They say they're not having a political fight, but if Lt. Gov. Bill Ratliff and Comptroller Carole Keeton Rylander were having a political fight, chances are it would look a lot like this.

The short form of this story is that Rylander took a potshot at a provision in the Senate budget that was put there by the lieutenant governor his own self. She says she didn't do it for political reasons, but because she's worried that the Legislature is raiding the Rainy Day fund. He didn't impugn her motives, but said writing the budget is a jealously held duty of the Legislature and stuck with his support for the provision in the Senate's budget.

That provision would allow the Legislative Budget Board to divert new money from the Rainy Day accounts in cases of emergencies and contingencies. The Legislature is in the process of adding more than $700 million to the current budget, covering spending gaps and exigencies that weren't apparent two years ago when the budget is written. The Ratliff proposal would allow the ten members of the LBB to do that when the full Legislature isn't in session.

There are a couple of legitimate reasons for elected officials to get their noses out of joint over that. First, it's a partial emasculation of the governor's powers. If there's an emergency that just can't wait for a regular session of the Legislature, the governor has the power to call everybody to Austin for a special session. If the money in the Rainy Day fund was available to the LBB, and was sufficient to cover the emergency at hand, the governor wouldn't have any say in the process. And some lawmakers don't like the idea of handing their budget vote to a small and powerful committee.

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Rylander's gripe, according to her letter to Senate Finance Chairman Rodney Ellis, D-Houston, is the constitutional provision that the Rainy Day fund be left alone unless two-thirds of the Legislature wants to dig into it. But she delivered the message in a way that all but guaranteed failure in the clubby Senate. She did it on the eve of the Senate's floor vote, asking them to remove the provision from the bill. The Senate hasn't amended an appropriations bill on the floor—not at this stage anyway—for longer than anyone can remember. Several senators got the letter after it was in the hands of reporters, leaving Rylander's detractors with the easy excuse to ignore the showboating.

More to the point, she gave senators a choice between Ratliff, who they themselves installed just three months ago, and her, an officeholder who might try to grab his job next year. Rylander aides called Republican members of the Senate Finance Committee the night before the vote to make sure they knew about the letter and to seek their support for the idea.

The next morning, the Senate's GOP Caucus got together to talk it over. Ratliff, who generally doesn't attend these things, showed up and told members that amendments to the budget weren't acceptable on the floor at this stage of the game, since there is plenty of time to fiddle with the budget in conference committee and later. They stuck with him. Sen. Steve Ogden, R-Bryan, spoke on the floor in favor of the provision. Senators who side with Rylander on the issue agreed to keep their thoughts to themselves, and that was that. When the Senate voted to approve the budget plan, Ratliff cast his first vote of the session, putting himself on record in favor of the plan.

The next day, Rylander kicked out a proposal of her own, saying the state should dedicate three-quarters of the interest earned on general revenue accounts to the Rainy Day fund to build it up more quickly. She said she was calling on legislators "to abandon their efforts to raid" the fund and said they don't have a crisis at the moment that justifies taking out any of the money in it.

Stuff to Worry About Later

Some of the budgeteers were carrying some statistics with which to defend themselves in duels over that Rainy Day money. Six states are already digging into various accounts—rainy day and otherwise—and other states are looking at the grimmest budget forecasts in years. Blame the economy in part and Medicaid and other programs in part. One measure of how quickly things have changed is that 44 states had revenues running on target in December, but only 31 could make that boast two months later, in February. Medicaid cost overruns like the ones that are busting the Texas budget have hit 23 states. Nearly a dozen states plan to cut their budgets, another 11 are getting into their budget reserves and ten are talking about tax increases.

The rainy day provision in the Senate budget, by the way, is not included in the House plan but will certainly be a topic of conversation during the conference committee talks this month.

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Big Numbers and Lots of Them

The Senate will go into the budget negotiations with the high number to set against the House's low number. The upper chamber weighed in with a budget of $111.7 billion that spends all but about $700 million of the available money. And if they had all the money in the world, they would only be able to spend about $900 million more than they are currently spending; that's the difference between the constitutional cap on spending growth and what the Senate is actually proposing to spend.

