With state agencies filing budget requests for the next Legislature, all attention is on the growing demands on state spending. The Austin American-Statesman led the pack, reporting that the differences between available money and spending needs has swollen dramatically, to $7 billion and beyond.
But here's the question: How big a hole can the budgeteers fill before they get to the hard stuff, like tax bills or budget cuts that dramatically change the direction of government? The short answer we get when tapping around on the subject is in the $5 billion range. Anything that's seriously above that is hard work for the number-crunchers and extremely hard work for the political folk.
The first stab at the size of the gap came from Comptroller Carole Keeton Rylander, who estimated last year that there would be a $5 billion difference between what's available and what's needed for the next two-year budget. Since then, state revenues have slowed—notably, sales tax revenues are missing the mark. At the end of last month, sales tax income was below what Rylander had projected and was even in danger of falling behind last year's receipts. If the trends hold, sales taxes would have to grow by almost 8 percent in the next year to catch up.
At the same time, all of the trends in spending have continued to go reliably haywire. Medical and insurance costs are driving most of the budget. That's most obvious in health and human services agencies, but also shows up in places like the prison system and retirement programs for state employees and teachers. The Medicaid program is ballooning; the state's Health and Human Services Commission is telling lawmakers it will need another $2.4 billion or so to keep up with current services. And the Teacher Retirement System followed a few days later with a whopper. That agency got $653 million for health care for retired teachers in the last budget, and the amount covered two years' worth of premiums. The agency's new request is for $1.3 billion for just that; all together, the agency claims it will need $1.8 billion to stay put next time.
Here's a caveat before we proceed: This is the part of the budget cycle when agencies pad their numbers, and there are typically some things on the lists that don't really and truly belong on lists of things that have to happen. Still, the numbers this time are comparatively big, and the issues—if not some of the exact numbers—are real enough.
There are a couple of bailing strategies lawmakers can try when a budget is underwater, and some of those will go into place before anybody talks seriously about tax bills and program-threatening budget cuts next year. A quick list would include the Rainy Day fund, which has attained sacrosanct status even as it has bulged. Rylander estimates it'll end the year at near $1 billion, and swears she'll fight to defend it. But if it comes down to it, it's hard to tell voters they have to pay higher taxes while there's money in the bank. Smoke and mirrors, if lawmakers can stomach things like delaying payments and the type of finance that is generally employed by college students and energy traders, could produce another $1.5 billion or so, by one estimate.
Some of the wonks have talked about borrowing against the tobacco payments that are coming into the treasury because of a lawsuit settlement. It's distasteful to most of them, but it's worth another $1 billion or so. Clean up franchise taxes to get rid of an increasingly popular corporate tax dodge, and you get another $300 million. And then there are a couple of politically acceptable taxes, like adding a buck to the price of a pack of smokes. That's one version of the easy list, and it brings in about $5 billion. If the budget gap continues to grow past the current $7 billion, the choices get even worse.
Looks Like, Quacks Like, Waddles Like
Sen. John Carona, R-Dallas, says Democrat John Sharp "is the overwhelming best choice" in the race for lieutenant governor, but Carona is not using any form of the word "endorse" in stating his preference. For Sharp, that's a difference with no distinction: A Republican senator supporting a Democratic candidate for Lite Guv is a big deal, however you word it.
For Carona, the difference in wording will matter only in a reelection campaign. He has two opponents in the November election—Democrat Jan Erik Frederiksen and Libertarian Jack Thompson—but the district is overwhelmingly Republican. He's pretty safe this time. But this is a redistricting year, and state senators won't find out until after the fact whether they've won two years in office or four. They'll draw straws in January, and if Carona gets a two-year term, tempers might remain high enough to attract opponents for his next race. A four-year gig would give him some breathing room, and if he wanted another term after that, the added time might heal more wounds.
In the meantime, Carona is telling the same story in two ways. His quote to reporters goes like this: "I believe this session... will be extremely difficult and it's going to take leadership willing to tackle the problems. This is not to be a session where we can simply make a few cuts and adjustments and head back home. These will be tough, difficult votes, and it will require leadership experience. In my view, given those factors, John Sharp is the overwhelming best choice."
