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Gov. Rick Perry wants the Legislature to interrupt its off year for a special session on public school finance, and he says he'll call them back for a second session, and maybe a third, until they solve it. He doesn't have the consensus he wanted, but the threat of a long summer grind might force a fix.

Gov. Rick Perry wants the Legislature to interrupt its off year for a special session on public school finance, and he says he'll call them back for a second session, and maybe a third, until they solve it. He doesn't have the consensus he wanted, but the threat of a long summer grind might force a fix.

His own plan hasn't excited much support. Perry wants to allow video lottery terminals at racetracks and on Indian reservations, to speed collections of sales and franchise taxes from businesses, to collect at least $5 from everybody who walks into a strip joint, to add $1 to the tobacco tax, and to allow private firms to collect state taxes (on contract). He wants to use that money to cut school property taxes for homeowners, to end the Robin Hood scheme that has around 120 school districts with lots of valuable property shipping money to over 900 school districts with less property value to tax, and to spend a bit more money on education. He's getting flak from businesses for his proposal to split the local property tax rolls in the state, collecting business property taxes at the state level while leaving residential property for local school districts to tax. Businesses would be taxed at $1.40 -- an average cut of 6 cents, but a tax increase for companies in more than 200 school districts -- while homeowners would see their tax rates cut 25 cents from whatever they're paying now.

The session starts on Tuesday, but the Select education committees are already working on those proposals. By this time next week, there could be three or four plans in the works from Republicans. As we went to press, Democrats were still arguing internally over whether to present a school finance plan of their own or to sit back and let the Republicans try to reach consensus.

Dark Alleys

The governor's rollout of a school finance proposal and the speculation preceding it swamped the comptroller's rollout of a highly critical report of the state's foster care regulation, but keep watching. Carole Keeton Strayhorn has had her staff looking at homes and camps for foster kids for months. The resulting report is illustrated with pictures of conditions out of the third world. As we've noted previously, the Health and Human Services Commission jumped up a week before the announcement with some proposed reforms, just in time to blunt the impact. Strayhorn initially declined to name the places where she and her staff found the worst conditions. A day later, she released a list of the places she had visited and pointed the regulators at HHSC to the trouble spots. And she's promising follow-up visits over the next several months to see whether things are getting better.

The political context: She's building a possible political campaign around children's issues, and you'll hear more from that quarter about school finance, the Children's Health Insurance Program, and the like. In fact, as the governor announced the special session will start on April 20, Strayhorn put out a press release demanding he add CHIP funding to the agenda.

Expect another round next week. Texas comptrollers are required to update their forecasts of the state's revenues and spending patterns every time lawmakers return to Austin, whether they're coming back for a regular session or a special one. Strayhorn is planning a Monday announcement preceding the Tuesday session. She insists the state has enough money to restore CHIP to last year's level — more than 115,000 kids eligible under last year's standards are not eligible for benefits now. Meanwhile, a Houston Chronicle report says the state is short in Health and Human Services funding by well over $500 million, about the same amount that was cut from the budget after HHS officials lowered their estimates of how many people are eligible for state help. Stay tuned.

Cranking up the Populism Machine

The Texas Republican Party, Gov. Rick Perry's campaign office, local GOP organs and various conservative and/or anti-tax groups drummed up support for a rally on the Capitol steps. It's never easy to get a weekday lunch crowd at a political event, and the turnout was slight. Only 250-300 people made it to hear from the governor, Harris County Tax Assessor-Collector Paul Bettencourt and assorted lawmakers. They were promoting the caps on property taxes proposed as part of Perry's school finance plan. GOP officials in Harris and Bexar counties tried to drum up support for the rally, as did the radio talk show folks who've been stirring the pot — mostly in Houston. These are the same proposals that have cities and counties up in arms; they've been louder, in their fashion, at the Pink Building. But public hearings on the proposals haven't started, and that'll generate headlines. So far, the public noise on school finance isn't as impressive as it was last year for the redistricting fight, and that's supposed to be an issue nobody cares about.

