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Surprise: Pauline Rescued from Train

In our last episode, an unforeseen problem in the massive school finance bill was threatening several bond issues from Texas school districts and prompting several others to calculate how much they'd have to raise their taxes to pay for facilities they previously thought would be paid for with state money. If this was the "Perils of Pauline," we're to the part where the good guys show up and pull her off the tracks before the train can run her down.

In our last episode, an unforeseen problem in the massive school finance bill was threatening several bond issues from Texas school districts and prompting several others to calculate how much they'd have to raise their taxes to pay for facilities they previously thought would be paid for with state money. If this was the "Perils of Pauline," we're to the part where the good guys show up and pull her off the tracks before the train can run her down.

It wasn't final at our deadline, but the lawyers, bean counters and policy wonks may have found a solution to the problems in the quickly assembled $3.8 billion school finance bill.

We wrote about this at length last week, but the short explanation is that the bill made it impossible for some districts to pay for their facilities in the way that they had planned. The bill prompted bond rating agencies to put 13 Texas school districts on credit watch, because those districts had financed facilities construction using lease-purchase plans that appear to be affected by the new law. Three districts that had proposed similar financing packages were stalled in getting approval from Attorney General John Cornyn, who was waiting to see if they'd have the state money to cover their deals. And almost 100 districts were in the position of considering tax rate increases to pay for borrowing they had assumed would be covered by state funds but that, because of timing, is not included in either the budgets or tax rates that trigger funding under the new law.

The mess resulted from the Legislature's attempt to revise the finance formulas that apply to capital spending and facilities and debt. In creating a new formula, lawmakers forgot to include some of the funding that had existed under the old formula, and districts that relied on certain types of financing, or that made certain assumptions about timing, were left out.

In School Finance, Not Saying No is Like Saying Yes

The Texas Education Agency, the attorney general, and outside groups like the Equity Center and bond firms and the districts themselves have been scrambling for a fix. They may have found a way to squint at the problem, wave a wand and make it go away until the Legislature returns.

Until now, most of the education wizards have assumed that facilities could be paid for only out of so-called Tier 3 monies. The funding used to come out of Tier 2, but that was outlawed in the new law and legislators intended to move those facilities funds to Tier 3. Now that it's clear that Tier 3 money can't be used for some of this financing, and Tier 2 is out of the picture, the policy folks had assumed the districts were in deep trouble.

Now they're looking at Tier 1, which is the basic part of state funding for local school districts. You can make a sound argument to the effect that lawmakers never intended Tier 1 money to be used for facilities, but the people who know their way through this patch say it is not expressly forbidden. And since there is no statutory "No Trespassing" sign, state officials are now talking about letting some districts use Tier 1 money for debt service and lease-purchase deals.

That needs a nod from Cornyn, and Education Commissioner Mike Moses and his folks at TEA would also have to agree to go along. But the alternative is to either let the districts hang or to call a special legislative session to clean things up. The first option would affect 200 to 300 districts in one way or another; nobody seems to be seriously considering the second. This is not a completely done deal, but it's on a fast track: School districts need the information to set their tax rates before the next school year and the bond folks need to know how they're going to get paid.

A State Hiring Squeeze

The new state budget that takes effect at the end of the summer holds a zinger that has the honchos at the big state agencies in a state of mild shock. Legislators are requiring most agencies to count temporary employees and some of their contractors as if they were state employees.

The budgeteers also left in place the so-called "FTE caps," which dictate the number of Full-Time Equivalent employees a given agency can have.

What that means, when you look up from the State Auditor's report to rub your eyes, is that agencies that employ a lot of outside help will now have to fit the insiders and the outsiders under the same limit. Some agencies have used temps and contractors to get around those FTE caps.

Lawmakers have spent several years, without much luck, trying to get accurate counts of the numbers of those "non-employees." The new law, aimed at both issues, could bring odd results.

On the face of it, agencies with a lot of contractors or temporaries that are also close to the limits on the number of people they can employ will get squeezed unless they can figure a way out of the trap. One way or another, they'll have to lose some folks. They'll argue, sometimes with merit, that that will curtail their ability to manage their programs.