There's a word missing from that statement, as you know from the headline, but Carona's preference is clear. He says he'll vote for the Republican ticket, with the exception of the race for lieutenant governor.
The politics of that are easier to negotiate in Austin than in Dallas. Sharp has a slight lead over Dewhurst in the latest polls, and it's simple enough to see the value of being the first senator to cross party lines to welcome the new presiding officer. If Sharp wins, Carona will have the distinction of being the only (or at least the first) Republican to take his side.
The Dallas end of the stick is barbed. Carona's Senate district is solidly Republican, and it includes the Park Cities, where a number of brand-name GOP financiers reside. Put it another way: There are plenty of diehards in the district who would like to be in the state Senate and there are plenty of diehards in the district who are capable of financing new candidates. Carona admits the reaction from those folks was swift and fierce, but he also says a lot of people agree with him: "As disappointed as some Republican activists appear to be by this decision, it's obvious there are a great many Republicans out there who feel as I do but who choose to remain silent."
The test of whether he goofed politically will come in the next election cycle, if Carona chooses to run again after his next term (and assuming he wins in November). But he doesn't seem upset about reaction to his support for Sharp, and he isn't backing down. A friend of Carona's sums it up: "I think John's give-a-flipper is broken."
Sharp welcomed the endorsement (and used the word); the Texas Association of Realtors, which is backing his bid for office, did the same thing, praising Carona for his "bipartisan vision."
An Ambidextrous Pitchman
Carona is not the only Republican to join Sharp's camp. Former baseball pitcher Nolan Ryan, who signed up with the Democrat earlier this year, cut a radio commercial for Sharp that's running across the state. Ryan does all of the talking in the commercial, saying "Sharp's cost-cutting crusade saved us from a state income tax and reduced welfare fraud." He quotes Business Week as saying the Democrat "saved billions" and then touts the state's prepaid college tuition program as Sharp's creation. Then he points out that the former comptroller is a Democrat, "but one this Republican is supporting." Ryan never mentions Dewhurst, directly or not. The commercial is running on talk and talk-oriented radio and in some baseball broadcasts.
The ad was touted as "a home run pitch." Somebody call the Metaphor Police—a home run pitch is what happens right before a pitcher is pulled off the mound and replaced. Pitchers prefer strikeouts.
Speaker Voter 1
Rep. Ron Clark is waiting for word from Washington, D.C., on when and whether he might get approval from the U.S. Senate for a federal judgeship. In the meantime, he says he'll remain on the ballot for another term in the Texas House. The Senate is out on break and won't be back before September 3. That's the last day that Clark could drop off of the ballot and be replaced by the Republican Party. There's still another week after that to take Clark's name off of the ballot if he wins confirmation quickly. But the Texas Secretary of State will certify the ballots on September 11, and after that date, no names can be added to or taken off of the official ballot.
The reason to scribble all of this is that Clark might or might not be a voter in the upcoming election for Speaker of the House. If he's not on the ballot and the Republicans can't replace him, the seat would go to Democrat Donnie Darvis Jr. That would presumably add a supporter for Democrat Pete Laney while subtracting one supporter of Republican Tom Craddick in the speaker's race.
If Clark's name is on the ballot, which appears likely, the Republicans will have more options. On paper, the district is solidly Republican—Clark could stop campaigning but still win it if his name is on the ticket. If he were to win first and get confirmed later this year, Clark could simply refuse to serve. That would allow Gov. Rick Perry to call a special election to fill the post, giving the Republicans and the Democrats another bite at the apple (in a district that could easily vote either way). If the Senate is slower and Clark wins in November, he can take his seat in the House in January and serve until there are favorable signs from Washington, D.C.