Strange Bedfellows

Scott McCown, the former state district judge who quit the bench and now heads a liberal think-tank, and Royal Masset, former political director of the Republican Party of Texas who now runs campaigns, wrote to Gov. Rick Perry to promote a broad-based business activity tax. They made fun of their alliance, saying Masset would like to have no taxes at all while McCown would prefer a state income tax. In their letter, they say that such a tax would pay for enrollment growth, inflation, and "significant improvements to education such as lengthening the school year and providing performance-based pay for teachers." They end with a political maxim that remains untested: "Texans love Texas more than they hate taxes."

Enforcement Elections

Texas House Democrats finished off three more of their own strays, ending a primary season marked by internal retribution for Democrats who didn't stick with the pack on congressional redistricting, tort reform, and on changes in the House leadership that began in the 2002 elections.

Two members who were bleeding after the March primaries were wiped out in the runoff. Rep. Gabi Canales, D-Alice, garnered only 27 percent of the vote in her bid for a second term. Yvonne Gonzalez Toureilles, who finished first in March, won handily. Veronica Gonzales, challenging Rep. Roberto Gutierrez, D-McAllen, didn't break a sweat, either. She got 71 percent of the votes this time (she missed an outright win on Election Day by only 55 votes, but Gutierrez refused to concede).

Rep. Jaime Capelo, D-Corpus Christi, was done in on Election Day. He blames trial lawyers seeking revenge for his votes in favor of limits on lawsuit awards. In the second round, Abel Herrero beat Nelda Martinez, getting almost 56 percent of the vote. Locals who had worked to run Capelo out, like Rep. Vilma Luna, D-Corpus Christi, had been helping Martinez.

The Austin Democrats lost one in San Antonio, where David McQuade Leibowitz beat Ken Mireles in the HD-117 runoff. On paper, that's a Democratic seat, and Ken Mercer, R-San Antonio, is in for a race in November. But the establishment wanted Mireles. Some of that is scar tissue: Leibowitz spent a pile of money losing to Sen. Leticia Van de Putte, D-San Antonio, when she won her spot in the Senate. The Austin crowd, to the extent it was playing in the race, was playing with Mireles. Leibowitz, who finished second in the first round, came up with 56 percent in the runoff.

In March, the House Democrats nailed half of the colleagues they targeted: Reps. Ron Wilson of Houston, Glenn Lewis of Fort Worth, and Capelo were all on the outs. (Allan Ritter, D-Nederland, and Dan Ellis, D-Livingston, were sideways with trial lawyers but okay with their colleagues). All three were on House Speaker Tom Craddick's leadership team.

Live Redistricting

Everybody who spent last year imagining how new congressional districts would vote just got a nice demonstration. Most of the Republican action in the runoffs was above the state-federal line on the ballot in elections that determined one race, set up two contests that'll be watched nationally, and sent two Republicans into races where Democrats are favored to win in November.

The most expensive race in the country wasn't even close when it was over. If you send three pounds of mail to every voter in CD-10, pepper them with television spots for weeks and weeks and weeks, and give all of the Republican establishment support to one candidate, the candidate with the endorsements will carry the day. That's one theory, anyhow, and Mike McCaul of Austin is on his way to Congress. He got 63 percent of the votes (including 69 percent of the early votes) to beat Ben Streusand, a Harris County candidate who had the luxury of a personal fortune (McCaul, who married into money, was no piker) and the advantage of a bigger population. There's no Democrat in the way, and McCaul, a former prosecutor, can start house-hunting in DC.

State Rep. Arlene Wohlgemuth, R-Burleson, got 54 percent of the runoff vote and moves into a terrific race — you're reading this because you like politics, no? — against U.S. Rep. Chet Edwards, D-Waco. That contest is of national interest. Republicans want the seat, for one thing. And one of the residents of that congressional district is President George W. Bush. Outside money, particularly from the Club for Growth, powered Wohlgemuth's campaign; both candidates will raise a lot of money from outside CD-17 in the general election.

Louis Gohmert, a former state appellate judge, easily beat John Graves, getting 57 percent of the votes cast in CD-1. He'll face U.S. Rep. Max Sandlin, D-Marshall, in a more Republican district than Sandlin has defended in the past.

Michael Thamm, former mayor of Cuero, won the CD-15 runoff with 61 percent of the vote to Alexander Hamilton's 39 percent (having your name on money isn't everything). U.S. Rep. Ruben Hinojosa, D-Mercedes, is the incumbent.

