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Groundhog Day at Economic Development

The Texas Department of Economic Development could get a new board of directors and be stripped of two of its highest-profile programs if a recommendation from the state's Sunset Commission gets into print as a final report and through the Legislature next session.

The Texas Department of Economic Development could get a new board of directors and be stripped of two of its highest-profile programs if a recommendation from the state's Sunset Commission gets into print as a final report and through the Legislature next session.

The recommendations for the state's most frequently remade agency will apparently pull up short of killing TDED outright, as some have suggested. Instead, the draft suggests a smaller agency with a new board be left in the place of TDED, to handle inquiries from local and regional economic development outfits and from companies that need information about doing business in Texas.

In mid-April, the Texas Sunset Advisory Commission will lay out its report on the agency, a tormented organization that has spent the last several months working through a devastating audit followed by pointed questions from lawmakers and others in government.

The questioning moves to the formal stage in May, when the commission begins sunset hearings on TDED and a couple of other agencies. The economic development agency is in for a particularly hard ride. Drafts of the sunset report would take away two marquee functions, moving the Smart Jobs program to the Texas Workforce Commission and moving the agency's tourism program to the Texas Department of Transportation.

Smart Jobs was the subject of the scathing audit that came out at the end of 1999 and that began with the three little words "gross financial mismanagement." TDED, with an unsolicited assist from a SWAT team made up of bean-counters from the auditor's office and the comptroller's office, is sorting through records to find which Smart Jobs vendors owe the state money. That'll take months, and the Smart Jobs program is basically on hold until it's done.

Pay Without Work and Work Without Pay

Two of the biggest problems come from paying vendors for work not done, and conversely, from hiring vendors to do work without paying them. For instance, the number-crunchers have found five Smart Jobs vendors who each owe the state more than $100,000 because they were paid, apparently, for work they never completed.

On the other end of the spectrum are vendors who are supposed to be using Smart Jobs money to train people, but who aren't getting paid -- or at least say they're not -- by the agency. Those are vendors who jumped in right before legislators froze spending in the program. They're waiting for money and for further instructions about how to proceed.

A dispute over how much money TDED should pay into the state's unemployment compensation fund was finally resolved a couple of weeks ago, when the agency quietly transferred $63 million from the Smart Jobs fund to the unemployment fund. TDED (and others in the executive branch) maintained that the money should remain at Smart Jobs. The state auditor (and others in the legislative branch) maintained that the money should be transferred, and contended a failure to move it would force the workforce agency to raise the unemployment tax paid by Texas businesses. That part is over with, but the other troubles will plague TDED for months.

The SWAT team, ordered in by the Legislature's Senate Finance and House Appropriations chairmen, is going through around 300 Smart Jobs accounts, trying to reassemble that program's books in an effort to figure out who owes what to whom. Until then, the agency has been ordered to stop signing new contracts for job training.

Houston: Pick Your Parser

Rep. John Culberson, R-Houston, says he has never cast a vote for a tax increase. His congressional runoff opponent, Peter Wareing, says Culberson voted for higher sales and gasoline taxes in 1987, his first session as a legislator. They're both right, they're both wrong.

Why is this an issue? Because it's the basis for one of Wareing's more effective campaign ads in the runoff campaign to replace U.S. Rep. Bill Archer, R-Houston in CD-07. Wareing's folks say they would have left it alone had Culberson not bragged of his historical opposition to taxes.

Culberson says he never voted for a bill that increased taxes, a contention that meets no real objection from the Wareing campaign. He voted against the tax bill conjured up by Gov. George W. Bush in 1997 because it would have raised a number of taxes while cutting others.

Culberson says he was part of the gang that ripped up the 1991 tax bill, a $3.1 billion number that bailed the state out of a budget crisis brought on by a slow economy, a prison-building boom and a number of expensive court cases from which the state was trying to extract itself. The bill had a famously rough night in the Texas House, entering as a $3 billion bill and exiting as a bill that would have raised about $30 million. It was patched in the Texas Senate and then zipped through, with Culberson and some others voting no. (He also voted against the state budget that year, in part because spending was not slashed to match the economic plummet the private sector was taking.)

