School Finance, Without Taxes

The upcoming school finance study could be a two-parter, with a special panel looking at everything except taxes and then and only then messing with taxes, and only if they must. That, according to Lt. Gov. Bill Ratliff, would separate the thicket of school funding formulas from the bramble of state taxes. Both are hairy problems, and they are interwoven, but Ratliff says he and House Speaker Pete Laney lean toward starting an interim study on school finance with taxes removed.

Maybe it's best to think of the group as a bomb squad. There are two bombs in the bucket, and it's safest to handle them one at a time. Maybe, just maybe, they'll be easier to defuse that way. And it's probably easier to work on school finance if you're not constantly distracted by the need to express deep loathing for personal income taxes that some people insist is the only correct answer.

The two legislative leaders are looking over names for the 15-member panel and could go public in a couple of weeks. Ratliff wants to include some of the perennial players—the protagonists, he calls them—so that they'll have to catch rocks instead of throwing them. That could mean including people from wealthy school districts, poor ones, from the groups whose names appear regularly on school finance lawsuits, and a handful of lawmakers from the Senate and the House.

The question for the panel is one of the great paradoxes of Texas state government: How do you fund a statewide public school system if you don't have a statewide tax system? Texas outlawed its statewide property tax more than 20 years ago. There is no state income tax, nor is there any significant support for one. The sales tax, at 8.25 percent when you include local options, is probably high enough to keep anyone from looking at it as a potential source of funding for schools. (It is near the point where an increase in the rate could actually reduce state revenue. If the state adds, say, ten percent to the price of something, does that affect sales? Does it cut them by ten percent or more?)

But those are tax questions. In the past, lawmakers who didn't want to tinker with those bombs invented the ridiculously complicated funding formulas that now determine which school districts get how much money and when and how and why they get it. The premise for this group is that there may be an answer inside the funding formulas. Tax issues can wait until they've studied the formulas.

The finance system now in place was designed to do everything a statewide funding system would do, without creating any illegal statewide taxes. That's the ruse, if there is one, behind the Robin Hood system so many rich districts abhor. If the taxes for public schools were raised statewide and distributed statewide, something very much like Robin Hood would be in place: Areas with more valuable property would get less back from the state than they contributed and poorer property areas would contribute less than they received. The current system, authored by Ratliff, manages to spread out the money without having a statewide tax.

The pending school finance lawsuits contend that the current system, which limits the top tax rate for school taxes, is essentially a statewide tax system. They argue that the cap will become an effective state-set tax rate when a certain number of districts lose their ability to raise rates. Fewer than one in five of the state's districts have reached that $1.50 tax rate, but a large number of districts are within striking range. Their threatened lawsuits are part of what drove Laney and Ratliff to promise an interim study on the subject. Poorer districts, by the way, are challenging those lawsuits and saying the current system is doing what it's supposed to do. They say the richer districts still have advantages over them in what is supposed to be an equalized statewide system.

Failing the Last Governor's Education Test

Remember when George W. Bush was campaigning for governor and said the state ought to pay 60 percent of the cost of public education? Well, fuggetaboutit. By the end of the 2003 budget period, the state will be hovering close to the 40 percent mark, according to the Texas Taxpayers and Research Association. School funding formulas are based in large part on local property values and tax rates.

Property values have been rising and districts haven't been lowering rates at the same pace; since the districts are thus bringing in more local money, they are entitled to less and less state money.

During the two previous legislative sessions, lawmakers voted to give some of that "leftover" state money back to taxpayers. This time, they used it for other things, notably a $1.2 billion benefit package for public school employees. If you don't include the health package in the total for public education spending, the state will spend $1.3 billion less on public schools in the next budget than it did in this one. You have to add the health plan, however, to keep the state above the 40 percent share in two years. Without that, according to TTARA, the state's share of education spending would drop to 37 percent of the total. In their summary on the state budget, the group noted a telling detail: The state's budgeteers used to include the state's percentage share of public education spending in the budget as a measure of how things were going. This year, they left it out.

Watch for two big changes in those numbers in the next couple of years, whether or not the Legislature rebuilds the school finance system. The school employee health plan is $1.2 billion in the next budget cycle, but that's because it starts in the second year of that two-year spending plan; it'll be twice that much in the 2004-2005 budget because it will require two years' worth of spending.

