing for minorities in four areas: contracting, community contributions, membership on boards and hiring. It's actually the group's standard checklist, used whenever it deals with companies
Others who attended, however, said it was a useful meeting, and said that what took place was essentially a pitch for South Texas. Oliveira never mentioned his tax bill, didn't endorse the flyer from TAMACC, and simply rolled out a rationale for investing in South Texas, including some statistics and slides from the comptroller's office on the Border economy.
A couple of people we talked with said it wasn't heavy-handed at all. They point out that the job creation incentives were tailored for the Border and added in the Senate, not in the House. One even said Oliveira could have and probably should have laid it on a little thicker, since many of the folks in the audience are from the high tech sector and don't have any history of even looking at the Texas Border when they build plants or expand their operations.
None of the versions had anyone tying anything in the bill to anything that was said about investing on the Border. But the timing of the meeting -- talking to the beneficiaries of the bill while the bill was under consideration -- did make several folks scratch their heads, and some of the business people who attended thought it was a little bit strong.
Single Shot Taxes
A couple of relatively small -- but politically important -- tax bills sailed through the Senate on the way to the House and are worth watching. One, which grew out of Gov. George W. Bush's reelection campaign, would wipe out sales taxes on Internet access charges of up to $25 per month. Most providers charge about $20 per month, and with a couple of notable exceptions, most collect the sales tax now. Texas has been vilified in the online community for Internet taxes, and this issue is likely to stay on the burner for the next few years. Access charges are a small part of an argument that extends into whether and how the states should tax online sales and transactions.
The Senate also approved a tax break for the timber industry sponsored by Sen. Bill Ratliff, R-Mount Pleasant, (and in the House by Rep. Paul Sadler, D-Henderson). The latest fiscal estimates on the bill don't put a cost on the first two years of the tax break, making it a whole lot easier to pass since it takes nothing away from the current budget. But once it's up and running, the break -- which includes cuts in property and sales taxes for timber land and for equipment and services used in timber production -- would cost the state about $40 million per biennium. Counties in the affected areas would get hit for $3 million to $4 million a year. Some see a tax bill, and some see trade bait, and either vision is worth following. The timber legislation is on the table at the same time that Sadler is pushing an expensive education package and Ratliff is pushing a state budget and chairing the committee that controls most of the finance items the House is routing through three separate committees.
Public School Funding Only
Some of the Capitol's dramatists were watching for vouchers to come up when Sen. Teel Bivins, R-Amarillo, rolled out his school finance and property tax cut bill last week. Bivins had told other senators that he wouldn't try to add vouchers in an amendment, but also told them he would not oppose adding them. After all, he said later, he's the sponsor of the voucher bill. No one tried, partly because supporters still don't have required two-thirds of the Senate on their side, and partly because the education bill was delicate enough already. Bivins unveiled a new version two days before he went to committee, but it was declared dead on arrival in the face of opposition from Democrats. He rewired it and picked up the support he needed to get the bill through the Senate. But he celebrated that win by cautioning the House: Amend this much in either direction and the votes will go away.
Republicans, he said, wanted more on the tax cut side of the equation. Democrats wanted more for teachers and education. If the House makes big changes -- almost a certainty -- he'll have to rework the Senate compact. But that's to be expected, and the trick will be in fitting all of the remaining big bills together. Gov. Bush has met at least once with the some of the main players in the financial game, including Sens. Bill Ratliff, R-Mount Pleasant, and Bivins, and Reps. Rob Junell, D-San Angelo, Paul Sadler, D-Henderson and Rene Oliveira, D-Brownsville. They're apparently telling him privately the same thing they've been saying publicly: There's not enough money in the pot for everyone to get everything they want.
On the education front alone, the differences in the House and Senate packages are vast. It's worth pointing out, however, that the governor could probably claim either bill as a victory, since he's likely to get a big tax cut of some kind and a big education bouquet of some kind.
It's Still Tax Cuts vs. Teacher Pay Raises
The House version is less oriented to tax cuts. Bivins says there are $1.1 billion in property tax cuts inside the $2.7 billion Senate bill. Sadler quibbles with that, saying the formulas don't guarantee that much. It's difficult to sort out, since the details aren't clear. Bivins says, for instance, that the tax cuts won't go to everybody and won't be the same amount in every school district. Likewise, the teacher pay raises in his bill would guarantee that the teachers on the bottom of the pay scale -- those who make the state minimum -- would get annual raises of $4,000. But he says that won't be true for teachers in districts that pay more than the state minimum. Their actual mileage may vary.
