Snake Eyes

Democratic leaders in the House say they're against gambling as a way to finance public education or to fill holes that might appear in the state budget. They said they'll oppose it during the current legislative session.

It'll take a constitutional amendment — and thus, 100 votes from Texas House, 21 in the Senate, and a majority from Texas voters — to add slot machines to racetracks or to allow casinos in the state.

The issue might not ever get to the second and third hurdle. Four top Democrats in the Texas House — Garnet Coleman of Houston, Jim Dunnam of Waco, Pete Gallego of Alpine, and Scott Hochberg of Houston — say they're against adding gambling to the state's revenue mix right now. If they've got even a small number of their colleagues on board, that's it for new gambling this session.

Do the math. The House has 87 Republicans, including a faction estimated at two dozen or so who say they're against gambling no matter what. Actual mileage may vary — we've talked to members who count anything from 45 to 65 GOP votes for gambling. With those numbers gambling supporters need at least 35 Democrats on their side, and as many as 55, to prevail in the lower chamber. Even a subset of the Democratic contingent could block gambling.

Though they say they're speaking only for themselves, Dunnam heads the House's Democratic Caucus, Coleman heads the Black Caucus, and Gallego heads the Mexican-American Caucus. Hochberg doesn't head any particular group, but he's the leading voice on public education among House Democrats. Proponents will have to peel Democratic votes away from Democratic leaders; not impossible, but it raises the difficulty of passing a gambling measure during this session.

If the Democrats and renegade Republicans hold enough votes to block gambling, it could put management into a fiscal corner. Without expanding gambling to raise new money from so-called "voluntary taxes," the confederation of budgeteers, tax wonks and public education wizards will have to pull together a package of revenue, spending and reform that all fits neatly into a balanced budget.

Living Large, Part II

The budget section took another step forward, and Appropriations Chairman Jim Pitts, R-Waxahachie, will give the full House a dose of spending next week. The House Appropriations Committee would spend $137.5 billion overall, compared with the Senate's bottom line of $139.3. Both numbers are up significantly from the tight budget approved two years ago, and both include only some of the money that'll be needed if the state is going to put more into public education. They're closer together on general revenue spending — the part funded by state taxes and other revenues — which totals $65.9 billion in the House version and $66.2 billion in the Senate blueprint.

Two big differences: The Senate has a pay raise for state employees in its bill, and the House does more of its public education spending in the budget than in the school finance bill. And the House budget isn't really as frugal, compared to the Senate, as it first seems. The lower chamber spends a negative amount — $1.9 billion, in accounting parentheses — in Article 9, the "general provisions" section of the budget. The Senate version has a positive number — $662.1 million — in that section. That's because the House put public education and child protective services reforms into its supplemental budget bill, a smaller measure meant to cover any spending gaps that have developed in the current budget. When you put the House budget and its supplemental bill against the Senate's plans, the differences are less stark.

The differences will be settled, as usual, in conference committee after the full House votes and the Senate respectfully disagrees with that plan.

Taxes, as we've noted, are in the hands of the Senate, where Finance Chair Steve Ogden, R-Bryan, plans to take the rest of the month hearing testimony and tinkering. Senate Education Chair Florence Shapiro, R-Plano, has already begun similar hearings on school finance and education reforms.

The three bills probably won't reach the crucial intersection where they have to be reconciled with each other until May. That's when the real numbers emerge, showing the size of the budget, the school finance reforms, and the revenue bills that pay for them.

Roll Again

Meanwhile, neither side of the gambling fight is ready to call it a day. Gambling opponents, who now include the odd couple of Tina Benkiser and Charles Soechting, the leaders of the Republican and Democratic parties, respectively, held a rally at the Capitol to say they don't think slot machines and casinos are the best ways to fund the state budget.

And gambling proponents are promoting the idea of letting voters decide. In fact, that's the name of their website:

www.LetTheVotersDecide.com

They've unwrapped a report by Texas economist Ray Perryman that says casinos would produce $5.5 billion every two years for the state and would produce 200,000 jobs. The report is on the website. At the same time, another group pulled out a report — also by Perryman — that says video lottery terminals, or VLTS (slot machines, to us natives) at Texas racetracks would create 26,073 jobs and bring in $1.2 billion in annual state revenues. 