In 1987, the year of the record tax bill that got the state budget through the oil crash, Culberson voted against the $6.1 billion tax increase pushed by lawmakers and then-Gov. Bill Clements.

Does a Vote Against a Tax Cut Equal a Vote For a Tax Hike?

But that wasn't the only tax bill in 1987. The sales tax and the gasoline tax were supposed to drop that year. Oil prices went deep into the ditch in 1986 and lawmakers temporarily increased the sales and gasoline taxes in September of that year (under Gov. Mark White) to keep the budget going until the regular session began in January. Culberson was one of the lawmakers elected for the first time that November, and was also one of the legislators who, in 1987, voted to make those temporary tax increases permanent. The bill to hold the sales tax at the higher rate died in the Senate, and the bill to hold the gasoline tax at a higher rate was vetoed by Gov. Clements. In a special session that year, Culberson voted against the big tax bill that won final approval. That bill made the gasoline tax increase permanent and increased sales taxes beyond the temporary rate.

Culberson, in conversation and in a defense of his votes that is posted on his Internet site, says he never voted to raise taxes. He admits, if you push hard enough, that he voted to hold the two taxes at then-current rates instead of letting them drop. Wareing says that's tantamount to voting for a higher tax, since Culberson and the overwhelming majority of House members were voting, in effect, against a tax cut that was already in the law.

Both sides are sticking to what brought them to the runoff stage. Wareing, with a five-to-one financial advantage so far, wasn't off television and radio for more than, oh, five minutes between the primary and the runoff. Both candidates will rely heavily on "neighbor-to-neighbor" grassroots networks that are supposed to produce some votes in a low turnout runoff.

Underneath, as previously mentioned, is the race to succeed Culberson in the Texas House. All but a couple of the precincts in his House district are also in the congressional district, and odds are good that the overlap will help Culberson. Conservative activist and pamphleteer Steven Hotze surprised everyone by endorsing Bill Callegari over Aubrey Thoede in that HD-130 race to succeed Culberson. One theory making the rounds in Houston is that Hotze needs to win some races -- his won-lost record in the primary was abysmal -- and so picked the horse he thinks will win the race. Hotze endorsed Corbin Van Arsdale, who finished third, in the primary.

Down, Down, Down to the Wire

It's not the first time a runoff was nastier than the election that led to it, but the descent of the race for House District 48 in Austin has been notably quick. The Republican runoff between two lawyers, Scott Loras and Jill Warren, has turned into a name-calling, rock-throwing, rug-chewing mess.

Worse, it's full of charges that have no authors, some of which came to light in letters and emails not as attacks, but as defenses. All of this follows a primary election so polite that finger sandwiches and ice cream sundaes would have been in order.

Loras is now defending his record as a lawyer, his time on the staff of Democratic former U.S. Sen. Lloyd Bentsen, as a divorced father, as a Christian and as a businessman.

Warren is likewise defending her lawyer occupation, her time on the staff of Democratic former state Sen. John Montford, her campaign contributions to Democrat Paul Hobby in the 1998 comptroller race, the fact that her brother Jim Warren is a lobster, and her voting record.

The shots at Warren come, for the most part, directly from the Loras campaign. Some were on a flyer than went out to precinct chairs and other organizers. Others are in an email sent under the name of Maria Burbridge, one of the losers in the primary election. It takes a memo sent out by Warren consultant Hans Klingler and goes point-by-point to shoot at Warren and defend Loras. Each of the losers in the GOP primary endorsed Loras, as we noted last week, and Burbridge was among them.

Then the unsigned faxes started up, pointing recipients -- we were among them -- to a Christian website called Five Doves. Loras was one of the regular writers in the letters section there, particularly during a period leading up to September 1999, when he and others apparently expected Rapture to occur.

He stands by the things he wrote then, and says he is angry that religion has been brought into the race. "They're desperate and they're looking for ways to vilify me. They're trying to make me out to be some kind of religious fanatic and I think it's going to backfire on them." One letter notes that "Jews as a whole are 'blinded' until the end of time." Loras says that refers to the fact that Jews don't worship Jesus Christ and says there is nothing anti-Semitic in that or in any of his other writings. His former law partner, County Civil Court Judge Gary Michael Block of Houston, is Jewish and calls Loras "one of the least anti-Semitic people I know."

