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And They're Off!

The House elected a new speaker. The Senate started with a partisan dogfight. The comptroller filed a gloomy forecast on the state's revenue for the next two years. The Republican candidates for governor — that's an election more than a year away — revealed multi-million-dollar bank balances. Once all that had rolled out, lawmakers left for a week. The House will return next week for a day, then do rules the week after that. And the Senate is gone until January 26. Soon enough, it'll seem like they never left.

The House elected a new speaker. The Senate started with a partisan dogfight. The comptroller filed a gloomy forecast on the state's revenue for the next two years. The Republican candidates for governor — that's an election more than a year away — revealed multi-million-dollar bank balances. Once all that had rolled out, lawmakers left for a week. The House will return next week for a day, then do rules the week after that. And the Senate is gone until January 26. Soon enough, it'll seem like they never left.

Campaign Finance, at the Gate

Candidate and committee reports due this week are popping up on line. News, so far:

• Gov. Rick Perry reached the end of 2008 with $6.6 million in hand, raising $4.7 million in the second half of the year.

• U.S. Sen. Kay Bailey Hutchison's exploratory committee will have enough money to chart Antarctica if they want to: She moved $8 million ($1 million first, then $7 million more) from her federal account to her state account. That's probably a one-way street: She can't move it back — the rules are different — without some serious lawyering. Hutchison's detailed report isn't available yet. Her actual fundraising was skimpy: just over $30,000.

Perry himself ducked the chance to comment on the finances, saying his attention is on the legislative session and suggesting the federal government (that'd be the senator, see) could help the state out by working on immigration and border security and such. His spokesman, Mark Miner provided the towel-snap on finance: "It’s clear her campaign is already faltering when they have to use their federal campaign dollars to bailout their dismal state efforts. It’s just like a Washington politician to use money intended for one purpose and spend it on another."

Hutchison is still in exploratory mode, but she's inching toward a commitment. "Today, as we file the first campaign finance report for the committee, we are starting fundraising in earnest, and making a major step toward a campaign for Governor," she said in a press release. "In the coming weeks, I will be taking additional steps toward a race for governor. This is a critical time for our state and nation. I am going to be traveling our state, talking to Texans from all walks of life, and working hard to make certain that the wisdom and opinion of people across our state is heard."

Perry says flatly that he's in the race for another term after his current one.

• Comptroller Susan Combs starts the 2010 cycle with $3.6 million in the bank and has said she plans to stay where she is, if voters approve. She raised $1 million in the last half of 2008.

• Attorney General Greg Abbott ended the year with $8.6 million in the bank — more than either Hutchison or Perry. He was coasting, though, raising $582,514, and spending $318,994. Abbott has feinted at a run for U.S. Senate should Hutchison step aside for the governor's race; his state money is incompatible with federal finance laws and he'd have to start all over again. He's also got his eye on the lieutenant governor job, should David Dewhurst run for something else.

• What of Dewhurst? He's been paying down his loan balances, now at $1.3 million. Dewhurst raised $3.1 million during the second half of the year, spent all of it, and ended the period with $759,856. He's generally suspected of wanting Hutchison's spot — since the race for governor is crowded — and could self-finance all or part of a federal race, giving him a leg up.

• Deposed House Speaker Tom Craddick, R-Midland, ended the year with $2.1 million after bringing in $314,987 and spending $511,390 during the last two months of the year (his report, since he was on the ballot in 2008, covers everything since his last report filed in October).

• Craddick's successor, House Speaker Joe Straus, ended the year with $647,966, raising $50,650 since his October report and spending $26,562. Interesting tidbit: Straus' mom recently showed up on a fundraising notice for Hutchison (she's pulled out of that now that her son is speaker); Straus himself reported a mid-November contribution of $1,000 to Texans for Rick Perry.

San Antonio Rising

Rep. Joe Straus III, R-San Antonio, is officially the speaker of the Texas House.

