Bad News Bounces Right Off

If you think the governor is getting hammered on his plans for the state's huge financial surplus, you're arguably right. But if you think he has a big political stake in the details of teacher pay and taxes, you're probably wrong. All that matters in the end is the big picture.

The tax cuts that came out of the 1997 session of the Legislature were not the same as what Gov. George W. Bush proposed, either in form or in amount, but he was able to say accurately that he had campaigned for tax cuts and that lawmakers had, in fact, cut taxes. Voters liked it, and he won another term without argument on that subject. He'll be able to do the same if, at the end of this session, lawmakers have reconfigured everything he proposed, so long as they pass tax cuts of some kind and teacher pay raises in some amount. That seems like a fairly safe bet at the moment.

In announcing legislation that undoes the governor's proposal, Sen. Teel Bivins, R-Amarillo, is acknowledging the fact that teachers have a better argument in the Senate right now than property taxpayers. While that kills Gov. Bush's plans a $2 billion property tax cut, it's no surprise: Both the House and Senate have been foreshadowing the move for about two months.

The education and the finance types in both chambers have been saying there wasn't enough money to do both things on a meaningful scale. Cuts in taxes for businesses and in sales taxes for consumers will likely be more visible anyway. Last session's cut in property taxes was swallowed in many places by school districts; voters never saw it.

At our deadline, property tax cutters still had an outside chance: The new Bivins version of the teacher pay/tax cut bill includes a provision that would freeze school districts' income from local taxes at this year's levels and replace it with state money. That would force a cut in local property taxes (assuming property values in a given district rise). But local districts aren't keen on the idea, and it would cost the state the same amount it saves local taxpayers, so there's a good chance it will come out. We've already heard some mumbling about "drafting errors" in the legislation, and the provision was not included in the Cliff Notes version of the bill offered up by the sponsor.

At the Intersection of Policy and Politics

From the viewpoint of many legislators, there's a good policy argument for a teacher pay raise (it's been a while since the last one, voters are more interested in education than anything else, higher pay might attract better people). And there's a terrific political argument (the state's 260,000 teachers are watching carefully, and they have been known to vote, on occasion, especially when angered).

On the other side of the rotunda, Rep. Paul Sadler, D-Henderson, has been fairly blunt about raises for teachers. He has reminded his committee and his captive audience that many lawmakers promised teacher pay raises during the last elections and need to deliver something. Not very many lawmakers promised property tax cuts during the last election cycle – they campaigned mostly on education. Bush proposed both a pay raise and a property tax cut. Where the new Bivins plan departs from that is in the weight given to each piece. It would give some property tax relief, but would provide for a $4,000 increase in the state's minimum teacher salaries. That's roughly half the property tax cut Bush wanted, and roughly double what he proposed for teachers.

The governor is not necessarily a loser in the deal. He suffered a couple of days of bad headlines, but in the end, teachers will be making more money and he can point to property taxes, franchise taxes, sales taxes and various other credits, breaks and deals and say he promoted and got tax relief.

Pouring Money Into a Hole

It sounds odd, but it's difficult to give teachers a pay raise, even if the amounts and the recipients are not in question. It's tricky for the state to pay someone employed by a local school district.

The quest for a better delivery system continues in the Legislature: So far, they haven't found a way to make sure all of the pay raise money goes to the teachers while, at the same time, keeping the teacher groups happy. The education gurus of our acquaintance still haven't invented a way to get the money directly to teachers without blowing up the school finance system in the process.

The teacher pay raise in the newest Bivins plan would guarantee more money to about 45 percent of the state's teachers. It would increase the minimum salaries for teachers at all levels. But most teachers make more than that state-set minimum. Local districts can add a supplement to the state minimum and most teachers, it turns out, are in districts that add more than $4,000 to what the state dictates as a minimum. Since the state can't dictate the amount of local supplemental pay, the state increase only reaches the lower-paid teachers.

Bivins dropped a proposal cooked up by Sen. Bill Ratliff, R-Mount Pleasant, that could have guaranteed the money would go to all teachers, because it also would have required a constitutional amendment that was opposed by the teacher groups. That proposal would have increased net pay for all teachers by replacing their contributions to the Teacher Retirement System with contributions of the same size from the state.

