It's Only Money

Two weeks ago, the smart guys were betting there'd be $1 billion to $2 billion in red ink in the state's starting budget. Instead, it's in the black, though it will probably swing from one inkwell to the other in the next few weeks.

The Legislative Budget Board's blueprint calls for general revenue spending of $63.5 billion. A few days before that was uncorked, Comptroller Carole Keeton Strayhorn's forecast said the state would have $64.7 billion to spend over those same two years. The numbers are all mushy and subject to politicking and other crises, but the initial cushion of $1.2 billion was encouraging to budgeteers who started this same exercise two years ago with a $10.5 billion shortfall.

The LBB also issued its first set of performance reviews. Those were created in the comptroller's office and stripped away from that agency by the Legislature and handed to the budgeteers. Their first effort would redirect and/or save $3.2 billion in general revenue; $1.3 billion of that amount is already included in their draft budget. Both those recommendations and the LBB's starting budget are available on their website: www.lbb.state.tx.us.

The revenue side of the puzzle belongs to the comptroller alone, but Strayhorn ventured far enough onto the spending front to say that she thought the starting cushion amounted to $400 million. The Center for Public Policy Priorities did its version of a current services budget and guesstimated the state starts $1.5 billion short of the amount it needs to keep doing what it's doing now. That think tank's list of "improvements and restorations" added another $5 billion to that.

In fact, the budgeteers have some wiggle room. School finance can't be solved without a tax bill or, if you prefer, a "revenue package," and that exercise always makes it easier to write a budget. Even lawmakers who think school finance is destined for a special session later this year say the budget won't be hard to balance. And there's an advantage to doing the budget without doing school finance at the same time. The budget would be set — that is, taken off the bargaining table — before the tax bill is in play. That simplifies the trading. Other spending will be locked down early, and public schools will be the only real supplicant in line for money when the tax bill is in play. If school finance gets done first, lawmakers will be tempted to swell the tax bill to feed other pet programs.

A few highlights:

• The "all funds" total — which includes federal funds and state funds and everything else — would be $134.4 billion, up $7.8 billion from the last budget.

• Spending in public education (education and health and human services spending dominate the state's budget) would rise 8.3 percent under the LBB draft, from $31.0 billion to $33.6 billion.

• Higher education spending would rise, but there's more to that. Spending at health-related schools and at two-year schools would rise while other areas would see cutbacks.

• Public school attendance was 4.0 million in FY 2004, and is expected to hit almost 4.3 million in FY 2007. By then, the LBB expects 72 percent of those students to be passing all standardized tests, that half the school districts will be exemplary or recognized, and that 2.9 percent will drop out of school.

• The LBB figures 53.5 percent of the state's college kids will be graduating within six years in FY 2007 and that enrollments by then will be 24 percent larger than they were in 2000.

• The budgeteers say 61,448 college kids got Texas Grants in 2004 to help pay for school; they would cut that to 19,425 by FY 2007, the second year of the two-year budget they're writing. Funding for the B-on-Time program would be increased by $129.7 million.

• Overall employment in health and human services would drop from 46,328 full-time-equivalent employees this year to 41,720 two years from now.

• 36 percent of the state budget would go to health-care related appropriations, a total of about $48.6 billion.

• State lawmakers are working on a workers' compensation reform in response to rapid rises in premiums; the state's own workers' compensation payments are expected to rise only 4 percent per year.

• Client loads at the Department of Aging and Disability Services are rising. For instance, the number of people in Medicaid community care is expected to rise from 125,332 per month now to 149,102 in two years time.

• Child protective services investigations are expected to rise from 138,587 in FY 2004 to 170,480 in FY 2007. Investigations in adult protective services would rise from 60,998 to 67,025 in those same years.

• The LBB assumes the average number of days per month for foster care would go from 488,060 in FY 2004 to 578,955 in FY 2007.