Loras says the shots at him for being a plaintiff's attorney are lame; he represents insurance companies in subrogation cases most of the time, and characterizes that as work that helps keep premiums down. It's coded in the Harris County records as plaintiff work, however, leading the other side to slap him as a "personal injury trial lawyer."

News and Politics, Briefly

This rumor will turn to ash right after you read it, but the names of a couple of the top dogs at Texas Tech are back on the rumor mill. The name of Chancellor John Montford (the former state senator mentioned above) keeps coming up in conversation about who will be the next chancellor of the University of Texas System since William Cunningham is going. And although the selection committee has just been formed, Dr. David Smith, who now heads the medical school at Tech, is getting his name knocked around in talk about who will head the medical school at UT Health Science Center at San Antonio now that Dr. John Howe III is leaving... This might not seem like a great time to talk to people about tax breaks in the oil patch, but Sen. Teel Bivins, R-Amarillo, is talking about a sliding scale that would ease taxes for oil and gas folks when prices are low but tax them when prices are high. That idea came up during the last legislative session, when lawmakers temporarily whacked severance taxes to give the oilies some relief... Keith Wheeler, the Rockwall attorney who was after the GOP nomination in SD-02 (currently held by Sen. David Cain, D-Dallas), is throwing his support to Dr. Robert Deuell of Greenville, who faces Tyler businessman Richard Harvey in the runoff. Harvey has run four times for the seat, an exercise that that built him some name identification. The winner will face Cain in November.

A Special Election for a Future Footnote

The death of Rep. Ronny Crownover, R-Denton, forces a special election that won't mean much, at least on paper. There will be an election to fill his seat for the rest of the term (through January) and anyone -- Republican, Democrat, Independent or whatever -- can sign up for that. But the Legislature won't meet during that term and the only contest will be in the fall, when the GOP chooses a ballot replacement for Crownover, who died after the cutoff for adding people to the November ballot.

But the Republican Party will get to choose who will have Crownover's place on the general election ballot. Local officials are trying to talk Myra Crownover, Ronny's widow, into the race, according to Denton County GOP Chairman Richard Hayes. That might keep other Republicans out of the contest, and since the primaries are over and all of the legal deadlines have passed, the Democrats -- who didn't have anyone holding a spot on the ballot -- won't get a shot at a full term.

The winner of the special election for the unexpired term won't have a lasting claim to the spot, either. It's entirely possible that the winner of that election will be out of a job before the Legislature ever meets, since the Republicans aren't obligated to go with the winner of the special election. The party has to pick someone for the general election ballot by September 8.

The special election will be called by Gov. George W. Bush and can be set for either of the upcoming uniform election dates: Saturday, May 6, or Saturday, August 12. This was unfurling as we went to press, but Bush had until Friday, March 31, to meet the deadline for the May elections, and was expected to pick the earlier of the available election dates.

Careful What You Ask For

The partial recount in the Republican primary in East Texas' House District 11 didn't improve the results for Jacksonville businessman Kenneth Durrett. On Election Day, Paul Woodard Jr. of Palestine won by 57 votes in the four-county district. Durrett, who won in three counties but got whomped in Anderson County, asked for recounts in Anderson and Robertson counties. When it was done, he'd lost by 60 instead of 57. While the recounting was going on, Durrett made the deadline for a local race, filing for reelection to the Jacksonville City Council, where he's the mayor pro tem.

Woodard, a banker, will face Chuck Hopson, a pharmacist, in the November general election. Hopson beat JoAl Cannon Sheridan, who was the Austin favorite in the Democratic primary, but not the local champ. In fact, Hopson's supporters included U.S. Rep. Jim Turner, D-Crockett, who helped talk Hopson into the race. This is odd on the surface: Hopson, like Woodard, won convincingly in his home county while getting beat in the other three counties in the district.

The HD-11 seat currently belongs to Todd Staples, who is trying to win a promotion to the state Senate. The district leans Republican, but not by an overpowering margin; the GOP thinks they'll hold it, and the Democrats contend they could pull an upset.