Speaker Voter 2
That's one of two House Republican seats in play in a way that has attracted the attention of speaker candidates and their trusty sidekicks. The other is a Laney vote: Rep. Warren Chisum, R-Pampa, is a potential appointee to the Texas Railroad Commission. It would help Craddick's candidacy, the reasoning goes, because a new Republican would probably replace Chisum, and that newbie would have more reason to vote for a GOP candidate for speaker than for a Panhandle candidate. The hitches are numerous: There is no opening on the RRC, yet, and nobody's sure if and when there will be one. President George W. Bush wants Commissioner Tony Garza to be the U.S. Ambassador to Mexico, and the U.S. Senate hasn't weighed in. Garza won't quit until and unless he's confirmed.
Chisum probably can't take the job until after the first of the year, because of a constitutional clause that bars legislators from voting to increase the pay for a state position and then taking that position themselves. The Legislature voted to increase pay for commissioners last time, and nobody who voted for that budget is eligible for a commissioner's job until after their legislative terms end. Attorney General John Cornyn has been asked for his official position on that question, but it looks like current legislators are barred from the post until after mid-January, when new terms begin. In the context of the speaker's race, that means Laney could potentially lose Chisum's vote, but it also means Republicans probably couldn't install a Craddick Republican in his place in time to add to his support.
Democratic Judge David Hodges of Waco voted in the Republican primary last March. That disqualifies him from running in the general election, according to the Texas Supreme Court. Hodges argued that the "sore loser" law violates his voting rights; the Supremes say he got to vote, and that "candidacy is not a fundamental right." He's out. The Democratic Party in McLennan County gets to pick a replacement for him on the ballot, so long as they do it before September 3.
• Sidebar: Keep your eyes open during that first third of September. Candidates who drop out after September 3 can't be replaced on the ballot, and if they drop out before September 11, they can remove their names from the ballot. That could turn contested races into cakewalks.
Terror on the Campaign Trail
Republican attorney general candidate Greg Abbott is touting a "Lone Star Shield" as the best way to fight terrorism. His hook? The AG is the state's chief law enforcement official and should thus be involved in keeping the state safe. Abbott's not the only one in the race talking about terrorism: His Democratic opponent, Kirk Watson, has been saying in speeches that the AG's office should be the hub of the state's homeland security efforts. But Abbott is the only one being specific about it.
He says the governor should deploy National Guard troops on the "vast, unguarded 1,240-mile border with Mexico" and other "strategically vulnerable areas." He says they would have nothing to do with immigration, and probably wouldn't mean any huge armed presence. As much as anything, Abbott says, he wants National Guard troops to supplement local law and border enforcement efforts to collect and analyze information.
He's also proposing making the AG's office the hub of the state's efforts, coordinating information and people and such, and he wants to beef up the technologies the state is using to deal with threats—tracking weather patterns or the spread of biological outbreaks, for instance.
Watson said he hadn't had time to study Abbott's new proposal, but said if troops on the Texas-Mexico border were necessary for security after last year's attacks, President George W. Bush would probably have deployed them. Watson hasn't laid out a list of specific proposals himself, but he questioned Abbott's timing, with the new proposal coming out just before the 9/11 anniversary.
Abbott says it would be irresponsible for an AG candidate to do nothing, and says he's making the proposal now because he thinks it would be inappropriate to unveil a new plan in September.
An Endorsement with a Limited Run
What appeared to be an endorsement or at least reconciliation on the other side of the lieutenant governor's race turns out to be something less permanent. Officially speaking, Sen. Jane Nelson, R-Flower Mound, hasn't endorsed either Republican David Dewhurst or Democrat John Sharp in the race for lieutenant governor, although she did allow Dewhurst to put her name on a list of "Women for Dewhurst" in an invitation for a fundraiser. Up until that invitation went out, Nelson had been relatively outspoken about her problems with the land commissioner; Dewhurst was one of the three statewide Republicans who voted to remap her Senate district. Nelson was steamed, and vociferously so, about the results. She now says—through an aide—that the Women for Dewhurst invitation was a one-time, event-related deal, and that she hasn't endorsed anyone in the Lite Guv's race. The aide added that Nelson frequently lends her name to fundraising events and such for Republicans who don't have her endorsement and that's what happened in this case. But keep watching: The aide said neither of the candidates has asked her for her endorsement.