Straus was elected by acclamation after six nominating speeches on a day marked by ceremony, crowds of families and friends, and the start of another legislative session. He was sworn in by a fellow San Antonian, Texas Supreme Court Chief Justice Wallace Jefferson, at a House session presided over by another, Secretary of State Hope Andrade. He gave a short speech, saying the Biblical line invoked by Houston and by Lincoln applied here: "A house divided against itself cannot stand." And he ended on a similar note: "Let there be no walls in this House."

The House will do rules within the next two weeks or so. Straus will assign committees, and they'll be off to the races early next month.

The Senate, meantime, made Robert Duncan, R-Lubbock, the president pro tempore. That body's expected to organize more quickly, since it has only two new members and no management and staff overhaul in process. And the Senate revved up an old fight over its two-thirds rule. That body won't take up legislation unless two-thirds of the people in the room agree. Democrats have just enough members to block partisan bills, and some Republicans, led by Sen. Dan Patrick, R-Houston, want to get rid of the rule or lower the requirement to, say, 60 percent. More on that in a minute. Notes from the opening:

Rep. Senfronia Thompson, D-Houston, on Straus' nomination by a group of eleven Republicans: "I wasn't surprised. I was shocked."

Rep. Jim McReynolds, D-Lufkin, in his nominating speech: "In this 140-day session, policy should transcend politics."

Rep. Veronica Gonzales, D-McAllen, in hers: "With the numbers [of Republicans and Democrats] so close, I take comfort in knowing that bills will live or die based on their merit and not on a partisan basis."

Rep. Burt Solomons, R-Carrollton, will oversee changes in the House rules. Among the things in that grab-bag: How many committees the House will have and how many people will be on each of them.

Gov. Rick Perry ended the first day with a rhetorical flourish: "The first day of a session is a beautiful thing — it's like a blank canvass. Here's hoping we paint a masterpiece."

One last note: We originally filed this from the House, on the public wireless system that was put in and activated in the last week. For several years up to now, the House has been one of the few wifi-free zones in the state Capitol, due to "technical problems."

Senators Start, and Start Bickering

On their second day in town, Texas senators stepped into the first partisan fight of the new session, with Republicans successfully carving out an exception to rules that govern how many senators it takes to consider legislation.

The upper chamber has a rule barring consideration of bills that are objectionable to more than a third of the senators. And with 12 Democrats among the 31 senators, there are enough votes to block consideration of partisan bills. But senators voted 18-13 in favor of an exception: Voter ID legislation won't require the two-thirds vote required for other issues.

Republicans, led by Lt. Gov. David Dewhurst, want to pass a Voter ID bill — one that requires voters to show a photo identification before they're allowed to vote. Republicans say that's a security measure against voter fraud. Democrats say it suppresses votes disproportionately, hurting their side more than the GOP side. And the only way to bring the legislation to the floor — with the Democrats in opposition — is to change the rules.

The debate echoed the arguments over redistricting that sent 11 Democratic senators packing to New Mexico several years ago, where they denied the Senate a quorum by leaving the state. That incident — like a previous one that saw House Democrats decamping to Ardmore, Oklahoma — ignited a call within the GOP for an end to the two-thirds rule. Voter ID is the issue of the day; redistricting — up for consideration every decade — will be the issue in its place in two years.

The Senate spent its first two days in Austin working on that battle, with Republicans — Sen. Tommy Williams, R-The Woodlands, suggesting the two-thirds rule should have an exception for partisan issues in general and, as the battle went on, for the Voter ID bill in particular. Every preliminary vote along the way had the same result: 19 Republicans to 12 Democrats.

Senators did much of the negotiating and debate — as is their custom — behind closed doors (thus the headline above). They came out at one point and actually did some debating in public. With Republicans proposing an exception for Voter ID, the Democrats proposed several amendments, forcing Republicans to vote against amendments that would have substituted the Voter ID exception with other issues, like insurance reform, higher veterans benefits, job programs, public school finance, college tuition rollbacks, and the Children's Health Insurance Program.

