Budget Problems? What Budget Problems?

Don't get all cocky just because there is no budget deficit. The cure for high financial hopes can be found in the newest files at the Legislative Budget Board or in any number of budgeteers' offices at the Capitol. State agencies are presenting their boring old Legislative Appropriations Requests, detailing what they believe they'll need during the next two-year budget cycle.

This next bit is easier than the questions on Who Wants to Be a Millionaire, but guess what? The agencies want a load of money. The final numbers aren't in yet, but if you cherry-pick some of the biggest departments in government, you quickly get requests for more than $6 billion in new spending. That would represent a 10 percent increase in general state spending (that is, without including federal funds from the wish lists or the current budget) before you even get to requests for higher teacher pay and benefits, state employee pay, severance tax breaks and such.

No need for alarm at this point, because this is just the first step in a nine-month dance. Some of the requested money is lard, just like you can always on bureaucratic wish lists. But the Legislature made a change a few years ago that requires agencies to include on their wish lists money that would be needed, in some cases, to keep services at current levels. Some of this is in the current budget.

The wish-list items include $1 billion from the Texas Department of Health alone. The biggest chunk of change there is almost $600 million for Medicaid, a sum that can be largely attributed to trends in drug costs, patient populations and the rising number of claims made on Medicaid each year.

The Teacher Retirement System says it wants $626 million, most to cover the health plan for retired educators. The Employee Retirement System needs $492 million to cover increases in insurance premiums. The prison system needs more space for its burgeoning population, and more money for pay raises already promised to correction officers. Human Services needs more money for Long Term Care. Education wants half a billion, including $375 for facilities.

Was This Supposed to Be a Secret?

The Frew decision -- that's the Medicaid ruling by a federal judge that tossed the health department and the denizens of the Pink Building into a tizzy -- will be appealed. Attorney General John Cornyn called it spinach, saying the ruling is out of whack with both the law and the facts. Maybe he's right.

But in the meantime, the folks at TDH, and even their lawyers at the AGs office, are in hot water at the Capitol: The first word of the ruling came in a budget meeting. Nobody at the agency or at the AG's office remembered to pick up the red phones to let the Big People know what was afoot. That caught the leadership off-guard and surprised the budgeteers. (Note to agencies: Budgeteers don't handle surprises well.) If the ruling stands, it's supposedly an expensive piece of work, but TDH hasn't come up with a solution to present to the court, and consequently doesn't know the cost yet.

Curiously, the official response from the executive branch's highest officer didn't come from the Governor's office in the Pink Building. It came instead from the presidential candidate's office nine blocks to the South. The press release from the Bush-Cheney operation announces that the state plans to appeal, goes through a timeline of the case and then takes up a defense of Medicaid spending in Texas and its increase of over $3 billion during Bush's administration. The original suit predates the Bush Administration, but this latest twist came on his watch: The ruling says the state didn't do all of the things it said it would do when the lawsuit was settled in early 1996 -- especially with regard to marketing and delivering medical services to children.

Fire in the East Texas Woods

It must be Labor Day, because there are political ads on television and radio in Texas. Other parts of the country, where there is some question over who'll win the presidential race, have been seeing commercials for several weeks. But the paid marketing in Texas just got going.

Predictably enough, the first ads to hit the air were in Senate District 3, the race for an open spot in the Texas Senate and the race that will likely decide the partisan mix of the upper chamber. Democrat David Fisher, a defense lawyer from Silsbee, bought television time on the northern end of the 17-county district and radio time throughout the district. Republican Todd Staples won't be far behind.

The TV spots are of the "Get to Know Me" ilk. One starts off "My family came here 160 years ago," and before it's over, labels Fisher as conservative, independent, interested in education and health care, against "big money Austin lobbyists", and faithful. The second sounds almost like a soft Republican effort, with a plea to "bring values back into the lives of our children" photos of the candidate on the steps of his church with his family, and several shots with kids in them. Fisher is also running radio ads. One sounds almost like a commercial for a church or a denomination, talking about King Solomon's request for an understanding heart. Another goes to issues, with Fisher saying he's against school vouchers and against piping East Texas water to "big cities to the West."