The theory is that when those three big bills collide — the budget, school finance reform and taxes — those gambling numbers will look better and better.

This Ain't Over Yet

Will Texas House members have to go a "trust, but verify" strategy before voting on another tax bill? Will the folks in charge get a chance for revenge against the state's chief number cruncher? Does this sound like a bad imitation of a Batman comic book? Their first effort, pushed by House Speaker Tom Craddick and other House leaders (with significant help from allied lobbyists), passed by a narrow margin. A couple of days later, Comptroller Carole Keeton Strayhorn bombed it, saying the measure spent around $12 billion on local school property tax relief while raising only $8 billion for that purpose. The tax legislation, in other words, would create a $4 billion deficit.

Craddick House leaders said she was either incompetent or dishonest, but state law says it doesn't matter: The only numbers that count, as a matter of law, are those from the comptroller. That's always been the case for state budgets, though lawmakers now argue the point and have seen some sympathy for that view from Attorney General Greg Abbott. But tax bills are different, since the comptroller is not only the official estimator but also the tax collector. As it stands now, what she says goes.

Tempers have settled a bit, but there's still a quiet effort in the House to take away some of the comptroller's powers or to punish Strayhorn in some way for embarrassing the House. In the Senate, where the comptroller raised tempers two years ago, she's in better shape; they got their pound of flesh by removing performance reviews — the e-Texas program — from her office and putting them in the LBB.

Apprizing the Situation

Gov. Rick Perry hit the bricks this week to talk to House members about appraisal caps, among other things, but the votes still aren't there and the issue was delayed for a second week. Rep. Dwayne Bohac, R-Houston, had his legislation on the House's calendar once, but it was knocked aside by a real, live technical problem and by a quieter political one; the bill was flawed but fixable in the first case, and short of votes in the second. With the first problem patched, it now appears that the constitutional amendment is short of the two-thirds support it needs to clear the House. The legislation would lower limits on allowable annual increases in taxable property values to 5 percent from 10 percent, and would impose that cap on residential, commercial and other properties.

Perry, who's been calling for a 3 percent cap for two legislative sessions, says he still likes the idea and he told reporters he disagrees with city, county, and other local officials who form the opposition. "The fact of the matter is that this is not limiting them in any way. It's asking them to ask the public for approval to spend above a certain amount," he said. And he said he thinks the House and Senate will eventually approve the caps: "I think it is a popular item that the public is for, and so I think they'll have a vote and we'll get it done."

Local officials don't like the caps for a variety of reasons and they've been hollering loud and hard at lawmakers since the beginning of the session. That's beginning to have some effect, and it's given new life to alternate legislation by Rep. Carl Isett, R-Lubbock, that leaves the appraisal caps alone while limiting growth of local government spending to three percent unless voters say more spending is okay.

Assembling a Political Posse

Carole Keeton Strayhorn hasn't said in any definitive way where she wants Texas voters to put her next year, but she's hired two of the people who'll help her campaign.

Alex Castellanos of Alexandria, Virginia-based National Media, Inc., has worked on three of Strayhorn's previous statewide campaigns. He was on the George W. Bush reelection team in 2004 and worked for George H. W. Bush's campaigns back in the day. His firm does political advertising.

John McLaughlin is a pollster and general consultant. His firm, Blauvelt, New York-based McLaughlin & Associates, was part of the phalanx that helped Arnold Schwarzenegger win the special election for governor of California.

Strayhorn has hinted broadly that she'll be running for governor against Rick Perry next year. But she's got a placemat at the table; when Agriculture Commissioner Susan Combs said last year she's running for comptroller and that Carole wasn't, Strayhorn stepped in to say Combs had gone too far. Strayhorn wants to keep the option of reelection open.

So far, she and Perry and U.S. Sen. Kay Bailey Hutchison — who's also got her eye on the Governor's Mansion — are the only prominent state politicos making a show of gearing up for next March's GOP primaries.

