The overriding issue of the next legislative session quietly starts its 10-month road show this week in Abilene with the first public hearings on redistricting. The House and Senate committees will collect opinions about what should and shouldn't be split geographically around the state, a record that will be used in the court battles that will almost certainly follow the next Legislature's final decisions on the state's political fence lines. Some members think that public testimony will be important in court. Some think it will be completely ignored once the pencils are put away in favor of ink pens.

All agree that the hearings are required by the Voting Rights Act, and so here they go.

The committees that handle this first round might or might not be the committees that handle the next piece, the actual drawing of districts. Lt. Gov. Rick Perry named a committee last week to handle the first year of this, but if all goes well for the Republicans, he won't be the lieutenant governor next year and his replacement might have different ideas about who should and shouldn't be handling the reapportionment crayons. Even if Gov. Bush loses the presidential race and Perry is still the presiding officer, the committee could change (as could the House committee). Ten years ago, the interim committees were replaced when the session began by a Senate Committee of the Whole, and the COW drew the final lines. In any case, the panel going around the state to gather string for next year's fight can't do anything that binds the next Legislature. If the House and/or the Senate change their committees in January 2001, the new committees won't be hamstrung by what's done in the interim.

Redistricting Notes & Scuttlebutt

Final Census numbers don't have to be sent to the state until April 1, 2001, midway through the legislative session (statewide numbers, which will determine any change in the number of congressional seats, will be reported by January 1, 2001).

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The Legislative Council has a new book out that will serve as a starting place for people who haven't lived through redistricting, or for those who live to forget about the last time and now need to remember. The Guide to 2001 Redistricting is available online.

One new twist comes from the technological advances of the last ten years. A decade ago, redistricting plans were cranked out of one computer, called Red Apple, that had only eight terminals. This time, legislators will get personal computer software that does the same job, so they can fiddle with ideas in private and at any time they choose. Another piece of software will let the public look at current and proposed district lines on the Internet.

Houston Democrat Mario Gallegos won a spot as co-chair of the Senate's redistricting panel. He is widely rumored to have set his heart on a seat in Washington, D.C. But ask him if he wants to run for Congress and you get an "Oh, man..." that has the tone of "I wish you hadn't asked me that." Officially, he says he's "been fortunate in the past and will take things as they come." Offered the opportunity, he didn't knock the idea, however... Rep. Mike Krusee, R-Round Rock, has been watching the numbers and reading up on all this for more than a year, but he's not on the House redistricting panel. No matter: Rep. Kenny Marchant, R-Carrollton, who is on the House committee, has appointed Krusee to head the redistricting task force for the House Republican Caucus... Some Democrats gripe that the Senate panel picked by Perry has no Anglo Democrats on it. One of the five Democrats on the committee is African-American, the other four are Hispanic. And some Republicans note that the most often-mentioned candidates for lieutenant governor are nowhere to be seen on the redistricting panel.

Texas Notes on the Man Who Would Be

Almost all of the Texans who took to New Hampshire in the days leading up to the primaries were, as you might expect, supporters of Texas Gov. George W. Bush. But a trio of Texas Republicans went out of their way to show their disfavor, all of them jumping to support publisher Steve Forbes, who finished a distant third in the first primary of the year. State Board of Education Commissioner Bob Offutt, former SBOE member Donna Ballard, and Mary Williams, a Houston-based activist who has been pestering Bush for years on tax issues, each showed up to support Forbes and to knock Bush. Williams claims Bush signed a no-taxes pledge during his first run for governor in 1994, then broke it with the tax reform package he proposed in 1997, a plan that lowered some taxes while raising others. Ballard and Offutt, each of whom has a history of opposing the governor on education issues, each hammered at his education record. They contend he is insufficiently conservative.

Groundhogs played havoc with the headlines coming out of the New Hampshire primary, mostly variants on Bush seeing John McCain's shadow and getting six more weeks of primaries.

Media and public attention in the presidential race are moving in parallel, according to the Vanishing Voter Project at Harvard. It might sound odd to political junkies, but even with the increasing attention, less than half of the nation's voters had tuned into the elections in the week between the Iowa caucuses and the New Hampshire primary, according to that weekly survey.