Secondly, property values in many parts of the state are decelerating. The value increases that have been pushing school funding will eventually turn, and that's typically when cries about the state's share of spending reach their peak.

This is Love?

A smart aleck among our readers says the members of the Legislative Redistricting Board have the same looks on their faces as members of the families at a wedding where everyone expects the marriage to fail. It's a pretty good observation, actually. Attorney General John Cornyn, whose job doesn't give him many opportunities to be on stage doing official things, is engaged. Lt. Gov. Bill Ratliff has taken on the role of the inquisitor, asking most of the questions, for instance, when legislators were testifying about plans. House Speaker Pete Laney is characteristically quiet and might be the most disgruntled family member in that wedding scene painted by our reader.

Land Commissioner David Dewhurst missed most of the session set up to hear legislators' comments about the political maps because he was stuck in court with a whistle-blower case against his agency. And Comptroller Carole Keeton Rylander spent most of the last meeting signing her way through boxes of letters and other documents.

Laney is married to the redistricting plan that passed the House, so he doesn't have to get out his crayons and draw unless he's just itching for something new to do. The rationale is that he has to stick with his members on the map that advanced the farthest, winning approval in committee, on the House floor, and then in Senate committee. Ratliff doesn't have any such restraint, since the full Senate never passed a plan and several members of the Senate Redistricting Committee held their noses just to advance a plan. He's drawing a map of his own that includes the agreed-upon parts of the Wentworth plan (some West Texas, some East Texas) and then incorporates whatever Ratliff draws in the hot spots like Dallas and Harris counties. It's not drawn yet, and Ratliff says he's undecided about showing it around to members, because he won't be presenting it as the will of the Senate. The plans from and for the Legislative Redistricting Board will be considered July 10.

Same Wentworth, But More Republican

Sen. Jeff Wentworth, R-San Antonio, isn't convinced yet that the governor should call a special session on redistricting. But he says he thinks it would be possible to get state lawmakers to agree on a plan for U.S. Representative districts in Texas. He's more confident, in that regard, than some of his peers. Like Ratliff, who stops short of disagreeing while sticking to his line that it would be difficult at best to make a deal. He says he hasn't seen evidence of support for any plan.

Wentworth, nevertheless, has produced a plan for the senators and others to chew on. Judging from the reaction to it, keep your wagers on Ratliff: Democrats hate the Wentworth congressional map as much as some Republicans hated the Senate maps he drew during the legislative session.

Wentworth said his congressional map would create a new Hispanic seat anchored in Laredo, and an African-American seat in the Houston-Galveston area, but that's not where the open seats would land in the next elections. Those new seats were a surprise: Many watchers and players expected a new seat to land in the suburban terrain on the north side of Dallas County, and conversation about a new seat in the Houston area was focussed on expanding populations to the north and west.

Based on results of the 1998 elections, the map would change what is now a 17-13 split that favors Democrats into a Republican majority. Wentworth guesses it would add at least four Republicans to the total, and that number could easily stretch to six of seven if the 1998 elections are used as the measure of the political parties' voting strength in Texas. Nationally, Republicans want to pick up seats in Texas to offset losses they expect elsewhere. If the result in Texas were 17 Republicans and 15 Democrats, as Wentworth forecasts, that would be a net addition of two Republicans in Congress. That's on the low end of (national) GOP hopes; they'd like to get another two or three seats here to build a majority in Washington, D.C. Democrats are working the other side, but Republicans have the upper hand in Texas and Democrats' best hope here is to limit the advance. If you look at Wentworth's map through the lens of the 1998 elections:

• Garry Mauro (D) beat George W. Bush (R) in only three proposed districts in the gubernatorial race, coming close in two others.

• Rick Perry (R) beat John Sharp (D) in 20 of 32 districts in the lieutenant governor race. Statewide, that race was close; Perry won with 50.04 percent of the vote.

• John Cornyn (R) beat Jim Mattox (D) in 22 of 32 districts in the contest for attorney general.

• Carole Keeton Rylander (R) beat Paul Hobby (D) in 19 of the 32 seats. That was, you'll remember, the closest statewide race of 1998. Rylander won with 49.54 percent of the vote.