Castellanos worked in the California race, too, but not for Schwarzenegger. He did ads for the "American Taxpayers Alliance," which was critical of Gov. Gray Davis, whose unseating made the actor's rise possible. And if you remember the commercial knocking Al Gore in 2004 — the one by the Republican National Committee that flashed the word "RATS" for a second and raised some news controversy about subliminal advertising — you've seen a famous Castellanos ad. The consultant also worked for Jeb Bush, now governor of Florida, in Bush's first and unsuccessful run at that post.

In Texas, his ads for Strayhorn were among the best of the last cycle, featuring a sepia look at old dusty western scenes while an announcer talked about "One Tough Gramma."

McLaughlin worked for presidential hopeful Steve Forbes on campaigns in 1996 and 2000. He's worked on a bunch of U.S. Senate races — he and Castellanos both worked for former U.S. Sen. Jesse Helms of North Carolina. Helms was the beneficiary of one of Castellanos' most famous efforts. In "Hands," an Anglo's hands are shown wadding up a job rejection letter that says the post went to a minority. Harold Gantt, Helm's opponent, was a Black Democrat who favored affirmative action.

Kay and Hillary

Live and in living color, senators acting like senators: Download it in Quicktime or in Windows Media.

This video, shot by a crew working for Gov. Rick Perry's political campaign, shows U.S. Sens. Kay Bailey Hutchison, R-Texas, and Hillary Rodham Clinton, D-New York, exchanging pleasantries at a fundraiser for restoring an historic building in Washington, D.C.

Luis Saenz with the Perry campaign says he shared it with a couple of consultants and that it spread from there to other Perry supporters via email. While some in the Perry camp made hay of Hutchison getting kudos from the unpopular (in Republican Texas) Clinton, some in the Hutchison camp were making hay of Perry's early efforts to discredit a possible challenger in next year's GOP primary for governor.

Perry himself said filming opponents is a normal part of modern campaigns and said he has come to know the photographers from other campaigns filming him during election season. And while he is critical of anybody " hanging around with a person who is absolutely anathema to the philosophical positions of the Republican Party," he still wants Hutchison to remain in the Senate. "What I know is that its not good for Texas to have a brutal expensive contention primary and Texas to lose its seniority in the Senate," Perry said. "Everyone knows that."

Hutchison isn't the only Republican in Texas who has consorted with Democrats, or for that matter, with Sen. Clinton.

After the Air Kiss video turned up, the Houston Chronicle came up with a 1993 letter from then-Texas Agriculture Commissioner Perry to then-First Lady Clinton. In the letter (click here for a copy in .pdf format), Perry commended Clinton for her "worthy" efforts to reform health care and asked her to be mindful of agriculture interests while working on it. His folks say it's not a big deal, that he was just standing up for rural Texans. Her folks say the video doesn't show people anything but Normal Senatorial Behavior. And there you have it.

Want to guess at the next rounds of "Who's true blue, er, Red?" Perry was the 1988 state campaign chairman for Democratic presidential candidate Al Gore Jr., who was trying to win his party's nomination to run against then Vice President George H. W. Bush (honors, of course, went to Michael Dukakis). And if you want to drag the other potential candidate into the mix, Carole Keeton Strayhorn appeared, as the mayor of Austin, at events for Walter Mondale, who was running against President Ronald Reagan in 1984. Both Perry and Strayhorn were Democrats at that time; they changed parties and ran for statewide office later.

Noisy Insiders

David Hartman, a retired Austin banker and active Republican financier (and a former candidate for state treasurer in 1994) was so unhappy with the House's tax bill he called for House Speaker Tom Craddick to "step aside." Hartman, who is also the chairman of the nonprofit foundation that publishes the Lone Star Report, wrote in that publication that HB 3 includes a payroll tax that in his view "looks like, and smells like, a personal income tax."

He said Craddick pushed the bill through with "a heavy gavel" and closed by saying the speaker should be appreciated for working to elect "well-qualified legislators capable of improving Texas state government." His closing looked to some like a call for the speaker's head; to others like a prayer that the Senate would undo what the House did: "It is now time for him [Craddick] to step aside and let them usher in a new efficient and progressive era of state government. It is to be hoped the Senate will prove capable of joining them in this crusade."