They disappeared again for several hours, emerging with a proposal to send the Voter ID bill to a Committee of the Whole — that's the whole Senate at once — so that everyone can debate there before the bill comes to the floor. But it could come to the floor with a simple majority vote — and without the two-thirds support required for other legislation.

Sen. John Carona, R-Dallas, told senators he favors the Voter ID bill, but didn't want to change the Senate rules. He was the lone Republican voting against the change.

Williams argued that this is a one-time thing on "an issue of bipartisan concern" that won't necessarily lead to other exceptions. But Sen. Dan Patrick, R-Houston, is hoping this is the first step in undoing the two-thirds rule. He has argued for years that it's undemocratic and that the Senate should do away with it or at least lower it to 60 percent. Either option would give the Republican majority a final say in any partisan issues before the Senate. Sen. John Whitmire, D-Houston, said the Voter ID episode will lead to more exceptions and said senators were drawing a road map for outside partisans and political consultants who want to pressure the Senate to vote on other "emotional issues."

So why the first day? Because you can change the rules on the first day with a simple majority. Wait until later in the session, and you have to have a two-thirds vote to bring it up. The Democrats can't block it now, but could have done so later.

While they were debating, a court in Georgia said that state's voter ID bill is legal.

Thinking Negatively

The new numbers from the comptroller aren't all that bleak, to tell the truth, but if you read the report that came with them, you'll rush out and buy an umbrella and some galoshes.

Comptroller Susan Combs says the state Legislature will start with $77.1 billion available for general revenue spending in the 2010-2011 biennium. That's down more than 10 percent from what was available to the budgeteers two years ago.

And put the first asterisk here: Combs' new "biennial revenue estimate" also comes with the biggest balance ever reached in the state's Rainy Day Fund — enough to nearly cover the difference between this year's estimate and the one Combs made two years ago. At the end of the biennium, that fund is expected to have a balance of $9.1 billion. Put it another way: If they can get two-thirds of the Lege to go along, they can use that money for general spending.

The lower numbers are based on two things, mainly: Lawmakers start with a cash balance of about $2.1 billion, as against $9 billion two years ago; secondly, Combs and her forecasters appear to have adopted negative assumptions about the economy wherever they had the choice. They could well be right, but any mistakes they've made will bring relief — more money — rather than grief. It would be hard for the state to do worse than she's predicting, financially; it could do better, adding money to the pot.

The comptroller expects actual general revenue — not counting that starting cash balance — to drop by $2.2 billion, to $75 billion (general revenue is what they call non-dedicated state funds in the $167 billion budget). And she's expecting the Texas economy to share the national economy's troubles — if later and to a lesser extent. "Our new economic forecast indicates Texas will be affected in fiscal 2009 before regaining economic momentum in 2010."

They're predicting Texas will lose 111,000 nonfarm jobs between now and mid-summer before starting to add jobs again in the fourth quarter of the year. In fiscal 2009, they're forecasting gross state product will increase by 1.8 percent, then by 1.9 percent in 2010, and 3.8 percent in 2011.

The state's biggest revenue-producer — the sales tax — is expected to rise, but more slowly. Combs expects a drop in income from several other taxes, including the natural gas tax, the insurance tax, motor vehicle sales and rentals, and oil production and regulation taxes.

The state franchise tax, she says, will be flat over the next few years. This is an example of a place where she's taking the dimmest possible view. A one-time break cut the franchise tax revenues in its first and only year of collection by hundreds of millions of dollars. But in her projection for the second and third years of that tax, Combs didn't add those numbers back in. That might turn out to be right, but it's another place where a little light could shine and the numbers would grow. That said, it's clear the tax isn't producing what the comptroller and her predecessor predicted. When that tax was revised in 2006, the comptroller said it would produce almost $6 billion a year; in fact, it's producing only about $4.4 billion annually.

