Bumps on the Fast Track

The newest obstacle to medical malpractice liability legislation is this question: Would limits on liability increase the availability and number of abortions done in Texas every year?

Houston attorney Mark Lanier has been talking to lawmakers about unintended consequences he thinks would arise from the legislation. First, the legislation itself: It would put a $250,000 limit on a court award for non-economic damages in a medical malpractice case.

Lanier is a plaintiff's lawyer, but says he's not acting for the Texas Trial Lawyers Association; instead, he says he's acting as a longtime anti-abortion activist who has done legal work for protesters and adoptive parents. He's also a Republican, but says he picks and chooses his way through the ballot when he's voting.

He has two objections to the med mal bills filed in the House by Rep. Joe Nixon, R-Houston, and in the Senate by Jane Nelson, R-Flower Mound. First, he says, they put more value on a woman who has a job than on a woman who stays home and raises children. Involve the first woman in a malpractice case, he says, and her economic damages will be based in part on her salary. A limit on non-economic damages could hurt, but won't completely undermine her case. The stay-at-home mom, on the other hand, won't have a salary to factor into the award amount. That second malpractice victim wouldn't get a fair award under the proposed law, he says.

Lanier's second objection has attracted the attention of conservative legislators, because it raises the question of whether a vote for medical malpractice is also a pro-abortion vote.

Lanier's statistics are underdeveloped, but he says insurance companies include questions about elective abortions when they're writing policies for doctors, and that the premiums go up when a doctor performs those operations. A limit on non-economic damage awards, he argues, would do away with that question and remove much of the risk that an insurer would have to pay a big award in a malpractice case resulting from a botched abortion. He says the number of abortions in California grew dramatically in the six years following the passage of a damage limit there in 1975 and that there was a spike in the number of those operations after Minnesota passed a limit (that was later rescinded). He's still looking at the numbers, though, and admits that the high numbers could also have something to do with the U.S. Supreme Court's Roe v. Wade decision in 1973 and with the fact that those years correspond with the years of the baby boom generation's teenage and young adult years.

Facts to back that up are scarce, but lawmakers say they've been hearing from conservative activists in the last week about that concern. They've been promised statistical evidence that the liability limits would make abortion clinics and operations proliferate, and vague references that a similar jump was first observed in California.

Lanier met with Nixon and plans to meet soon with Nelson to talk about changes to their bills. One proposal would be to give plaintiffs the option of suing for economic damages with the limits on non-economic damages, or to forego economic damages in return for unlimited non-economic damages.

Nixon calls the whole theory a red herring dreamed up by trial lawyers who don't want his legislation to pass. Adding an exception for abortion cases would change the nature of the debate on the House floor, from an argument about tort reform to an argument about abortion or about what else ought to be left out. And he's also raising questions about the underlying argument: "How many abortion clinics went out of business because of medical malpractice anyway?" he asks.

No New Taxes, Except for the Old Ones

Gov. Rick Perry's State of the State speech included several calls for new tax revenue alongside his decree that the people of Texas don't want any new taxes. His out: He doesn't include "fixes" and loophole closings and gizmos like that on the list of what he considers new taxes. He's not alone in that, either: conservative lawmakers have been talking for years about all the companies that are escaping the state's corporate franchise tax and adding penalties for companies that don't tell tax collectors about their taxable property.

Perry's camp carefully laid the groundwork for the speech. On the media side, they turned out out-of-Austin live crews who never cover this stuff, ensuring coverage in other markets that didn't go through the regular filters of the regular Capitol press corps. They briefed Republican supporters, activists, stalwarts, and civics geeks via a statewide conference call the day before Perry spoke to drum up conversation about the ideas in the speech. They briefed lobbyists so that the cuts and tax fixes and such wouldn't cause any surprised, nasty reactions.

Finally, they briefed House Speaker Tom Craddick and Lt. Gov. David Dewhurst about the governor's proposals, in the hopes that their reactions would be positive. They were, mostly. Craddick told reporters it was a good speech and said the Legislature would look at everything and probably pass some of it. Dewhurst said the cuts to higher education were a little stiff, but said the governor had some proposals worth consideration.