For what it's worth (an assessment that depends on your partisan affiliation), the Republican primary drew 6,876 voters and the Democratic primary drew 13,734 voters.

Holding the Hispanic Vote, So Far

When Gov. Bush was reelected in 1998, he pulled in 39 percent of the Hispanic vote in Texas, according to polling done by the San Antonio-based William C. Velasquez Institute. We were curious about how the Guv is holding up with Hispanic voters, but alas, they didn't do any polling in the March primaries in Texas. That said, Antonio Gonzalez, president of the organization, says Bush's numbers were steady through the summer and winter and says the governor is probably on solid ground. "He's wedged in there like a tick," Gonzalez says. The institute will do another poll on Bush (similar to surveys done in July and December of last year) in the next couple of months.

What to watch: Gonzalez says that if Bush continues to garner at least 35 percent of the Hispanic vote, he'll effectively neutralize what has been a traditional constituency for Democrats.

No Deposit, No Return

Democrat David Fisher says rumors of withdrawals from nervous contributors to his Senate campaign are flat wrong. He says the only guy who has asked for a refund had his nose out of joint because Fisher was a little too slow to write a thank-you note. They've made up now.

The refund rumors were born in Austin, where Lt. Gov. Rick Perry has been breathing on lobbyists to indicate his desire to get Todd Staples elected to the Senate in SD-03.

The lobby was predisposed to Staples anyway, since he's a member of the Texas House. And they were certainly already aware that Perry would prefer a Republican majority to a Democratic one. Fisher says that he wasn't counting on much help from Austin anyway, and says it won't hurt him at all to tell voters he is running against the lobby and the special interests from the Capitol.

What is new about Perry's recent efforts at persuasion is the written word. He has committed to writing what historically would have been a word of mouth campaign about the preferences of the Lite Gov. That breach of tradition has irked some folks in the lobby, but there's not much they can do about it since the guy they're irked at will be either governor or lieutenant governor a year from now.

The race is clearly important from a partisan standpoint, since the party that wins will hold the majority in the Senate. But from Perry's standpoint, there are potential collateral benefits. The SD-03 race offers him a chance to work on his own East Texas base even as he works for Staples. He's also way out in front of other Republican officeholders in Texas in the race; when it comes time to count coup, he'll be able to say who was there and who wasn't when it came time to fight for control of the Texas Senate. Think ahead to possible primary races Perry could be involved in and you get the idea.

The downside is relatively slim, since there's little the lobby can do to express displeasure, if, in fact, the lobby is displeased. One wart has been pointed out to us, though, in the form of a question: "Sure, he's talking to Democrats. But why is Perry strong-arming his friends?"

What? Not Enough Reading? Need More Homework?

It's spring, and the state is killing trees so that policy wonks will become more educated, better read, healthier and have fatter bank accounts. Seriously, there's some reading material out there that might be of interest if you want to dig into a specialty subject. To wit:

• The House Research Organization has put together a primer on redistricting that lays out some of the things lawmakers will be arguing over in one year. That report, "Redistricting by the Numbers: Issues for Census 2000" is on their Internet site. That report is a good starting place if you're trying to figure out the arguments over counting and sampling by the U.S. Census and what that might mean when the Legislature reapportions.

• The Criminal Justice Policy Council has been cranking out what seems like a report a week for a while, and those are stuffed with information about prison inventories and such. They are knocking out reports on prison programs that will be the basis for a lot of spending and policy decisions next year. The stacks can be found at the Policy Council. The latest editions are on the state jail system and early intervention programs for youths. The Texas Department of Criminal Justice is warning lawmakers that prisons will need upwards of $1 billion to keep prisons in shape (or replaced) and the numbers from the policy council will drive at least part of that debate.

