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Wake Everyone When You're Ready

Judging from the reaction to the latest solution to the school finance mess, a special session on the subject would come as a huge surprise to legislators and lobsters alike. Sen. Florence Shapiro, R-Plano, is proposing a combination of business, sales, and tobacco taxes to raise money for education and to buy down local school property taxes. If lawmakers and voters are willing, they could increase the size of the property tax cut by allowing slot machines in Texas.

Judging from the reaction to the latest solution to the school finance mess, a special session on the subject would come as a huge surprise to legislators and lobsters alike. Sen. Florence Shapiro, R-Plano, is proposing a combination of business, sales, and tobacco taxes to raise money for education and to buy down local school property taxes. If lawmakers and voters are willing, they could increase the size of the property tax cut by allowing slot machines in Texas.

Shapiro's is the first plan that includes a big business tax that hasn't been treated like skeet by Gov. Rick Perry. The governor, who opposed earlier proposals for business activity taxes, gross receipts taxes and payroll taxes, was "receptive" to Shapiro's ideas. But the proposal hasn't started any of the fire drills that normally attend these things; the lobby and the trade groups aren't jumping to attack or defend the package. Not all of the details have been made public, and the proposal cobbles together some ideas that have been in circulation for some time. The "business license fee proposal" would raise $3.5 billion in addition to the $1.9 billion already raised by the state's business franchise tax. But its components have all had political problems when proposed in other forms.

Shapiro proposes a modified tax on business gross receipts. A company would have the choice of subtracting one of two numbers from that tax — either the amount they would owe under the state's current business franchise tax or the amount that they would owe paying a percentage of their payroll in tax. They'd pay the net amount, possibly with a cap on the total bill.

A tax with that name surfaced some time ago, but was killed by legislators afraid that taxing gross receipts would look a lot like taxing income in a reelection campaign. Republican leaders in the House floated a payroll tax proposal during the special session on school finance earlier this year. It sailed out of committee, but was shanghaied by the governor before it came up for a floor vote, angering House members who turned around and unanimously killed the Guv's proposal. That little drama effectively ended the House's serious efforts to work on school finance this year. House members are still in the game, but they're letting Perry and the Senate take the lead in proposing a new state tax package.

Shapiro would use the business tax to cut local school property taxes. She proposes raising $1.2 billion by increasing sales and motor vehicle sales tax rates to 6.75 percent (from 6.25), and would get another $427 million from a 50-cent increase in the tax on each pack of cigarettes sold in Texas. Legislators have been talking about a $1 increase for more than a year, but Senate budgeteers want to hold half the money back for other uses during the regular legislative session next year. (In a fact sheet on her proposal, Shapiro notes a difference between the comptroller and the lieutenant governor on how much a smokes tax would raise. The Lite Guv says a $1 increase would net $707 million; the comptroller, who controls the official revenue estimates, says it would raise $854 million. Shapiro went with the bigger number.)

The plan would dedicate some of the proceeds from normal state revenue growth to buying down property taxes. That tradeoff of state taxes for local taxes would happen faster with slot machines, but by her projections, the state could get to a 75-cent property tax rate by the 2008-09 school year even without the gambling expansion. That assumes the state's revenues will grow and that future Legislatures would stick to the plan. It also assumes this Lege could pass something in August, sometime between the national party conventions. It's unlikely — you can see that in the non-reaction to new plans. But an outside chance remains, if lawmakers find a fix in the next two or three weeks.

Property Taxes Aside

Shapiro got some attention with her finance plans, but there's some interesting stuff on the spending side, too. She included almost $300 million (these are two-year numbers) to bring teacher pay up to the national average (less a cost-of-living adjustment); $355 million to restore the $1,000 "pass-through" for health insurance for teachers, nurses, librarians, and counselors; and $400 million for a teacher incentive program. Shapiro figured in about $580 million for local enrichment; $300 million for bilingual programs; and $1.2 billion for changes in the school formulas.

Texas numbers on teacher salaries are still below the national average, according to the latest annual survey by the American Federation of Teachers. The national average for the 2002-03 school year was $45,771, up 3.3 percent, or $1,444, from the previous year. Average starting teachers last year made $29,554, up $903 from the year before. In Texas, the average teacher made $39,972, up $742 from the year before. The state ranked 30th nationally. The best average salary was in California, at $55,693; the lowest was in South Dakota, at $32,414. The average starting salary for Texas teachers last year was $31,874, up $936 from the year before. Beginners here ranked 17th nationally in salaries, ahead of the national average by almost $2,000 a year. Alaska, at $37,401, was best for beginners, and Montana, at $23,052, had the lowest average starting pay among the states.

