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Swapping Potholes for Skylights

Some of the same people who voted to constitutionally limit state borrowing four years ago have found a way to issue hundreds of millions of dollars in new state highway bonds without counting the new debt against that constitutional cap. Each of the three different types of bonds spelled out in current highway funding proposals would punch a skylight into the legal debt ceiling designed to brake the heavy borrowing that began during the prison-building boom of the 1990s.

Some of the same people who voted to constitutionally limit state borrowing four years ago have found a way to issue hundreds of millions of dollars in new state highway bonds without counting the new debt against that constitutional cap. Each of the three different types of bonds spelled out in current highway funding proposals would punch a skylight into the legal debt ceiling designed to brake the heavy borrowing that began during the prison-building boom of the 1990s.

Though they don't all work the same way, all three of the bonding programs promoted by state and city officials from around Texas would be broadly defined as revenue bonds, and revenue bonds don't count against the constitutional cap. For instance: Money borrowed to build a toll road doesn't count against the borrowing cap because general state revenue—tax money—isn't used to repay the loans. Instead, tolls collected from people who use the road, a dedicated source of income, are used.

One proposal for building new highways would allow the state to pay for some roads by mixing the traditional pay-as-you-go system with the toll road system—a new highway stretch would get funded partly with tax money and partly with toll-supported revenue bonds. That wouldn't count against the cap. Proponents see that as a way to stretch highway dollars. Some opponents say it would push tax money towards projects that should be toll roads but which aren't economically feasible because use is too low to justify the costs. Other opponents simply dislike bonds.

Another proposal, a perennial that won Senate approval two years ago and then died in the House, would use federal highway money to repay road bond debt instead of directly on roads themselves. The wonderfully warm and fuzzy moniker: Grant Anticipation Revenue Vehicles, or GARVEEs. It speeds up highway projects by making more money and thus more roads available immediately, but cuts into what's available for later road construction. The governor and comptroller are pushing GARVEEs, along with a number of lawmakers. But they'll have to overcome strong pockets of resistance, especially from House leaders. GARVEES use federal money and not general state revenue, and thus would also avoid the state's borrowing cap.

Finally, the state is looking at what some folks are calling Jackson bonds, named for Dallas County Judge Lee Jackson, who is credited with cooking up the idea. You dedicate a slice of state revenue to set up a fund that pays principal and interest on highway bonds. A relatively small fund of $100 million or so could support up to $1 billion in road construction. The money wouldn't come from current highway funds, so some GARVEE opponents might calm down. And since the revenues are dedicated, the bonds don't get counted against the borrowing cap.

Road builders aren't the only folks installing skylights. Tuition revenue bonds, used to finance a world of things in higher education, don't go into the formula because the state doesn't directly repay them. Instead, the state hands the money to the universities and they pay off the bonds. That financial wink allows the state to say it didn't use tax money to pay off bonds. Budgeteers are currently perusing 189 proposed projects that would require $3.1 billion in new tuition bonds this biennium.

The state isn't anywhere near the cap, according to the Bond Review Board's latest reports. That agency says servicing the state's $5.6 billion in general obligation debt (part of a total bond debt of more than $13 billion) uses up less than half of what's allowed. Put another way, the state could more than double its general obligation bonds without hitting the constitutional cap. But if the various types of revenue bonds were included, the state would be well past that line.

Take a Number, Please

Budgeteers hate dedicating funds because it makes their jobs harder; money gets stuck in a particular hole and can't be pulled out for emergencies, like economic downturns, or bigger priorities, like health insurance for public school employees. The last time the state got into a financial crunch, in 1991, they stretched some definitions and pulled money into other areas to free up what was needed to make the budget balance. They were scrambling to find ways to reduce the size of the tax bill that passed in that special session ten years ago.

Sen. Florence Shapiro, R-Plano, wants to undo a couple of those stretches to fund the highway bond program she's sponsoring. There's a complex financial doohickey called the County Fee Switch that let the state get its mitts on money from motor vehicle registration fees. Shapiro would undo that and bring some $100 million annually back in for use on highways. That's the money she would dedicate to the Jackson bonds. She's also after highway money that was taken away from roads and put into highway enforcement at the Department of Public Safety; that's about $69 million a year.

