Take a look at the clock: The next available date for a regular constitutional amendment in Texas is in November. Tax appraisal notices go out in late spring — May or so — and people pay their property taxes — or their mortgage companies pay and then send out escrow notices — in December and January. Most cities and counties and school districts set their property tax rates in mid- to late-summer. And then the cycle starts all over again.
Now look at it through the eyes of a candidate for statewide office. The next primaries are in March 2006. Texans and their mortgage companies will pay property taxes a couple of months before that, based on the bills they'll get in October 2005. Those bills will be based on tax rates set in summer 2005, which will be based, in part, on the appraisals that come out in May 2005.
A constitutional amendment designed for property tax relief won't do any tangible good — money in the bank — for voters unless it's on the ballot and passed before all those dates roll by, and a January-June 2005 legislative session offers the last possible chance to get that done. Uniform election dates, when constitutional amendments normally go on the ballot, come up in November, February, May and September. According to the Secretary of State, constitutional amendment elections can be held at any time, without regard to the uniform dates. Still, anything after May or June of next year would be pushing the deadline. Passing property tax relief out of the Legislature after about this time next year means no relief for taxpayers before they vote in that March 2006 primary.
That's the best argument for a special legislative session sometime between now and late summer, when it becomes too late to get a constitutional amendment on the November ballot. If you were advising Gov. Rick Perry — the only statewide official currently facing a genuine risk of a serious challenge in the GOP primary in 2006 — it's a timeline you'd be aware of. He could wait as late as the beginning of the regular session next year, but lawmakers would be working on a tight deadline.
That said, Perry hasn't called a special session. He wants consensus from Lt. Gov. David Dewhurst and House Speaker Tom Craddick before he'll call lawmakers back. He has told reporters and other onlookers that he'll make the call on whether to have a session or not within a week or so (he said April 1, but some interpreters think that includes "early April").
Since we're just speculating while we await the pronouncement, add some more variables. A session in the fall is probably too late, and too close to a regular session to justify to voters. A session this summer has two key disadvantages. It would anger lawmakers still explaining last year's redistricting sessions and blown vacations to their families. And it would put lawmakers in Austin arguing over school finance while teachers are on summer break, free to come lobby the issue.
If it's in the Spring, several April dates could affect the timing of a session: Religious holidays start on the 4th and run through Easter Sunday, the 11th; primary election runoffs are on the 13th; and federal taxes — a nice peg for the public relations people — are due on the 15th. We haven't heard anybody credible pinning down a date for a session.
Perry says he hasn't decided whether to call lawmakers back. Based on what he's said, it's accurate to report that there will be a session this spring, that he's leaning against a session since no consensus has emerged, or that he's in limbo, waiting to see whether talks now underway between the three top leaders will produce something worth presenting to legislators. All three say they want a solution, but Craddick and Dewhurst don't have any reason to worry about the calendar. Perry might.
What Will They Do If They're Called?
Sometimes the question tells you as much as the answer, as when a reporter for the Fort Worth Star-Telegram asked Gov. Rick Perry the other day how to get a constitutional amendment out of a House "that probably couldn't get 100 votes for a Christmas resolution."
Most proposals for school finance would require a constitutional amendment, which requires a two-thirds vote from the House and from the Senate. Put another way, 51 votes in the House and/or 11 votes in the Senate are all it would take to kill a plan. It would take a constitutional amendment to legalize Video Lottery Terminals at racetracks, or to create a state property tax for business, or to cap increases in local property tax appraisals at 3 percent and limit local government revenue increases.
A sales tax increase wouldn't require a constitutional amendment, but Perry has called that prospect something he "doesn't particularly favor." If anybody wants to try to pass an income tax, it would only take a simple majority of legislators to do it. The constitutional "ban" on an income tax says voters have to vote, but the constitution has already been amended. Legislators could, with simple majorities, ask voters to pass a referendum on income taxes. And if voters said yes to that — pollsters say they'd sooner trade their SUVs for Rollerblades — the state would have an income tax (two-thirds of the money would go to school property tax relief and one-third would go to public education). A state income tax may be politically inedible, but it's the biggest thing the Legislature could do if they can't muster two-thirds support for anything else.
