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Wasn't There a Lucky-Ducky in the Fable?

While everyone is talking about the potential gap between income and spending in the next budget, the state is facing a big problem in the current budget. Put simply, lawmakers will face a combination of spending overruns and revenue shortfalls when they show up for work in January. Annual sales tax revenues have increased every year since 1983. But not last year: The state's largest single source of tax income dropped by almost $187 million during the fiscal year that ended on August 31. It was supposed to increase by $366 million.

While everyone is talking about the potential gap between income and spending in the next budget, the state is facing a big problem in the current budget. Put simply, lawmakers will face a combination of spending overruns and revenue shortfalls when they show up for work in January. Annual sales tax revenues have increased every year since 1983. But not last year: The state's largest single source of tax income dropped by almost $187 million during the fiscal year that ended on August 31. It was supposed to increase by $366 million.

Overall, the state's revenue estimate was on track last year, in spite of that $553 million swing in what was expected from sales taxes. Insurance taxes, driven by rising premiums, brought in about $250 million more than expected. Franchise and motor vehicle and inheritance taxes brought in another $167 million more than expected. There were some smaller disappointments, but the lottery, which had been lagging, did almost $100 million better than the estimators predicted. All of that balanced out at the end, with state revenues in about the same shape as the estimates.

But the sales tax numbers make budgeteers nervous. The state planned for $15.0 billion in sales taxes last year. For the fiscal year that started this month, the forecast calls for $15.8 billion in sales tax revenue. To make the numbers work, the state would have to see a $2.8 billion jump in sales tax revenue over the next 12 months. That would amount to a 12.7 percent increase in sales tax income; the best year of the 1990s economic boom, 1998, produced an increase of 9.9 percent.

Other taxes and revenue sources could narrow that canyon between reality and expectations. For instance, there's a time lag between changes in insurance premiums and changes in insurance tax revenues—the higher premiums people are paying on their auto and home and other insurance right now will show up in higher insurance tax results for the state a year from now.

At the same time, spending—particularly on health and human services programs—is ballooning. Those programs appear to be about $400 million over budget (the numbers will probably change). Add that amount to the still undetermined amount of the revenue shortfall, and you have a problem in the current budget. Lawmakers expect a rough time writing the next two-year budget. But before they deal with that future budget, they face painful emergency surgery on the current one.

Play it out, and you can see why it sounds like the state's chief economist is Chicken Little. Changes made during this budget to cover escalating costs add to the size of the starting numbers in the next budget. The short-term fixes increase the difficulty of the long-term fixes.

The short-term problem is rising costs on one hand and falling revenues on the other. If lawmakers find $400 million to cover current cost overruns, agencies will start talks for the next budget by adding that $400 million to their baseline numbers. As for revenues, that's where you start talking taxes. Facing a similar problem in 1987, lawmakers passed a temporary tax bill (which was supplanted later by a permanent tax bill), and that's why sales tax revenues didn't fall that year.

The long-term problem is that the costs of current programs are growing faster than the economy. Leaving them alone is the road to a tax bill. Go the other way—holding revenues to their natural growth levels without increasing tax rates or fees or definitions to raise the state's income—and the budgeteers have to figure out what programs to cut and which current beneficiaries of those programs should do without. That's the fight over the next two-year budget. Combine it with the current revenue dilemma that will come up early in the session, and, well... cluck, cluck.

Busted

A U.S. Senate committee voted along party lines to kill Priscilla Owen's bid for a spot on the 5th U.S. Circuit Court of Appeals in New Orleans. President George W. Bush nominated the Texas Supreme Court Justice well over a year ago for that post. But the Republican judge was blasted as a right-winger by Democrats and by a coalition that included unions, pro-choice women's organizations and Texans for Public Justice, an outfit that's been critical of the state's high court in general and of Owen in particular. Owen's defeat before the Senate's Judiciary Committee is the second for Bush in that forum and the Republicans have vowed revenge.

But that's a Washington story.

On the Texas end, Republicans say they'll use the Owen nomination and bust to show that a vote for Democrat Ron Kirk, who's running for U.S. Senate, is a vote against Bush, who remains overwhelmingly popular in the state. Attorney General John Cornyn, Kirk's opponent, was one of Owen's colleagues on the court. He's been saying for months that he would vote for her nomination if he was in the Senate and in a position to do so (the nomination died in committee and most senators never got a chance to vote on it).