If you leave out cost of living adjustments (which weren't part of the AFT survey), the average Texas teacher made $5,799 less than the national average last year. AFT says there were 276,719 teachers in Texas public schools last year. Using those numbers, it would cost $1.6 billion a year to bring the Texans up to the national average.

The Bucks Stop Here

Gov. Rick Perry had $5.1 million in the bank at the end of last month, and the election isn't until March 2006. His campaign finance report says he raised $3.2 million during the last six months. And he's increased the amount he's got in the bank from less than $500,000 a year ago (after an expensive run against Democrat Tony Sanchez and a legislative session when state officials are barred from raising money). Comptroller Carole Keeton Strayhorn, who's positioning herself (but not saying so publicly) for a challenge to Perry, raised $1.2 million during the last six months — $704,040 of it during the last three months — and got to the midyear point with $3.7 million in the bank. U.S. Sen. Kay Bailey Hutchison, often mentioned as another potential gubernatorial candidate, was relatively quiet on the fundraising front, but why push? She ended June with a campaign bank balance of $6.6 million and $123,672 in what the Washington folk call a "leadership PAC." Federal money doesn't convert as easily as it used to, and Hutchison might have problems getting that financial armory to a state race.

• You'd expect the Guv, the senior senator, and the Guv's chief antagonist to be in the money, but Texas Agriculture Commissioner Susan Combs is in the hunt, too. She's got $911,151.35 in the bank for a 2006 race for comptroller of public accounts, or what she hopes is enough to inspire heebie-jeebies among potential competitors. Combs says she raised about $615,000 during the first half of the year. Combs said earlier this year that she plans to run for comptroller; she's assuming the current occupant, Strayhorn, will be running for something else. Strayhorn isn't saying she cleared Combs for take-off, but if she plans to stay put, she seems remarkably unoffended by the Ag commissioner's efforts.

Louie Gohmert's spin: He set a record for Republican candidates in CD-1 by raising over $470,000 during the last three months. That's more, his camp says, that all of U.S. Rep. Max Sandlin's last three opponents combined. The spin from the Marshall Democrat: Sandlin got to midyear with $727,000 in the bank compared with $371,000 Gohmert had on hand.

• U.S. Rep. Chet Edwards, D-Waco, got to midyear with $1.2 million in the bank, about $800,000 more than his challenger, state Rep. Arlene Wohlgemuth, R-Burleson. But she says she raised $728,000 in three months, or about $112,000 more than Edwards. She ended up with a $402,000 war chest.

Picking Sides

Tina Benkiser, who heads the Republican Party of Texas, launched an indirect strike at U.S. Sen. Kay Bailey Hutchison, praising U.S. Sen. John Cornyn and others who voted to confirm Arkansas lawyer J. Leon Holmes for a federal judgeship. She didn't mention Hutchison by name in a late Friday afternoon press release (that kind of timing is almost a guarantee that the coverage will be slight, unless something huge is being announced), but didn't give the senior senator much cover, either.

Holmes was opposed by pro-choice activists and supported by pro-life activists; both groups lobbied heavily. Hutchison said she talked with Holmes and decided he doesn't believe in equal rights for women. (She wrote a letter of explanation to quell noise from social conservatives. It was distributed widely by the Texas Christian Coalition, and you can download a copy from our website by clicking here.) She was one of five Republicans who voted against him; enough Democrats voted the other way to get Holmes his place on the federal bench.

Since the vote, supporters of Gov. Rick Perry have been flogging it, making sure Texas Republicans know how Hutchison voted and trying to frame it as an abortion vote, rather than an equal rights vote as she explained it. Benkiser said she was pleased with the final outcome of the vote: "Texas Republicans appreciate Sen. John Cornyn's support of Mr. Holmes, and are disappointed with those who voted against the President's extremely qualified nominee..." As we said, they left Hutchison out, but it was clear what they were thinking from the title on the document containing the statement: J. Leon Holmes - KBH - nay.doc.

Hutchison's votes on the overall subject are pretty consistent. The National Right to Life's website includes voting records for members of Congress, and she only voted against that outfit's position once on the list of about three dozen bills. She voted to affirm the U.S. Supreme Court's Roe v. Wade decision, essentially taking the same position she described a few weeks ago at the GOP's state convention. She's managed to dissatisfy the purists on both sides of that dispute.