The Guv followed with a trick he pulled during his first session in the middle office two years ago, traveling the state to tell media and supporters outside of the capital city what he's all about. He'll talk about his zero-based budget–which starts with every state program getting no money–and then he'll talk about $9.5 billion he would move around to make his budget balance.

The missing element? He isn't saying exactly what he wants to retain in the current budget. The governor says he doesn't want any "new" taxes and that he does want the cuts he has outlined. But he never says whether his starting place for cutting is the current budget or the one proposed for next year. It's a minor point, made by the number-crunchers, that probably makes no difference in a State of the State speech. Voters and lawmakers got a glimpse at what the governor wants and he didn't get hooked into a bunch of politically hairy conversations about this thing and that one.

Side-swiping a Sacred Cow

Some of Gov. Rick Perry's detractors keep files on the man–politics ain't patty-cake–and one of them sent us a news clip from the Austin American-Statesman from the end of the last legislative session. It's an item on Perry's support for $250 million in economic development on the Border coupled with his opposition to using the Rainy Day Fund for stuff like that.

Stand that up next to the governor's proposal for a Texas Enterprise Fund that would be run at his discretion, totaling $390 million and financed by scooping up 30 percent of the money in the state's Rainy Day Fund.

Under Perry's proposal, a governor could use the money for economic development bait for companies like Toyota, for projects like the proposed Border Health Institute in El Paso and the Regional Academic Health Center in the Valley, and so on. The state put up $29 million to help attract Toyota to San Antonio, but the Legislature still has to approve that spending. Under Perry's plan, he'd have been able to spend the money without asking for permission. Some of the money would be for a one-time item: paying the state's share of the damages from Hurricane Allison. The Guv wants $40 million to try to keep Sematech in Texas (it's considering a move to New York), and $55 million of the $390 million would go to other technology and biotech projects. Immediate reaction from legislators was mixed: Some of them were eyeing the Rainy Day money as part of their budget solution.

That's What Comptrollers Do

The comptroller's letter saying she wasn't going to cut as much from her own agency budget as the people in the Pink Building had asked was well-covered by the papers, but that's not all of the story. Carole Keeton Strayhorn's e-Texas report, released last month, would add around 100 audit and enforcement personnel, a move she says would increase tax collections and which therefore has a large and positive fiscal impact. Perry, by including all of the savings from the e-Texas deal in his budget plan, has effectively endorsed that idea (along with everything else in her report).

Strayhorn's rationale for limiting cuts now was that trimming the number of tax collectors would trim tax collections at a time when the state is looking through old shoeboxes and cookie jars for cash. Cutting more would reduce the state's income, forcing more cuts, she wrote. Increasing her staff, she said in the e-Texas report, will increase state income, allowing fewer cuts.

• Perry got $300 million of his savings from a proposal that has failed to capture the ardor of either the current comptroller or her predecessors. It would move the collection point for gas taxes to terminal operators–the industry jargon for that is "Back to the Rack."

State transportation officials have argued for years that the current system has too much slop in it, and that the state is losing millions and millions of tax dollars to fraud. But they've never presented it to the comptroller's office in a way that convinced the number-crunchers that the numbers were real. And as they like to say at the comptroller's office, their numbers are the only numbers that count when it comes to balancing the budget. But Perry grabbed the money and side-stepped the fight over what it's worth: He'd take the money out of transportation and move the collection point, leaving transportation officials to hope they were right and that the savings they predict really exist. One other way to get some money: The businesses that collect the taxes now get to keep 2 percent as a fee. That's $58 million that the state might be able to share or grab outright.

Taking Hits

Perry's proposals got the loudest cries of pain from higher education, which would lose up to $2 billion from what was proposed in the Legislative Budget Board's starting blueprint for the next biennium. Perry offered, in return, to let the universities set their own tuition rates, but he would hit them in their sensitive regions, cutting "special items" funding and pulling the slack out of their estimates of what they'll make from tuition and fees each year. Perry's argument: Those estimates are usually wrong by up to $300 million, and the state should get the float instead of the schools.