Staples hasn't gone up on television or radio yet, but it shouldn't be long before there is a full-fledged air war to go along with the ground war that's been grinding along all year.

The National Rifle Association's political action committee endorsed Staples, but Fisher blunted that news with word that the NRA gave him an "A." That's based on his answers to a questionnaire, and in their letter telling him about it, the group says it's the highest grade they give non-incumbents. The group's endorsement of Staples was unabashed: They even called him a "genuine public servant." Seriously, the group said it has no reservations at all about the Palestine Republican. The endorsement and the letter to Fisher were handled by the same official at NRA headquarters in Washington, D.C.

Drugs, Debate-Debates and Fake Presidents

Fisher took contributions totaling $6,000 from Clay Dugas, an attorney who was convicted on misdemeanor drug charges in 1995. Staples, after letting loose that piece of information, said he would sponsor a law, and if necessary, an amendment to the Texas Constitution, making it illegal for drug offenders to give money to political candidates. Fisher noted that that wouldn't be allowed under the U.S. Constitution. He said misdemeanor drug and alcohol charges are not uncommon, and said he doesn't do background checks on his contributors. (Neither does Staples.) Then he upped the ante, telling Staples' hometown paper in Palestine that he'll write a $6,000 check to a drug treatment center if Staples will agree to debate him in 12 of the counties in the district.

Fisher and Staples are still engaged in a low-level debate over debates. They have agreed to a few joint appearances and there will be a September 11 debate at a forum in Palestine set up by prison guards. Fisher has been pushing for more debates; Staples has said he's willing to debate, but has balked at setting up times and dates.

The runner-up in the Who's First on TV contest is Jon Newton, the Republican running against U.S. Rep. Ralph Hall, D-Rockwall. He hit the airwaves with an ad called "The Truth" that has actors playing Hall and President Bill Clinton. The Clinton actor thanks the Hall actor for his vote against impeachment and his support for Dick Gephardt. "You have a worse voting record than any Texas Republican and few know it," the Clinton sub says, laughing. Then the real Newton is shown in a photo with the real George W. Bush. Most voters there watch Dallas television, which is horrendously expensive; Newton's ad is running in Sherman and Tyler, each of which has a shorter reach.

Uncoordinated Campaign

The Republican Party of Texas is retooling its Victory 2000 campaign after parting ways with Kent Martin, the consultant who had been hired to run the show. The official line from the GOP is that Martin came to realization that the Victory effort would take most of his time. Don't fall for that one: He's been in politics for years and it was clear from the get-go that this would be a full-time job.

Victory is half of the party's coordinated campaign; it's supposed to pay for the so-called "non-campaign" things GOP campaigns need. If the money is there, for instance, the program will pay for voter identification. People knocking on doors and working on phone banks call voters to find out who they support. They figuratively mark the curbs outside the homes of sympathizers. That information can be passed along to the campaigns -- it doesn't, on its face, support one candidate over another, thus satisfying the rules for soft money spending -- and the campaigns can use it to turn out voters from the sympathetic homes. If that program isn't comprehensive, some candidates could be left without info they need to be effective in November.

There's plenty of back and forth on what's wrong and who's at fault. The most widespread complaint is that Victory wasn't raising money fast enough to meet the $4 million goal outlined at the kickoff press conference earlier this summer, when U.S. Rep. Tom DeLay, R-Sugar Land, lined up with nearly all of the statewide Republican officials in Texas to say that the party's soft money effort would be bigger this year than ever before. They have nine weeks left to make it work.

Martin was criticized generally for not running his decisions by everyone with a carpeted office. For instance, he had some statewide polling done, and some of the statewide officeholders were unhappy with their low input on questions that would be asked. On his side of the argument, he announced that the poll would be done in front of about 300 of the party faithful, and it's hard for them to argue now that they didn't know what was going on. On the third side of the argument are the candidates themselves, many of whom are wondering what good a statewide poll does in a House or Senate race where local issues outweigh issues that poll well on the other side of Texas.