The Retro Look
Before he decided to run for governor, Democrat Tony Sanchez wore wire-framed glasses that merited a citation from the Style Police, and he had a mustache. Now he's got new rimless glasses that have lenses that don't glare in the TV cameras, he's clean-shaven, and his haircut has been upgraded. But you wouldn't know that by reading the Texas Republican Party's magazine. That publication has an article questioning the Sanchez campaign's payments to political consultants who are also members of the state Legislature. And they decided to use the pre-makeover photos. A spokesman for the GOP says the mention of Sanchez isn't supposed to be good for him and says flatly that they used the picture because "it's less flattering." The Sanchez campaign doesn't want to play; they passed up the opportunity to comment. The photo, by the way, apparently came from the University of Texas website. Sanchez is on the board of regents.
Allies of Rep. Fred Bosse, D-Houston, have dusted off a letter opinion issued by former Attorney General Dan Morales on the same constitutional pay question that is bedeviling Warren Chisum. But Chisum is interested in a place on the Texas Railroad Commission, an elected office that would initially involve a gubernatorial appointment. Bosse is interested in a different job and needs to prove that he's eligible for the executive director's job at the Texas Natural Resource Conservation Commission. Bosse isn't running for reelection. Jeff Saitas is leaving TNRCC, and eight people made the list of candidates. Bosse is one of them, but he voted on the budget, and thus on the executive director's pay.
But there may be an out: Morales said in 1996 that the chancellor's job at Texas Tech University wasn't legally included in the ban since an independent board did the hiring and firing. Sen. John Montford, D-Lubbock, was chairman of the Finance Committee at the time, but the ruling was enough to clear the way. Montford (who's now a telephone company exec) took the job at Tech and that was that. Bosse's pals say the TNRCC job is similar, since a three-member board there picks the agency's director.
Other names on the list include insiders Glenn Shankle, the number two at TNRCC, and Margaret Hoffman, who heads legal services. Former legislator Tony Grigsby, who used to head the agency, is also on the list. The posting for the job had to be changed, according to the San Antonio Express-News, because it initially required a college degree. The board wanted to consider Shankle, who's not a grad, and so they changed it to include "equivalent experience."
Air Wars and Other Political Notes
U.S. Sen. Phil Gramm, R-Texas, isn't on the ballot this year and won't be an officeholder as of January. But he's on the radio, statewide, talking about the Democrat who's running for his post. The Texas Republican Party is paying for radio ads in which Gramm blasts Democrat Ron Kirk for not supporting the Bush Administration's tax cuts. He never mentions the name of the Republican in the race, but goes back and forth between quotes from Kirk and from George W. Bush. He closes by giving out the phone number for the Kirk campaign and urges listeners to call in and say "Hey, don't mess with our tax cut." The buyer is the Republican coordinated campaign.
• Gov. Rick Perry has a new commercial blasting Tony Sanchez, this time saying the Laredo Democrat's business practices are nothing for government to emulate. Perry's spot focuses on the Sanchez-controlled Tesoro Savings and Loan, saying mismanagement and risky lending at that thrift cost taxpayers $161 million, and pointing out that Sanchez says he wants to "run government like his businesses." The Sanchez campaign, meanwhile, has resorted to humor. They're running a commercial where Sanchez is standing on a basketball court. He tosses the ball over his shoulder and out of the frame, and another ball comes in from the other side and makes a basket. Perry's attacks, he says, are "about as honest as this shot." He says Perry should "start telling the truth, and let's debate the issues."
• While John Sharp was busy lining up endorsements from high-profile Republicans, David Dewhurst was working the Valley and he's come up with a list of South Texas Democrats who prefer him to Sharp. The GOP candidate for Lite Guv is claiming the support of Mission Mayor Norberto Salinas, Donna Mayor Ricardo Morales, and Donna Mayor pro-tem Guadalupe Castillo III.
• Montgomery and Associates released its polling on the Lite Guv's race and has the contest almost neck-and-neck. Sharp leads Dewhurst by 4 points in that survey, but that's barely outside the margin of error of ±3 percent. The pollsters say Sharp had 46 percent of the respondents on his side, while Dewhurst had 42.4 percent. That's virtually the same result the firm got in a poll in May. Then, Sharp was at 46.4 percent and Dewhurst was at 42.4 percent.