The teacher groups want every teacher to get a $6,000 pay raise. That amount isn't likely; lawmakers seem content with the discussions hovering around $4,000 (and some in the House will push for $2,000 in combination with a half-cent sales tax cut). But another component the teachers seek might turn some legislative heads: They want all teachers to get the same pay raise.
Two teacher groups -- the Association of Texas Professional Educators and the Texas State Teachers Association -- followed the Senate vote on teacher pay raises by saying that the bill is better than predecessors, but isn't enough to make the teachers happy. They have been pushing for raises of $6,000 and want the state to make sure that every teacher gets the money. About 45 percent of the state's 261,000 teachers make the minimum amount.
Sadler hadn't rolled out a bill at our deadline, but he has rolled out an overpriced $5 billion starting plan for his Public Education Committee. His committee has about $3 billion available to tinker with. Rep. Scott Hochberg, D-Houston, is trying to whittle the big number down by tinkering with school finance formulas and teacher pay raises in tandem. The idea, very roughly speaking, is to find a way to use a dollar on a teacher pay raise in a way that also satisfies other school finance requirements.
The House version would spend about $480 million on property tax relief. Combine that with about $250 million in sales tax relief in another bill, and $500 million to $700 million in business tax relief in yet another, and you see why some folks think Bush could get out of this alive as far as tax cuts are concerned. His bill also gives teachers a "basic" pay raise of $3,000, then adds in bonuses for continuing education and other items.
Doctors' Orders, Prison Ministries, etc...
The doctor-HMO fight ended up lop-sided in the Senate, though both sides had declared beforehand that they had the votes to carry the day. When the legislation finally came up, the doctors cleaned up, and the Texas Association of Health Plans and the Texas Association of Business and Chambers of Commerce, which for different reasons want the bill killed, were squashed.
The Senate pooh-poohed the idea that the legislation would allow doctors to form unions. The sponsor, Sen. Chris Harris, R-Arlington, said both the docs and the business groups were wrong about the union label. The American Medical Association has referred to the bill as a step along the trail of collective bargaining. The business groups say that's union talk. The Harris version is that doctors ought to be allowed to compare notes about contract terms and fees when they're dealing with large health plans. Now the House takes up the fight, and the fax wars are underway: TABCC is already alerting its business members around the state asking them to call Austin and register their opposition to doctors getting "union-like power." Stay tuned.
•• It seems like ages ago that the Senate passed something called the Religious Freedoms Restoration Act, but it's still out there and sustaining attacks from unusual corners. The House sponsor, Rep. Scott Hochberg, D-Houston, is getting mail saying the bill would cut into Prison Fellowship, the program started by Nixon Administration official Charles Colson. Kelly Shackelford, an attorney with the Liberty Legal Institute in Plano, says the bill would place a "presumption against any religious freedoms claim in the prisons." Among other things, Shackelford's letter says the amendments to the bill could prevent access to Bibles in prisons. The head of the Texas prison system, Wayne Scott, sharply disagrees with that view of things in a letter of his own. At the bottom of this: The folks who preach in prison worry over language that would let the prison system vet their programs for what Scott calls "religiously insincere" inmates. Scott likes that; Shackelford doesn't.
• Government agencies got some new tools against public information requesters in legislation by Sen. Jeff Wentworth, R-San Antonio. The bill, most of which had the support of the big newspapers and other media groups, allows agencies to charge more for voluminous requests and for requests of old information that's harder to dig up. It also allows agencies to refuse to give information to someone who makes repetitive or redundant requests. On the other side, the bill shortens the time available to agencies and the attorney general's office to cough up public information.
• What's with Reps. Senfronia Thompson, D-Houston, and Charlie Howard, R-Sugar Land, hugging at the dais in the House? Well, Howard tried to amend Thompson's hate crimes bill to include crimes against student athletes, and admitted he wouldn't support the bill even if she accepted his change. The bill passed, and Thompson made a change in another piece of legislation to get even, striking a line that would have created two new district courts in Howard's state legislative district. She let him stew overnight, then added it back in with an amendment on the floor. Hugs all around.
The Rules Are Coming! The Rules are Coming!
Yeah, it's a weird headline, but the big monster hanging around in the shadows is closer than you think. Anyone with anything at stake in the Pink Building will begin to feel the pinch of the House and Senate rules early next week. And in the late part of that week, the hammer falls on bills that haven't reached the proper stage by then. The House rules prevent consideration of certain bills starting on the 13th; the Senate follows by one day.