That's just an example of the finger-pointing over what some candidates thought they were supposed to be getting from Victory. The program was never intended to give direct support to campaigns, regardless of what some candidates were saying after the reorganization. Victory is taking corporate contributions that can't be converted or laundered for use by particular candidates. And there are other parts of the coordinated effort, like House 2000, designed to funnel money straight to candidates in targeted races. Both campaigns have elected officials at the helm, but the details -- who gets what and when and who gets paid and when -- are now in the hands of the staff of the state GOP.

There is some backup in the form of local efforts. The Travis County GOP is doing its own extensive voter ID work, and there's a big program in Dallas as well. But candidates elsewhere, especially in the slew of hotly contested East Texas races, are hoping for help from Austin.

All of those rumors and reasons are flying around. But money, or the lack of it, is apparently the basis for the turnover at Victory. The new director, Lia Zaccagnino, is a fundraiser who has also kept the trains running on time at big party events. And Republican financial heavies around the state hit the phones the morning after Martin was dumped to try to get things back on track. GOP operatives say Texas Victory is expecting a $1.25 million infusion of cash from the national Victory 2000 campaign, which is being run by former state party chairman Fred Meyer of Dallas.

A footnote: If you're looking for a campaign finance report for Victory 2000, there is no such thing. It's an account at the state GOP, and its money flows are recorded in the party's own financials. That means it is almost impossible to separate Victory money from party money, which come to think of it, is probably the point. Various campaigns reported contributions from Victory; those total less than $4,000, and were all in-kind contributions. Most were for candidate listings on the Voter.com website. The largest, to House candidate Darrell Brownlow, is listed in his report as research on his opponent's voting record. Brownlow is challenging Rep. Ignacio Salinas Jr., D-San Diego.

What's in a Name?

The tort reformers complaining about the innocuous names on political action committees run by trial lawyers do, in fact, have some ideas about campaign finance reform. Enraptured by their promise to complain to the ethics commission, we jumped over their reform ideas last week.

Jon Opelt with Citizens Against Lawsuit Abuse in Houston says that group would support legal changes requiring statewide candidates to file reports on contributions received in the last ten days of their campaigns. Right now, legislative candidates have to file those so-called telegram reports, sending the ethics commission notice when late-breaking money comes into the accounts. Statewide candidates have to report that money, but not until after the elections. Opelt says his group also wants the law to require out-of-state PACs to report to the state when they spend money here, and says they agree with other reform groups that want better disclosure of the occupations and or employers of contributors to candidates, political action committees and political parties.

Opelt is still after trial lawyers and the Texas 2000 committee. His latest angle: How come the Texas Trial Lawyers Association PAC makes in-kind contributions to the Texas 2000 PAC, which is dominated by contributions from attorneys? He says the lawyers contribute to the PAC with the innocuous name for no reason but to hide their giving.

His official complaint to the ethics wizards tries to get some throw-weight behind his plea for a name change, but just going by the law he cites it would be a stretch. That law says, basically, that PAC names should reflect the names of the groups that control them, and while there's some evidence to show that plaintiff lawyers give money to both TTLA and to Texas 2000, there's nothing in what Opelt is showing us to prove that the lawyers are in control of the Texas 2000 PAC. Without that, the ethics police probably can't act. What they can do, however, is put out an advisory opinion, and that's what Opelt is after. Even if the ethics commission can't do anything, the opinion could provide a roadmap for a legal reform, he says.

An Unexpected Improvement in Health

Just when the relationship was starting to look like the script for a John Woo flick, the Texas Association of Business and Chambers of Commerce sent an olive branch to the Texas Medical Association. The fence-mending ends, for the moment, the escalating tension between the trade groups, but the larger issues beneath the spat remain. TABCC wants to see lower health insurance premiums for businesses.

Their fundraising and membership letters got a little heated at the expense of the doctors. One letter that went to fewer than 250 people -- all of them supposedly in harmony with the business group's positions on health care -- caused a particular stir. The doctors were especially peeved about the parts that implied they were greedy so-and-sos. TMA dropped its membership in TABCC, and the business group started getting mail from doctors and others who didn't like the tone of the conversation. TABCC president Bill Hammond stepped in with a letter of apology to TMA president Dr. James Rohack, offered him a free membership of his own, and suggested they meet. That's the next step.