Perry has been meeting with legislative leaders — at the Governor's Mansion, with both his policy folks and his political consultants on hand — to sniff around for common ground on school finance formulas, Robin Hood and various ways to raise money. Everybody at this point says the talks are promising and cordial, and that there aren't any deals about to be cut. It all has to fit together in a way that attracts support, frightens opposition, and is possible to do. The governor's package of education incentives is supposed to attract support, appealing to anybody who thinks educators need more spurring to improve public schools in Texas. He's adopted tax-capping proposals for that reason and to nullify opposition. As Perry put it the other day, "I would not want to be the legislator that went home and said, 'Gosh, I just couldn't vote for lowering your property taxes."
Now they have to put the votes together, and that'll hinge on getting some consensus on revenue packages, making some accommodations on how much they want to cut property taxes, and so on. Then come what's known as "printouts," a huge variable that historically has overshadowed every fight on school finance. It refers to the sheets passed out to lawmakers on any proposal that's up for a vote; the sheets detail the effects of a given proposal on all the school districts in a legislator's district. Printouts make a theoretical policy fight a local political battle, when each lawmaker sees what the Great Idea of the Moment would do at home.
Details, Details, Details
School districts would have the same revenue caps as cities, counties, hospital and other special districts, a detail that didn't make it into Gov. Rick Perry's speeches on the subject but that did get included in the sheets describing his proposals. Like every other local government getting property tax money, school districts would be barred from raising that particular tax without voters' permission. The exception, in the case of school districts, would be a tax increase to cover inflation and Average Daily Attendance, or ADA, increases; for other governments, population growth and inflation would be the only increases covered by tax increases without voter input. Another difference, which may explain why you hear the cities and counties complaining and very little from the school districts: The state's portion of the budgets of school districts — which would rise as local property taxes are lowered — would not be subject to the cap on revenues from property taxes.
The grand jury looking at campaign finance in the last elections has officially disbanded, and their work will be handed over to a new group, impaneled for six months, which will get organized over the next several weeks and start catching up. The outgoing panel issued no indictments, no reports, and nothing to indicate what work is left to do.
The panel has been investigating the financing of GOP House races in the 2002 elections, with particular attention on the Texas Association of Business' political action committee and another PAC called Texans for a Republican Majority. Broadly speaking, Travis County prosecutors and the grand juries want to know if those groups used corporate money to help 22 candidates who were trying to get elected to the House. It's against the law to use corporate contributions directly on behalf of a candidate and the question is whether those groups did so. Investigators also want to know if the activities of campaigns and third-party groups were illegally coordinated, and how they were tied to House Speaker Tom Craddick's efforts to bring a Republican majority that could make him the first Republican speaker since Reconstruction.
The first grand jury that looked at the allegations was discharged last fall — attorneys for TAB were asking the courts to limit the investigation when that panel's time ran out. Like the panel disbanded this week, that earlier grand jury issued no public reports, indictments or statements.
Meanwhile, U.S. House Majority Leader Tom DeLay, R-Sugar Land, is reportedly telling colleagues that he will step down if the Travis County panel indicts him. He's associated with TRM-PAC, and his daughter and some of his political consultants have been questioned. His own PAC, Americans for a Republican Majority, also contributed to most of the Texas House candidates. Roll Call, a newspaper that covers Congress, reported DeLay's conversations with others in the leadership, saying he would be following a House rule that requires leaders to step aside, at least temporarily, when they're charged with crimes. There has been no indication that he's a target of the Texas investigation.
Changing the Subject & Other Tax Notes
With state leaders convinced it would be difficult, particularly in the House, to get a two-thirds vote for a revenue-raising constitutional amendment, there's some talk of pulling a bunch of stuff into one package. That would mean only one two-thirds vote instead of several, and it might mean that the attractive things were more important than the smelly things in the package for any given lawmaker. Somebody who's not crazy about video lottery terminals or other gambling, for instance, might not want to vote against it if it also meant a vote against capping local property taxes.