That brings you to the second possibility. Say, for argument's sake, that a given state agency has just the right number of people to fulfill its mission. Say it's close to the cap, and has the equivalent of five percent of its total work force laboring under temporary contracts. If the agency can successfully argue that it needs those people, the size of government will apparently grow. The same number of people will be doing the work, but they'll be counted for the first time as state employees.

The State Auditors Office has been meeting with some of the agencies to figure out how to count each kind of contractor, temporary, consultant, computer programmer and whatever else is out there. They'll try to cook up a policy this summer, and might offer the first head count before year's end.

Hoarding is Easier When You're Broke

How badly did the state Legislature need money? Well, to judge from what they did with the latest report from the Comptroller Carole Keeton Rylander's Texas Performance Review, not much. Lawmakers grabbed only $111.5 million worth of suggestions from that report, a record low.

To be fair, the latest TPR was a product of her predecessor's staff, and her first solo shot at saving the state some money will come in two years.

But it might have been a bad year for financial suggestions. Legislators had a $6 billion budget surplus to play with, a fact that left little inspiration to make difficult decisions about where to trim and where to scrimp. They also nixed the biggest single item in the package, deciding not to borrow against future highway funds, a proposal that would have accelerated construction of highways in the state, especially along the Texas-Mexico Border.

• Shades of Bullock's Raiders: Rylander brags in a press release that she has "padlocked" 26 businesses for not paying taxes since she was sworn in at the beginning of the year. The latest was a Waxahachie dry cleaner who didn't pay taxes on the grounds that the taxes were illegal, since the Republic of Texas was, he claimed, illegally annexed by the U.S. The courts disagreed, and after he didn't pay the judgement, Rylander's employees shut him down.

• Separately, Rylander announces that Moody's Investors Service, which rates bond issues and other financial instruments, upgraded the state's bond rating from AA2 to AA1. That doesn't immediately translate into money, but it will slightly lower the cost the state pays to borrow. Moody's based the grade on a forecast of strong growth, on the state's relatively low debt level, and on the fact that the state is not as dependent on oil as it once was, a fortunate thing when the oil economy is, as it is now, in rough shape. Also cited was high tech growth.


Listening to stories about Bob Bullock for the last week has been like rehearing the story of the seven blind men inspecting the elephant: Everybody who knew the man seemed to know him from a slightly different angle than everybody else.

He was variously described as a leader, a bully, a master of mundane government dreck, an obsessive tinkerer, an accomplished deal-maker, a hilarious comic, a prolific Samaritan, a great friend, a terrible enemy, a teacher and mentor, an outrageously large personality, and a miracle of timing that can never be repeated in Texas politics. Someone remembered that when former Gov. John Connally was asked which adjectives applied to Lyndon Johnson, he answered that all of them did.

It's difficult and maybe impossible to say that this thing or that thing would not have happened if Bullock hadn't been here; most things in government get done eventually. But he pushed harder than most, got a lot of things done earlier than they would have been done without him, saw problems earlier than most other watchers and observers and thinkers, and pushed everyone else to act on them. An example: The state would eventually have started working on its water needs for the future, but probably not until the regions without water and the regions with it were locked in battle. Bullock got the Legislature to begin settling that fight before anyone had a chance to form a fist.

Lots of friends and foes have been saying that Bullock was the last of a breed, and that may be so. He was the last of the big shot Texas politicians who didn't automatically react with caution to any new situation. Bullock often jumped in and said what he thought and acted on his thoughts while others were still sifting through the implications of this course or that one. He frightened the others, because he wasn't afraid to make the mistakes they were afraid to make.

When he was right, that absence of hesitation put him way in front of the pack.

Sometimes, as with his pitch for a state income tax, he was wrong. But unlike many politicians, he could take a punch. While everyone else was talking about how Bullock had committed political suicide with that income tax endorsement, he was figuring out how to protect Texans -- and himself -- from that same levy. He got through it and suffered little in the way of political consequence from the original endorsement. He understood as few politicians do that mistakes usually don't stick around to haunt you. The opponent who challenged him on the subject was so unformidable that Bullock decided to go ahead with heart surgery that could have waited until after Election Day. No one else would have dared, but he stayed home for the last six weeks of the campaign, then won easily.