MISCELLANY: Republican Shane Phelps, who's trying to knock off Travis County District Attorney Ronnie Earle, has switched consultants. Phelps will go with Bill Tryon instead of Ted Delisi, who was one of his Phelps' colleagues at the attorney general's office. Their story is that Tryon can put more time into the race... AG John Cornyn filed a deposition asking for testimony from Texans for Public Justice, a public interest group that has bedeviled him since he was elected. He seeks, among other things, details about the group's financing. TPJ doesn't do campaigns, and ordinarily doesn't disclose that information. The group blasts back, saying he's abusing his powers and promising a fight... Rod Paige, superintendent of the Houston ISD, takes some flack for traveling with the Bush campaign. The Harris County Tejano Democrats fired off a letter saying that Paige should have been in Houston during the second week of school instead of on the front page of The New York Times with Bush. Paige was traveling on his own time, and didn't use district money for the trips.

Statistics and Other Lies

No matter what else happens, Gov. George W. Bush is expected to thoroughly trounce Vice President Al Gore in Texas in November. That's reflected in state and national polls, which raises a question: Does Bush's big lead here skew the national polls? After all, Texas is a big state and a huge lead for Bush here could hide smaller differences in smaller states in a national poll.

It's not a completely idle question: The Electoral College won't give Texas more sway just because the result here is lopsided. In the EC, a margin of one vote counts the same as a landslide. Whether there's a scientific reason to do it or not, it's also interesting to see how much Bush's great popularity here tugs at the national perception of how he's doing.

So we fiddled around and built a machine that statistically removes Texas from a national polling result, turning the result into a survey of the other 49 states. If you put in a poll that has Bush ahead, his lead shrinks a bit. If you put in a race that has Bush only slightly ahead of Gore, Gore moves slightly ahead. Polls that show Gore ahead increase his margin without Texas included.

Texans cast slightly less than six percent of the total U.S. votes in presidential elections. We used Bush's win over Democrat Garry Mauro in the 1998 elections as a base, making the assumption that Texas will vote for Bush in about the same percentages -- 68.6 percent to 30.9 percent -- that they did that year. The assumption, in other words, is that six percent of the national vote, representing Texas, will go to Bush in that lopsided manner. What if Texas came out of the national pool?

Here's a real example. Bush leads Gore by 43.6 percent to 39.4 percent in the latest Portrait of America poll. Apply our Texas Discount, and his lead narrows to 42 percent to 39.9 percent. Votes for "Others" jump from 17 percent to 18 percent in that example. You can do the same thing with any large state that pulls the results in favor of one candidate or another, pulling New York out of Gore's numbers, for instance, to see whether that's juicing the Veep's numbers. It slightly increases the margin of error in the polling, but not a lot, to "remove" a state.

Cheap Drugs, Presidential Spying, and a Future Candidate

Democrat Chuck Hopson says he has his own drug plan, thanks. Republican Paul Woodard hit last week with something he calls the "Prescription Drug Patient Protection Act" that included a couple of slaps at pharmacists. Hopson is a pharmacist and is ignoring Woodard's plea to the Democrat to sign his program. Hopson says it should be easier for patients to get generic drugs in place of expensive name brands, and says the state should consolidate its buying power to force pharmaceutical companies to sell drugs here at lower prices. He also says the state should allow pharmacies to buy American-made and U.S.-approved drugs from wholesalers in Canada and Mexico, where the manufacturers charge less for the same products.

• Big Brother: The Bush campaign does its own radio snippets, recording them, cutting them into sound bites and making them available to reporters on a toll-free line. As it turns out, reporters aren't the only people calling in to listen. The Bushies say the Gore campaign and/or the Democratic National Committee have called the phone line at least once each day since it became available. That was funny enough to justify its own press release, but it raises a question: Doesn't that mean the campaign is also tracking calls from reporters and others?

• Lobbyist (and former House member) Phil Cates ordinarily spends his time on state issues and officeholders, but he's hawking political contributions for Bexar County Tax Assessor-Collector Sylvia Romo. In a letter to some of his fellow Austin lobsters, Cates wrote "What would it take for a Texas born woman who is a minority to win election to statewide office?" He said the former legislator is a friend, that he doesn't know of any plans she might have for higher office, and that he was just trying to get people to pay attention. He also says he mentioned the governor's office in the first draft, but took it out for fear that important people might get riled.