• Legislative budgeteers are assuming CHIP rolls will drop from 409,865 in FY 2004 to 331,132 in FY 2007, that the average number of TANF recipients in that same time frame will go from 253,907 to 215,300, and that Medicaid acute care caseloads will rise from 2.7 million to 3.1 million.

Guess Who's Coming to Dinner?

The Texas Women's Political Caucus will roast Carole Keeton Strayhorn even though she disagrees with one of the group's key principles.

Texas Comptroller Strayhorn, a Republican who opposes abortion rights, has agreed to headline a fundraising roast for the Texas Women's Political Caucus, a group that describes itself as a promoter of pro-choice women running for political office. The group's invitation says the aim of the February 7 event is to honor the comptroller "for a lifetime of dedication to public service" as a school teacher, school board member, mayor of Austin and Texas railroad commissioner.

"Comptroller Strayhorn is the comptroller for all of the people of Texas," said her spokesman, Mark Sanders, when asked about the event. He said the group roasted Sen. Jeff Wentworth, a pro-choice Republican from San Antonio, at a previous event and that Lt. Gov. David Dewhurst — a pro-life Republican — was one of the speakers there to tease Wentworth and, because of the setting, to help the group raise money. Aides to Dewhurst say the Lite Guv did that favor for Wentworth — not for the group.

Strayhorn would outlaw abortion in all but three instances: cases involving rape, or incest, or where a pregnancy imperils the life of the mother.

TWPC is an affiliate of the National Women's Political Caucus, which describes itself like this on its website (www.nwpc.org): "The National Women's Political Caucus is a multicultural, intergenerational, and multi-issue grassroots organization dedicated to increasing women's participation in the political process and creating a true women's political power base to achieve equality for all women. NWPC recruits, trains and supports pro-choice women candidates for elected and appointed offices at all levels of government regardless of party affiliation."

The local version, from www.txwpc.org: "The purpose of the Texas Women's Political Caucus is to increase women's participation in the political process and to identify, recruit, train and support women for election and appointment to public office. While in pursuit of this goal, TWPC will strive to: win equality for women; ensure reproductive freedom; achieve quality dependent care and eradicate sexism, racism, anti-Semitism, ageism, ableism [sic], violence, poverty and discrimination on the basis of religion or sexual orientation... TWPC is a multi-partisan organization open to all women and men who support our issues."

The comptroller is more or less openly considering a run for governor against Rick Perry in 2006, and the two have essentially the same position on abortion rights. Both are pro-life, with those three exceptions. Perry will end this week by speaking at a rally of anti-abortion groups at the Texas Capitol marking the anniversary of the U.S. Supreme Court's Roe v. Wade decision. Perry aides wouldn't comment directly on Strayhorn's role as headliner for the TWPC's fundraising event.

Wallflower

Texas Republicans are inviting everyone but their top vote getter to their biennial dinner party next month. Comptroller Carole Keeton Strayhorn, a Republican who's been making trouble for Gov. Rick Perry for the last two years, says through an aide that she wasn't invited to the party's "Fourth Biennial Banquet," and wasn't asked to either be an honoree or sign the invitation with each of the GOP's other non-judicial statewide elected officials.

The Republicans are feting Perry, Lt. Gov. David Dewhurst, and House Speaker Tom Craddick at Austin's Four Seasons Hotel on February 22. "This will be an especially memorable occasion as we begin another legislative session," the invitation says. "Members of the Texas Congressional delegation, Statewide Elected Officials, State Senators and State Representatives will be joining us as we salute Gov. Perry, Lt. Gov. Dewhurst and Speaker Craddick in a special event you will not want to miss."

Six officeholders signed the letter: Attorney General Greg Abbott, Agriculture Commissioner Susan Combs, Land Commissioner Jerry Patterson, and Railroad Commissioners Victor Carrillo, Michael Williams and Charles Matthews. Less than two weeks ago, Perry's campaign announced it had the support of each of those six officeholders in the governor's bid for reelection in 2006.