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The Texas Department of Public Safety tells The Dallas Morning News that the state's taxpayers spent $2.65 million last year on Bush's security detail. In 1998, DPS spent $285,000 protecting Bush.

And the Bush year-end report is in. He raised $68.7 million after he said last March 2 that he was launching an exploratory campaign to consider a presidential bid. During the last three months of 199, the raising/spending curve changed: Bush raised $11 million and spent $17.3 million during that period. He ended the year -- this is before Iowa and New Hampshire, mind you -- with $31.4 million in the bank. They spent 27 percent of their money raising more money, 17 percent on media, 17 percent on general operations and 10 percent on travel.

A Poll and a Gift

Peter Wareing's campaign pollster, Mike Baselice of Austin, has his candidate slightly ahead (it's barely within the 4.9 percent margin of error, but it's inside it) of Rep. John Culberson in the race to succeed U.S. Rep. Bill Archer, R-Houston, in CD-07. By Baselice's reckoning, Wareing has 25 percent of the vote, compared with 20 percent for Culberson. Everyone else in that race, according to this poll, is way back, but Wallace Henley is currently running third. That was done in the last week of January and the pollsters talked to 401 people in the district. The question with a candidate field of that size -- eight people are in the primary -- is who will make the runoff. At the moment, based on a poll put out by Wareing (that's a bias alert), it'll be Wareing and Culberson... Say what? Noble Willingham, the actor running for Congress in CD-01 against U.S. Rep. Max Sandlin, D-Marshall, got a long and favorable write-up in The Dallas Morning News, which featured him in a Sunday "High Profile" cover story. A Willingham aide says the paper did it without prompting.

CORRECTION: We pointed at the wrong program in one part of last week's piece on state finances, fingering Medicaid Managed Care when we should have been pointing at Medicaid. Forget we ever said it. Medicaid's problems: Caseloads are declining more slowly than expected, prescription drug costs are higher than expected, and utilization rates in some parts of the program are higher than expected. And as noted last week, it might be a problem and might not; the projections are based on data from a short period of time, and could be off the mark. If the trends hold, the program has a $116 million problem. Fluctuating caseloads could stabilize. It happens less often with drug prices, which tend to stay up when they go up. That element has officials particularly skittish.

Texas Internet Taxes: Don't Ask, Don't Tell

It's funny that elected officials in a state with a flush economy and a growing stream of revenue would be talking about taxes, but it's true. Forgive them, if only because they didn't bring it up. The Dot Community brought it up after finding that their channels of commerce didn't exactly mesh with the channels described in tax law. Some saw a way out of those taxes; others simply saw a system that wouldn't perfectly transfer over to some new ways of doing business, and Boom! We're talking about sales tax exemptions for Internet transactions.

Lt. Gov. Rick Perry weighed in as he spoke at the first meeting of his Advisory Council on the Digital Economy, saying the state shouldn't impose any new taxes on the Internet, at least partly because the state doesn't need the money right now. the key word there is "new".

There is a widespread assumption that sales taxes on online sales are illegal for three years because of a federal moratorium. That's a misreading of the federal law, which bars states from imposing new taxes on those transactions but leaves existing laws in place. States like Texas that already tax the online world in one way or another can continue to do so. They are allowed to kill online taxes but they weren't ordered to do so. For instance, most small Texas-based companies providing Internet service were collecting taxes a year ago, but some of the big national companies were not and didn't want to. So the Legislature killed that tax. But that legislation didn't drift into the area of taxes on transactions.

Many tax experts in the state believe Texas already has the law in place to tax some or all online sales. If you buy something online from a Texas company, you have to pay sales taxes on it since the seller was located here. If you buy something online from a company that doesn't have a physical presence in the state, that company doesn't have to collect taxes on the sale or send those collections to the comptroller's office. But the Texas buyer still owes the tax, should they want to report themselves and pay it. Most consumers don't do that, which gives the out-of-state folks an advantage of at least 6.25 percent -- the state's current sales tax rate -- over Texas-based sellers.