For the record, he favors a business activity tax as an alternative to the current state franchise tax and says the school finance problem is "a remarkable opportunity" that state leaders ought to exploit to revamp the tax system. "It's about time somebody showed some leadership somewhere in the higher offices of the state," he said.

Craddick responded with a letter saying the House's proposed taxes on payrolls aren't income taxes and are based on unemployment insurance taxes that have been in place in the state since 1936. He didn't get into a fight over the weight of his gavel, but did say the bill was the product of work by members of the House. He also quoted Comptroller Carole Keeton Strayhorn (the letter is dated before she concluded HB 3 was out of balance) as saying an earlier version of the bill would add to personal income growth, investment growth and new jobs in the state.

Janelle Shepard, meanwhile, wrote in "Texans for Texas" that Comptroller Strayhorn — the top vote getter among state Republicans — ought to step down.

Shepard is among those listed by Gov. Rick Perry's reelection campaign as an early supporter — that list went out early this year to highlight some of his support among well-known conservative Republicans. Strayhorn is openly considering a challenge to his reelection bid next year. And Shepard says the comptroller is showboating.

Shepard is executive director of Texans for Texas, which publishes periodic email flyers on state issues from a conservative viewpoint (it's free; sign up at www.tx4tx.org). Without repeating her support for Perry, she blasts Strayhorn in the latest edition for flunking the House's tax bill and calls on the "rough grandma" to resign. Strayhorn, you'll remember, said the bill as passed by the House would raise $4 billion less than it spends; House leaders said she ambushed them after they consulted with her. She said they made big last-minute changes without asking her tax wizards about the effects. Shepard sides with the House and says Strayhorn was playing to the spotlights. Strayhorn aides passed when given a change to comment, but noted Shepard's support for Perry.

Halfway to a Majority on Ethics Reforms

Three dozen House members, including a number of Republicans, have added their names to legislation (HB 1348) that would prohibit so-called "issue and advocacy ads" in the last days before elections (but would allow them earlier in the election cycle).

They'd outlaw issue ads funded by undisclosed contributors and narrow the definitions of how money donated by unions and corporations could be spent in politics. Those organizations would also be prohibited from giving to political action committees that aren't directly associated with the donors. Reps. Todd Smith, R-Bedford, and Craig Eiland, D-Galveston, were the first on board. Now they've signed up more members and are trying to get a hearing for the bill, which was last seen waiting for attention from a subcommittee.

The new co-sponsors, grouped by party:

Democrats: Rafael Anchia, Dallas; David Farabee, Wichita Falls; Scott Hochberg, Houston; Mark Homer, Paris; Elliott Naishtat, Austin; Aaron Peña, Edinburg; Eddie Rodriguez, Austin; and Mark Strama, Austin.

Republicans: Fred Brown, College Station; Dennis Bonnen, Angleton; Scott Campbell, San Angelo; Carter Casteel, New Braunfels; Warren Chisum, Pampa; John Davis, Houston; Joe Driver, Garland; Gary Elkins, Houston; Dan Flynn, Van Horn; Charlie Geren, Fort Worth; Toby Goodman, Arlington; Tony Goolsby, Dallas; Bob Griggs, North Richland Hills; Pat Haggerty, El Paso; Rick Hardcastle, Vernon; Charlie Howard, Sugar Land; Delwin Jones, Lubbock; Terry Keel, Austin; Jim Keffer, Eastland; Edmund Kuempel, Seguin; Brian McCall, Plano; Tommy Merritt, Longview; Jim Pitts, Waxahachie; Wayne Smith, Baytown; John Smithee, Amarillo; and Vicki Truitt, Keller.

Political Notes, Federal Division

Several Texas groups are gearing up, again, for judicial confirmation hearings that might include the appointment of Texas Supreme Court Justice Priscilla Owen. The locals — a combination of Texas outfits and the Texas affiliates of national groups that bills itself as the Texas Ad Hoc Coalition on Judicial Nominees — are trying to fire up supporters who'll write to U.S. Sens. John Cornyn and Kay Bailey Hutchison to tell them to leave the Senate's filibuster rules alone. Democrats in the Senate have used those rules — or the threat of them — to stall a dozen of George W. Bush's judicial nominees, including Owen. They told reporters they don't really have much hope of swaying Cornyn and that they think they've got slightly better chances with Hutchison — they got that reading from her disapproval of J. Leon Holmes of Arkansas. Their real hopes, they said, are pinned on convincing Republican senators from other states.