Kirk initially ducked the question, but later said he would vote against Owen if he were in office. Part of his pitch has been that he'll work with Bush when he agrees; Cornyn's camp argues that the former Dallas mayor would be a thorn in Bush's side. Kirk's camp says he wasn't taking his orders from national Democrats, and wasn't telling them what to do, either. Cornyn tried to paint Kirk as the one guy who could save the nomination, but Kirk aides say he's not in the Senate yet and didn't have a thing to do with it. They also said Kirk always said Owen should have gotten her hearing sooner—she waited more than a year for that—and said he would back candidates who (unlike Owen) have bipartisan support.

Begin the Spin

Within an hour of the committee's vote to bust Owen, Washington reporters were quoting "a top White House official" as saying "Ron Kirk just lost the election." That's part of the plan to get Cornyn elected, but it could be a tough sell. Texas Republicans have already been running an ad knocking Kirk for his opposition to Owen and building the Kirk vs. Bush argument. But most voters don't follow this kind of insider stuff, and the Kirk clan is hoping the Owen issue gains no traction.

An anecdote in their favor: an out-of-state GOP consultant who came to Texas for a meeting saw the state party's Owen ad and told one of his Texas colleagues that he had seen "one of Kirk's TV spots." On the other side, there's the prospect of Bush himself campaigning for Cornyn and telling voters that Kirk was no help to Bush's choice for a federal court.

Those Owen-Kirk-Cornyn spots are being run by the Victory 2002 campaign. The Texas Republicans won't say how much they're spending, but they got $802,166 in the form of "coordinated expenditures" on Cornyn's behalf from the Republican National Committee in July.

That contribution was made after Cornyn cleaned out his state accounts, which can't be used on his federal race because of the mismatch between state and federal campaign finance laws. But, as was first noted by the San Antonio Express-News, Cornyn's last state report included a contribution of $3.1 million to the same RNC that gave the money to the Victory 2002 campaign. His aides say he didn't ask the national party to send any of the money back to the state party, and that the nationals didn't offer, and that there wasn't any coordination. Neither the Cornyn campaign nor the state GOP will say whether the RNC has sent more money. It'll be in the next set of reports if they do.

• Attorney General John Cornyn's best argument before the Combined Law Enforcement Association of Texas was the running feud between his opponent and the Dallas Police Association. Ron Kirk crossed swords regularly with that group when he was mayor of Dallas. CLEAT hasn't announced a decision on its own endorsement yet, but Cornyn was on his way to Dallas at our deadline to pick up the local group's blessing. Dallas is one of CLEAT's affiliates.

Franchising the Vote

South Texas officials want to know if political campaigns can pay counties to set up early voting in specific locations next month. The Tony Sanchez gubernatorial campaign, accused of making the offer, says they have asked county officials all over the state to open extra places for early voting. But aides deny the campaign ever offered to pay for the extra spots or to say where they should be located.

Wherever it started, the request is a weird one, and according to the Texas Secretary of State, counties probably shouldn't do it. But, surprisingly, the SOS says it might be legal for them to do so.

Larry Speer, a county commissioner in Dimmit County (north of Laredo and east of Eagle Pass in South Texas) sent a letter to the SOS asking whether the county could take money from a campaign to cover costs of extra early voting locations. That part is perfectly legal, according to the state. But Speer said the offer was conditional: The campaign (which he didn't name in his letter) wanted the extra voting sites to be put in specific places. As he put it: "... my concern is whether or not it is legal for Dimmit County, or any other county in Texas, to accept money from people within a particular campaign to place polling locations at sites that certain candidates feel benefit them the most?"

The word from the SOS is that the donations would be legal. The new polling place locations would have to be approved by the U.S. Department of Justice (which has broad oversight over elections here and elsewhere in the South under civil rights laws), and that it would be a good idea to ask for DOJ's permission at least 75 days before the places were added. That last bit would be a problem since early voting starts next month.