By the end of his career, other politicians looked at Bullock the way a child looks at an adult.

They didn't understand how he did it, how that temper could blow so hot, how he could have time to read that much or know that much, how he could know that many people that well, how so many of the folks in charge of various branches and agencies had worked for him and still answered to him, or how he could control -- or seem to control -- so much of the government and political environment around him.

They didn't understand how he could have done all of those things in all the stories about him and survive politically. He walked through any number of fires that would have torched most political careers, and seemed to grow stronger each time. Everything that first appeared to be a political epitaph turned out to be Just Another Bullock Story. He survived a grand jury investigation. A drunk driving arrest that included, for narrative interest, a gun, a bottle, and the fact that this elected official was screaming down the road at 100 miles an hour. His health was so bad for so long that it ceased to be a political liability. He joked with reporters that he would outlive them all, adding in recent years that he had outlived several of the big newspapers that had once predicted his actual or political demise. The stories are incredible, and they just go on and on and on.

In a profession marked by skittish people with delicate egos, he seemed fearless and somehow impossible, and so they followed him, maybe to try to figure out how someone like Bob Bullock could even exist. When he died, they were left to wonder if there would ever be another one like him.

The Pen is Mightier Than the Legislature

The old line about Texas governors is that they're constitutionally weak creatures who have only two real powers: the power to appoint and the power to veto.

Before leaving town to campaign and raise money for the presidential race, George W. Bush got busy with power number two, killing 29 bills and a couple of resolutions that won legislative approval, and excising a relatively small $51.1 million from the $98 billion budget approved by lawmakers before they left Austin at the end of May.

Bush vetoed a bill that unanimously passed the Senate and unanimously passed the House, but that irked the state's judges. The legislation, by Sen. Rodney Ellis, D-Houston, and Rep. Juan Hinojosa, D-Edinburg, would have given counties the option of setting up public defenders' offices. Under current law, people who can't afford lawyers get court-appointed attorneys. The sponsors say they'll try again in the future. Some of the judges we've talked to say they'll pay more attention next time, so bills don't sail through the Legislature before they (the judges) know what's inside.

He killed a bill that would have required the Secretary of State to post judicial campaign information on the Internet, saying the candidates and the political parties should handle that. Another veto ended the life of a bill that would raise inspection fees on cars.

He whacked a bill designed to open up the business of organizations that contract with the state, saying it might subject some non-profits and some religious organizations to government intrusion. That bill was aimed mainly at community block grants; Bush said the state can take care of the problem through rule-making from the Texas Department of Housing and Community Affairs.

What's on TV that Night?

Legislators approved 17 amendments to the constitution, which means there will be that many things to decide on the November ballot. If that election is true to form, few Texans will show up.

But what little sex appeal there was in the constitutional amendments got a boost; the amendment most likely to have anything to do with the news of the day -- a provision that would clear up the order of succession if and when a Texas governor becomes President of the United States -- will be at the top of the ballot. The Secretary of State's office does a random drawing to fix the order on the ballot, and that one came up on top. Next is another issue that might interest some voters: an amendment that would allow reverse mortgages on homes, something that's not legal under the second-mortgage changes already approved by voters.

The Right to Testify Against the Boss

We wrote during the session about the so-called "expert witness" bill; it got signed. In its final form, the bill by Rep. Pete Gallego, D-Alpine, requires the Texas Higher Education Coordinating Board to annually report on faculty and staff at colleges and universities who were paid to testify in cases involving the state. The original version, included as a budget rider two years ago, was to prevent those folks -- who are state employees, after all -- from testifying against the state.

That got a rise out of First Amendment types at the schools and the Texas Faculty Association, who said such a ban would infringe on academic freedom and rights to free speech. Federal courts agreed, and struck it down. The new version doesn't prevent anything, but does require reports when professors or staffers get paid as expert witnesses or consultants in cases involving the state.