The plan spends a total of $47.9 billion for public and higher education, $34.7 billion on health and human services, $13.8 billion for transportation and business and economic development, and $8 billion on public safety and prisons.

The biggest part of the increased spending—$4.8 billion of it—is going to health and human services. Education is getting $2.7 billion of the increased spending, followed by business and economic development, at $1 billion. Total spending under the Senate plan would be $9.8 billion more than what the state is spending in the current budget.

The Senate also put in an $814 million pay increase for state employees and about $1.2 billion in state funds for a teacher health insurance package that hasn't yet been put together. Big as it is, that number would balloon in the budget that will be written two years from now; if lawmakers create a state health plan for teachers, it will take some time to get it up and running. Since they probably won't have a full system up and running for the entire two-year budget period, they won't have to set aside the full cost of insurance for the coming budget. The budget that comes after that one, however, will have the full price tag on it.

Filtered Water

You had to be watching closely or have a friend on the scene, but Sen. J.E. "Buster" Brown, R-Lake Jackson, quietly removed the most divisive provision in his sweeping water bill during a committee meeting Thursday, removing the section of the bill on junior water rights. That was the biggest snag in the legislation, pitting areas that have more water than need for it against areas that need water they don't have, for instance, that glob of people in and around Houston against the people in the Sabine river basin whose water the Houston people would like to have. Earlier in the week, Brown proposed leaving junior water rights law in place for waters transferred out of particular river basins but allowing those transfers elsewhere in the state. After knocking that around with other legislators for a couple of days, he decided to leave junior water rights alone. Brown faced some opposition in the Senate, notably from Sens. David Bernsen, D-Beaumont, and Todd Staples, R-Palestine, but has won the vote there before. The House has been the critical stumbling block. Taking out that provision doesn't ice the deal but should make it easier to get the bill through the House.

The Next Governor's Race is Already Ugly

Watch for legs to sprout on this story about the letter and investigation and slander job involving gubernatorial maybe Tony Sanchez Jr. and Secretary of State Henry Cuellar. This has the makings of a long and mean campaign.

The story started in the Houston Chronicle, and lays out like this. Aides to Sanchez say he got an anonymous letter that was vaguely threatening in a physical sense and specifically threatening in a political sense. It appeared to have been written by someone who knows Sanchez or who has done some research and seems familiar with him and his businesses.

They decided not to call the cops, but to hand it over to Tony Canales, a former U.S. Attorney who's now in private practice. Canales hired a former FBI agent to poke around.

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The poking around was sloppy—either intentionally or stupidly—and stirred up rumors in the Pink Building and in Laredo. The investigator's premise, apparently, was that Cuellar wrote the letter. They asked friends and associates and other officeholders about rumors that he is homosexual (he says no) and that his custom broker's license has been suspended (no again, although a company that he was involved in lost a license after it went out of business). All of that was going on while Cuellar's appointment as Secretary of State was pending.

He was confirmed, and now he is demanding a copy of the letter and threatening a lawsuit. He says, by the way, that he didn't write any letters to Sanchez and doesn't know "why, out of 20.9 million Texans, they think I wrote it."

Sanchez aides—Sanchez still isn't answering inquiries from reporters or others—say the Laredo businessman didn't know the investigators and has called Canales to ask how things rolled the way they did. Those aides say they didn't let word of the letter or the investigation out, and say it must have come from Cuellar, or possibly from Gov. Rick Perry's camp, since they would presumably benefit from bad news about Sanchez. Cuellar says he heard about it from the people who'd been contacted by the investigators.

He and Sanchez haven't talked since last session, he said, and he has no plans to call Sanchez. Sanchez' aides say they don't know when Canales is supposed to get back to the boss about what happened with the investigation. They say they have no plans to release the original letter (partly because the writer details the information he or she thinks should keep Sanchez out of the race).