It had another problem, too. Teachers pay 6.4 percent of their pay to TRS, and since that's a percentage, higher paid teachers pay higher dollar amounts. If the state jumped in and replaced what the teachers were putting in with state money, all teachers would get, in effect, a 6.4 percent pay raise. But those higher paid teachers would get more dollars than their lower-paid counterparts.

No Final Claim on this Jackpot

While the Texas Lottery was awarding a scratch-off ticket contract to a new vendor, California was doing the same thing – the two states might have just swapped vendors. Georgia-based Scientific Games won the Texas contract, but lost the Golden State deal. BABN, which was printing the Texas tickets at its San Antonio plant, won in California while losing here.

BABN, the Texas subsidiary of a French company, has appealed the Texas Lottery's decision, and the delay in awarding that contract has created a confusing situation: There are three companies bidding for two different contracts to do the same thing in the same state during different periods of time. The state is still trying to award a long-term contract to print the scratch-off tickets. In the meantime, the lottery is running out of tickets that had already been printed and are sitting in warehouses, so they're taking bids for a short-term ticket contract. Both should be awarded soon.

BABN, as we've written, has enlisted the support of the San Antonio legislative delegation. The minority caucuses in the House have registered their support for the company, which outscored its opponents on minority contracting part of the original bidding.

One other follow-up note: At the request of the delegation, Comptroller Carole Keeton Rylander had written a letter saying San Antonio would lose 370 jobs and $9 million in investments if BABN lost the Texas contract. That wasn't admissible in the bidding process, so the lottery asked for an official number. There apparently isn't one; the comptroller is staying out of the war.

Also, the original letter from Rylander did not take into account the effect of the California contract on the economy. BABN's opponents – there are two other firms bidding – say that deal should end the argument about Texas taking jobs away from the Alamo City. On the other end of the argument is Rep. Juan Solis, D-San Antonio. BABN is in his district, and he says he wants the state to bias its bidding in favor of Texas firms.

Promises, Promises

There is something of an art to counting legislative votes, but it ain't rocket science. It's not always safe to assume a given lawmaker will vote a given way, and it's best to ask and make sure; misplaced assumptions account for some of the Senate's vote-counting errors this session.

But truth be told, there's usually a lie at the bottom of a bad count. Some senators are saying they'll vote one way when they're counted, then going the other way when the vote actually comes up on the floor. That's one reason the whole Senate caucused last week, to try to cut down their exposure on close votes by cracking down on the vote-counting.

And look underneath the votes that got the Senate talking. The so-called "Holy Trinity" of the last couple of sessions – Sens. Teel Bivins, R-Amarillo, Bill Ratliff, R-Mount Pleasant, and David Sibley, R-Waco – showed some unexpected weaknesses on three key votes last week. The three were clearly the anointed leaders of the Senate under former Lt. Gov. Bob Bullock, but they're having a hard time holding the pack together this year.

Sibley is the sponsor of the "submissions" legislation touted by Texans for Lawsuit Reform and other business groups. That legislation, you'll recall, got seriously stalled in what was supposed to be a favorable subcommittee, and when it got to the full Senate, it faced a steep climb. But Sen. Greg Luna, D-San Antonio, is still in the hospital. And one day last week, Sen. David Cain, D-Dallas, was agonizing over an abscessed tooth in Dallas. Sen. Mario Gallegos, D-Houston, left the floor (he said later that he had to go to a meeting in his office while the Senate was in session). With three 'No' votes thus indisposed, Sibley brought up the tort bill. But where tort players on both sides of the bill were counting Sen. Drew Nixon, R-Carthage, as a 'Yes' vote, he voted 'No'. Sen. Buster Brown, R-Lake Jackson, had said he would be a 'No' vote on the day Sibley raised the issue, but also said he'd probably turn into a 'Yes' the next day, after talking to some people.

Bivins had his Maalox Moment on another tort bill – one regulating class actions – when he apparently just miscounted the Senate. That led to some speculation that the tort reformers wanted to draw some senators – Cain was most often mentioned – into a vote on the issue, whether they had the votes to bring up the bill or not. The Bivins episode was a part of what led to the caucus last week.