That puts some pressure on budgeteers. The state is obligated to spend about $14.2 billion every two years to fulfill a promise to offset cuts in local school property taxes. That was the deal in 2006: Cut local property taxes, replace the money lost with state funds. But the property tax fund doesn't cover that nut: The $14.2 billion cost stacks up against a fund that's projected to have $8.5 billion this biennium. Lawmakers will have to make up the difference out of general revenue.

Combs expects the Texas Lottery's numbers to slide about three percent.

The whole BRE is available online, with charts and tables galore. Read the executive summary up front — you'll see what we mean about the bad weather gear.

Interview: Rick Perry

Gov. Rick Perry is doing his biennial rounds of pre-game interviews on the legislative session. He'll outline his plans and hopes in his State of the State speech in a couple of weeks (and isn't spilling now). So we asked him about being in office long enough to name all of the appointees in all of the agencies as well as dozens of top state employees throughout the executive branch, about his 24 years in government and why he wants six more (the rest of this term and another one), his short- and medium-term plans, the changes (or not) in the state's politics, and the fate of rural Texas in an increasingly urban and suburban state. He never talked about U.S. Sen. Kay Bailey Hutchison by name, but prick your ears: You'll find campaign themes sprinkled throughout his comments. A transcript of the full interview is available online.

Perry has been in office longer than any of his predecessors — long enough to fill all of the appointed jobs, the terms of which are staggered over six years time. And he's touting that control and his experience as reasons to keep him in place. "It is one of the reasons that I think we have had the successes over the course of the last five years that we've had in this state. Due not all, but in part, to having people who are philosophically all on the same page of the hymnbook.

"There's a real philosophical imprint on state government today that George Bush and Rick Perry together — and obviously, all the appointees now that I've made," he said. "... From time to time, we don't necessarily agree that the result was the one I was looking for. But in the vast, vast majority of the times, we do."

He's a fan of public-private partnerships and hints at proposals along those lines in higher education. He defended the HPV vaccine he proposed last session and said the idea was consistent with his pro-life politics.

Perry touted his experience, comparing his knowledge of state government and his resume on the state level to a Texas president's national and international resume. "There have been very few if any people who have been trained as well as I have to be governor," he said. "That's just factual. You know, Appropriations, state agency, lieutenant governor, governor, small businessman before that, kind of 'gets it' about public service. Not unlike George H.W. Bush. There's a man who was very well prepared to be the President of the United States. From the standpoint of different life experiences, where he really had a broad grasp of the world and Congress and international affairs, and I think history will show that he was a pretty darn good president."

His focus during the session will be on the state budget, and after that, on running the state and running for office.

So in the next 138 days, it's pretty simple, particularly since last September and the financial meltdown. It's managing this state's budget — prioritizing what's important — and keeping Texas on track... I don't get confused that just because the Legislature leaves town, there's still not a very big state to manage. I get the added interesting aspect of a possible primary election and a general election. But I'm up to it. I can multitask. I've done it before."

The governor said Texas remains "a right-of-center state" but said the GOP needs to mend its image with Hispanics. "For instance, I think that the Tancredo guy and his very anti-anybody-that-don't-look-like-me rhetoric has not been particularly good," Perry said.

But he's hopeful that they're in sync with him: "The Hispanic population is growing and they're pro-life, pro-family, pro-business, pro-patriot, pro-military, if you will. And pro-God, pro-faith. Those are people that are philosophically, pretty attuned to me."

The Back of the Envelope, Please

If lawmakers were to do redistricting this year (based on mid-2007 estimates from the Census Bureau, the latest available), the average House district would have about 20,000 more people in it than in 2000. And the migration of political power from rural areas to populated areas — especially suburbs — would be particularly painful for rural Texas.