And Jim Hopson beat Francisco "Quico" Canseco in CD-28. The winner of that gets to face the winner of a lawsuit. So far, the Democratic nominee is Henry Cuellar, who apparently upset U.S. Rep. Ciro Rodriguez, D-San Antonio. As they promised, lawyers for Rodriguez filed a lawsuit contesting the election results in the CD-28 Democratic primary. Rodriguez was the winner after the first count, but an overwhelming number of votes for Cuellar, the former Texas Secretary of State, were discovered during the recount, flipping the result. Rodriguez hollered foul, and now it goes to retired Judge Joseph Hart, who was appointed to hear the case. It should take about a month.

Breaking the Spell

Railroad Commissioner Victor Carrillo undid the jinx, winning a statewide Republican primary with an Hispanic surname. It's been done before, but even the most optimistic Republicans consider it a problem. He beat Robert Butler, a relative unknown, with 64 percent of the vote. Carrillo will face Democrat Bob Scarborough in November.

Jean Killgore is the GOP's choice to run against Rep. Robby Cook, D-Eagle Lake, but she was originally going to stay out of the race to make way for the incumbent. Cook had agreed to switch parties, and Austin Republicans were working to clear the field for their new friend. But he got cold feet, first deciding not to run at all, then deciding to seek reelection. He won his primary election handily, and Killgore, who jumped in when Cook decided not to run as a Republican, won the GOP runoff to challenge him in HD-17. She's a former member of the State Republican Executive Committee, and lives in Somerville.

• Finally, the new Republican celebrity in Texas, Sam Walls of Burleson, lost to Rob Orr in the race to succeed Wohlgemuth in the Texas House. Walls, a widely respected Republican businessman, was exposed as a cross-dresser and never recovered politically. He got 44 percent in the early vote and faded from there, finishing with just less than 40 percent of the vote.

Musical Chairs

After surveying the election results and the resignation lists, House Speaker Tom Craddick filled the new gaps in the House leadership with Anglo Republicans, many of whom had been in the co-pilot seats on the committees they'll now chair for the rest of the year.

Craddick promoted Rep. Brian McCall, R-Plano, to chairman of the House Ways and Means Committee, which also gives him a seat on the Legislative Budget Board and on the Legislative Audit Committee (that second panel will soon be trying to hire a new state auditor to replace Larry Alwin, who retired). McCall is replacing Ron Wilson, D-Houston, who'll be back for the special session, but who lost his chairmanship as a result of losing the Democratic primary last month.

For similar reasons, Craddick promoted Wayne Smith, R-Baytown, to head the County Affairs Committee. Glenn Lewis, D-Fort Worth, held that job, but lost his primary. And the House Public Health Committee will be headed for now by Jodie Laubenberg, R-Parker. She's replacing Jaime Capelo, D-Corpus Christi, who also lost last month.

When Kenny Marchant, R-Coppell, decided to run for Congress, he gave up the chairmanship of the State Affairs Committee; that'll go to Jerry Madden, R-Richardson, who had been vice chairman.

The elections also triggered a game of musical vice chairs. Gene Seaman, R-Corpus Christi, will become vice chairman of the Calendars Committee, replacing Arlene Wohlgemuth, R-Burleson, who gave up the job by running for Congress.

Madden's replacement is Byron Cook, R-Corsicana. Warren Chisum, R-Pampa, is Smith's replacement in the second chair at County Affairs. Leo Berman, R-Tyler, gets the vice chairmanship of House Administration, a seat vacated by Lewis. Dan Flynn, R-Van, gets second chair on the Financial Institutions panel, replacing Wayne Christian, R-Center, who ran unsuccessfully for Congress.

We're not done yet.

Glenn Hegar, R-Katy, will become vice chairman of the House Committee on Law Enforcement, replacing Timo Garza, D-Eagle Pass, who lost his primary race. Kent Grusendorf, R-Arlington, will be vice chair of Pensions and Investments, replacing Barry Telford, who'll be here for the special session but who gave up the job when he decided not to seek reelection. Larry Taylor, R-Friendswood, will be the new vice chairman of Public Health now that Laubenberg is in the middle seat. And Ken Paxton, R-McKinney, succeeded McCall as vice chair of Ways and Means. With that duo at the top of the committee, tax bills would ordinarily have to go through Collin County on their way to the House. But this is a special session coming up; don't be surprised if revenue bills go through a special committee along with everything else on the governor's agenda.