Some legal and parliamentary wizards have been studying the possibilities. Nothing conclusive yet, but some of them think a single constitutional amendment could be crafted to include a package of things that are not at all alike. There is a one-subject provision in the constitution, but if you design a bill carefully, it might fit several subjects under a bigger subject. Earth, Wind, Fire and Water are four subjects unless the bill is crafted around "Ancient Elements." In practical terms, VLTs could be put in an amendment with a statewide property tax on businesses, all aimed at cutting local property taxes and limiting local governments' ability to raise those property tax rates back up. There's a risk: The enemies of each component could join forces to bring the whole thing down.
• U.S. Sen. Kay Bailey Hutchison has again proposed making the sales tax deductible from federal income taxes for residents of states that don't have their own income taxes. That's a group that includes Texas and Florida, and because of the size of the sales tax revenue in those states, you probably shouldn't count on it becoming law. It would cost the feds a lot of money, and most states wouldn't benefit. Here, it would keep about $700 million in the pockets of Texas taxpayers. Taxpayers in states with income taxes already get to deduct; Texas doesn't have one, and sales taxes aren't deductible. But there are only seven such states, and they only account for 14 of the 100 votes in the Senate. Count your votes, and turn your hopes to the U.S. House.
Runoffs & Recounts
State Rep. Roberto Gutierrez, D-McAllen, won't actively campaign for reelection in next month's runoff; he's been diagnosed with Guillain-Barré Syndrome, a central nervous system disorder that put him in the hospital and forced him to suspend his campaign. Gutierrez was challenged by two candidates in the primaries, and finished second. He almost finished out of the running — Veronica Gonzales finished just 55 votes shy of an outright win (10,149 votes were cast). Some of his friends and supporters urged him to concede, but he decided to remain in the runoff. It's too late to pull his name off the ballot; he and Gonzales will find out who the winner is sometime after 7 p.m. on April 13.
• U.S. Rep. Ciro Rodriguez, D-San Antonio, isn't out of the woods, yet. Laredo Democrat Henry Cuellar decided to write a check for $13,930 to pay for a recount. That has to start by the middle of next week; the end date for the counting isn't as clear, according to Democratic Party officials. It's an 11-county district. Rodriguez won in seven counties, including Bexar, where he buried Cuellar and got 80 percent of the vote. But Cuellar, who served in the Texas House with Rodriguez and got his help two years ago in a contest against U.S. Rep. Henry Bonilla, R-San Antonio, swamped the incumbent in Webb County with 84 percent of the vote. Add 'em up and do the numbers, and Cuellar got 53.8 percent of the vote in the two biggest counties — combined — in the district. Rodriguez' votes in the smaller counties on the northern end of the district narrowly outnumbered Cuellar's votes on his end of the district. After the official canvass, the difference was 145 votes.
• State Rep. Ray Allen, R-Grand Prairie, cut a radio ad and wrote a letter of endorsement for CD-10 candidate Ben Streusand after that campaign paid him $2,500 for what he called writing and consulting work. The letter, he said, was one of several he wrote for Streusand; after he wrote the letter and had been working for the candidate, Allen said, he offered to sign it and put his name and official title on the letterhead: "From the Desk of State Representative Ray Allen." In the letter, he notes that "one of the other leading candidates" in the race also has a pro-life endorsement. But he offsets that by noting Mike McCaul's endorsement by the Austin American-Statesman, which he calls "an ultra-liberal newspaper." He says the radio spot evolved in a similar way; he wrote several for different people to voice and then wrote and voiced one himself. Allen's district is in the Metroplex, and the CD-10 runoff between Streusand and McCaul is for a district that runs between Austin and suburban Houston. Allen says he isn't known in local political circles, but says he is known to pro-life and pro-gun audiences, and that's the value, he says, in using his name and voice on advertising. Allen wasn't specific, but said he continues to do paid work for Streusand; he says his support is not tied to the paychecks, but because Streusand is "a candidate that I like and believe in."