• National groups trying to knock off U.S. House Majority Leader Tom DeLay, R-Sugar Land, are running television ads in and around Houston kicking the Texas Republican for ethics lapses they say are evidence of deeper problems in Congress. Two groups — Campaign for America's Future and the Public Campaign Action Fund — are running commercials in DeLay's congressional districts and in the districts of three congressmen they say are key to whether the House does anything to rebuke the Texan. And in a model that worked for groups on the left and right during the last election campaign, their ads online are linked to their forms for raising money, to run more and raise more money and so on. Meanwhile, a coalition of conservative groups has formed up to defend DeLay. The groups say they're not trying to get DeLay to resign from Congress, but want him to give up the leadership post. They're running about $75,000 in commercials on cable networks in his district.

• Rep. Richard Raymond, D-Laredo, is raising money for his exploratory campaign for Congress, and says there's a legal loophole in the law that prohibits Texas lawmakers from raising money during legislative sessions. It's a federal race, not a state race, he says, knocking down a press-release complaint from U.S. Rep. Henry Cuellar, D-Laredo. Raymond went to Dallas for his first funder in that possible challenge race; the notice said, "Contributions are appreciated, but not required." Among the hosts: state Reps. Rafael Anchia, Yvonne Davis, and Terri Hodge, all with D-Dallas suffixes, and Aaron Peña, D-Edinburg; former U.S. Rep. Martin Frost, former Dallas mayor Ron Kirk and a mess of other Dallas politicos. A political consultant to Cuellar said Raymond is "trading on his state job to raise money." Raymond says it's all legal and said Cuellar is scared "because these are real Democrats." He hasn't decided on a challenge to Cuellar yet, and says he'll give all of the federal contributions back if he decides not to run.

Good for Judges and Then Some

Legislative retirement benefits are based on a formula that includes the salary of district judges, who might be in line for their first pay raises in seven years.

The basic setup — it changes according to benefit choices made by each legislator — is to multiply that judicial salary by 2.3 percent, an arbitrary number set in statute, and to multiply that by a lawmaker's years of service. Judges now make $101,700 (some make more, by local option, but that's not part of the formula). Lawmakers have to serve at least eight years to qualify for retirement at age 60; if they serve 12 years or more, they can begin drawing state retirement after age 50.

The Senate's pay raise for judges would increase lawmakers' retirement benefits by the same percentage. That bill, authored by Sen. Robert Duncan, R-Lubbock, is on its way to the House.

Based on the current judicial salary, each lawmaker gets $2,339.10 in retirement pay for each year served in the Legislature. If Duncan's bill raising judicial pay to $125,000 passes in its current form, legislative benefits will jump that same 22.9 percent; each retired lawmaker would get up to $2,875 in annual retirement pay for each year served. A retired lawmaker with 20 years experience can now draw $46,782 in benefits each year. If the Senate version of the judicial pay bill becomes law, that amount would increase to $57,500 annually.

Duncan had hoped to avoid political problems that can crop up when lawmakers sweeten their own benefits by tying the lawmaker retirements to the governor's salary instead of to judicial pay. But he got his fingers burned: legislative budgeteers have proposed raising the governor's pay to $150,000, which would have meant that a 47 percent increase in retirement pay for lawmakers was included in the state budget. He moved the index back to judicial pay, and to the smaller increase.

Political People and Their Moves

Sherry Sylvester, lately the voice of the Texas Republican Party, is leaving the Lone Star State for New Jersey, where she'll be snapping the verbal towel for gubernatorial candidate Doug Forrester, a businessman and former mayor who's leading a six-person field in the GOP primary.

Sylvester joined the Texas GOP late last year. She wrote Texas Media Watch, an online press critique, before that and was the political reporter at the San Antonio Express-News before that. But she was in New Jersey and New York first, working in Democratic politics (for former U.S. Sen. Geraldine Ferraro and former NYC Mayor David Dinkins, among others) and then working for papers. Sylvester starts Monday; no word on who'll be the new spokesperson for the Texas GOP.