Strayhorn's name is nowhere to be found on the invite. A spokesman, Mark Sanders, accused the Party of putting the governor's politics first and said his boss wasn't invited to sign the invitation or to attend the Party's party. He said she'd have done both. A spokeswoman for the Republican Party said hired fundraisers put the event together and didn't have an immediate comment on the slight.

Strayhorn got 2,862,752 votes in the 2002 election, more than anyone else on either side of the ballot. Combs came in second in that sweepstakes, with 2,621,128, and Perry was third, with 2,617,106.

And Now for Something Completely Different

The top contributors to Comptroller Carole Keeton Strayhorn include several big-time trial lawyers and others who typically give their money and time to candidates on the other side of the aisle: Walter Umphrey, John Eddie Williams, Ben Barnes, and former state Rep. Roman Martinez, D-Houston. She also got $197,428 from executives, employees and a political action committee associated with Ryan & Co., a tax-consulting firm that represents clients with issues at the comptroller's office.

Umphrey and Williams, two of the state's most successful trial lawyers, each gave $50,000, as did five other contributors: Dr. David Alameel, a Dallas dentist, George Ryan, the honcho at Ryan & Co., Dallas investor Harlan Crow, Kenneth Banks of Schulenburg (also the treasurer for Strayhorn's campaign), and Q PAC, a Fort Worth-based political action committee affiliated with investor Geoffrey Raynor, its sole contributor.

She ended the cycle, as we noted a week ago, with $5.7 million cash on hand.

Some notes from the other big spreadsheet: Gov. Rick Perry's biggest giver was a non-relative with the same last name. Houston homebuilder Bob Perry gave the governor's campaign $260,000 during the second six months of last year; he alone accounted for six of the governor's top ten contributions. Alice Walton of Mineral Wells gave $50,000, the Texas Association of Realtors gave $50,000, and Kirby Corp. Chairman Charles Lawrence gave $33,000. Perry got 39 separate contributions of $25,000 each.

He ended up with $7.9 million on hand.

Ol' Number 88

The head of the Texas Republican Party, convinced lawmakers in her own party are trying to bury an appeal of the election that unseated a 22-year veteran legislator, is pushing voters to phone Austin to help overturn that result.

Republican Chairman Tina Benkiser is sending daily emails to citizens of the GOP persuasion, asking them to contact their state representatives and offering a countdown to next week's committee hearing on Talmadge Heflin's challenge of his election defeat. The emails are written to stir the furies: Benkiser began with a message on MLK day — government was mostly closed — that referred to "double and triple voting, vote buying, ballot box stuffing and fraudulent election practices."

Republican Talmadge Heflin of Houston was knocked out of the House — and the chairmanship of appropriations — by Democrat Hubert Vo. Heflin lost by less than three dozen votes out of more than 41,000 cast. He's challenging the result. (Quick recap: To challenge a legislative election, the losing candidate appeals not to a court but to the Legislature. One member — that's Rep. Will Harnett, R-Dallas— is appointed to manage the contest and act as a judicial figure. A committee is appointed to govern the process, and that committee makes a recommendation to the full House. If the House can determine a winner, that guy gets the seat; otherwise, the House would order a new election to let voters sort it out.) The hearing in the Heflin case is set for Thursday, January 27.

In December, Hartnett sent a letter to House members cautioning them against talking to the lawyers involved in challenges to elections that would be heard by the full House. Heflin's is the only such challenge left, now that Eric Opiela has joined Jack Stick in tossing his towel into the ring, and the lawyers and House members are apparently being good kids and staying out of touch with each other. Texans sent 87 Republicans to the House in November; Heflin would be the 88th if he prevails.

Hartnett doesn't have the control on anyone else he's got on lawyers and House members, so he's not jumping into this fight. "I'm being guided solely by the law and the facts — not by political parties — as has been the precedent in previous election contests," he says. "I'm going by the book."