One Pair and Three Open Seats

The Wentworth plan would pair only one set of incumbents, forcing U.S. Reps. Ken Bentsen, a Democrat, and John Culberson, a Republican, into a race in Houston. Culberson is a freshman. Bentsen is in his fourth term. The district the two would share is distinctly Republican, though: In the very close race for comptroller, Carole Keeton Rylander won 62.2 percent of the district's votes over Paul Hobby. She narrowly won statewide, but lost in Harris County even while racking up that decisive win in the district Wentworth drew for Culberson and Bentsen.

Because of the Houston pairing and the addition of two new seats to the Texas total, there would be three open seats in the 2002 elections under the Wentworth map.

One takes in all or part of 19 counties in East Texas and leans to the Democrats. The biggest counties in that group are Angelina, Henderson and Nacogdoches, but the district is spread out enough to dilute the power of the population centers. The next open seat would be dominated by Cameron and Hidalgo counties in South Texas and by the numbers would belong to the Democrats. And the last starts in Travis County and runs east to Harris County, giving Austin and Houston about equal sway over that congressperson. A GOP candidate would have the edge, based on the 1998 election returns.

And a Mess of Angry Democrats...

The new Wentworth map was immediately blasted by Democrats who said it unconstitutionally breaks up communities of interest, is too partisan, and could never get out of the Legislature. The sharpest comments came from U.S. Rep. Martin Frost, D-Grand Prairie, who appears to be one of the surest victims of the map Wentworth drew. His district would be decidedly more Republican. By Frost's estimation, the map would give Republicans 20 or more seats in the Texas delegation.

Wentworth said his map would probably result in 17 Republican seats and 15 Democratic seats. Two seats held safely by Democrats Ralph Hall of Rockwall and Charlie Stenholm of Abilene would tilt to the Republicans, but he thinks those two incumbents would be able to hang on.

Several other Democrats would be in jeopardy in Wentworth's plan. U.S. Reps. Max Sandlin of Marshall, Jim Turner of Crockett, Ken Bentsen of Houston, Lloyd Doggett of Austin, Chet Edwards of Waco, and Frost would all be in districts where Rylander and Perry won the close 1998 races. Some of those new districts would be distinctly Republican. Frost and Bentsen would, by the numbers, be most endangered, followed by Stenholm, then Edwards and Turner. One district currently held by a Republican—Ron Paul of Surfside—goes mildly Democratic in the Wentworth map.

A couple of other notes: Ciro Rodriguez, D-San Antonio, would get a chunk of Travis County added to his district, and he'd win the state geography contest. That district would stretch about 600 miles to El Paso County. Four representatives would get chunks of Travis County, up from two now.

The Other Lite Guv Candidate

Gil Coronado is beset by rumors. We'll let him take them one at a time.

Rumor number one: He did not work in the first Bush Administration in Washington, D.C. This is one of the rumors that has the first-time candidate explaining that he's not a Republican in disguise.

Rumor number two: Yup, his son Troup worked for U.S. Sen. Orrin Hatch, who is as Republican as all get-out. Troup is now a Washington lobbyist for Bell South. Coronado says he considers Hatch a personal friend and he credits the senator for convincing his son to go to law school. But he says they disagree on politics and he, Coronado, is not a Republican.

Rumor number three: Republicans didn't recruit him into the race. He says he got involved in politics in San Antonio through his friendship with the late Frank Tejeda, who served in the Texas Senate and in Congress. That led to some campaign work for Bill Clinton in 1992, and that led to an appointment in the Clinton Administration. Coronado served in a series of offices in Washington, D.C. His wife Helen was chief of staff to the director of the National Council of La Raza Unida. When his gig was ending, he said, friends "among rank-and-file Democrats" told him he should run for lieutenant governor. He won't name names, but says some of the "party elite" in Austin tried to talk him into running for something else on the ballot. In spite of all that, he says he'll stay in the primary race with former Comptroller John Sharp. Coronado hasn't worked on policy, and says vaguely that he'll fight for the underdogs and against the powerful folks in Austin. He hasn't hired a staff, and says this will be a decidedly low budget campaign. He has a new Buick and says he'll drive it all over the state campaigning. "It's going to be big bucks... the other side has the money. I'm going to have the people."