On the next question, the SOS says the law is silent. But they said the idea has trouble all over it, since the campaign writing the check would probably want to put the new spots in beneficial locations and since the county commissioners voting to take the money could be beneficiaries of the new locations in their own elections. The state lawyers add that it could put the county in a pickle with other campaigns. What's more, if they do add voter locations, counties have to add the same number to each of their county commissioner precincts under state law. And if they do mobile voting booths at the request of one political party, they have to do the same for the other party. In other words, there are a zillion ways to goof. "The county would be better off to accept donations without strings attached and not to accept donations at all from interested parties," wrote Elizabeth Hanshaw Winn, director of the SOS's general law division.

Say What?

Texas Senate candidate Bob Deuell—quoted in a small Dallas paper as saying he would allow benefits for same-sex partners and expressing disapproval of the state's sodomy law—is disavowing the report. Deuell, a conservative Republican running against Sen. David Cain, D-Dallas, says he was "quoted out of context and misrepresented by a liberal Dallas newspaper in an effort to discredit him."

The Dallas Voice News, a publication that focuses on gays and gay issues, quoted Deuell saying the state's sodomy law "is a law that doesn't need to be on the books." Deuell, in a written statement sent in response to our questions about the article, remembers saying the law "is difficult for law enforcement authorities to enforce" but says he would neither introduce nor support legislation that would do away with it. The article also says Deuell told a local group of Log Cabin Republicans that he would support extending benefits to same-sex couples, but wouldn't support laws allowing them to marry. In his written response, Deuell says he wouldn't do that, adding that those benefits should go only to married couples of the opposite sex.

Don Maines, who wrote the article, stuck by it and said he hadn't received any request from Deuell or his campaign to correct or clarify the story. A Deuell aide said they plan to do that, but hadn't done so as we went to press.

Changes at the Post

Strike Republican Bruce Harris of Wichita Falls from your November ballot. The attorney who was challenging Rep. David Farabee, D-Wichita Falls, sent a letter to the state pulling his name from the race. And he did it in a way most beneficial to the Democrat, waiting until September 3 to tell the election people about it. That means the GOP can't replace Harris on the ticket, and with no other opponents, Farabee gets a freebie in his reelection bid. The drop was foreshadowed a few weeks ago when Harris told the hometown paper he wouldn't actively campaign.

At one time, Republicans had high hopes for that HD-69 race. By the numbers, the district is GOP-friendly—the party's 1998 ticket, including the data-skewing performance by George W. Bush, won by almost a two-to-one margin. Comptroller Carole Keeton Rylander beat Democrat Paul Hobby in that district by several percentage points (while winning the statewide contest by a whisker). A year ago, when Republicans were crowing about their victories in redistricting, the Wichita Falls seat was on their list of possible trophies. But Farabee is from a well-known political family and it would have been a close and expensive race; Harris decided he wants to spend more time on his law practice.

Clifford William, the Libertarian Party's candidate for chief justice of the Texas Supreme Court, won't be on the ballot unless he wins in a Hail Mary appeal that's pending in the courts. Republican Tom Phillips, the incumbent, sued to remove him on the grounds that William, who is not a member of the State Bar of Texas, isn't eligible for the office.

William is arguing that bar membership issue in a separate case—he says he shouldn't be required to join the club in order to practice in or serve on Texas courts. But that's a federal case. In this one, the 3rd Court of Appeals in Austin agreed with Phillips. The court told the Libertarians to take him off the ticket. They did so, under protest, saying they'll insert Dallas immigration lawyer Eugene Flynn in his place in case William can't get the courts to put him back on the ballot.

They're allowed to name a replacement because the courts say William is ineligible; if he was still eligible but quitting, like House candidate Bruce Harris, for instance, the party wouldn't be allowed to replace him. Barring another legal turn, that leaves Flynn, Phillips and a Democrat—Liberty attorney Richard Baker—in the contest.

• Last minute machinations also removed Erich Schwartz from the ballot. He was the Libertarian Party's candidate in HD-47 in Austin. Republican Rep. Terry Keel is the incumbent. Democrat Bill Martin and Green Party candidate Sarah DuBose are still in that race.

A Stack of Appointments

Gov. Rick Perry knocked out a series of appointments on the eve of the Labor Day holiday. To the Texas Judicial Council, Perry named Lance Byrd, a Dallas oil executive, and reappointed Delia Martinez-Carian, an assistant district attorney in Bexar County. Dr. Lance Goetz, a Dallas physician, is Perry's pick for an open spot at the Texas Rehabilitation Commission.