• With Dave McIntyre out of the race in CD-17, Waco Republican Dot Snyder hired two of his consultants, apparently hoping they'll bolster her chances in Brazos County. Snyder is running against state Rep. Arlene Wohlgemuth, R-Burleson, and both are trying to get the Aggie votes on the southern end of the district. Wohlgemuth has been at it longer; she's getting help from a couple of former aides to state Sen. Steve Ogden, R-Bryan. The Democrat in the race, U.S. Rep. Chet Edwards of Waco, is the only Aggie still in the running.
• Add Rep. Leo Berman, R-Tyler, to the list of local Republicans endorsing former Judge Louis Gohmert in the CD-1 Republican runoff. It's a Tyler v. Longview deal; John Graves, the other candidate still in the race, is from Longview. Former Sen. Bill Ratliff already signed off on Gohmert, as did Rep. Wayne Christian, R-Center, who ran for the congressional seat but didn't make the runoff. The runoff winner will face U.S. Rep. Max Sandlin, D-Marshall, in November.
• Texans for Lawsuit Reform's PAC endorsed Nelda Martinez in the runoff in HD-34. Rep. Jaime Capelo, D-Corpus Christi, got knocked out in the first round. Abel Herrero finished first with Martinez a couple of hundred votes behind. TLR says Martinez was on their side in last year's successful effort to constitutionally limit legal penalties in medical malpractice and other lawsuits. Herrero is backed by some of the same law firms that helped knock off Capelo.
Flotsam & Jetsam
The State's Health and Human Services Commission claims it will save $389 million over five years by streamlining its service delivery to include in-person, Internet, fax and phone systems. A study done for the agency says it's spending $700 million annually to determine who is eligible for services. The savings will come from reductions in staff, the creation of call centers to handle cases, and streamlining services. For instance, where there are now 381 field offices in Texas, they'd reduce that to 164, supplemented by mobile offices serving areas without permanent facilities. The number of employees would be cut to 3,377 from 7,864 currently delivering those services. That new eligibility determination system isn't in place yet; the agency has started briefing legislators and others, will publish rules next month, and then will hold public hearings before it makes the changes. The study they commissioned to justify the changes is available online at www.hhsc.state.tx.us. Look under "consolidation." And watch for a battle over this; some advocacy groups say the agency's current system is inadequate and contend the new system is being designed to save money without improving services. HHSC, as you might imagine, disagrees with that characterization.
• The Cook Political Report puts five Texas congressional incumbents in its "toss-up" category, saying the Democrats trying to hang onto their seats after redistricting have an even shot. The five are U.S. Reps. Chet Edwards of Waco, Martin Frost of Dallas, Nick Lampson of Beaumont, Max Sandlin of Marshall, and Charles Stenholm of Abilene. Stenholm is in a district with another incumbent, Republican Randy Neugebauer of Lubbock. All of those Democrats are in districts that were drawn to knock them off and replace them with Republicans, and each has a credible opponent (or will have, after the runoffs) for November. Let the arguments begin.
• The federal government stuck states with a $29 billion tab in the 2004 fiscal year, according to the National Conference of State Legislatures, and the amount is expected to rise to $34 billion in the next budget year. The NCSL report (online at ncsl.org) says the unfunded mandates were led by the Individuals with Disabilities Education Act, at $10 billion, the No Child Left Behind Act, at $9.6 billion, and changes in state drug costs for certain types of people, at $6 billion. Next year, add $1.45 billion for Homeland Security, and $1.9 billion for Medicaid.
• U.S. Rep. Ron Paul, R-Surfside, is putting money back into the till for the sixth year in a row. He's got $210,000 left in his House operating account this year — he says it's 20 percent of the total — and he's giving it back. This refund will put his total returned at almost $1 million.
• The Texas House is trying to create a bottleneck for Open Records requests made of members, asking them to route both the requests and the records being turned over through the House Administration Committee and the Speakers' office. In a memo to legislators, Rep. Peggy Hamric, R-Houston, says members should require requests to be made in writing and fills them in on some of the details of open records law that some legislators might not know. Like this, for instance: state officials aren't allowed to ask people why they want a particular piece of information or what they plan to do with it. The memo also outlines time constraints, and then says the materials being sent out in response to a request should first go to her committee, which will run it by the Speaker's communications office before handing them out. It's similar to what most state agencies do with these things, but it freaked out some of the members who got the memo.