John Davis, R-Houston, will head the Appropriations Subcommittee on Health and Human Services, a job formerly held by Wohlgemuth. And after Roberto Gutierrez, D-McAllen, was defeated in his runoff election, Craddick named Linda Harper-Brown, R-Irving, the new vice chairman of the Select Committee on State Health Care Expenditures.

Craddick appointed Carl Isett, R-Lubbock, to a spot on the Texas Legislative Council.

And the Select Committee on Ethics, chaired by Steve Wolens, D-Dallas, is being disbanded. They got their bill done, Wolens opted not to seek reelection, and Craddick decided to close it down. That was a PR goof, at best. With a Travis County grand jury investigating the elections that put a Republican majority in control of the House — the majority that made Craddick speaker — critics pounced on the panel's death.

The appointments put several major panels in the hands of freshman legislators. That might be how it finally comes out, and it might not be; the assignments will hold until Craddick appoints committees for the next regular session, which begins in January, after the November elections. The House will play musical chairs again then. Most committees will be doing their interim reports and not much else. Education, tax and spending committees will be busy with school finance, but unless Gov. Rick Perry adds issues to the call for the special session, the other committees will be idle.

Didn't Someone Get Sued over that Slogan?

A new online newsletter, TexasDigest.com, started by Jim Cardle, Jorge Uresti and Seton Motley, will officially premiere what it bills as "fair, balanced Texas reporting" on April 19. Each has been involved in conservative politics, but Motley — who's in charge of the content — says the Internet-based news service won't be partisan. Cardle is the president of the Texas Citizens Action Network, a grassroots outfit. He's on the masthead of the Texas Club for Growth, a local affiliate of the national organization that's been pumping money into the campaign accounts of conservative Republicans all over the country (according to The New York Times, the group recently contributed $484,000 to Arlene Wohlgemuth's primary and runoff campaign for Congress). He's also served on the board of the Lone Star Foundation, which publishes a conservative political newsletter called the Lone Star Report.

Uresti has been doing website work for Cardle's groups, and is also the chairman of a related outfit called the Center for Hispanic Advocacy, which popped up during last year's battles over congressional redistricting and took the position that redrawing the maps to the benefit of Republicans also would give minorities a larger voice in the congressional delegation. Halfway through the elections, the new maps caused the replacement of U.S. Rep. Chris Bell, an Anglo, with Al Green, an African-American. Both men are Houston Democrats. Motley, who's been involved in a few Republican campaigns and has been writing for Texas CAN and other groups, will provide content and says he plans to add another reporter at some point.

Political People and Their Moves

Mike Regan is retiring at the end of the month after several years as the state's associate deputy comptroller and more than 30 in state government. Carole Keeton Strayhorn served at the Texas Railroad Commission, where Regan was executive director, before she was elected comptroller. She brought him along when she crossed the street for what he now says was "probably the best job in state government." He worked for four governors and for a number of state agencies — the old Board of Control, Texas Department of Commerce, to name a couple — before moving to RRC. Regan says he'll shuttle between his home in Austin and his hometown of El Paso, where his dad still lives...

Randy Fritz is back in state government after a Children's Health Insurance Program consulting gig that for the past year had him shuttling weekly from Central Texas to Central California. Fritz will join the Texas Department of Health as chief operating officer in the middle of the month, as that agency is being pulled into the Health and Human Services Commission umbrella. Before consulting, he was the agency's chief of staff (under then commissioner Reyn Archer) and helped start the Texas CHIP program...

Bob Huxel, who lobbied for almost two decades in Austin for the Independent Insurance Agents of Texas and then for Farmers Insurance, moved to Naperville, Illinois, to become director of government affairs for the National Fraternal Congress of America. That's an association of fraternal organizations. After 31 years of working for outfits with "insurance" in their names, Huxel left Farmers last year...

Jenny Young is the new public affairs honcho at the Texas Dental Association. She had been acting legislative director at the Texas Medical Association, where she'd worked since 1995...

Gov. Rick Perry named Joe Ned Dean of Trinity to serve as district attorney until the next general election. He's a rancher and a visiting judge, and he's a Democrat. The incumbent, Joe Price, died, and Dean won the Democratic primary to replace him. There's no Republican in that contest, so Perry is giving Dean the green light to go ahead and take over now. He'll take office on his own account in January.