Do the math to see which counties would gain seats in that hypothetical drawing and Collin, Denton, Fort Bend, Williamson, and Montgomery counties rise to the top. Each — depending on rounding and whether and how districts cross county line — would gain a seat in the Texas House. Most of the losses would be spread across rural Texas; for the most part, those multi-county districts would have to grow in geographic size, diluting local interests, to keep up with the numbers. But some losers are clear: Dallas County would lose a seat, and El Paso and Jefferson counties would lose some clout, too. You don't have to lose population to lose power in this arithmetic; growing more slowly than the rest of the state is enough to do the damage.

The trend is similar but less clear in the state Senate, where districts are bigger and the chance of a county getting a whole new Senate seat are small. The size of the average district would jump to 771,109 from 672,638 if the 2007 estimates were used. That's 98,470 more people in each senator's district, and rural district lines will have to be stretched to find sufficient population (at the time they're drawn, districts have to be equal in size).

Congressional seats work a little differently. If Texas gains three seats (we're growing while other states grow less quickly or shrink), one will probably go in the Collin-Denton county area. Another would probably go to the vicinity of Harris/Fort Bend counties. Rural congressional districts in Texas would get bigger, geographically, to make up for lost population. Tarrant and Bexar counties probably wouldn't get entire new seats, but their increases might ensure that seats they share with others were dominated by those urban centers. Same with Travis and Williamson counties, which are adjacent.

Huge areas of Texas — 118 of 254 counties — lost population between the 2000 census and mid-2007, according to the Census Bureau's estimates. Only 31 of the state's counties grew faster than the state as a whole, and they tended to be larger counties. Only four of the state's 15 biggest counties missed that growth mark and one of them — Bexar County — only missed by a tenth of a percent. Those counties will be first in line to gain seats, since they grew the most on both a percentage and raw number basis. Only five of the 50 largest counties lost population, although 28 of that top 50 grew more slowly than the state as a whole.

This is early and highly speculative. The trends are clear, but the specifics will change when the real 2010 census numbers are in and when the real political work is done on redistricting — when creative people bend the demographic facts to their advantage, or try to.

Straus House

Speaker-apparent Joe Straus named former Rep. Clyde Alexander will be his chief of staff.

Alexander, who served as a Democrat from Athens, now lives in San Antonio and is friends with the new speaker. He's been involved in the transition since Straus announced he had the votes to become speaker. He'd been rumored for the job from the outset and has been helping Straus to put a game plan together for the session.

Former Bexar County Judge and state Sen. Cyndi Krier, also of San Antonio, will stay on as senior advisor into the legislative session.

Staffers for House Speaker Tom Craddick were told the day before the session began to clear their desks — they won't be on the new speaker's staff.

Craddick Chief of Staff Terral Smith told them that Straus wouldn't be keeping any of them. Smith met the day before the session with Alexander. After that meeting, he told staffers to clear their things out, and said some clerical employees are being asked to stay through the end of the month. House employees in the clerk's office, the sergeant-at-arms' office, and the like, were not included in the layoffs.

When Craddick took over from Laney, he kept a handful of the 25 to 30 people who work in the Speaker's office. And he also had more time for a transition. Craddick's win was apparent right after the elections put the Republicans in the majority with 88 members. In the current case, the race for speaker was open until the first week of the New Year. Straus, compared to Craddick, and to Laney, too, has to organize in a hurry.

Though he served as a Democrat, Alexander has been giving to Republicans since 2002, giving $62,453 to their candidates while giving $20,345 to Democrats. His biggest beneficiaries include Gov. Rick Perry, $20,000; Carole Keeton Strayhorn, $19,000; Sen. Jeff Wentworth, R-San Antonio, $6,000; and $5,000 each to Lt. Gov. David Dewhurst and to House Speaker Tom Craddick. The contributions to Perry, Dewhurst, and Craddick were all made in December 2002 — the month after the elections when the Republicans took solid control of the statehouse. Rep. Patrick Rose, D-Dripping Springs, has been Alexander's biggest Democratic beneficiary, pulling in $10,005 in contributions. John Sharp got $5,000, and Sen. Kirk Watson got $3,000.