• Community colleges would take a $200 million hit in the governor's proposal. He wants to cut the state's share of funding for group insurance at those schools from 100 percent to 35 percent.

• The governor would cut $500 million in one-time telecommunications grants for schools, libraries and hospitals and use that money for ongoing technology spending in public education. That would fix the problem now, but leave lawmakers looking for $500 million two years hence to keep the technology allotments in the budget.

• Most of the governor's money came from his proposal to cut average agency spending by 9 percent and to cut Medicaid spending by 6 percent, netting a total of $3.8 billion. If that's applied evenly–and there's no indication that each and every agency would be cut by the same percentage–it would mean about $770 million from prisons and public safety, according to the Center for Public Policy Priorities. Health and human services would have to cut $950 million in state money and about $1 billion in federal matching money, by their estimate. The numbers are slippery, no matter how you want things to come out: The HHSC folks are working through Medicaid to maximize the federal matches and minimize the effects of cuts on clients. Prisons might not take the full nine percent, especially in the face of new estimates that they're nearly full in spite of a building binge during the 1990s. And, hey, the economy could always perk up.

• Perry wants to cut state mandates to public education, including a two-year-old exercise program ordered by state officials worried that Texas kids are too fat.

Wrasslin' Over Veto Power

Perry's budget staff sent an email to agencies telling them to respond to requests for budget cuts in a particular format–the one that's used by the governor's budgeteers. But the Legislative Budget Board actually made the requests of the agencies, and actually writes the budget that the Legislature works on. Legislators don't want the executive branch getting in their sandbox, and they got the Guv's office to back off of the request. The agencies can run budget numbers in the LBB format just like they always do. There's a bigger deal hidden in the wiring: The Legislature writes its budget to protect items from the governor's line-item veto. They group several things into one item, for example, to protect things a governor doesn't like by coupling them with the executive's pet projects. In some cases, they put an entire agency or university into one item giving the governor a choice between leaving it in business or killing it altogether.

The Guv–Perry is not different in this respect from his predecessors–would like to have more control over the process. He's arguing for a "transparent" budget that would expose more line items to his veto pen. It's a power struggle, when you get down to it, and it's the biggest difference between his so-called "zero budget" starting plan and the Legislature's plan. His leaves items like an agency's travel budget exposed, and theirs does not. Legislative budget-writers say they will probably include more detail in the state budget they put out, in response to the governor's call for "transparency," but they're not sure they include the detail in a way that expands Perry's line-item veto powers.

The Other Budget Pothole

We've written about the Health and Human Services Commission's immediate budget problem, but the size of it has grown, and the conversations about how to fill the hole start in earnest next week. HHSC needs another $493.6 million during the current budget year to do the things it's already doing. Caseloads are higher than lawmakers predicted when they wrote the budget two years ago, and some other costs have risen. Medicaid needs $467.2 million, and the Children's Health Insurance Program needs $26.4 million.

We haven't heard serious talk of cutting the programs during the current budget year. Instead, lawmakers are talking about a supplemental appropriations bill that would allow the agency to spend that money and would find some way to finance the increased spending. On the face of it, the increase in spending would lead to a bigger deficit than the $1.8 billion forecast by Comptroller Carole Keeton Strayhorn. Still, much of that deficit is a paper monster that can be financed without new revenue, by moving payments around and by applying some of the cuts that various agencies have proffered in response to the general call for belt-tightening. It will add to the red ink, however, and unless the numbers change again, the next budget won't start at zero, but at a negative $2.3 billion. Two years ago, the Legislature got to start with a $3.5 billion surplus. Appropriations Chairman Talmadge Heflin, R-Houston, says he'll start working on a supplemental spending bill within the week, as his committee members feed him information about spending cuts proposed by other state agencies.

And Who Cares?