Benkiser isn't one of the lawyers in the case and isn't directly lobbying the decision-makers. She's just asking Republicans around the state to express their desires to their public servants. Benkiser's first message after the government holiday called on Republicans to come to the meeting next week and gave the time and the place for it.

Her email countdown started ten days out, with an assertion that "we have definite proof from this election of votes being cast against Republican candidates by voters long dead, votes being cast from out of district, individuals voting up to 80 times, cash payments being giving in exchange for votes, etc." Her email said the practices are a hangover from Democratic dominance in Texas, but added, "some Republican lawmakers are already urging that these incidents be swept under the rug. They are afraid of what the press will say if the elections are reversed." A spokeswoman for the GOP declined to name any of those chickens.

The email urged readers to contact their state rep to push for the evidence in the Vo-Heflin race to be presented to the full House, and gave a link to help people contact their legislators.

Day 9's email named Hartnett and the members of the committee that will hear the case.

Day 8's included allegations that "ten people cast 800 illegal ballots in this election!" and that "they were paid to do it." That allegation was part of the challenge Opiela dropped last week. It's still under criminal investigation by local officials in Jim Wells County and by the state attorney general's office, but it's not an issue the House will be considering in the Houston race.

Case Closed, Case Opened

Eric Opiela, a Republican from Karnes City, dropped his challenge, citing unspecified pressures from within and without his own camp.

He lost the election to Yvonne Gonzalez Toureilles, D-Alice. The decision in that race was clear, but Opiela questioned the legality of the voting in Jim Wells and Bee counties, and his inquiry triggered a grand jury inquiry and visits from investigators for Attorney General Greg Abbott. That criminal investigation is apparently still under way.

He said afterwards that he thought the case was winnable, but that he didn't want to go through the lawsuits and other obstacles a win would require. Others have noted the institutional bias in the Legislature against challenges; despite the rhetoric you hear around these things, politicians get nervous about the appearance of overruling voters. Opiela would like to run for public office in the future, but said, "until we solve the problems [in those two counties], there is no point in running for this seat."

His attorney, Hector DeLeon of Austin, said a successful challenge would have likely resulted in another election, held in the same places where there were alleged problems in November. He said they'll hand their stuff over to investigators if asked, but said he and Opiela aren't involved in any criminal investigation.

A Special Election Brought to You by the Letter S

The Texas House, at the moment, includes 86 Republicans and 63 Democrats. Elizabeth Ames Jones, R-San Antonio, would have been the 87th Republican had she taken the oath of office.

But she opted out; Gov. Rick Perry is poised to name her to the Texas Railroad Commission, and the special election to replace her will be held two weeks from Saturday.

The district — HD-121 — looks like elephant habitat on paper, but the most prominent name on the ballot belongs to former Texas Supreme Court Justice Rose Spector, a Democrat. She'll face three men whose last names all start with the same letter as hers: Paul Silber, an engineer and former state representative who listed no party affiliation with the Secretary of State; Joe Straus, a Republican who lists his occupation as insurance and investments; and Glen Starnes, a Republican financial adviser. This is a fast setup: Early voting starts on Tuesday, January 25.

CHIP Shot

The fact that set off this round of dueling Republicans is this: Texas has left $772 million in the federal pot that could have been used on the Children's Health Insurance Program.

Some of the money was forfeited by the state's relatively slow startup of CHIP. The federal money was available, but Texas didn't have its program in place to attract the federal money. After the state got going, it spent less state money on CHIP than the federales allowed, and some of the available federal matching funds went untouched.

By federal fiscal year, here's what Texas left on the table: FY98, $133.5 million; FY99, $324.4 million; FY00, $124.6 million; FY01, 85.2 million; and FY02, 104.3 million.