Voices from the Grave

Democratic gubernatorial candidate Marty Akins got quoted in The Daily Texan as saying he used to go visit Lyndon B. Johnson in the White House when Akins was a student and the starting quarterback at the University of Texas. The story said Akins caught the president's attention by rooming with three African-American players; Akins told the paper he "wanted to send a message that it's time UT open its door up to minorities." The timeline on this doesn't work out. Akins was at UT from 1972 to 1975. LBJ left the White House in early 1969 and died in 1973. Asked about the discrepancy, Akins' aides say the paper got it wrong and say Akins did visit several times with LBJ, but it was when the former president had an office at the LBJ Library on the UT campus.

Capture the Flag, Political Notes

The Republican Party followed Gov. Rick Perry's string of vetoes with radio ads touting GOP accomplishments during the legislative session. Those are running statewide. Several of the ads attempt to plant the Republican flag on hills won by Democrats. For instance, the ads claim the Republicans passed the budget without getting into the Rainy Day fund. The chief budget-writers in both houses are Democrats. And they say that Perry and GOP lawmakers took special care of rural Texas. That was a pet project of House Speaker Pete Laney, a Democrat. Party officials say they did a similar run of radio ads two years ago, but it was smaller and didn't get this amount of attention. They wouldn't say how long the commercials will run, or how much money they spent.

For their part, the Democrats pulled together a "report card" and stuck it on their website (www.txdemocrats.org). They include a bogus claim or two of their own. They list the death of electric utility refunds as a GOP act; in fact, one version of that legislation met its fate in the hands of a Senate Republican. But a late attempt at revival was nailed by Rep. Steve Wolens, a Dallas Democrat.

• It's not just the people on the state ballot who announce their candidacies early; now it's the party hacks. Susan Weddington and David Barton, who are respectively the chair and vice-chair of the Republican Party of Texas, announced they'll run for reelection to the posts they first won in 1997. Craig Murphy, the consultant who is coordinating their reelection efforts, says the two were asked by none other than Gov. Rick Perry to seek reelection. That election isn't for a year: The state GOP's next convention will be held next summer.

• Rep. Charlie Howard, R-Sugar Land, says he'll run for the state Senate if the redistricting lines suit him. He's looking at the post currently held by Sen. J.E. "Buster" Brown, R-Lake Jackson. If the mapmakers go to the north and include a lot of Harris County at the expense of Fort Bend and Brazoria, Howard would be less inclined to run. But if the two suburban counties are dominant, he says he'll give it a go. Brown hasn't made an official announcement of his plans.

• Matt Matthews hasn't decided—and won't make a final decision until the redistricting lines are drawn—but the lobbyist and former aide to Sen. Florence Shapiro, R-Plano, is considering a run for the Texas House. He's looking at a district on the northern end of that extremely Republican county. In the maps that actually came to votes on the floor of the House during the legislative session, one new House seat started in Frisco and filled the top half of the county. That map, drawn by Collin County's delegation, appeared in identical form in both the statewide map drawn by House Republicans and in the map that prevailed when the House actually voted. Matthews is still talking to consultants and elected officials and whatever other gurus he can scrounge up. He'll announce his final decision later this year. There's another new seat—assuming the maps hold—on the southeastern end of the county, and there could be a race developing. We mentioned Mike Lawshe of Rockwall last week. What we know now and didn't know then is that two others in the area are looking seriously. Jodie Laubenberg, a former member of the State Republican Executive Committee and a locally well-known GOP activist, has been calling around. She is a city council member in Parker, in Collin County. And John Roach Jr., son of a well-known judge (that would be Sr.), is also looking. Most of the population in that district is in Collin County, assuming it remains drawn the way it was drawn in the Legislature.

• Land Commissioner David Dewhurst is now officially off the hook. After a trial that lasted more than a week, a jury took less than an hour to decide in favor of Dewhurst and the General Land Office. A former employee, David Scott, claimed he had been fired from the land office after he said the agency was under-collecting royalties from oil and gas assets. Dewhurst had to testify, as did his predecessor, Garry Mauro, but the jury didn't buy the charges.

• It turns out Sen. David Sibley, R-Waco, filled out an application for a federal judgeship, but says (through an aide) that he did so before Lt. Gov. Bill Ratliff decided not to run for election to the job. Sibley jumped into the Lite Guv race immediately after Ratliff got out, and asked the folks in Washington, D.C., to remove his name from consideration for a federal judgeship.