The subtler of the key votes was a small comeuppance of Ratliff. Sibley brought up a tax bill that was widely supported in the Senate. Sen. Steve Ogden, R-Bryan, put up an amendment that added some cost to the bill. Sibley and Senate Finance Committee Chairman Ratliff argued against it, with Ratliff saying the budget didn't have much money for that sort of thing. Ogden pressed on and when it came to a vote, he prevailed. The people voting against Ratliff on that money issue included eight of the eleven members of his finance committee. Another spending amendment, authored by Sen. Royce West, D-Dallas, went on with a voice vote after similar debate.

The Shrinking Voucher Pilot

Vouchers are dead in the House unless they're alive in the Senate, according to Rep. Paul Sadler, D-Henderson, who told his Public Education Committee that he won't bring up any voucher bills "unless and until they are finally passed" by the Senate. The Senate backers, meanwhile, have shrunk the program again in an attempt to make it palatable to opponents. The latest version of vouchers is a two-county pilot program – down from the six-county pilot that was an alternative to a statewide program proposed during the last elections.

Democrats are sticking with their sheet of signatures, released after Sen. Mike Moncrief, D-Fort Worth, changed his mind and said he would allow the bill to go to a vote. The Democrats still have 11 signatures, enough to block a vote, and that's without counting any Republicans who oppose vouchers. The two-county idea hasn't attracted enough votes, however. The issue's odds are slim, but actually might be best in the House, where voucher proponents are looking for a Senate bill that could accommodate a voucher amendment without a two-thirds vote in either chamber.

The Union Label

Lobbyists who aren't in this fight are joking about whether doctors will join the Teamsters Union or some other outfit. The fight is over legislation that would allow docs to bargain in groups with managed care operators and others. The managed care folks have launched a mini-blitz against what they call "the doctor's collective bargaining bill."

The HMOs have teamed up with the Texas Association of Business and Chambers of Commerce, but they waited a long time to try to stir up trouble, and the bills they are trying to stop have popped out of committees on both sides of the Capitol. The House bill was on its way to Calendars at our deadline; the Senate version was already eligible for a floor vote.

Lt. Gov. Rick Perry, by all accounts, is sympathetic to the doctors on this one. But with the cries of pain from the business groups, he has done what lite govs do, locking everyone in a conference room and telling them to work out their differences.

The doctors say collective negotiation – letting a bunch of doctors sit down and hammer out terms of a contract – would best serve patients. The physicians' gripe is that they are on the wrong side of a take-it-or-leave-it deal whenever they talk to the managed care providers. They want the right to negotiate both the provisions of contracts and the fees they charge

On the other side, the insurance and HMO outfits say the doctors will run up the costs and include unnecessary coverage if they're given the power to negotiate in groups. The docs would have too much power and the companies, the argument goes, would lose their ability to check rising prices.

Business groups, which pay premiums, fear that would raise the prices they pay. TABCC sent out alert faxes to folks all over the state saying the legislation could result in higher costs and "force many businesses to drop voluntary coverage" for their employees.

Both sides say Texas is the leader on the issue, and that other states might follow. Only one state – Washington – currently lets doctors negotiate fees in this manner. The American Medical Association is telling members to watch what's happening here, and so are some of the insurance and managed care groups. Perry told the negotiators he'd give them a week to put something together and then he'll throw it to the full Senate. That could put the issue on the floor as early as Tuesday.

Doctors, Counselors, Family Members and Judges

Now that they have a parental notification bill moving in the direction they want, the sponsors and supporters are trying to figure out how to keep it from gathering and losing provisions.

We'll give you the short form. Doctors want out of the criminal penalties that would ensue if they perform an abortion on a young lady without the proper permission. Some compromise is forming up around reporting errant physicians to the State Board of Medical Examiners, where licenses could be revoked, and possibly leaving them open to civil liability. The legislation currently has criminal penalties in it; doctors want only the licensing deal, with no civil liability.