Back up and look at the big picture for just a minute. There are really three bills of consequence (meaning they really have to pass), and there is but a handful of bills that have a chance at a headline or two, and there is a crunch in the rules one week away from here.
The budget, the business tax bill and the education package (property taxes, teacher pay raises) are on the must-do list, according to most lawmakers. Some other bills are on the list of important or noteworthy things that might or might not happen: Electric industry deregulation, tweaking phone deregulation and lowering long distance access charges, and private school vouchers are on that list.
Political People and Their Moves
Texas Supreme Court Chief Justice Tom Phillips has not decided whether to run for reelection, and won't decide until 2001. Contrary to what you might have heard, that means he might just run again. His term isn't over for a couple of years, so he's in no rush... Former Assistant Attorney General Madeleine Johnson, who has been working as an assistant U.S. Attorney in Dallas since she left state employment, is on the way to being Dallas' new city attorney. Johnson headed the opinions committee in the AG's office... Add the Rev. Wallace Henley, a Republican who once worked for President Richard Nixon, to the pack running for Congress when U.S. Rep. Bill Archer, R-Houston, retires. Henley will face at least four others, including Rep. John Culberson, R-Houston, businessman Peter Wareing, Cathy McConn, who works for the GOP, and Mark Brewer, an attorney. Not a single Democrat has signed up to run in that district, considered one of the most solidly Republican seats in the U.S.... Update: Sen. Gregory Luna, D-San Antonio, is getting out of the hospital and, at our deadline, was waiting to find out when he could report back to Austin. Luna had surgery on both of his legs and is already up and walking... Appointments: For the state's Board of Protective and Regulatory Services, Gov. Bush tapped Naomi Lede of Huntsville, a research scientist at the Texas Transportation Institute, and Edward Wagner of Harker Heights, a math professor at Central Texas College in Killeen... For the Texas Department of Economic Development, he named Limas Jefferson of Seabrook, a banker and businessman; Houston City Council member Martha Wong, a former college professor; and Marion Szurel of San Angelo, the director of the convention and visitors bureau there... Finally, to the board of directors of the Texas Low-Level Radioactive Waste Disposal Authority, Bush appointed Louis Lee Munoz of Plano, head of the radiation oncology department at St. Paul Medical Center in Dallas; and Bernold "Bruno" Hanson of Midland, a consulting geologist and independent oil operator. That's the board that will do site selection and then oversee operation of a low-level waste site in Texas. None of those appointments have been through the Senate yet.
Quotes of the Week
Rep. Paul Sadler, D-Henderson and chairman of the House Public Education Committee, on cautions that the Senate's school finance bill can't take many more changes: "They've been compromising with themselves. Hello -- there's another chamber."
Dallas school trustee Jose Plata, on news that the school board's choice for the next superintendent -- Waldemar "Bill" Rojas of San Francisco -- has two drunken driving arrests on his record: "If we had hired Jesus Christ in the Bible Belt, probably the criticism launched against him would have been he's not good enough because his hair's too long and he wears a smock."
Rep. Tony Goolsby, R-Dallas, talking from the back microphone in the lower chamber on the condition of legislation at the end of April: "Mr. Speaker, doesn't it seem strange that the messenger from the Senate never brings over any House bills?"
John Cole, of the Texas Federation of Teachers, on why he thinks the money is available for a bigger pay raise: "You only have to settle for $4,000 if you decide you need another property tax relief bill like we had last session. Once you get that idea out of your head, then the $6,000 is doable."
Annette Freeman of Dallas, talking to the city council there before that panel voted to ban roosters inside city limits after August 1: "I have one rooster that I've owned since he was hatched in my back yard. He's just like family. It's going to break my heart to give him up."
Texas prison system spokesman Glen Castlebury, talking about delays in getting castrations for the four convicted child molesters who requested the procedure under a relatively new law: "There is no rush to get out the knives. These are people who are going to be with us for some time."
Rep. Suzanna Gratia Hupp, R-Lampasas, saying after the Littleton, Colorado, massacre that teachers should be allowed to carry firearms: "Our schools are gun-free. You see how well that works."
Former President, and more to the point, former Central Intelligence Agency Director George Bush, on the unsung heroes in the spy business: "It's not all James Bond and Miss Galore, if you will."
Texas Weekly: Volume 15, Issue 42, 5 May 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.
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