The problem for budgeteers is that it leaves them with yet another hole to fill. The $169 million a year—$338 million per biennial budget cycle—would have to be made up with money from general revenues. That's the same pot of money that everyone else is trying to eat from. After the long conversation about bonds, Shapiro will have to win the war over appropriations.

Political Maneuverings and/or Head Fakes

Lots of other Democrats have been talking about him as a potential candidate for attorney general, but Austin Mayor Kirk Watson isn't saying whether he'll run for statewide office in 2002. To do so would be a career move in itself because of state law. Saying he is not interested would take him out of the hunt. Saying he is interested in running—or even exploring—would trigger an automatic and abrupt resignation from his current post.

His official line is that he's flattered by the talk and probably won't publicly focus his own attention on what's next until after the legislative session, which ends June 1. That will be a relief to some of his City Hall colleagues. They've all got more than a year left on their terms. If Watson were to resign before June 15, city council members who want the big chair in the middle would have to resign to run. But when they have less than a year left on their terms, they wouldn't have to resign to run in a special mayoral election. That mid-June date is the magic block on the calendar. Watson says that, whatever he does, he won't time any announcements to intentionally influence another city race.

While we're speculating, add Houston City Councilman Carroll Robinson to the list of folks who might be interested in statewide office. He and another Houston politico—city controller Sylvia Garcia—are looking at the state comptroller's job should Carole Keeton Rylander decide to run for something else. Both are Democrats, and the betting is that they wouldn't run against each other. City elections in Houston are in November instead of late spring, so their announcements could come late.

Sen. Teel Bivins, R-Amarillo, says rumors of his political passing are exaggerated. Will he run for reelection in 2002? He hasn't decided, he says. Put Rep. David Swinford, R-Dumas, on the list of possible candidates if Bivins leaves before the end of the session.

And here's a non-speculative item. Former Sen. Jerry Patterson, who's running for land commissioner, has opened up a website to raise money. While he is openly running for the General Land Office job, he has said and continues to say he won't run against the current occupant. But Land Commissioner David Dewhurst, who defeated Patterson in the GOP primary in 1998, is widely expected to give up the current desk to run for lieutenant governor. Best phrase in the Patterson fundraising pitch: "Early support will discourage unnecessary competition."

Getting Ready to Choose Voters

The Legislature's redistricting movie has come to that scene where the warriors sit in their respective camps, talking big, cleaning their guns and sharpening their knives, and writing letters to Ma and Pa and the boys and girls back home. The House and Senate committees that will manage the political cartography have organized. And the lawyers have already started their pre-game target practice, filing motions and counter-motions in state and federal courts. They're basically tussling over where the inevitable court cases will be argued after officeholders are through with their crayons.

For several days last week, the big conference room in the hall behind the Texas House was handed over to the line-drawing lawyers from the Texas Legislative Council. They ran legislators and other visitors through the basic set of maps, documents and other tools needed for redrawing lines for congressional, legislative and State Board of Education seats during the next four months. People walked out with stacks of stuff to read and programs to master before the decennial war over political lines opens up, a war that won't start in earnest for almost two months.

The detailed official population numbers, as you probably know, won't be available until late March (the U.S. Census folks have to have the data to Texas lawmakers by April Fools Day), but the people who will draw the maps and actually draft the bills want to familiarize legislators with the tools and literature before the fights actually commence.

This round of redistricting will be very different on the technological level from previous efforts. The mapping and number crunching that used to be available only on mainframe computers will be done this time on personal computers. Members of the Legislature—and a number of folks who aren't members—will be able to crank out redistricting maps on their own computers, fiddling with lines and wish lists without waiting in line and without having to show anyone else what they're doing.