And Now, For Something Completely Different

A bill exempting the Panhandle from some provisions of electric reregulation came up in House State Affairs this week, and Rep. Sylvester Turner, D-Houston, wanted to make the point that it, like a bill he's promoting, would benefit only one area of the state. The trick here is that passage of the Panhandle bill, which has House Speaker Pete Laney's brand on it, would create a precedent for Turner's bill, which doesn't (that's not to say Laney is for or against it, but he's weighed in on the other bill and not on Turner's). Turner walked Rep. Warren Chisum, R-Pampa, through a series of questions to show that Chisum was trying to take care of ratepayers in the Panhandle, just like, wink, wink, Turner was trying to take care of his voters. That's all a setup for this exchange from the transcript, starting with Rep. Steve Wolens, D-Dallas, and ending with Rep. Debra Danburg, D-Houston:

Wolens: Warren, Sylvester Turner was leading you around like a little pony, and pardon me...

Chisum: That's nothing new to me. He's done it for years.

Turner: You all are making me blush.

Chisum: So I'm used to it, Mr. Chairman.

Wolens: And I could tell. Rather than treating you like a pony, I'd like to approach you like a stallion if I could.

Chisum: All right.

Danburg: Go for it, big boy.

He Says Tomayto, She Says Tomahto

Conditions and demographics along the state's border with Mexico have the government's attention, and that can only mean one thing: More reports. The two latest are from Secretary of State Henry Cuellar, who issued "State of the Border: A Decade of State Agency Funding for the Texas-Mexico Border", and Texas Comptroller Carole Keeton Rylander, who released, "The Border: On the Brink." His is a review of state agency funding in the border region during the 90s; hers paints a picture of conditions considerably bleaker than previously thought.

The Cuellar report shows that government spending has generally increased along the border. Cuellar hopes to show that there has been some success in the area of public and higher education, but also that more can be done in the areas of transportation and the environment.

The Rylander report builds on her predecessor's 1998 report, "Bordering the Future", a comprehensive review of the 43 counties in the border region. The new report trims that area, redefining the region as the 14 contiguous counties to the border and leaving out the San Antonio and Corpus Christi areas. The result: unemployment, population growth, the overall poverty rate and the number of children living in poverty are all higher; per-capita income, annual pay, and growth rate in annual pay are all lower than the 43-county figures indicated.

Cuellar defines the region (most of the time) as the 32 counties lying within 100 kilometers of the border. In that area, funding for the Department of Public Safety tripled from 1998 to 2000. Housing and community development programs increased from 1992 to 2000, and Texas Department of Transportation expenditures more than tripled during the decade. Funding for school districts along the border increased almost $1 billion dollars during the same time frame, and funding for higher education also increased dramatically. The Texas Water Development Board increased its spending in the 90s, the majority going to first-time wastewater service for residents of colonias. Funding by the Texas Workforce Commission has varied since 1998. In short, by Cuellar's measure, state expenditures on the Border have generally increased.

Rylander's report contains a mess of statistics comparing her 14-county border region to a 32-county "sub-border" region, South Texas, Texas, and non-bordering counties. By her measure, the poverty rate on the border is 34 percent. It's 14.3 percent in non-border counties. The unemployment rate is 11.4 percent compared to 4 percent in the non-border region. Among schoolchildren, the border poverty rate is 40.5 percent; it's 18.9 percent in the non-border region. Average annual pay on the border is $22,368, compared to $33,712 in the non- border region, and per-capita personal income is $14,224 compared to $27,165 in non-border counties. While 31.2 percent of children under 19 are uninsured on the border, only 23.6 percent are uninsured in the non-border region.