Political People and Their Moves

The American Heart Association isn't shutting down the state operation, but it has a new interest in local matters, like smoking ordinances and EMS equipment, and is opening up a handful of new Texas offices. The first, in Houston, will be headed by Elizabeth Biar, who until she moved was an employee of Sen. David Sibley, R-Waco. She'll work the Southeast Texas region, and Austin VP Tim Conger says offices will be opening soon in Dallas, Fort Worth and San Antonio... Former Rep. Mark Stiles of Beaumont, now an exec at Dallas-based Trinity Industries, is going onto the board of the Texas Taxpayers and Research Association... Edward Blum, who heads the Houston-based Campaign for a Colorblind America, is merging that organization into Ward Connerly's American Civil Rights Institute. Their press release landed in our email basket with the header "Right-Lane Merge" and that was put there by their allies... We told you we'd announce his landing and here it is: Andy Erben is going to work for Kaufman and Broad, the giant homebuilder, doing local and state lobby work out of Austin. He had been with the Texas Association of Builders... Attorney General John Cornyn hired Jeffrey Boyd, an attorney at Thompson & Knight, to head the agency's litigation section. He'll replace Linda Eads, who is returning to her job as a law professor at Southern Methodist University. Cornyn also promoted David Talbot to special counsel for consumer affairs, and took away the interim part of Katherine Minter Cary's title; she is now chief of the open records division... The Texas Department of Parks & Wildlife tapped Joey Park to be the agency's legislative liaison. He's been working there for six years and worked for former Lt. Gov. Bob Bullock for a dozen years before that... After six years working in the Senate, including the last four for Sen. Bill Ratliff, R-Mount Pleasant, Clint Small says he's out of politics, out of government, and off to try to start his own business in convenience stores and gasoline stations... Judicial spankings: Municipal Judge Nancy Robb of Grand Prairie earned a reprimand from the State Commission on Judicial Conduct for presiding over a traffic case in which she herself was the injured party... Ooooops: Steve Fryar spells his name the way we just spelled it, and not the way we spelled it last week. Richard Raymond went to work for the Department of Labor, not the Department of Agriculture... Deaths: Karen Potter Campbell, former Austin Bureau chief of the Fort Worth Star-Telegram and a reporter and editor with a professional touch respected and admired by colleagues, competitors, subjects and readers, of a rare form of bone cancer. She was 40.

Quotes of the Week

Sen. Frank Madla, D-San Antonio, in a written statement responding to news reports that a federal grand jury is investigating him: "First of all, there is no impropriety here. No conflict of interest. In today's environment, anyone can cause an investigation of anybody. We've seen speculative investigations at every level of government and business in this country over the past several years. In the political climate of today, some people are only too happy to cast doubt on another person's integrity... This is just the latest attempt to do that. But, I am not afraid."

Former White House aide George Stephanopoulos turned pundit, in a Dallas speech: "We Greeks like to think we invented politics. 'Politics' comes from Greek, 'poly' meaning 'many', and 'ticks' -- 'blood-sucking insects.'"

New Mexico Gov. Gary Johnson, telling The New York Times about cocaine, a drug he says he stopped using after college: "Whoa! I understand why people do it. This is unbelievable."

Adam Clayton Powell III, technology VP for the Freedom Forum, on the political power of the Internet: "The Internet provides incredible depth... but the number of political junkies may not have expanded, so it may be a massive amount of coverage for what is still a very limited audience."

Drought watcher Bill Proenza of the National Weather Service, on what would break the long dry spell: "We don't want to get in the position of wishing for disasters, but sometimes they can be monsoonal and bring nothing but rain. It's the most we can hope for at present."

TXU Electric's Christopher Schein, on rules requiring electric plants to be more environmentally friendly: "We're concerned about the inherent uncertainty of trying to predict the future."

Texas Weekly: Volume 17, Issue 10, 4 September 2000. Ross Ramsey, Editor. George Phenix, Publisher. Copyright 2000 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.