New Jersey has an off-year gubernatorial race, with the primary set for June 7 of this year, and the general in November. Texas will just be coming to a boil when New Jersey gets through.

Susan Hays is resigning as chair of the Dallas County Democratic Party, the victim of infighting spurred by her endorsements — one on Party letterhead — of a couple of Republican federal appointees. Those are old news — Hays has said she'd rather endorse good judges who are Republicans than fight everybody with an elephant pin in George W. Bush's home county. And the Democrats have started winning races there, topped by Lupe Valdez' election as Dallas County sheriff last year. Dallas County Democratic precinct chairs will meet over the weekend to elect her replacement. Hays, an attorney, has held the post for three years.

Say goodbye to the artist formerly known as Bracewell & Patterson. The Houston-based firm has a new partner of some renown, former NYC Mayor Rudy Giuliani, and has changed its name to Bracewell & Giuliani. The new guy will work out of firm offices New York office.

Add a blog to your list. Lobby Duck is an anonymous lobbyist who's writing about the session as if he/she/it were on vacation here. Check it out, at www.lobbyduck.com.

The governor appointed Rebecca Simmons of San Antonio to the Fourth Court of Appeals for a term that expires at the next general election. She's currently a state district judge — the 408th District Court — and the chair-elect of the Texas Bar Foundation. Paul Green left that court to become a Texas Supreme Court justice in last year's elections.

Press Corps Moves: Gary Scharrer will remain in Austin, reporting and writing for San Antonio instead of El Paso. Scharrer, who has been working for the El Paso Times for a quarter of a century — his words, or we'd have been gentler — will leave that paper at the end of April for the Austin Bureau of the San Antonio Express-News. He's been reporting on state politics since 1987 for the Times, and will actually pass his 25-year marker in mid-April. The San Antonio shuffle started with Gardner Selby's move to the Austin American-Statesman.

Gov. Perry reappointed Charles Aycock of Farwell and Jackie DeNoyelles of Flint to the Texas Board of Pardons and Paroles. Aycock is a former Parmer County attorney (that's up by Amarillo, to you new people), and still lives there. Denoyelles used to work for Perry, in economic development, and now works in the Palestine office of TBPP.

And the Guv put Stella Caldera of Houston and Howard Johnsen of Dallas on the Texas Private Security Board, which licenses private investors, security guards and their ilk. Caldera is president and CEO of Etoile, Inc. Johnsen heads Hans Johnsen Co. and is a director of the Visiting Nurse Association of Texas.

Births: Christopher John Mark Toureilles, to Rep. Yvonne Gonzalez-Toureilles, D-Alice, on the afternoon of Good Friday. He was 6 lbs. 12 oz., and 20 ins. tall. Everybody's fine.

Quotes of the Week

Former U.S. Rep. Charlie Wilson, D-Lufkin, talking about the U.S. majority leader's troubles in the Houston Chronicle: "If you've seen a chicken in the barnyard get a peck on his head so a little blood is showing, then the other chickens all rush in and peck him to death, that is the danger for Tom DeLay right now. He's got a little blood on his head, and sometimes that is enough to get you killed."

Roy Minton — House Speaker Tom Craddick's attorney — quoted in The Dallas Morning News on conversations between Craddick and the Texans for a Republican Majority PAC before the 2002 elections: "You show me a politician who says, 'No, I don't think I'll go to a meeting where there'll be a lot of people who are effective getting votes and contributing money,' and I'll show you a dead one."

Gov. Rick Perry, whose campaign sent cameras to catch U.S. Sen. Kay Bailey Hutchison on the stage with Hillary Clinton, asked whether he's also got a crew chasing Comptroller Carole Keeton Strayhorn: "She's pretty well capable of making news on her own without us helping her."

Sen. Kel Seliger, R-Amarillo, after being interrupted for the umpteenth time during the traditional hazing on his first bill: "I've already yielded more than a cheerleader at a drive-in."

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Texas Weekly: Volume 21, Issue 40, 4 April 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 info@texasweekly.com. For news, email ramsey@texasweekly.com, or call (512) 288-6598.