The other scuffle on this legislation is over who can be notified in place of parents, and the issue is a little clearer, maybe, than it was when we last scribbled about it. Option one would have a young lady telling her parents before an abortion; and option two would have her telling a judge.

Some lawmakers want to expand that bypass provision by adding family members or counselors to the list of people who can sign off on a minor's abortion. Any additions will peel votes off of the bill, but we're told that fewer votes would peel if counselors or others were tacked on as designees of a judge instead of as alternatives to a judge. It's an odd distinction, but it would allow judges to bring in attorneys ad litem or others to handle some of the duties. And it would soften attacks from folks who want to keep bypass provisions as narrow as possible.

This one's still in committee, but could be out before the legislative slow-down rules take effect in about three weeks.

How Do You Spell Tax Relief?

Now competing for your tax dollars: Investment tax credits for companies that build really, really big plants in Texas (like Intel), and in the other corner, tax credits for companies that spend significant amounts of money on research and development (like Texas Instruments). And in the wings while the big guys fight: tax credits for companies that create jobs in areas that haven't been reached by the booming economy, and sales tax cuts for regular folks.

But maybe there's a happy ending for everybody. Rep. Rene Oliveira, D-Brownsville, chairman of the House Ways & Means Committee, has uncorked an expanded set of business tax breaks that dwarfs the bill passed earlier in the week by the Senate. He started with the version brought up by Sen. David Sibley, R-Waco, and started adding money to it. Oliveira's version would include an investment tax credit for really big plants – those worth $500 million or more.

Instead of limiting that break to certain counties, he wants to make it available statewide. And instead of sticking to the $500 million, he's running the numbers to see what it would cost to include more investments by lowering the size limit to plants that cost over $250 million or even $100 million. The original number would accommodate Intel's plans in North Texas; Oliveira wants to open the credit up so that it could be used to build smaller plants on the border or in other parts of Texas.

He's also talked about other tax breaks, like a break for businesses that provide vouchers, or scholarships, to public school students who want to go to private schools. And he's referring to the tax bill as an "omnibus bill" now, so it could accumulate more ornaments before his panel is done.

Legislative Tidbits

The rewrite of the state constitution is now officially dead. Sen. Bill Ratliff, R-Mount Pleasant, sent a letter to Sen. Florence Shapiro, R-Plano, saying he won't ask her State Affairs Committee to vote. He noted that a majority of the committee members had told him they'd vote for the bill in spite of problems with some parts of it. But he said the House had all but killed the bill and so the senators should avoid taking a vote on the constitution, which is full of the kind of prickly stuff that can be used in campaign attacks. A special House committee on the subject signaled the defeat of the rewrite by passing another bill that would excise some of the antiquated provisions in the constitution without making changes of real substance... The governor doesn't like the measure, but legislation that would outlaw the use of the death penalty in cases involving mentally retarded murderers is on its way to the Senate floor. Gov. Bush has said he would prefer to leave the state's death penalty laws alone... There are some big differences between the Senate and House versions of a proposed program that would offer tuition to college students who keep their grades up. The authors don't even agree on the name. Sen. Rodney Ellis, D-Houston, calls it the HOPE scholarship program (the name of a similar program in Georgia). Rep. Henry Cuellar, D-Laredo, calls it the Texas Gateway to the Future bill. Even with that, the legislation has passed both houses and is on the way to conference committee... Faster cars, but not trucks: The House passed legislation by Rep. Pete Gallego, D-Alpine, allowing 75 mile per hour speed limits on some state roads, but an effort to add big trucks to that higher speed limit got pulled down when opposition became apparent... Here's a business vs. business deal: The Ford Motor Company wants to sell cars in Texas. Manufacturers are prevented from operating dealerships, except in "temporary" situations like when they rescue a failing dealer. But the company wants to roll three Fort Worth dealerships into one, and the company itself would own a chunk of the resulting dealership. The Texas Automobile Dealers Association opposes the carmaker, and is seeking to add a couple of words to current law. TADA wants to make it illegal for Ford and other carmakers to own or operate any dealerships on a permanent basis... One of the more contentious issues on the campaign finance reform front – electronic filing of contribution and expenditure reports – is now on its way to the floor of the Texas House. That would require state office-seekers to make their fundraising and spending figures available to anyone with a computer. Campaigns could opt out by signing papers saying they aren't using computers or by running their races for under $20,000 per year.