The arguments over a handful of different maps for each set of politicos will be replaced by squabbles over as many maps as there are people with computers. That could prompt new kinds of chaos, chicanery and figurative knife-fights before the end of the session. People outside of the Legislature—party hacks and political consultants, for instance—can get lawmakers to sponsor them, allowing them access to the computers. They can also sign up to use the Lege Council computers. Plans drawn by members will be kept secret. But some of the plans drawn by outsiders could be subject to open record laws, especially if they're not drawn under the guise of legislative working papers.

While members get direct computer and legal help, Lege Council has set up an Internet site for the rest of us with most of the same tools, at .

It's a terrific resource, listing all of the data available, all of the court filings so far (five, but it'll balloon quickly), news and other sources of information. It's also where you'll be able to look at (but not draw) redistricting maps as they're officially submitted.

Ready, Fire, Aim

Though the maps haven't been drawn yet, the legal skirmishing around redistricting is already well under way. Towel snaps and counter-towel snaps were filed at the end of last year in state court in Austin and in federal court in Texarkana (with the same U.S. District Judge David Folsom in charge of the state's fight with its hired-gun lawyers in the tobacco case).

In the state case, Democrats filed suit based in part on the belief that "the state of Texas will deadlock over congressional redistricting." They're basically trying to grab venue. The state answered back, saying that the lawsuit is too early, jumps the gun and ought to get the boot. Attorney General John Cornyn argues that there's not yet anything to fight over.

The federal case is basically the same drill, bolstered by a quote from state Rep. Mike Krusee, R-Round Rock, who told the Austin American-Statesman almost a year ago "Democrats have a choice... [The plan is] either Republican or the courts." That's a promise of partisan gerrymandering, according to the suit. In that case, Cornyn says another federal court still has jurisdiction (having never let go last time) and says the lawsuit, like the state version, is premature. Neither court has ruled.

Non-Republicans vs. Non-Democrats

Watch for legislation in the next few days that would keep the political parties out of the big judicial elections in the state, and would keep the big contributors out as well. There's a bill in the pipeline from Rep. Pete Gallego, D-Alpine, that would make judicial races non-partisan and would provide public financing for candidates who can demonstrate a certain level of support, in the form of small contributions and signatures. The money would come from attorney occupation fees.

That parallels, more or less, a "Call to Action" published after a third of the nation's chief justices (including Tom Phillips of the Texas Supreme Court) held a summit in Chicago in December. The justices each invited other leaders—including Sens. Rodney Ellis, D-Houston, Robert Duncan, R-Lubbock, and Gallego—to come along. They talked, argued, voted, and then issued a document calling for nonpartisan judicial elections funded by the public. They called for longer terms of office, so that judges wouldn't have to act as candidates so often. They also kicked out a code of conduct for judicial candidates and some ideas about how to keep the public informed in elections where the candidates can't really take positions on what they'd do once elected.

The Judicial Council formed here by Phillips endorsed most of the things issued by the summit. They support increasing judicial terms on the state's high courts to six and eight years instead of four and six years, and they support an interesting idea called "cross-filing." That's when a judge files to run for office in both the Democratic and Republican primaries. Win both races, and the judge doesn't have to run in the general election.

And An Attempt at Self-Regulation

Judicial campaign finance reform is just part of what's in the pipeline, and might turn out to be the least controversial part of it, even when you take public financing of campaigns into account. It appears that the House will start zipping through campaign finance legislation within a week or so. Two years ago, the lower chamber passed a bill late in the session and it died in the Senate amid complaints that the upper chamber didn't have time to digest the changes.

A couple of bills have been filed in the House. One, sponsored by Reps. Debra Danburg, D-Houston, and Jerry Madden, R-Richardson, sticks pretty close to an interim study on the subjects of disclosure and fines and such. It does not include a recommendation of that interim report that would require candidates to consolidate all of their campaign money in one account.

Gallego has filed a separate bill (which got a low bill number that often signals support from Speaker Pete Laney). It has several differences from the interim report. It doesn't require candidates to list their cash-on-hand balances (that's required now in judicial races, but not elsewhere). It has a section that would allow candidates to put their campaign messages up on a state-controlled website run by the Secretary of State's office, so that voters could compare one politico to another in any given race. It would limit contributions from children to $100 or less (you might be surprised at how much little Mikey's trust fund cares about, say, a gubernatorial race). And it would strike a provision of current law: Right now, campaign reports can't go up on the Internet right away unless all of the candidates in a race have turned in their reports; Gallego's bill would put reports on the net as soon as they roll in, regardless of whether everyone in a race has filed.