The faculty group, an affiliate of the Texas State Teachers Association and the National Education Association, says the new law unfairly singles out college workers instead of including all state employees. They also contend it will raise a legal issue by requiring the state's adversaries to report the names of some of their consulting experts to the Attorney General, information they contend would not be disclosed under normal court rules.

Mad Enough to Advertise

Lots of groups, unions and trade associations thank their friends. Few are normally willing to paint targets on their enemies. And even fewer of either stripe will spend a lot of money buying glossy pages to promote their opinions about elected officials. But right there in the same issue of Texas Monthly that features that publication's list of the ten best and worst lawmakers stands an ad titled "Texas Law Enforcement's Legislative Report Card" and sponsored by CLEAT -- the Combined Law Enforcement Associations of Texas. The ad lists three lawmakers the group apparently would rather do without and ten that CLEAT singled out for laurels.

The group's bests include Republican Lt. Gov. Rick Perry; House Speaker J.E. "Pete" Laney, D-Hale Center; Sens. Gonzalo Barrientos, D-Austin; Mario Gallegos, D-Houston; and Chris Harris, R-Arlington; and Reps. Bill Carter, R-Fort Worth; Jessica Farrar, D-Houston; Sherri Greenberg, D-Austin; Barry Telford, D-DeKalb; and Dale Tillery, D-Dallas.

The group only named three lawmakers to the worst list, reserving special venom for Rep. Tom Ramsay, D-Mt. Vernon, who they accused of killing a bill for police officers that was similar to another bill he supported, that benefited doctors. They also put Sen. Robert Duncan, R-Lubbock and Rep. Pete Gallego, D-Alpine, on the list. Each had a hand in killing something dear to the group. Gov. George W. Bush, who vetoed a "meet and confer" bill the group was pushing, escaped mention.

Witches, Political Consultants and Other Scary Stuff

Something Wicked (or at least Politically Hazardous) This Way Comes: U.S. Rep. Chet Edwards, D-Waco, takes a hit for his stand on witchcraft from Thomas Leath, the son of Edwards' predecessor in Congress, Marvin Leath. There's a flap underway at Fort Hood, which is allowing a group of soldiers who practice witchcraft as their religion to do so on base. That has prompted some folks in Christendom to call for restrictions on what can be called a religion and practiced as such on a military base. Edwards' stance -- he says he's not crazy about witches but adds the military shouldn't be allowed to decide which religions are okay and which ones aren't -- inspired the younger Leath, who lives in Dallas, to write to the Waco paper. Under the title "Pro-Witchcraft?", he suggests Edwards should have responded by threatening to close down the base until the Army comes to its senses. The editors felt the need to respond, saying Edwards hadn't turned into an advocate for Wicca.

• There's a new consultant on the horizon: Mark Brewer, one of six Republicans in the race to replace retiring U.S. Rep. Bill Archer, R-Houston, has hired Steve Stockman as a campaign consultant. That's the same Steve Stockman who beat U.S. Rep. Jack Brooks, D-Beaumont, in 1994, then lost the seat to Nick Lampson, another D-Beaumont, in 1996. Last year, he ran unsuccessfully for Texas Railroad Commission. We mentioned the newest addition to that race last week, but fouled up his resume: Ron Kapche was the founding executive director at the Texas Workforce Commission. He and Brewer are in a field that also includes GOP activist Cathy McConn, state Rep. John Culberson, Rev. Wallace Henley and businessman Peter Wareing.

• Sen. David Bernsen, D-Beaumont, sends out a fundraising letter noting his thankfulness that his freshman year in the Legislature is over, and asking for help addressing "a pressing matter of the past: the dreaded, and substantial, campaign debt." His soiree is on July 12 in Austin.

Department of Crow Ingestion

We wrote last week that Gov. George W. Bush didn't have a primary opponent when he ran for a West Texas seat in Congress back in 1978. Wrong, wrong, wrong. In fact, he had both a primary and a runoff. Here's the lowdown from the Texas Secretary of State's office, if this comes up in an argument near you. Bush ran against Jim Reese and Joe Hickox in the GOP primary that year. Bush got 6,296 votes, Reese got 5,498, and Hickox got 1,455. That forced a runoff, which Bush won with 6,802 votes to Reese's 5,395. Bush then went on to lose in the general election to Kent Hance, then a Democrat, who got 54,729 votes to Bush's 48,070.