More than half of the people in this fair state haven't heard about the state's budget woes or know very little about it, and about one in five claims to know a great deal about it. That's from a survey done by the University of Houston's Center for Public Policy, which also says most Texans agree with state leaders who want to cut spending and leave taxes alone. The pollsters say 50 percent of the people polled like the spending cut idea; 35 percent say they'd like to see a combination of cuts and tax and fee increases. How many would make it all up with new taxes and fees? Just 4 percent. Where would they cut? Not in education, said 77 percent. Not in higher education, said 59 percent. Not in Medicaid and other programs, said 69 percent (more were willing to cut if those were called "welfare" programs). Most would tolerate small to large cuts in prisons, and 64 percent would tolerate small to large cuts in road and highway spending. The poll of 1,000 has a margin of error of ±3.5 percent.

No Zero Budgeting Here

Every time there is an ethics or campaign finance investigation during a legislative session, there is an accompanying rumor about a budget cut to the agency designated to police political crimes. And so it is this year: The Battle Royale between the Travis County District Attorney's office and the Texas Association of Business over the trade group's support for Republican legislative candidates has produced gossip about cutting state appropriations to those prosecutors. Travis County's public integrity unit gets cases involving state officials, and gets state money in return.

The prosecutors are asking questions about whether TAB's activities ran afoul of state laws preventing corporate money in election campaigns; TAB's lawyers say their free speech and association rights are under siege. With that fight in full flower, we've heard talk that the budgeteers might cut off the D.A.'s money. But the gossip, while widespread, is apparently untrue: Appropriations Chairman Talmadge Heflin, R-Houston, dismissed it as "just rumors." And Travis County D.A. Ronnie Earle says he wasn't asked about the TAB investigation during hearings before a budget subcommittee this week.

After Mediation, and Some Election Results

Remember that nasty rift between the Texas Medical Association and Texans for Lawsuit Reform, the tort-reform group? Well, they're playing nice again. Both are backing medical malpractice legislation, and TMA has rejoined TLR and started contributing money to it again. Dr. Tom Hancher, one of TMA's honchos, wrote a letter to other doctors that blames the fuss last session on a "lack of communication" (it'll be in an upcoming issue of their association magazine). They got tangled up two years ago over a "prompt pay" bill that was number one on the doctor's priority list and that was number one on TLR's skeet-shooting list. Gov. Rick Perry vetoed the bill after the session ended, saying it would have opened up a whole new way to file lawsuits in the state. (Rep. Craig Eiland, D-Galveston, filed an exact replica of the prompt pay bill, without the section that formed the basis for that veto, a few days ago.) TMA opposed Perry's reelection, and TLR was one of his biggest supporters. To the victor, etc., etc., etc. Hancher's letter encourages doctors to join the tort group.

Flotsam & Jetsam

• Fun facts: Texas legislators make $600 a month, and get a $125 allowance for every day they're in Austin on official business. A lawmaker who shows up for the 140 days of the session gets $17,500 for that; add it to the regular salary, average it over two years, and divide by the 2,000 work hours in a regular year, and you get their hourly wage: $7.975.

• State Auditor Larry Alwin backed off an estimate of state government fraud that appeared in a recent report from his agency, telling lawmakers he doesn't think there is a $7 billion waste and fraud problem in Texas government. He does, however, have some ideas for saving money and put out a report outlining $1 billion to $1.8 billion in savings the state might get through fraud prevention and better contract management.

• Another school, and another survey. This one, from the University of Texas Health Science Center in Houston, says 75 percent of Texans asked about tax hikes like a hike in cigarette taxes "as the preferred method to bring in additional state dollars."

• Add this to your list of lawmakers raising money during the session, not for their politics, but for their causes: Sen. Gonzalo Barrientos, D-Austin, sent letters to lobbyists asking for contributions to the "Gonzalo Barrientos Scholarship Fund." That program is used to give two students from each Austin high school a $1,000 boost for college expenses. Contributions are tax-deductible. State law prevents officeholders from raising money during a legislative session, but several have been involved in fundraisers lately, soliciting for political parties, think tanks, and now, scholarships, from lobbyists and political supporters.