On the northern end of East Texas, Matt Bingham won the Republican primary for district attorney, and also has no November opponent. Perry appointed him to serve what's left of Jack Skeen's term. Skeen, who is a state district judge now by virtue of a Perry appointment, swore in his successor. Bingham was one of Skeen's assistants.

In Nacogdoches, Perry named Ed Klein to a judgeship, and now has named Stephanie Stephens, one of Klein's assistant DAs, to the job. She'll need the GOP to appoint her to the ballot for November, and then it's a cakewalk; no Democrats are running...

Weatherford car dealer Roger Williams and Kevin Pagan, McAllen's deputy city attorney, are the two newest members of the Motor Vehicle Board at the Texas Department of Transportation. Gov. Perry also tapped Pagan to chair that panel, which regulates car sales, among other things. Williams is a trustee at Texas Christian University — he was a baseball star there 33 years ago — and on the board at the Bush School of Government and Public Service at Texas A&M University.

Judicial spankings, upheld: Terry Canales, who lost his spot as a state district judge after he was accused of sexual harassment, lost his appeal to the Texas Supreme Court. Canales, whose daughter Gabi Canales, D-Alice, is a state representative, sought reinstatement. The high court denied it without comment...

Deaths: U.S. District Judge Filemon Vela of Brownsville, who took senior status in 2000 after 25 years in robes (he was a state district judge before he was named to the federal post), of stomach cancer. He was 68.

Quotes of the Week

Gov. Rick Perry, calling for a special session: "I can't promise our work will be done in one session, or two, or three, but I can promise this: We won't fail simply because we refuse to try."

Sen. Kip Averitt, R-Waco, in the Waco Tribune-Herald: "There's a whole lot of folks that are real big on complaining about the plans without coming up with a solution of their own, so I do applaud the governor for putting a plan out there. However, I don't like it."

Sen. Florence Shapiro, R-Plano, in the Dallas Morning News: "I believe we need significant property tax relief. Significant is not 25 cents."

Gov. Perry, asked if he'd ever frequented the kinds of strip joints he now seeks to tax, quoted by the Associated Press: "Not to my memory."

Headline of the Week, over an Austin Chronicle report on the governor's proposed $5 admission tax on strip clubs: "Tits for Tots."

Fred Lewis of Campaigns for People, quoted in a Dallas Morning News story on the aftereffects of redistricting: "There were more competitive races in the old Soviet Politburo than there is in the Texas House and the Texas Senate."

Rep. Scott Hochberg, D-Houston, showing how the Rs and Ds are communicating since George W. Bush left Texas for Washington at the beginning of 2001, in the Dallas Morning News: "The last conversation I had with the governor was with the fellow who's serving as president now."

Victor Carrillo, quoted in the Austin American-Statesman after winning his runoff: "This should dispel the notion that having a Hispanic surname in a Republican primary is automatically a liability. This shows we can win and we can win big. That spells good news, in my opinion, for our party."

Railroad Commission candidate Robert Butler, who lost to Carrillo, telling the San Antonio Express-News that his family fell on hard times when technology killed their vegetable-crate making enterprise: "We were driven out of business by cardboard."

Charles Elliott, a political scientist at Texas A&M-Commerce, quoted by the Associated Press on whether U.S. Rep. Chet Edwards, D-Waco, will have an edge over state Rep. Arlene Wohlgemuth, R-Burleson, in the southern end of the district, where he went to college: "To be an Aggie is a terminal disease, and they never get over it. How much of an advantage it will be to Edwards, I don't know. But there is a long tradition of very intense loyalty by the students and graduates of Texas A&M."

David Keating, executive director of the Club for Growth, telling The New York Times it's easy for conservative candidates who win the group's backing (Wohlgemuth was one) to raise money: "For our candidates, they just have to open an envelope, and $50,000 in checks will fall out."

Between weekly issues, we gather news. Why wait until Friday to see it? Try clicking on Notebook over to the left in the black stripe. Along with Current Issue, which you're reading now, and daily News Clips from 45 papers, you'll see stories that can't wait until the end of the week.


Texas Weekly: Volume 20, Issue 42, 19 April 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.


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