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Most businesses do pay that so-called use tax. In fact, if you ever have the pleasure of going through a state tax audit, you'll probably get asked about unpaid use taxes on things bought out of state, like computers or furnishings. Buy your computers online from a company in California, for instance, and you're supposed to pay taxes even though the seller didn't add them to the price tag. In practice, most Texans who buy things online don't phone Caesar and volunteer to render.

Some of those same tax gurus think Texas could be more aggressive about enforcing those taxes on online sales without running afoul of the three-year federal moratorium. It ain't likely, but it would be allowed. That idea engenders some fear among those who'd like to keep the online world tax-free.

Internet promoters would like an outright ban on any taxes on online transactions. This is a new economy, they argue, that should be unfettered by taxes and regulations so that it can grow and make jobs and keep everyone's 401k going like a bottle rocket. They are finding support among folks who agree with the argument that the newest industry in town should be left alone, as well as from Tax Doves who support tax cuts and exemptions and repeals wherever they find them.

On the other side are so-called Tax Hawks who think repeal of sales taxes on some transactions will force businesses to retool, configuring their sales to take advantage of the tax break. That would keep those companies competitive with companies that don't charge the taxes. And it could dearly cost governments on every level that rely heavily on sales taxes. The State of Texas will get more than 28 percent of its revenue from sales taxes during the current two-year budget cycle. The hawks say a ban on online sales would sooner or later dig deeply into that $27.2 billion revenue stream.

Perry doesn't want to open the Pandora's box. He doesn't want the state to impose a new tax on online sales, he says, but he doesn't see a need right now to change the state's sales tax law. He also doesn't want to see any new interpretations of how that law should be enforced. While the law would probably allow it, Texas isn't taxing most Internet transactions and he doesn't want it to start. But he's not calling for a repeal of any of the existing sales tax law.

Sibling Rivalries

The Texas Hotel and Motel Association is abandoning the Free Enterprise PAC, and doing it harshly. That group's executive vice president, Don Hansen, fired off a letter to Free PAC's Richard Ford saying the group won't ever contribute to the PAC again. That followed complaints from several Republican House members -- Reps. Dennis Bonnen of Angleton, Kim Brimer of Arlington, Brian McCall of Plano and Tommy Merritt of Longview -- who were unhappy to find that Ford had been helping recruit their opponents. Their laments found their way to some of the contributors to Ford's PAC, including Hansen. And his letter is a barnburner. It says the money from THMA's political action committee was to be used only for a dinner honoring lawmakers and not for campaign contributions or to "tear down incumbents" that the hotel/motel people consider friendly. And then there's the close: "We will not be making any contributions to you in the future, and we will tell everyone we talk to not to even consider any contribution to your organization."

Merritt, who actually got a letter at one point asking for his help in recruiting his own challenger, got out unscathed. He's unopposed. Brimer got a primary opponent named Bill Zedler from Fort Worth. McCall will face Kenny Johnson of Dallas in the primary next month and Bonnen will face Diane Hensley of Alvin in the primary.

The other family has spats, too. Rep. Domingo Garcia, D-Dallas, might be innocent, but he's been booted from the group formed by House Democrats to keep incumbents safe from electoral harm. He insists he never recruited candidates to run against Anglo Democrats in Dallas County, but his fellows in the Texas Partnership apparently didn't buy his story. That group revoked Garcia's membership.

Funny Arithmetic, Dueling Endorsements

In the weekly jab-fest in Senate District 3, Rep. Todd Staples, R-Palestine, claims to have out-raised homebuilder Les Tarrance by a two-to-one ratio, but you have to do some hinky math to get there. There are some interesting tidbits in the 1999 reports. Staples took out a $20,000 personal loan; Tarrance took out a $100,000 personal loan. Staples ended the year with $184,000 cash on hand.

Tarrance picked up endorsements from former Gov. Bill Clements of Dallas and from the Texas Municipal Police Association. Tarrance's brother Lance was Clements' pollster. Staples, meantime, picked up an endorsement from Rep. Wayne Christian, R-Center. Christian, whose House district overlaps the Senate district, is in a race of his own. He faces a popular sheriff -- Democrat Joe Evans of Nacogdoches -- in November. That House race could be a factor in November, no matter who wins the Republican primary in the Senate race, by attracting voters to the polls.