The Juvenile Probation Commission got three appointees, including a new one: Judge Robert Brotherton of Wichita Falls was reappointed as chairman, College Station CPA Keith Kuttler was reappointed, and Barbara Punch of Missouri City, a retired elementary school administrator turned real estate agent, is the new addition.

Barbara Rusling of China Spring won an appointment to the Texas State Technical College board of regents. She's a real estate agent. The governor picked Kenneth Harris of Austin, a business consultant, and Gary Akright, a Dallas mortgage-lending executive, to the Texas Finance Commission.

On the legal front, Perry named Jim English of Hereford as Deaf Smith County's new district attorney. And finally, the governor issued robes to a couple of new judges: Roland Saul of Hereford to the 222nd Judicial District Court (he had been the DA, which is how English won his appointment); and Marilea Whatley Lewis of Dallas to the 330th Judicial District Court.

All of those appointments are subject to Senate approval when the Lege comes back to town.

Polls the Campaigns Don't Like

The spinsters were working on the Texas Poll and the Texas Medical Association's poll before either survey was released, saying the first is flawed because the voter screens are bad and the survey period is too long, and that the second is flawed because it's done by a Democratic pollster in Alabama who might or might not have ties to nefarious persons in the Democratic consulting class in Austin.

And then, they ask how the numbers came out for their guys.

Quick takes: TMA's poll of 600 likely voters has John Cornyn leading Ron Kirk by 45-39 in the U.S. Senate race, and Rick Perry leading Tony Sanchez by 45-37 in the gubernatorial race. An earlier poll done the same way had Kirk ahead of Cornyn by five points and the Perry-Sanchez race was two points wider then than now. Most voters in that poll think there is a medical liability crisis, and they prefer the Democrat on health care issues. But those issues aren't leading their concerns apparently, since Perry is in the lead. Who do they blame for the liability problems? Lawyers and insurers.

The Texas Poll has Republicans in the lead in every statewide race: Cornyn over Kirk by 37-32; Perry over Sanchez by 42-28; David Dewhurst over John Sharp by 35-30 in the lieutenant governor's race; Greg Abbott over Kirk Watson by 30-25 in the attorney general race; Carole Keeton Rylander over Marty Akins by 45-22 in the comptroller race; Jerry Patterson over David Bernsen by 33-23 in the land commissioner race; Susan Combs over Tom Ramsay by 34-26 in the agriculture commissioner race; and Michael Williams over Sherry Boyles by 31-26 in the railroad commission race.

Shucking Labels for the Benefit of Swing Voters

The word of the year is bipartisan, even if you're using it in a partisan way, as in the U.S. Senate race argument over Priscilla Owen. To wit:

• The candidates for lieutenant governor are keeping up a low-profile skirmish over endorsements from people who ought to be against them. The latest? Republican David Dewhurst has the support of three Democrats who are also sheriffs: Crockett County's Shane Fenton, Culberson County's Oscar Carrillo, and Hockley County's Donald Caddell. Democrat John Sharp, meanwhile, got the endorsement of Denton County Commissioner Sandy Jacobs, a Republican. Sharp is winning the celebrity war, having snared Republican baseball great Nolan Ryan as a spokesmodel, and grabbing the support of John Carona, the only state senator who's crossed the line for either hopeful.

• Tony Sanchez announced his "Republicans and Independents," saying he's won the support of Republican political and PR consultant Anne Whittington of San Antonio, car dealer Chuck Nash of San Marcos (who supports a number of other Democrats, too) and former U.S. Attorney Bob Wortham, a Ronald Reagan and later a George H.W. Bush appointee. Gov. Rick Perry took an odd turn to get his bipartisan credentials into the news cycle, putting out a press release saying Sanchez didn't say anything about the Priscilla Owen nomination while it was in the news and therefore isn't bipartisan. Perry's list of Democrats includes former Texas Supreme Court Justices Raul Gonzalez and John Hill, former state senators A.R. "Babe" Schwartz and Bill Sims, former House Speaker Gib Lewis, current Rep. Ron Lewis, D-Mauriceville, and "six South Texas Democrat mayors."

Where's the Audience for Politics?