Who's right? Both of them. Expenditures have increased, which could give a current officeholder something to crow about during an election. And things remain cloudy, which means an intrepid office seeker could have solutions to propose. Both reports come too late in the session to translate into new initiatives (though both can be used to make arguments about bills already filed). And both could come up again, as Cuellar's boss, Gov. Rick Perry, runs for election to his current office, and as Rylander runs either for Lite Guv or for another term as comptroller. — Rachel Goggan

Moonlighting Lobsters

A quartet of lobbyists that includes former House Speaker Gib Lewis, Wayne Franke, Mike Milsap and Tom Treadway has put together a business development firm to help private companies—especially those owned and operated by minorities—win and retain state contracts. Milsap is a former legislator, chief of staff to Lewis, and head lobster for the University of Texas System. Treadway headed the business operations in the House, lobbied for a bit, then headed the state's General Services Commission. And Franke was a phone company lobbyist for 20 years before opening his own lobby shop. Milsap said Business Partners Ltd. won't do any lobbying, but the partners aren't quitting their lobby jobs to do this.

Campaign Finance: A Negotiated Amputation?

Most of the opposition to the Texas House's version of campaign finance reform has come from conservatives and most has been focused on provisions that would limit "express advocacy", which is what you call it when a group does an advertisement that is arguably about a candidate as well as about an issue. The rules for promoting a political cause that's not on the ballot are different from the rules for promoting (or bludgeoning) a candidate on the ballot. But the lines between those things have blurred, especially on the national level.

The House bill that's been on hold for two weeks regulates so-called magic words, saying the candidate rules apply to ads that include words like "vote for", "reelect", or "support". That part doesn't raise hackles the way the next proposal does: It would regulate issue ads that could reasonably be taken as promoting one candidate or another. That's what got groups like Greater Austin Right to Life (GARTL) and the Free Market Foundation worked up about the measure.

Now there is a deal on the table that would remove that second provision from the bill in exchange for promises from those groups to drop their opposition to the rest of the House's campaign finance measure. At our deadline, GARTL had agreed to that, in writing, as had Houston Citizens Against Lawsuit Abuse and the Free Market folks.

Only the CALA folks are coming out in favor of the bill. The others are merely dropping their opposition to it. In a letter to Campaigns for People, a campaign finance advocacy group, Joe Pojman of GARTL said he would encourage other groups to drop their opposition if that provision goes away. He's been responsible for much of that opposition; his emails and other missives to other groups ginned up a lot of the controversy in the first place. Pojman says the express advocacy provisions in the bill would prevent groups like his from sending out candidate report cards and other materials during campaigns unless they were reporting contributions and expenditures like regulated political groups. They can live with magic words, but not with the other definition of electioneering.

Rep. Steve Wolens, D-Dallas, had some problems with the mechanics of the legislation but says he doesn't oppose listing employers and occupations of contributors, which is what we had him saying last week. He wants to know just how that's going to work, for instance, when a check comes to a campaign in the mail without that information in it, but isn't against the idea itself, or the legislation.

If you watch federal campaign finance details, one of the best sources of information has changed its name and has a new website. FECInfo is a privately run money tracking service started by a couple of former employees of the Federal Election Commission. They charge for some of their information, but a surprising amount of it is available free on their new website, www.politicalmoneyline.com.

That's one of the quickest ways to get a read on the political financial standings of federal officeholders from Texas and elsewhere. They put together a chart tracking consumer prices since 1974, when federal law was changed to limit political contributions from individuals to $1,000. The equivalent limit today, after inflation and average price hikes are figured in? $3,492.

A Meeting in Laredo

While the Democratic Party was blasting Gov. Rick Perry for holding a campaign confab in Austin, a group of Democrats who hope to be at the top of the ticket next year was meeting at Tony Sanchez Jr.'s ranch in Webb County. The Perry deal was set up weeks ago to garner support for his programs and, importantly, for what then looked like a primary fight with U.S. Sen. Kay Bailey Hutchison. She's out of the race, and that took some of the wind out of the deal, but Perry met with about 300 supporters and asked for their help with his legislative plans.

The other meeting was a policy/politics soiree with a smaller group that included Sanchez and several of his aides, along with former House Speaker and Lt. Gov. Ben Barnes, former San Antonio Mayor Henry Cisneros, former Comptroller John Sharp, Austin Mayor Kirk Watson, Houston Controller Sylvia Garcia, state Rep. Richard Raymond, D-Laredo, political consultant Paul Begala and Ed Kilgore, policy director for the Democratic Leadership Council.