Political People and Their Moves

Former Dallas Morning News Publisher and Editor Burl Osborne folded up his tent and went home right after making camp at Public Strategies Inc. Osborne agreed to be on the public affairs company's board of advisors, but that announcement raised eyebrows in the journalism business because Osborne remains on the board of the Belo Corp.—publisher of the News and a mess of other media properties—and of the Associated Press. The second announcement undid the first; he'll have no role with the company... Tony Sanchez Jr. is putting his local state representative on the payroll: Rep. Richard Raymond, D-Laredo, will work on organization in South Texas for the Democrat's gubernatorial campaign against Republican Gov. Rick Perry... Hilbert Ocañas, a Democratic activist and Austin printer, has signed on as campaign manager for Lite Guv hopeful John Sharp... Sen. David Sibley is stingy about revealing the results, but held fundraisers in Austin and Waco that his folks described as successful. He's hired Steve Pier as political director. He was most recently an aide to Rep. John Davis, R-Houston. And Sibley brought in Carlos Espinoza to handle organizing stuff; he was executive director of the Bexar County Republican Party... Appointments: Gov. Perry named Max Yzaguirre to chair the Public Utility Commission, added Rebecca Armendariz Klein of Austin to the panel, and reappointed Suzi Ray McClellan to head the Office of Public Utility Counsel. Yzaguirre was most recently an executive with Enron Corp. in Mexico. Klein, who worked for then-Gov. George W. Bush, has been working as a consultant with KPMG... Gov. Perry reappointed Maj. Gen. Daniel James III to serve as Adjutant General for the state. He's been in that post since 1995... U.S. Sens. Kay Bailey Hutchison and Phil Gramm have recommended Johnny Sutton for the job of U.S. Attorney for the Western District of Texas. Sutton, who works in the Justice Department, worked in Bush's Texas Administration on criminal justice issues... Margaret Lauderback will be the vice president for Republican outreach for TechNet, a California-based trade group made up of tech folk. (They have outreach for Democrats, too.) Lauderback is a former aide to both U.S. senators from Texas.

Quotes of the Week

Gov. Rick Perry, who vetoed a bill that would require insurers to pay doctors and hospitals promptly, urging regulators to help take care of angry providers: "I strongly believe that HMOs and insurance companies should pay their claims quickly and not use arcane rules or bureaucracy to delay legitimate payments. Make no mistake—delaying payment of a legitimate claim is not an option."

Austin attorney Roy Minton, asking a jury to discount claims that his client, Land Commissioner David Dewhurst, goes easy on oil companies that owe money to the state because they contributed to his campaign: "You think any of them believe that a multihundred million-dollar, almost a billionaire, is going to be bought and paid for by Conoco sending him $1,000 or $5,000?

Rep. Mary Denny, R-Aubrey, who was listed with more than 30 other House Republicans as a supporter of Rep. Kenn George, R-Dallas, in his race for land commissioner. She told the San Antonio Express-News that she supports former Sen. Jerry Patterson in that contest: "I've never had anywhere close to a conversation with [George] about my support in his race at all."

Bill Thompson, a gambling expert at the University of Nevada-Las Vegas, quoted in The Dallas Morning News on the nationwide slump in state lotteries: "Maybe it'll get to a billion and everybody'll take notice again. People lose interest."

Milwaukee Bucks guard Sam Cassell, quoted by the Houston Chronicle after he escaped his car during the city's floods by crawling out of the sunroof: "It wasn't that scary, but it was frightening."

Hidalgo County GOP Chairman Hollis Rutledge, quoted in the Valley Morning Star on his support for a redistricting plan that he thinks would make local legislative races more competitive: "We haven't won a race in Hidalgo County since Ulysses S. Grant stopped smoking cigars."

South Carolina GOP chairman Henry McMaster, responding to Democrat counterpart Dick Harpootlian's claim that Democrats are for beer and girls, as quoted in The Citizen Times, the newspaper for the Boy's State group in that state: "Republicans are for cold beer and hot girls."

Texas Weekly: Volume 18, Issue 3, 2 July 2001. Ross Ramsey, Editor. George Phenix, Publisher. Copyright 2001 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.