• The next Legislature will be hit by (at least) three employee groups looking for relief: prison guards, teachers and state employees. On that front, the State Auditor's Office has a new report out that says state employee turnover is now 17.58 percent per year, meaning that between one in five and one in six state employees leaves for another job every year. The national private sector turnover rate is 14.93 percent. The SAO estimates the cost of the state's turnover at somewhere between $127 million and $254 million. The report contains a couple of things that seem obvious: Workers who made less money are more likely to leave. Only 7 percent of those who leave cite pay as the main reason, but the auditors question whether the state is learning enough in its exit interviews with departing employees. The whole report is online at the State Auditor's Office.

Political People and Their Moves

Appellate Judge Anne Gardner watched the Fort Worth tornado from her hastily parked car, saving herself from shattering windows by ducking for the floor and holding up a legal pad as a shield. When it was over, she had no windows left, and her car had been hit by a chunk of someone's roof and by a tree. She emerged untouched... Give the Barry Switzer Airborne Armaments Award to Rep. Rene Oliveira, D-Brownsville, who walked into the Harlingen airport's security gate with a loaded .38 pistol in his bag. His explanation? He thought he'd left the gun in a different bag, and only has one because of "a recent and ongoing threat" on his life. The gendarmes took his gun and sent him on his way. They have not filed charges, but haven't said they won't... David Laney, the chairman of the Texas Department of Transportation, is giving up the middle chair, but he'll stay at the agency as just a plain old commissioner. John "Johnny" Johnson, another member on that three-man panel, has been tapped by Gov. George W. Bush to move into the chairman's seat. That's not the only such shuffle going on. Jay Brummett gave up the chair at the Real Estate Commission in favor of Charles Brodie, but stayed on the board. And Dr. Walter Wilkerson Jr., chairman at the Department of Health, will soon give up his spot to allow J.C. Chambers of Lubbock to become chair. Each of the replacements has more time left on his term than the chair being replaced... T.C. Mallett is one of those people who knows more than the rest of us about how things work in state government, but the master of state funds is ready to call it a career. Mallett, who's been at the comptroller's office for 34 years, is retiring. However, he'll come back for an encore (on contract) during the next legislative session to guide everyone through one more budget... Mona Shoemate leaves the comptroller's office for the private sector. She and her former confederate, Karey Barton (he left a few weeks ago) are forming a tax policy consulting firm called, oddly enough, Barton Shoemate... After five years at Public Strategies Inc., Fred Shannon will take a newly created position handing legislative and external affairs in Texas for Intel Corp. The company will keep its outside lobsters... Deaths: Rep. Ronny Crownover, R-Denton, after a two-year battle against leukemia. He was 54.

Quotes of the Week

State Rep. Rick Green, R-Dripping Springs, says the Wall Street Journal's Texas Journal misquoted him as saying "I consider myself the leadership of the next generation." What he says he said: "I am proud to be a part of the next generation of leadership." The Journal hasn't made a retraction or correction and when we talked with them, had no plans to. Here's what Green says now: "I have made a painstakingly conscious effort to never come across cocky or arrogant since I became a rep. At my age [29], it would brand me for life with my senior colleagues... I would never have said that and I pray I have never acted like that since I've been in office."

UT Journalism professor, columnist and George W. Bush advisor Marvin Olasky, in a 1998 interview with the Journal for Biblical Manhood and Womanhood: "God does not forbid women to be leaders in society, generally speaking, but when that occurs it's usually because of the abdication of men... I would vote for a woman for the presidency, in some situations, but again, there's a certain shame attached. Why don't you have a man who's able to step forward?"

Dallas school superintendent Bill Rojas, explaining that school administrators will be held responsible if student scores don't rise on their campuses: "If you're a happy person and everybody loves you but the children don't learn, you're going to have a little problem in your next contract."

Mexican presidential candidate Vicente Fox, telling an interviewer why people in the U.S. shouldn't be alarmed at his call for open borders between the two countries: "Let's think long-term. For instance, there is a huge need for gardeners in the United States. Today we're training in Guanajuato that kind of specialty, and they will be coming down here to the United States."

Fort Worth waitress Katy McCorkle, who waited out the tornado in the cooler at Angelo's Barbecue: "I was so scared I started cussing. I said a few choice words, then I realized nobody else was making a sound and they were all listening to me. That embarrassed me so much I got quiet."

Texas Weekly: Volume 16, Issue 38, 3 April 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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