Both bills would require contributors to list their occupations and for those who give a lot to also report their employers. Both would create Class A misdemeanors for late filers. The Gallego bill would prohibit intentional late filers from spending or accepting money while their reports were late. Both would require statewide candidates to report late contributions (as legislative candidates already do) during the last days of a campaign; HB 2 would prevent candidates from accepting contributions during the last nine days of a campaign.

Madden said it might be hard to pass more than the House approved two years ago, but says he's optimistic that both Republicans and Democrats want to make some changes. They'll start this week.

Which Employees Should Get More Money?

It was hard to miss the calls for higher pay for state employees, what with special hearings and rallies at the Capitol and such. Lost in most of those reports, however, was the conversation among lawmakers over whether to do targeted pay raises, across-the-board raises, or some combination.

They'll start by trying to figure out how much money is needed to quell high turnover and to fix trouble spots. If there's too little money for a meaningful raise for all employees, they'll lean toward the targets. And that starts with prison guards. They're asking the budgeteers for law enforcement status, a career ladder, a formal grievance process, more training and more labor management meetings. As for money, they point out that their counterparts in California, where a guard can make up to $50,736, and New York, where they make up to $42,055, far outstrip Texas. Here, pay for correction officers tops out at $25,524. The part of their argument that caught attention from some lawmakers was the experience level. Because of high turnover among C.O.'s, nearly half of them have less than three years' experience; 73 percent have less than 5 years on the job.

Here's another example of a group with worrisome turnover rates: Home health care workers. Their pay levels are set by the state and currently sit at about $6 per hour. Their argument, in a nutshell, is that federal and state governments are trying to deinstitutionalize Medicaid patients at a time when it's impossible to hire home health workers. You can't send folks home if you can't hire people to take care of them. They're asking for an increase to $7 an hour.

Meanwhile, the Texas Public Employees Association is asking for an across-the-board pay increase of 8.25 percent. They're against targeted pay hikes, which they say would unfairly leave some employees out. And they point out that overall turnover among state employees is costing around $500 million a year, according to the state auditor. Their recommended raise, however, would cost more than $1 billion, and lawmakers say they don't have that much money lying around.

Cold Californians, Mad Cows and some Lawyer Bashing

File this next stuff under the general header "We're not California and we're not England."

The Public Utility Commission and various others in the regulated and governmental worlds will spend a fair amount of time over the next ten days explaining, in detail, why the California energy mess won't spread to Texas. Among other things, Texas has more power available, and is in the peculiar position of having some insulation from the national energy grid. Most of the state is in a regional grid that doesn't cross state lines and thus isn't subject to some of the interstate agreements that have pulled several California neighbors into the California energy sinkhole.

That little bit about England comes to us from the Department of Agriculture, which is sending out missives to the effect that Mad Cow Disease is not here. It's not in the food, though rumors of that prompted Ag Commissioner Susan Combs to put out some press releases on the subject.

• Most Texans think class action suits are better for lawyers than for their clients, according to a survey done for a group that wants to do away with those lawsuits. Citizens Against Lawsuit Abuse, or CALA, said their survey showed people generally favor those kinds of lawsuits, but think they should be handled differently. The survey said most Texans favor contingency fees for lawyers, but don't like lawyers making more money than clients do. Some lawyers say that that goes right at class-action suits, however, because the reason they're class actions in the first place is because each individual case is too small to pursue economically.

The only way lawyers will pursue small claims, they contend, is if they can bundle like cases together. The survey questions weren't available, so we don't know just how respondents were quizzed. With that fat caveat in mind, here are a couple of other findings: Respondents believe class action suits push up the prices of products like health insurance and cars, and think regulation and legislation are more effective than going to court to protect people from injuries. The survey also included a mess of questions targeted to voter views about lawsuits against four types of businesses: technology firms, health insurers, gun and carmakers.