That last number just came out, prompting U.S. Sen. Kay Bailey Hutchison to tsk-tsk about the state's failure to use the money on kids. On the Texas end, aides to Gov. Rick Perry told reporters the federal officials should change the law to give states more time to use the money.

There is a federal law that allows states up to three years to draw some or all of the money, but even with that in place, Texas missed more than three-quarters of a billion bucks, according to federal and state officials.

Flotsam & Jetsam

Rep. Aaron Peña, D-Edinburg, started a blog, or web log, on his political Internet site. He says there that that it's in place to keep his voters up to date. The address: www.aaronpena.org/blog.htm. Correct us if you know better, but he appears to be the first Texas state politician filing daily reports on the net. Railroad Commissioner Michael Williams has a blog set up and ready to go on his website — it's at www.michaellwilliams.com — but hasn't started filing regularly (note the extra "L" in the middle of that web address; if you leave it out, you'll go to the site for a completely different Michael Williams).

• U.S. Rep. Gene Green, D-Houston, along with Democrats from Washington and Massachusetts, filed legislation to end the Electoral College and elect presidents on the basis of popular votes. The two major party candidates skipped those and other states during last year's elections, opting not to spend significant money or time in states that one side or the other had in the bag. Ending the state-by-state winner take all system would make each vote count, the promoters argue. And they blame the media instead of the campaigns, saying coverage of the some states as "swings" and others as "decided" makes voters apathetic. If all votes were contested, they contend turnout would rise. A squinty-eyed reporter might point out that more people voted this year than ever before. But from an economic standpoint, a change would make a difference: The presidential campaigns spent more money on TV ads in Cleveland, Ohio, last year than in all of Texas combined.

• Former Texas Rep. Ann Kitchen, D-Austin, is appealing a $10,000 fine imposed by the Texas Ethics Commission for her late reporting of $103,000 worth of in-kind contributions from the Texas Democratic Party. She amended her last pre-election report in 2002 six months later, in 2003, to show the last-minute work by the Party, which was trying to save that contest. They fell short. Todd Baxter, R-Austin won (and won again in November of this year). He was also fined for late reporting of contributions from supporters and his fine was cut to $300. Kitchens is asking the ethics folks to shrink her fine to match his. They'll meet again in March.

• Contrarians in the House point to a benefit of not tying leadership positions inside to investigations and grand jury actions outside: It separates penalties from accusations. The U.S. and Texas Houses have both had arguments over whether to allow an indicted leader to remain in office. The conventional wisdom is that accused criminals shouldn't be in the high chair, where the public might take offense at the Very Idea. But if an indictment alone carried a penalty — loss of office — it could give prosecutors too much juice. And we found a second House contrarian going in the same direction for another reason: Separating the grand jury's action and the penalty protects prosecutors, to some extent, from charges of playing politics instead of law.

• The "if" people were all over the place when the House talked about lifting its salary caps for one worker per office. The idea bombed when it came up. Some lawmakers wanted the freedom to pay at least one person enough to slow the migration to the Senate, where the pay is better. But others were afraid of bidding wars between House offices, and of the effect the new pay rule might have had on the person sitting second chair in each office.

• Bill Hammond, the former state representative who now heads the Texas Association of Business, noted George W. Bush's second inauguration by mailing out bumper stickers, playing off something from Bush's speech at the GOP national convention last summer. The quote: "Some folks look at me and see a certain swagger, which in Texas is called walking." Hammond's bumper sticker: "In Texas, we call it walking."

Political People and Their Moves

Margaret Spellings, who started her education policy education as a staffer in the Texas House during 1984's House Bill 72 reforms, cleared the U.S. Senate confirmation process and will be the next United States Secretary of Education. She's replacing Rod Paige, the former Houston ISD superintendent who held the job during President George W. Bush's first term.