Political People and Their Moves

The Republicans in the Texas Senate made Todd Staples of Palestine the new head of their legislative caucus... Swap 'em: Rhonda McCollough is moving back to the Texas Education Agency, where she'll be assistant commissioner for governmental relations, a job she held before moving back to the Senate last year. Her move leaves open a spot on the Senate Education Committee, which will be filled by Adam Jones, who had been in the TEA spot... Tom McCarty, who was with the Texas Association of Preferred Provider Organizations, is moving into the Pink Building to clerk for the new Select Committee on Health Care Expenditures. Rep. Dianne White Delisi, R-Temple, chairs that panel. The PPOs haven't announced a replacement... Texas Media Watch–the Sherry Sylvester project mentioned here last week–is on line. She got a financial grant from the conservative Lone Star Foundation to critique Texas newspaper coverage on the Internet at www.TexasMediaWatch.com. You can sign up there for free regular alerts... The U.S. Senate voted 91-0 in favor of former state Rep. Rob Junell's appointment to the federal bench. The San Angelo Democrat will soon be wearing black robes and working in Midland...

Jim Nugent, the former state rep and railroad commissioner who has signed on as general counsel of the House Ways & Means panel, will have a little more oomph than the ordinary committee aide: The legislators on that panel are letting him join them in asking questions of witnesses before the committee... Ian Randolph, unanchored by the defeat of Sen. David Cain, D-Dallas, has found new moorings, as legislative director to Sen. Eddie Lucio, D-Brownsville... Gov. Perry named Rod Pittman, who he appointed to the Texas Water Development Board, to chair that panel... Attorney General Greg Abbott named Herman Millholland to direct the agency's crime victims' services division. Millholland already works at the AG's office; before that, he worked for the Los Angeles (California) County district attorney and for the U.S. Department of Justice... They've reorganized the organization chart at the Health and Human Services Commission–the new associate commissioner for Medicaid and CHIP is Jason Cooke, who had been the agency's CHIP wizard...

Quotes of the Week

House Appropriations Chairman Talmadge Heflin, R-Houston, telling the San Antonio Express-News that holding the "no new taxes" promise will require state leaders to stick together: "If heat comes on them to where they say, 'You know, we can't do this,' then we're screwed."

Sen. John Whitmire, D-Houston, talking to the Fort Worth Star-Telegram about the lack of attention historically given to a governor's budget: "I'm not depending on the governor to give me his details. I'm on [Finance]. I'll get my own details. He was elected statewide recently and he is an experienced person, so he'll have to speak for himself."

Rep. Warren Chisum, R-Pampa, telling the Austin American-Statesman what he thinks of plans to kill the current school finance system before lawmakers have thought up a replacement: "I'm not excited about throwing the baby out with the bath water and then hoping that we run some more water to get another baby in there."

U.S. Rep. Tom DeLay, R-Sugar Land, disassociating himself from an anti-union fundraising letter that went out last week on his letterhead and from his office, apparently under the watchful eyes of his aides: "Even though my signature was on it, I didn't sign it."

Justin Garrison, a 29-year-old smoker interviewed by the San Antonio Express-News about proposals to increase the tax on cigarettes: "Raising the tax on smoking implies a judgment about its virtue, and when the state makes those kinds of judgments, I wonder whether that's their place."

Sen. Kyle Janek, R-Houston, saying legislation that would give public school students a minute for silent meditation does not force them to pray: "They could reflect on their puppy at home."

Gov. Rick Perry, doing a pretty good and unintentional imitation of the president while talking to a student group, as reported by the Houston Chronicle: "It's good to be around friends. When we are in danger and we are in concern, it's our family and our friends that we gyrate to and come together."

Texas Weekly: Volume 19, Issue 32, 17 February 2003. Ross Ramsey, Editor. George Phenix, Publisher. Copyright 2003 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.