Political People and Their Moves

President George W. Bush's ad man, Mark McKinnon, is rejoining Austin-based Public Strategies Inc., now that the presidential campaign is over. He'll get back to work on business clients. Glenn Smith, meanwhile, is getting ready to jump to his own enterprise, an Internet startup. Moving outside of the PSI offices would also free him to work on political campaigns again. Smith, who worked for Bill Hobby and Ann Richards, has been talking to the Tony Sanchez Jr. campaign... Robert Bryce, whose political stories for the Austin Chronicle and Salon gave the Bushies so much heartburn during the presidential campaign, is leaving political reportage for technology. He'll remain in Austin and report for Interactive Week, a widely read trade publication...

Gov. Rick Perry hired Luis Saenz to work in the communications office, but needs him elsewhere. Saenz will be senior appointments manager, working with appointments director Dealey Herndon... Lisa Mayes got a field promotion; she'll head government relations for the Public Utility Commission, a job that will require her to tell anyone and everyone why California's energy problems won't happen under Texas law. She replaces Ron Hinkle, who jumped to the private sector a while back... Tela Goodwin Mange will be the voice of the Texas Department of Public Safety, heading that agency's media relations division now that Mike Cox has retired...

Judicial Spankings: Judge Tom Price of the Court of Criminal Appeals got a Public Warning from the State Commission on Judicial Conduct for taking positions during a primary election campaign and for using photographs that implied endorsements by then Gov. George W. Bush and former President Ronald Reagan. Price, who was running for presiding judge of the court, said in campaign materials that he would be an advocate for crime victims and that he would be tough on criminals. Those are no-nos for judges, who aren't supposed to take sides before cases come to them. Price lost that primary, but was already holding another seat on the court, and still holds it... Former Justice of the Peace Joyce Weems of Winters got two Public Admonishments from those same critics. The first was for incompetence: She credited a man's traffic fine to the wrong account, failed to fix it, then was slow to refund another fine he got, along with being detained, for "not paying" the first fine. In the second case, she let a man off a vehicle inspection citation after talking to his boss—that's a problem—then didn't close the case. Like the first man, he was detained later on a case he had thought was closed.

Quotes of the Week

Texas Education Commissioner Jim Nelson, to a group of educators: "I've never thought vouchers were a major solution to what is wrong with public schools generally. But I never thought they were the boogie man, either."

Steve Murdock, chief demographer at the Texas State Data Center at Texas A&M University, on numbers that show higher than expected growth rates among Hispanics and other minority groups: "The future of Texas is tied to its minority population. How well they do is how well Texas will do."

Dr. Deborah Peel, head of the Texas Society of Psychiatric Physicians, telling the Austin American-Statesman what's wrong with mental illness coverage: "I've been in this so long that I can remember when we could take care of everyone—the wealthy, the middle class and the poor. [Today], the biggest psychiatric hospital in Austin-Travis County is the Travis County jail."

Maryland Lt. Gov. Kathleen Kennedy Townsend, asked about her favorite Super Bowl play: "I loved it when we made that football. The Giants had just made a football, and we came right back."

Sen. Gonzalo Barrientos, D-Austin, mis-introducing the manager of the Chicago Cubs: "As an old country boy who grew up in the country out in Bastrop, Texas, and loved baseball, it's an honor and privilege for me to present this esteemed body Don Baylor, coach of the Chicago Bears."

From a classified ad in The Daily Texan, the student newspaper at the University of Texas at Austin, that somehow made it into the Merchandise column: "FOR SALE: My thoughts. $1.00." No phone number was listed.


Texas Weekly: Volume 17, Issue 30, 5 February 2001. Ross Ramsey, Editor. George Phenix, Publisher. Copyright 2001 by Printing Production Systems, Inc. All Rights Reserved. Reproduction in whole or in part without written permission from the publisher is prohibited. One-year online subscription: $250. For information about your subscription, call (800) 611-4980 or email biz@texasweekly.com. For news, email ramsey@texasweekly.com, or call (512) 288-6598.


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