Political People and Their Moves

The Bush exodus from Texas continues, this time with Eric Bost apparently on his way to the U.S. Department of Agriculture. Bost currently heads the Department of Human Services. They administer the food stamp program in Texas, and USDA is the federal agency that runs that. Bost would be undersecretary for food, nutrition and consumer services if everything goes right... Pat Wood III has been patiently waiting for a Washington, D.C., drama to play out, and now comes the reward: a presidential appointment to the Federal Energy Regulatory Commission. The chairman of that commission is a political friend of U.S. Sen. Trent Lott, and Wood had to wait while the Bush folks were smoothing over rumors that Wood will replace him. Instead, Wood is being appointed to the commission and the decision over who's the chair will wait. Wood's departure will leave a second empty seat at the three-member Public Utility Commission, but he says he'll be around for a couple of months before making the jump... Mark McClellan, a medical doctor and economist who's the son of Texas Comptroller Carole Keeton Rylander and brother of presidential spokesman Scott McClellan, is being appointed to the Council of Economic Advisors... And there are still more: Clark Kent Erwin will move from the Texas Attorney General's office to the U.S. Department of State, where he'll be inspector general. Erwin, a former assistant Texas secretary of state, also worked in the George H.W. Bush Administration... The president tapped Anna Maria Farias as assistant secretary of Housing and Urban Development. She's on the Texas Commission on Human Rights and was the housing director in Crystal City... Gov. Rick Perry named David Diaz and J. Paul Johnson to the Texas Southern University Board of Regents and reappointed George Williams and Gerald Wilson to that same board. Diaz is a former Corpus Christi city councilman and district judge; Johnson is CEO of Houston-based Liberty Ink... Press corps moves: Rickey Dailey is getting out of the news bidness and into the flacking business. After 14 years writing about Austin stuff for the newspapers in McAllen, Brownsville and Harlingen, Dailey has signed on with Austin-based McDonald Public Relations firm... Press corps moves, once removed: John Williams, who's been at the Houston Chronicle for 13 years, is the paper's new local political writer. He replaces Julie Mason, who moved to the Chronk's bureau in Washington, D.C... Florita Bell Griffin, a Bush appointee to the Texas Department of Housing and Community Affairs, was sentenced to seven years and three months in jail on charges of trading influence there for interests in projects that received state tax credits.

Quotes of the Week

Rep. Arlene Wohlgemuth, R-Burleson, telling the San Antonio Express-News that Republicans are wary of voting for a teacher health insurance program that will cost too much in a couple of years, when the GOP hopes to have a legislative majority: "We're all pretty much in the same position. We don't want to take the majority and then have to come back and pass a tax bill."

Lt. Gov. Bill Ratliff, updating his year-old talk of a nickel increase in gasoline taxes, in the Fort Worth Star-Telegram: "I'd be hard-pressed to support it this session. When I put it on the table I think gasoline prices were $1.29. It's a little harder even to talk about it when gasoline prices are $1.50. So the circumstances have certainly changed."

Sen. Mario Gallegos, D-Houston, arguing that those cuts are making the current budget difficult to write and complaining that tax cuts passed in 1997 and 1999 were too small to do taxpayers much good: "I have yet to get the first phone call thanking me for that tax cut. Nothing. Not nothing."

Gov. Rick Perry, on a budget proposal that would take away some of his authority over emergency spending and put it in the hands of legislators: "I'm troubled because it .... does not allow the governor of the state of Texas to be involved with the declaration, if you will, of emergency, and I've got a problem with that.''

Sen. Gonzalo Barrientos, D-Austin, told of Perry's position: "Too bad."

House Redistricting Committee Chairman Delwin Jones, R-Lubbock, on how many times his panel needs to meet: "I don't know. I mean, we've already taken the committee picture."


Texas Weekly: Volume 17, Issue 38, 2 April 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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