Never Mind that Part About Advertising Space

It's not gonna say "Nabisco" next to the seal of the State of Texas after all. Comptroller Carole Keeton Rylander told the Austin American-Statesman that a bunch of what she called "brilliant overachievers" on her staff came up with the idea of trading endorsement mentions for private-sector contributions to her e-Texas program. They're still taking the donations and hoping to raise up to $400,000 to pay for that government reengineering project. What they won't do, apparently because of the paper's stories, is put contributors' logos or company names on e-Texas letterhead or on the e-Texas web site. They also won't follow through on their original plans to hold public hearings at the sites of companies that give $50,000 to the cause. They will, however, continue to take donations to pay for the program, and they've got a list of rules for the people and companies that want to donate. They won't take money from people involved in current tax cases, lawsuits against the agency, who owe delinquent taxes, who are under investigation, or who are behind on child support or guaranteed student loans. On the other hand -- and this is where the good government types have a problem with the funding -- the gifts don't disqualify givers from doing business with the comptroller's office. Two contributions totaling $11,000 have come in so far. The materials in a marketing packet mailed to prospects were dated January 13, so the idea has been on the street for several weeks.

Telling Stories on Yourself

There's a hairy email message following HD-130 candidate Aubrey Thoede. We're not going to repeat the details, for the same reason we didn't report it the first time we saw it: They're not substantiated and we don't have a solid idea who did the finger-pointing.

Suffice to say there are anonymous charges that he's had a couple of brushes with the law. One involves records that are supposed to have been expunged, according to Thoede. We were leaving it be. But now, Thoede is stirring it up his own self, by blaming another campaign for sending it out and threatening to take action against the other folks if they make the charges in the email public. And in doing so, he's repeating the charges, just to make sure everyone knows why he's upset at the other campaign that he thinks started the whole deal. Sheesh.

The plot: An email went to a group of political groupies including activists and reporters and others on January 21. Whoever mailed the message didn't answer our replies, but claimed they were a supporter of Thoede's until they found out about some of his past troubles.

Thoede's campaign got a copy and traced it and is now blaming Corbin Van Arsdale, who's also running for the seat, for sending the email. They contend, with pretty decent evidence, that the message originated on a machine in Van Arsdale's law office (Notice to future Donald Segrettis: You can trace the fingerprints of machines on the Internet). The Internet headers point to a machine registered to an organization affiliated with the law firm and sharing the same address.

Van Arsdale says, via email, that he did not send the email and doesn't know who sent it. He says he doesn't want to repeat the allegation, but in a note to several reporters, says that he checked and concludes that "one of them is almost certainly true and the rest of them are in fact true."

He concedes that the evidence pointing to a machine in his firm is convincing, but suggests such evidence can be faked. Like Thoede, he says he's not going to make a campaign issue of this. Like Thoede, he is saying that to a bunch of reporters. Go figure.

Lobbying, But Not in Austin

Rep. Bill Siebert, R-San Antonio, takes issue with the research done by his opponent, who has concluded that he's been lobbying in Austin. He says flat out that he has never lobbied in Austin, either before he got in the Legislature or after. Apparently, his opponent, Elizabeth Ames Jones, misread a financial report he filed with the state and is using that research to say Siebert is lobbying in Austin at the same time he's serving in the Pink Building. If a lawmaker makes money from a company that also lobbies the Legislature, that has to be reported. Siebert says some of his business clients also pay people to lobby the Texas Legislature. His disclosure reports say he's earned between $10,000 and $50,000 during each of the last several years from companies that lobby. But he wasn't the person doing the lobbying, as Jones contends. Some of her campaign literature says he's been representing companies that appear before the Legislature. That's carefully worded enough to be technically true, but misleading. Siebert, who has been pilloried for the last year for lobbying the San Antonio City Council while in the Legislature, admits he did that, but says he didn't do the other thing.

On the Ballot, But Not Running; Off the Ballot Altogether

Al Stowell is dropping out of the HD-48 Republican primary, but he'll remain on the ballot because he didn't pull his name in time. He has decided to run for the Austin ISD board instead of trying to replace Rep. Sherri Greenberg, D-Austin. That's straightforward enough, but then it gets confusing. Stowell had conversations with others in the race and at least one -- attorney Jill Warren -- thought he would endorse her on his way out of the race. Instead, Stowell threw his support to Scott Loras, another attorney who's running in the crowded but shrinking GOP field.