Political People and Their Moves

U.S. Rep. Ron Paul, R-Surfside, can expect another visit from his last opponent. Bay City Democrat Loy Sneary isn't officially in the race yet, but he's lining up advisers and supporters and could make an announcement relatively soon. The 1998 contest was on the national radar for both parties... Bob Reese, the Canton Republican who ran unsuccessfully against Sen. David Cain, D-Dallas, in 1996, says he does not plan to challenge Cain again next year. But he says that's not the last word on the matter and he's leaving himself room to change his mind. For the moment, he says he'll focus on family and business, and says he'll help recruit someone to run against Cain if he doesn't run himself. Reese heads Winning Strategies, a direct mail firm that has been under fire for doing partisan political work while receiving economic development tax credits... Chris Gunter, a criminal defense lawyer from Austin, has a new client: He'll represent the Austin school district, which has been charged with manipulating student test results to inflate its own rankings on state measures... Sen. Greg Luna, D-San Antonio, remains in the hospital for bypass surgery on each of his legs. Leg number one went fine; he was going in for the second surgery as we went to press. No word yet on when he'll be back in Austin... The conservative Free PAC run by Richard Ford put out its mid-session rankings of legislators' voting records, but the record's skewed. This session has started so slowly that the group only had four House votes to count and 13 votes in the Senate... Appointments: Gov. Bush named Eva Guzman of Houston to fill the seat of State District Judge John Montgomery, who died... Bush reappointed J. Michael Bell Sr. of Fredericksburg to the board of the Texas Growth Fund, which manages assets of $350 million... And he named three new members to the board of the Texas Department of Mental Health and Mental Retardation: Kenneth Altshuler of Dallas, chairman of the psychiatry department at the UT-Southwestern Medical Center, Sharon Swift Butterworth, a community activist from El Paso, and Lynda Scott of The Woodlands, a director of the Tri-County MHMR and of the Texas Council of Community MHMR Centers.

Quotes of the Week

Gov. George W. Bush, after Senate Republicans moved teacher pay raises ahead of property tax cuts on their list of proposals: "I fully recognize that oftentimes the governor doesn't get everything he wants. But I want tax cuts, and I'm going to keep saying tax cuts until this session sine dies."

House Public Education Committee Chairman Paul Sadler, D-Henderson, on money for teachers: "The fact of the matter is that virtually every member of the Legislature who ran for office promised a teacher pay raise, a significant teacher pay raise. And we should do so."

Sen. Teel Bivins, R-Amarillo, on not having the votes he thought he had in support of a tort reform bill: "Here's the guy doing school finance, and he can't count."

Sen. Mike Moncrief, D-Fort Worth, after changing his mind about blocking a vote on school vouchers: "From a philosophical standpoint, I am still opposed to vouchers. But I do believe... that the issue at least deserves to be debated."

Sen. Mike Jackson, R-La Porte, on a bill that would prohibit use of the death penalty on murderers with IQs of 65 or less: "The real problem I have here is that by putting a number you say that a person with 65 gets life, while a person with 66 gets death."

UT Law professor Doug Laycock, who helped write the state's legal brief appealing the Hopwood ruling that banned race-based admissions at Texas colleges: "Without affirmative action, we plainly still are the 'white law school' and Texas Southern University is still the 'black law school.' Affirmative action is needed to change those enrollment patterns."

Gov. Bush, in an interview with New York Times columnist William Safire: "I am a candidate and I am going to be the nominee. I think I am going to be the president." And later, when the quote was read back to him: "Then I misquoted, then I misspoke myself. I'm still exploring. I have not announced for president. If I run, I believe I have a very good chance to be the nominee."

---

Texas Weekly: Volume 15, Issue 41, 26 April 1999. Copyright 1999 by Printing Production Systems, Inc. All Rights Reserved. Reproduction in whole or in part without written permission from the publisher is prohibited.