• Officially, now, the Republican Party of Texas has "resolved" that prosecutions of state ethics laws should be moved from the jurisdiction of the Travis County District Attorney to the Texas Attorney General. Republicans say Ronnie Earle's current investigation of campaign finance in the 2002 elections is driven by his partisanship — he's a Democrat — and not by his law enforcement responsibilities. The State Republican Executive Committee passed a resolution to move those duties to AG Greg Abbott, a Republican. The resolution is non-binding, but you'll hear more. The state GOP convention is set for June, and the grand jury handling the case will still be in operation at that point.
Political People and Their Moves
Lawrence "Larry" Alwin, a CPA who has been the State Auditor of Texas since 1985, is hanging it up at the end of the month. Alwin works for the Legislative Audit Committee, co-chaired by House Speaker Tom Craddick and Lt. Gov. David Dewhurst. His replacement hasn't been named. SAO does financial audits of state agencies; they're among the number-crunchers who blew the whistles on the state's Cosmetology Board, the Department of Economic Development, and the Texas Commission on Alcohol & Drug Abuse in recent years when those agencies hit the financial shoals. Alwin was an accountant with Gulf Oil before becoming state auditor. In 19 years, he served during the administrations of five governors, five lieutenant governors, and three speakers...
House Speaker Tom Craddick got a Friend of the University Award from the University of Texas for his efforts on behalf of higher education. Craddick pushed through tuition deregulation during the last legislative session. That won him praise from higher education advocates who say the Legislature has been starving colleges for years by under-funding them and limiting their ability to raise money in other ways. Craddick's argument was that the quality of the schools was at stake, and the state didn't have any money in the budget to patch things; tuition deregulation was the only way out. But he's been derided by others who fear tuition increases will make public colleges in Texas unaffordable. On the day he was scheduled to get the award, a student group from UT staged an award of their own, calling Craddick an Enemy of Affordable Higher Education.
Quotes of the Week
Gov. Rick Perry, in the Fort Worth Star-Telegram: "As I said from the get-go, if no consensus is formulated, then we're not going to be here in a special session. I'm not going to bring legislators in without a fair consideration of success."
Sen. Todd Staples, R-Palestine, quoted in the Dallas Morning News: "Every child must have access to a quality education, and quality must not be dependent on their ZIP code."
Gov. Perry, quoted by the Associated Press: "I happen to think that a split tax roll is one of the only ways that you can get rid of Robin Hood without raising a plethora of new taxes in this state."
House Appropriations Chairman Talmadge Heflin, R-Houston, giving the Houston Chronicle his forecast of how the House would vote on a statewide property tax for schools: "It would take a small miracle. But we've seen things turn, so you never know."
Boerne Mayor Patrick Heath, quoted in the Abilene Reporter-News on proposals to force local governments to ask voters when they want more money than inflation and population gains would require: "If we want to pin everything on participation of our constituents, then we are up a creek because most of us are apathetic."
Weston Ware, legislative director of Texans Against Gambling, talking to the Dallas Morning News about Video Lottery Terminals, or VLTs: "It's the crack cocaine of gambling. I don't think a majority of Texans would vote for it. It's like selling cigarettes to raise money to fight cancer."
Lt. Gov. David Dewhurst, telling the Houston Chronicle that he's unlikely to repeat last year's suspension of the Senate's two-thirds rule during a special session on school finance: "It's my intention to continue its use as long as our senators continue to come together and work for what's best here in Texas... It historically has not been used in special sessions involving redistricting because redistricting is obviously not a bipartisan issue."
Former Gov. Ann Richards, talking to U.S. Senator and potential gubernatorial candidate Kay Bailey Hutchison at a forum reported by the Dallas Morning News: "Let me tell you something about the Governor's Mansion: It is really old. Raising those two little kids in the governor's mansion, you're going to have to put something over the furniture. It's very fragile and very delicate."
Texas Weekly: Volume 20, Issue 39, 29 March 2004. Ross Ramsey, Editor. George Phenix, Publisher. Copyright 2004 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.