Rodriguez Concedes, Promising a Rematch

Former Texas Secretary of State Henry Cuellar is — finally and officially — the Democratic nominee for Congress in CD-25, San Antonio's 4th Court of Appeals ruled 5-2 against U.S. Rep. Ciro Rodriguez, D-San Antonio, who asked the court for another chance to present his case for a recount. That's over — Cuellar will go to the November elections with a 58-vote margin.

The whole thing started on Election Night, when Rodriguez won — apparently — by 145 votes. Cuellar asked for a recount, and that ended with him in front by 203 votes. Cuellar gained 173 votes in Webb County in the recount; Rodriguez didn't gain one. That astonishing result encouraged the incumbent's lawyers to push the vote contest to the courts. Another recount, ordered by a trial court, narrowed the margin to 58 votes, with Cuellar in front. And a trial date was set. But when the trial court was ready to go, Rodriguez' lawyers said they hadn't been able to inspect enough ballots in a timely way, and that the court's rulings boxed them in, preventing them from inspecting the rest of the records and then contesting enough votes to change the outcome. They asked for more time to inspect more ballots in the hope that more inspections would bring at least 58 ballots into question, but the court decided time was up and ruled against them.

A three-judge panel from the 4th Court of Appeals said the lower court should go ahead and hear the case, but then the full appeals court jumped in, at Cuellar's request, and overruled the three-judge panel. The two votes for Rodriguez were from Democratic judges on that appellate court. The lone dissenter on the three-judge panel was joined by four other judges on the court and all five of them voted with Cuellar. Each member of that prevailing group ran on the Republican ticket. Both candidates are Democrats, but Cuellar — appointed Secretary of State by Gov. Rick Perry — has closer ties to the GOP. Rodriguez claims that's why the courts ruled against him.

"Starting right now, I'm preparing for the 2006 elections," Rodriguez said afterwards in a written statement.  "Of course I'm really dismayed that the Court of Appeals has denied me my day in court based on a legal technicality. I never got to present the evidence we've put together of illegal voting and ballot tampering.  The evidence is there.  I take comfort knowing that if only legal votes were counted I'd be the winner." Cuellar will face Republican Jim Hopson in November.

Wood Chipper

Comptroller Carole Keeton Strayhorn wants the federal government to join the feeding frenzy that began with revelations of overpayments to companies with contracts on the Children's Health Insurance Program in Texas. State auditors counted about $20 million in questionable payments to a CHIP contractor and a CHIP subcontractor. The state's Health and Human Services Commission, which runs the program, launched a self-investigation at the behest of Gov. Rick Perry. And now Strayhorn says the feds should investigate the program's spending themselves, since about three-fourths of CHIP funding in Texas comes from the federal government.

Strayhorn also tried to strengthen the links between the troubles at CHIP and Perry himself. She pointed out that the $20 million would have paid for CHIP coverage for about 17,000 kids, and she said the state's own investigation is tainted because of the governor's indirect control over the inspector general working for HHSC. She called reporters' attention to ties between some of the program's contractors and two top Perry aides, one current and one former. She offered no evidence, however, simply noting that Mike Toomey, Perry's current chief of staff, used to lobby for a company now involved in CHIP and that Dr. Mike McKinney, a former Perry chief of staff, used to head a company that will start work for CHIP in a little over a month.

There's no evidence that either man got any benefit from the contracts their former associates got. If there's anything smelly here, it's not apparent yet. Toomey, responding indirectly through press aides, says the specific outfit he worked for wasn't mentioned in the audit (an affiliate was featured there), and notes that the company didn't even make the finals in the latest round of bidding for the contract at HHSC.

McKinney, now a top official at the UT Health Science Center in Houston, says he never worked on CHIP when he was with the Centene Corp., a company he left in 2001 when he joined Perry's workforce. He worked in Indianapolis for a couple of years and then on an El Paso project he says was unrelated to CHIP. Since 2001, he's been in government, first with Perry and then with UT. "I can't explain to you what got into the comptroller," he says. "You'll have to take that up with her. She could be reading out of the phone book for all I know."

Flotsam & Jetsam

If you're not a member of a political party, you apparently can't serve on the Texas Ethics Commission. Texas Attorney General Greg Abbott, asked for an opinion in a dispute over an appointee to that panel, says the state constitution requires the Speaker of the House to get lists of nominees from members of the House. He (or she) has to appoint someone from each party, and they can only be nominated by members of the House who are in the same parties.