Off the ballot: Joe Libby won't be on the ballot for Houston's 1st Court of Appeals, which means the incumbent, Murry Cohen, will run unopposed. Cohen, who switched to the GOP last year, successfully challenged the petitions that put Libby on the ballot.

Political People and Their Moves

Former Sen. Jerry Patterson says he will start raising money soon for another run at the General Land Office. Patterson lost the GOP primary in 1998 to David Dewhurst, who went on to win the land commissioner job. Patterson says he is not looking for a rematch and in fact, won't run if Dewhurst wants another term. But he wants to be in position if Dewhurst decides to move up or out. He'll start by dragging the money sack this spring... The next race for State Bar president will be between Otway Denny Jr., of Houston and Broadus Spivey of Austin. This campaign sounds downright sedate at a time like this: They'll campaign for one month starting on March 15. Ballots will be in the mail in mid-April and the votes will be counted May 1...Comptroller Carole Keeton Rylander, a former teacher and Austin school trustee, gets the "Friend of Education" award from the Texas Classroom Teachers Association... Karey Barton, hired by Rylander at the beginning of her term to be her chief of tax policy, is leaving that agency to hang out his own shingle, advising business clients on tax issues. In his place, Rylander has hired Jennifer Patterson, a state and local tax lawyer at Baker Botts who once worked for Sen. Jeff Wentworth, R-San Antonio (her parents own the Scratch Bakery in San Antonio and her husband is the aforementioned Jerry). Patterson will probably be at work at the new job by the time you read this... Bill Scott, a former aide to Sen. Troy Fraser, R-Horseshoe Bay, is back working part-time for his old boss, but is still doing political consulting for the Dallas-based Clements Group on his own time. That firm isn't working on any Senate races... Andrew Wise is leaving the American Electronics Association to go to work for Microsoft, which is opening a regional office based here... The names have been changed to protect the innocent: Bobby Wightman-Cervantes, a Democratic candidate for U.S. Senate, will be on the ballot as Bobby Wightman. The party says, "Wightman is not eligible to use the name listed initially." Though he admits he's never used the second half of the name before, including when he ran a different race as a Republican, he's suing to use it this time... Who's the big cheese over there? In big letters on a letterhead we got recently: John Sharp. In little letters on the line below: Texas Chairman, Bill Bradley for President Campaign.

Quotes of the Week

U.S. Sen. John McCain, on how he hopes things will develop: "I don't know anybody who loses four or five primaries and emerges as the front-runner. I don't care if he has a billion dollars."

Gov. George W. Bush, on how he hopes things will develop: "The road to the Republican nomination for the White House is a long road. Mine goes through all 50 states, and I intend to end at 1600 Pennsylvania Avenue."

U.S. Sen. Fred Thompson, R-Tennessee, on what advice about campaigning in the Volunteer State he would give to his friend McCain: "Never drink Jack Daniels on an empty stomach."

Rep. Buddy West, R-Odessa, commenting in his local paper after an opinion request from a Midland representative had the effect of killing a $2.5 million appropriation for a local project: "When you find yourself the victim of another person's bitterness, ignorance, smallness or insecurities, remember, things could be worse. I'm directing this to the man east of Odessa. All this amounts to is Tom Craddick's bitterness toward me."

Harvard government professor Paul Peterson, on charter schools and the school voucher movement: "Every time something is introduced that provides more choice, it is never taken away. Parents really like it, so politicians can't afford to take it back. Vouchers may creep along because the political opposition is so intense, but it'll happen."

Stanford University professor Charles McClure Jr., on whether Texas should ban taxes on the Internet: "Why should we give even a temporary tax break to an industry that is growing faster and creating billionaires more rapidly than any in recorded history?"

New Yorker Judy Ann Cannizzaro, on her career and her abilities: "I've been a clairvoyant all my life. If I could get the lottery numbers, would I be working as a telephone psychic?"

Texas Weekly: Volume 16, Issue 30, 7 February 2000. Copyright 2000 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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