Political People and Their Moves

Write in the name of Carl Mullen as interim executive director of the state's General Services Commission. He's been at the agency for seven years, most recently as deputy to Tom Treadway. Treadway, you'll recall, left GSC last month, and Mullen will hold the job until a new chief is named. That could come from inside or out; the board will do a search... The new head of the Legal and Compliance division over at the Texas Department of Insurance is Sarah Waitt, named to that post by Commissioner Jose Montemayor to replace Mary Keller. Keller, who held the post for six years (and who was a top assistant to Attorneys General Jim Mattox and Dan Morales before that) jumped to the Austin office of the Houston-based law firm of Baker & Botts. Waitt, who's been in private practice for about 16 months, was a longtime staff attorney at TDI before that... The new marketing director at the Texas Tomorrow Fund is Helena Colyandro. TTF, the state's prepaid college tuition program, is a satellite of the Comptrollers office; the new hire's husband, John Colyandro, is the top aide to Comptroller Carole Keeton Rylander. TTF wants to do more marketing directly to Hispanics, and Rylander aides say Mrs. Colyandro, who was born in Mexico City, is uniquely suited to do that... Appointments: Gov. Bush appointed Jesse Wainwright, an attorney with Haynes and Boone, to be the new judge of the 334th Judicial District Court. He'll replace Judge Russell Lloyd of Houston, who resigned. The appointment of Wainwright, who is black, apparently sets a record for the number of minority judges serving in Harris County at one time. He makes the sixth minority among the county's 59 judges, and Bush appointed all six... Offered as evidence of a "life outside the Legislature" from lobbyist Brad Shields: He's been elected president of the Eanes ISD board of trustees. He was first elected to the board in 1994... Press corps moves: Longtime Austin radio dude Bob Crowley has a new gig in San Antonio, working for TXN, the Texas Network. TXN has also promoted Danny Hermosillo, an Austin and Capitol fixture, to Dallas to be the new bureau chief. TXN, one of two current attempts to create statewide TV networks, is backed by San Antonio businessman and political financier James Leininger; the other is financed by Dallas-based A.H. Belo Corp.

Quotes of the Week

Houston attorney Connie Moore, on talk that some Houston lawyers are manipulating name-change cases in ways that allow their transsexual clients to obtain same-sex marriages: "Marriage is a goal for the gay and lesbian community, but not so much that you're going to go out and change your sex so you can get it."

Rep. Pete Gallego, D-Alpine, on the dangers of being a House member who gets too much publicity: "I always try my best to keep a low profile and avoid the hedge-clipping service. When you stick your head above the hedge, the hedge-clipping service comes by and tries to clip it off."

Deece Eckstein, chief of staff to Sen. Rodney Ellis, D-Houston, on Gov. Bush's veto of an Ellis bill that would have allowed counties to select public defenders for indigent inmates instead of leaving that duty to trial judges: "Until Bush vetoed the bill, it wasn't his system. He's no longer the governor of a state that had a bad system. Now it's his system."

Joseph Guttentag, a U.S. Treasury Department official who is also a member of the panel studying taxes on electronic commerce at the behest of Congress: "We must not allow the Internet to become a tax haven that drains the revenue governments need to provide the services that citizens demand."

Dallas activist Thomas Muhammad, on why some minorities are upset that the school board elected a white woman, Roxan Staff, to be its president: "It still baffles us as to why they want to be a member of the school board if they represent only 10 percent of the population."

GOP pollster Q. Whitfield Ayres, on whether Florida First Lady Columba Bush's failure to declare $19,000 in Paris purchases to Customs will have a political impact: "This is not the stuff of which political commercials are made. I mean, a Democrat is going to attack the Hispanic wife of George Bush's brother? I'd like to see somebody try it."

Texas Weekly: Volume 15, Issue 50, 28 June 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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