Once more, in English: House speakers can only pick Democrats nominated by Democrats and Republicans nominated by Republicans. Independents, even if one were to be elected to the House, can't play, because they're not in a political party that holds primaries. The commission has to be bipartisan, but the constitution apparently prevents it from being nonpartisan. As for the dispute, Abbott didn't settle it. Rep. Mary Denny, R-Aubrey, wanted to know if former Speaker Pete Laney properly appointed legislator-turned-lobbyist Ralph Wayne to the commission. Abbott spelled out the rules, but said he doesn't settle fact questions, and left Wayne's appointment alone.

• Here's another election map for political mavens to tinker with. A reader pointed it out to us, noting the historical add-ons and the fact that, unlike a map offered by the Los Angeles Times (and highlighted here last week), this one doesn't require you to give your name and your marketable vital statistics to a newspaper in California. It's available online at</ P>

• Free wireless Internet service has been re-launched in the cafeteria in the extension at the Texas Capitol. That means you can get some work done while you're waiting for committee meetings or whatever. The RK Group, which manages the grill, and the Austin Wireless City Project put the deal together and wireless is back.

Political Notes

This is becoming a swarm: Public interest groups in Washington are calling for an independent prosecutor to look into campaign finance allegations made against House Majority Leader Tom DeLay, R-Sugar Land, by U.S. Rep. Chris Bell, D-Houston. Four of the five Republican members of the House ethics panel that will be looking at DeLay's case received money from his political action committee and the groups say those folks have a conflict of interest. The Washington Post found some emails about DeLay's fundraising among the documents turned out in the government's Enron investigation; in the emails, lobbyists for that company told their executives that DeLay was after a mix of corporate and personal donations, some of which could be used to help with what turned out to be a successful Texas redistricting effort. Bell, meanwhile, wrote to the ethics panel to direct their attention to a memo done internally by Westar Energy. That company's contributions to DeLay were one subject of Bell's original complaint against the Texas Republican. Bell says the Federal Election Commission has a copy and says the congressional panel ought to get a copy.

Texas Democrats trying to flip what Texas Republicans think is a positive call the current governor and his predecessor, who got a promotion, "anti-education" pols in the wake of a Census report saying Texas leads the nation in high school dropouts. The study measures the education levels of the population — not the number of people getting out of high school each year. While 85 percent of American adults have high school educations, 77 percent of adult Texans can claim that same level of achievement. The Democrats went for the fences with a headline saying "Republican Leadership Leads to Nation's Worst Dropout Rate." Republicans, meanwhile, went long with this headline assault on U.S. Rep. Lloyd Doggett, D-Austin, which followed a tied U.S. House vote to renew the U.S. Patriot Act: "As Terrorists Plan Another American Attack, Rep. Doggett Votes to Weaken Law Keeping U.S. Safe".

Political People and Their Appointments

Gov. Rick Perry named Amos Mazzant of Sherman to serve as a justice on the Dallas-based 5th Court of Appeals. He's an attorney in private practice, and he'll serve until the next general election, when he can run for a full term. He replaces Tom James, who is retiring. Footnote: There's not a Democrat among the 13 judges on that court...

He named the Legislature's chairs of education to the Southern Regional Education Board. Sen. Florence Shapiro, R-Plano, and Rep. Kent Grusendorf, R-Arlington, will join lawmakers and educators from 16 southern states who serve on that board. Each governor is a member, along with four appointees made by each chief executive...

Perry named Jerdy Gary, former mayor of Denison, chairman of the Grayson County Regional Mobility Authority. That panel will promote development and financing of transportation projects in the region...

The governor named five people to the Rio Grande Water Authority, which watches over conservation and reclamation along that river valley. They are Joe Barrera III, general manager of the Brownsville Irrigation District; Wayne Halbert, resident of San Benito, mayor of Rangerville, and general manager of the Harlingen Irrigation District and Adams Gardens Irrigation District; Sonia Kaniger of Harlingen, general manager of the Cameron County Irrigation District #2; Kathy Reavis of Mission, office manager of Reavis Farms; and Jimmie Steidinger, a farmer and rancher from Donna...