Dewhurst, meanwhile, is circulating a "confidential memo" that says other polls show him in the lead. The memo, penned by campaign manager Rob Johnson says the campaign's own polling shows him ahead, but gives no numbers. The poll numbers he does include come from a couple of television station surveys. One had Dewhurst leading by 9 points; the other had him up by 13 points.
Political People and Their Moves
Lobbyist Frank Santos is starting a new consulting firm—Santos Alliances—by joining his Austin healthcare lobbying practice with Interlex, a San Antonio advertising firm, to try to tap the Hispanic business market. Santos had been hooked up with Hillco, but he's moving into new office space for the new gig... Former legislator Jerry Benedict is retiring from the Office of Court Administration at the end of the month. He served in the House for three terms, and then worked in the attorney general's office for a dozen years before the justices of the Texas Supreme Court made him administrative director at OCA. Those justices have been interviewing candidates for the job, but haven't named a replacement for Benedict... Greg Abbott, the Republican running for attorney general, has hired Shannon Smith to handle the snarling guttersnipes in the media for the next couple of months. She was most recently working for AG John Cornyn's state agency press shop... Recovering from arthroscopic knee surgery: Comptroller Carole Keeton Rylander, who says her wounded joints are a result of years of punishment on the tennis courts.... Deaths: Robert Dedman Sr., Dallas-based Club Corp. International founder, philanthropist, political donor, and a former member of the state's highway commission. He was 76.
Quotes of the Week
U.S. Rep. Eddie Bernice Johnson, D-Dallas, quoted in The New York Times after two of her colleagues were defeated by candidates backed by Jewish and pro-Israel donors: "I definitely have some feelings about any outside group exerting this kind of influence in a race, and I've been receiving angry calls from black voters all day, saying they should rally against Jewish candidates. To have non-African-Americans from around the country putting millions into a race to unseat one of our leaders for expressing her right of free speech is definitely a problem."
Rufus Shaw of Dallas, in an article on Democrat Ron Kirk's bid for the U.S. Senate in The New Yorker: "This is our Colin Powell. This is as close as a black politician can come to being inoffensive to the Anglo community, without becoming a Republican. If Texas doesn't vote for him, it's going to say something about Texas, and it will not be very good."
John Hageman, state director for Farmers Insurance, answering the state's cease and desist order in a memo to Texas agents: "We will not accept any new or replacement business in Texas Personal Lines Fire (a standard homeowner policy) with an effective date after October 31, 2002."
Lt. Gov. Bill Ratliff, assessing the budget for the Houston Chronicle: "If we are not going to be able to raise significant revenues, there's going to be Draconian decisions. It's going to be bloody awful."
Rep. Kent Grusendorf, R-Arlington, hinting at his suspicion that the Legislature might have to have a special session next year if budget issues continue to worsen: "I would be very surprised to see a tax bill in the regular session next year."
One of the optional replies to a fund-raising letter for Rep. Wayne Christian, R-Center: "No, Wayne! I do not support you! Your lack of response will be registered as a lack of support."
County Court-at-law Judge David Hodges, quoted by the Waco Herald-Tribune after the Texas Supreme Court said he's ineligible to run as a Democrat because he voted in the GOP primary: "The tragedy of this ruling is that it removes from the voters the decision of who should be judge of this court. Therefore, we have already begun plans for a vigorous write-in campaign..."
Tracey Bogle, a member of an Oregon family that has seen 28 of its members arrested and convicted for various crimes, in The New York Times: "There is a domino effect in a family like ours. What you're raised with, you grow to become."
Merilee Lighty, an Oregon homeowner whose wood-shingled house is close to a raging forest fire, in the Houston Chronicle: "If it's going to burn down, I wish it'd hurry up and do it."
Texas Weekly: Volume 19, Issue 9, 26 August 2002. Ross Ramsey, Editor. George Phenix, Publisher. Copyright 2002 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.