Remember Harvard's "Vanishing Voter" project? They did polls at least every week during the presidential race to see how voters were reacting to the campaigns and to see what was turning them on and off. Now there's a book poring through 99 polls taken between November 1999 and January 2001. Among the conclusions: the weakening of the political parties has cut into voter participation, that modern campaigns turn off some voters who actually are interested in public affairs, that "attack journalism" erodes trust and interest in politics, that "frontloading" of the party primaries and nominations depresses turnout and interest in elections in late-primary states, and that the strategies that win Electoral College votes depress political involvement in states that aren't battlegrounds. More about the book and the project are online at www.vanishingvoter.org.

Political People and Their Moves

Indicted by a Travis County grand jury on charges they violated the state's open meetings law by getting together over lunch in a restaurant to discuss state investment business: State Board of Education members Joe Bernal of San Antonio and David Bradley of Beaumont, former SBOE member Bob Offutt of San Antonio, and financial consultants Joe Alderete, Brian Borowski and Russell Stein. That alleged crime is a Class B misdemeanor... Free and clear: Former Dallas City Councilman Al Lipscomb, who was confined to his home for more than two years as punishment for bribery, won't be retried on the charges that drove him from the council. His conviction on charges he illegally accepted monthly payments from the owner of a city-regulated cab company, was overturned and prosecutors said they'll drop the case. Lipscomb has said all along he wasn't bribed... The political wing of the Texas Hospital Association hired Lisa Colucci-Kepple to run their PAC. She had worked at Public Strategies Inc. and before that, for Karl Rove's political consulting firm... Tris Castaneda, who had been with Chris Shields' lobby outfit, is leaving there to join the lobby staff at Baker Botts. He'll take on some new things but will continue with some of his San Antonio clients... Louann Martinez, after 14 years at the Texas Association of School Administrators, will leave at the end of the month to start her own lobby practice... The Department of Public Safety tapped Randall Elliston—who headed the DPS contingent in the domed Pink Building for four years—to head its 3,300-employee traffic law enforcement division. Elliston has been the assistant there for a couple of years and replaced Charles Graham, who retired... Fred Pratt is the new state and local government contact at Dallas Area Rapid Transit, replacing Jay Barksdale, who's now handling federal government relations for DART. Pratt, a former Senate aide, had been working (on contract) on the Public Utility Commission's consumer education program... Laura Tolley is the Houston Chronicle's new state editor. Tolley, a former Associated Press and Houston Post reporter, was most recently the political editor at the San Antonio Express-News and is that paper's former Austin bureau chief.

Quotes of the Week

National GOP consultant Mike Murphy quoted in the Washington Post on the dangers of mixing politics and September 11: "It is a situation where that day and, in some cases, the days around it are when everybody in the country is going to be thinking of one thing, and the local campaign for Congress is not that one thing."

Attorney Rusty Hardin of Houston, flaunting his inner-Austin Powers in a blast at Travis County Attorney Ken Oden for indicting one of Hardin's clients after almost two years of silence on the subject, in the Austin American-Statesman: "That was November of fricking 2000 and we don't hear a swinging thing from this guy, or anyone else in law enforcement, until last week."

Sen. Jeff Wentworth, R-San Antonio, in an $8,500, half-page ad in the San Antonio Express-News, blasting the paper and one of its reporters for a story about his so-far successful reelection bid: "As for the suggestion that I need to put this election behind me, believe me, no one wants this campaign behind me more than I do, but not at the expense of the truth."

Democratic gubernatorial nominee Tony Sanchez, telling the Dallas Morning News that neither he nor Gov. Rick Perry is likely to come out with a specific plan for balancing the budget: "He won't, and neither will I. And if anybody does between now and November 5, they are going to lose."

Former U.S. Sen. Alan Simpson of Wyoming, in The New York Times: "In your country club, your church and business, about 15 percent of the people are screwballs, lightweights and boobs, and you would not want those people unrepresented in Congress."

Dr. David Smith, chancellor at Texas Tech University, describing the "unique" school's goals in the Dallas Morning News: "We don't aspire to be anybody else, and probably nobody aspires to be us."

Arizona State University student Brian Buck, after he let a "busload of porn stars" make a film at his frat house, quoted in the Portland (Oregon) Tribune: "I'm not apologizing for anything I did. It's not like this is Harvard."


Texas Weekly: Volume 19, Issue 11, 9 September 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.


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