DEPARTMENT OF CORRECTIONS AND FURTHER EDIFICATION: Instead of saying Victor Morales almost caught Phil Gramm in the 1996 general election, we should've said he gave the Republican a scare and left it at that. Gramm won with 54.8 percent of the votes, or 598,643 more than the Democrat got. Morales, in percentage terms, got 43.9 percent of the votes cast. The then-senior senator, who'd been a presidential candidate earlier that year, was expected to do better; other Texas Republicans outperformed him on Election Day. Carole Keeton Strayhorn, then running under the Rylander moniker, got 58.4 percent of the vote in her statewide race against former state Sen. Hector Uribe, who got 39.0 percent. And Texas Supreme Court Chief Justice Tom Phillips won reelection with 56.3 percent of the vote against a fella named Andrew Jackson Kupper, who got 40.6 percent.

Political People and Their Moves

Glenn Shankle, who worked his way up into management positions at the comptroller's office and in other state agencies, is the new executive director of the Texas Commission on Environmental Quality. Shankle, the deputy exec, took the state's retirement incentive option earlier this year — lawmakers last year instated a bonus for state employees who retire as soon as they're eligible — but has been running TCEQ on an interim basis since Margaret Hoffman left the director's job in May. He was a candidate for the top job when Hoffman was chosen; this time, the board picked him...

Dallas school Superintendent Mike Moses told reporters and other watchers that he's worn out and ready to move on. He's resigning that job after more than three years, leaving a formerly divided and divisive school district in much more unified condition than what he found when he got there. Moses, a former Texas education commissioner, Texas Tech vice chancellor, teacher and administrator, didn't announce what he'll do when he leaves the DISD job at the end of his contract term...

Richard Evans, who's been working on health care and workers compensation insurance issues at the Texas Association of Business for almost five years, is leaving TAB for the fun-packed world of freelance lobbying. Evans will office with former legislator Dan Shelley; he worked for Shelley in the House, the Senate, and when Shelley was the legislative guy in the Guv's office...

Steve Foster left the Texas Senate's Natural Resources Committee for the law firm of Cantey & Hanger. Foster, who also worked for the redistricting, jurisprudence, and criminal justice committees in the Senate, will work in public law and lobby out of the Fort Worth firm's Austin office...

See the trouble titles cause? All we had to do was put David Beckwith in the same sentence as "chief of staff" to Sen. Kay Bailey Hutchison, and the phone started ringing. The actual title belongs to someone who did not call: Lindsay Howe Parham, who also runs the senator's Austin office. Beckwith's title, as we pointed out last week, is "Helper"...

Deaths: Lucy Reed Garretson Selby, a piano-playing college prof, political activist, newspaper researcher and mother of Texas political reporter Gardner Selby. She was 67...

Dr. Lloyd Alton Doggett, an Austin dentist and father of U.S. Rep. Lloyd Doggett, D-Austin, after a long illness. He was 93.

Quotes of the Week

Conservative activist Grover Norquist, counseling caution on some social issues: "There is a group of people who don't care one way or the other but if they hear you talking too much about either side of certain issues — guns, abortion, same-sex marriage — they think you are a little obsessive. The first person to say 'gay' in the debate loses. Because you brought it up."

Samantha Smoot of the Texas Freedom Network, talking to the State Board of Education about the sex education materials in textbooks under the board's consideration: "Regardless of how you personally feel about whether teenagers should have access in their textbooks to family planning and disease prevention information, the curriculum clearly requires it, and these books clearly lack it."

Talk show host Chris Matthews, quoted in The Dallas Morning News on people who purchase My Life, former President Bill Clinton's lengthy autobiography: "They may have bought the book, but they're damned well not going to read it. Once you put it down, you can't pick it up."

Conservative political organizer Paul Weyrich, quoted in The New York Times on the chance that a vote on amending the constitution to ban same-sex marriages would run gays and lesbians out of the Republican Party: "Good riddance."

Former Dallas Cowboy (we hear he did some other stuff, too) Mike Ditka in USA Today on why he decided not to run for U.S. Senate: "There was a moment when I said, God, I'd like to take this and run with it, and then I said, you know, put your head on straight and think about what you're getting into... I don't know how I would react on the Senate floor if I got in a confrontation with somebody I really didn't appreciate and maybe didn't appreciate me."

Ditka, telling the Chicago Tribune that he was wary of the political microscope: "Listen gang, we've all been there. We've all done something. But I'll be darn if I want my past or my present or future dragged out in the media. I have enough problems trying to convince my wife."

This is the last issue before our annual two-week summer break.

Texas Weekly will return in the first week of August.


Texas Weekly: Volume 21, Issue 7, 19 July 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@ For news, email ramsey@, or call (512) 288-6598.

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