Krier's $54,482 in contributions mostly went to Republicans, though $13,139 went to the state and federal political action committees at USAA, where she worked after leaving public office. She contributed $12,000 to the Associated Republicans of Texas, $7,500 to Perry, $1,000 to Straus, $3,000 to Comptroller Susan Combs, $3,000 to George Antuna, who ran against Rep. Joe Farias, D-San Antonio, in 2006.

Political People and Their Moves

Dr. Francisco Cigarroa, a transplant surgeon and the president of the University of Texas Health Science Center in San Antonio, is the new chancellor of the UT System. UT's regents made that official Friday, after making him the sole finalist for the top job last month. The 51-year-old will become the 10th chancellor of the UT System next month.

Not Guilty: Former Rep. Borris Miles, D-Houston, who'd been accused of brandishing a gun at a couple of parties. Miles lost his reelection bid after publicity about the incidents.

Sen. Kirk Watson, D-Austin, left the KLGates law firm for Brown McCarroll.

Angela Hale, a former TV reporter who's been employed as an advisor to Attorney General Greg Abbott, is the new communications director for House Speaker Joe Straus.

Joanne Molina is the new deputy executive commissioner for social services at the state's Health and Human Services Commission. She'd been an associate commission in the agency's office of family services.

Jim Lee resigned from the Teacher Retirement System of Texas board. Gov. Rick Perry named Linus Wright of Dallas to chair the board in Lee's place. Wright had been vice chairman.

The Texas Department of Public Safety has a new general counsel: Stuart Platt, who's currently the U.S. Magistrate for the Western District of Texas in the Midland/Odessa Division.

Andrew Smith joins the University Health System in San Antonio, heading government relations and public policy; he's been doing similar work for the City of San Antonio.

Trey Blocker is going solo, hanging out a lobby shingle with his own name on it.

Anthony Gutierrez is the new deputy executive director at the Texas Democratic Party. He's been a regional field director there and worked on former U.S. Rep. Nick Lampson's unsuccessful reelection campaign.

Department of Corrections: We botched Amadeo Saenz' name in last week's edition. He's the head of the Texas Department of Transportation. Sorry, sorry, sorry.

Deaths: Dallas developer and political financier Trammell Crow, who started building commercial buildings in the 1950s and kept going through the 1990s. He was 94 and suffered from Alzheimer's Disease.

Quotes of the Week

Gov. Rick Perry, after his first breakfast meeting with Lt. Gov. David Dewhurst and House Speaker Joe Straus: "The day before yesterday, we got a pretty sobering wakeup call from a budgetary standpoint. I'm not sure anyone had estimated that it was going to be quite as severe."

The Dallas Branch of the Federal Reserve, in its latest Beige Book report on the Texas economy: "Most respondents don't expect conditions to improve until the second half of 2009 with a growing number of respondents now looking at early 2010."

Rep. Will Hartnett, R-Dallas, quoted in The Dallas Morning News on the change in House leadership: "There is a new day at the Capitol. We're in the process of having to rearrange our working relationships. The winning team has more input into the process."

Former House Speaker Tom Craddick, R-Midland, telling the Austin American-Statesman he might run for another term in 2010: "Yeah, I well might. I love the House. It's fun."

Former Sen. O.H. "Ike" Harris, telling the Austin American-Statesman that musical chairs will result if U.S. Sen. Kay Bailey Hutchison quits to run for governor: "If she'll really make the decision to run, that's the big thing. If she doesn't, that backs up the other stuff, like a commode."

Sen. Dan Patrick, R-Houston, on his push to change the Senate's two-thirds rule, in The Dallas Morning News: "I understand and respect tradition. But even Wrigley Field put in lights."


Texas Weekly: Volume 26, Issue 2, 19 January 2009. Ross Ramsey, Editor. Copyright 2009 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 (512) 302-5703 or email biz@texasweekly.com. For news, email ramsey@texasweekly.com, or call (512) 288-6598.

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