Public Strategies Inc., the Austin-based communications and public affairs shop, is laying off 20 employees in Austin and Washington, D.C., as part of a cost-cutting effort. About half were "professional" employees; half were "administrative." The company's managing directors are taking salary cuts, which will be replaced by a profit-sharing plan that "could allow them to make more than they were making before," according to a spokesman. The cutback was accompanied with a rumor that two former politicians with the firm — former state Sen. Kent Caperton and former U.S. Rep. Ken Bentsen — would be leaving. Caperton says that ain't so: the two will remain with PSI.

At the same firm, but unrelated to those layoffs comes news that Nick Voinis is leaving the world of politics and policy for the Toy Department. The veteran political spokesman and communications consultant will take over communications for the sports department at the University of Texas at Austin. Before going to PSI, Voinis worked for Kay Bailey Hutchison, Carole Keeton Strayhorn, and David Dewhurst, among others. He'll probably get tickets in the new gig, but he'll also have two bosses: Women's Athletics Director Chris Plonsky, and Men's Athletic Director DeLoss Dodds.

ERCOT's new director of security, Chander Ahuja, resigned after two months on post, citing personal reasons. The council named an interim finance officer — Roy Bowman — who'll work under contract to help the agency through the aftermath of a harsh state audit. He's with Tatum CFO Partners of Houston.

Gov. Rick Perry named Gilbert Herrera of Houston and W.A. "Buck" Prewitt III of Horseshoe Bay to the Texas Commission on Judicial Conduct. Both are businessmen and not judges, though the commission investigates complaints against judges and disciplines the ones it catches acting badly.

For instance: The commission reprimanded state district Judge Luis Aguilar of El Paso for derogatory and sexual remarks about women in and around his courtroom. The targets of that talk ranged from probation officers to other judges, including one incident involving a female prosecutor in open court.

Gov. Perry named Jack Ladd of Midland to head the State Securities Board. Ladd is an attorney and the director of the John Ben Shepperd Leadership Institute at UT Permian Basin.

And the Guv said he'll appoint Joe Brown Jr. to San Antonio's 57th Judicial District Court. He's with a law firm now, but used to be an assistant Bexar County district attorney. He'll replace Judge Pat Boone, who's resigning from that court...

Quotes of the Week

Gov. Rick Perry, quoted in the Fort Worth Star-Telegram on chances for legalizing slot machines to boost state revenue: "I think it was an issue that had some attraction to the Legislature when we had a huge budget deficit. I think that as the economy in the state of Texas grows, there is less interest by the Legislature... There's obviously less pressure to find alternative resources."

Ed Lorenzen, a former aide to Charlie Stenholm, D-Texas, predicting in the San Francisco Chronicle how congressional Democrats will use his former boss' defeat: "They'll say, 'Look at Charles Stenholm. He worked with Republicans on Social Security reform and they still went after him with everything they had. Why would you want to help Republicans after what they did to Charles?' That is a very powerful argument they are making. It is a chilling signal to any Democrat attempting to work with the president on this issue."

President George W. Bush, telling the Washington Post that voters ratified his Iraq policy: "We had an accountability moment, and that's called the 2004 elections. The American people listened to different assessments made about what was taking place in Iraq, and they looked at the two candidates, and chose me."

From the papers dropping a Republican candidate's legal challenge to last year's election results: "Eric Christopher Opiela looks forward to the day that it can truly be said that fair and legal elections were conducted in Jim Wells and Bee counties... [He is] not abandoning his belief that he was the legally elected representative of the District 35 election of November 2, 2004."

Sen. Juan "Chuy" Hinojosa, D-Brownsville, in a letter to Opiela before the Republican dropped his claims: "As an elected official who has won and lost races in the past, I offer you this advice: support your claims with evidence, drop the racial overtones and negative innuendos, for you will never win an election if you fail to show respect to the voters."

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Texas Weekly: Volume 21, Issue 30, 24 January 2005. Ross Ramsey, Editor. George Phenix, Publisher. Copyright 2005 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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