Stacking the Deck

Lt. Gov.-elect David Dewhurst waited until the Senate had voted on its rules—maintaining the powers of the Lite Guv—but not for his inauguration to name committees and their memberships. Unlike his predecessor, who led a Senate with a one-vote Republican majority, Dewhurst fronts a Senate with a 19-12 GOP advantage, and he tilted the table strongly in their favor. Democrats will chair six of the 15 committees in the Senate, but only one of those panels—Veterans Affairs and Military Installations—will have a Democratic majority. The major committees will have solid GOP majorities: Finance, 10-5; Business and Commerce, 6-3; Education, which gets school finance, 6-3; and Health and Human Services, where budget cuts could be focused, 6-3. State Affairs, which typically gets a range of major legislation, also has a 6-3 Republican majority.

Some expected Dewhurst to put Sen. Bill Ratliff on the back bench. Ratliff was elected Lite Guv by the Senate last session, and planned to run until Dewhurst and others showed up for what would have been an expensive and nasty race. But Ratliff will lead the State Affairs panel, and that's where Dewhurst intends to send insurance reform legislation, one of the top issues this session.

The Senate had 13 committees and two subcommittees last session. Seven committees and one subcommittee had Democratic chairs; six and one, respectively, had Republicans at the helm. This time, there are 15 committees and three subcommittees. Dewhurst folded redistricting into Jurisprudence, turned the subcommittee on Border Affairs into International Relations and Trade, and created two new panels: Infrastructure Development and Security, and Government Organization. Democrats will chair subcommittees on Higher Ed and Base Closures; a Republican will chair Agriculture.

• ADMINISTRATION: Chris Harris, R-Arlington, chair; Juan "Chuy" Hinojosa, D-McAllen, vice chair; Mike Jackson, R-La Porte; Kyle Janek, R-Houston; Leticia Van de Putte, D-San Antonio; Jeff Wentworth, R-San Antonio; and John Whitmire, D-Houston.

• BUSINESS AND COMMERCE: Troy Fraser, R-Horseshoe Bay, chair; Kip Averitt, R-Waco, vice chair; Kenneth Armbrister, D-Victoria; Kim Brimer, R-Fort Worth; Craig Estes, R-Wichita Falls; Jackson; Eddie Lucio, D-Brownsville; Van de Putte; and Tommy Williams, R-The Woodlands.

• CRIMINAL JUSTICE: John Whitmire, D-Houston, chair; Williams, vice chair; John Carona, R-Dallas; Rodney Ellis, D-Houston; Hinojosa; Steve Ogden, R-Bryan; and Bill Ratliff, R-Mt. Pleasant.

• EDUCATION: Florence Shapiro, R-Plano, chair; Royce West, D-Dallas, vice chair; Averitt; Janek; Ogden; Todd Staples, R-Palestine; Van de Putte; Williams; and Judith Zaffirini, D-Laredo.

Subcommittee on Higher Education: West, chair; Averitt, Janek, Staples, and Van de Putte.

• FINANCE: Teel Bivins, R-Amarillo, chair; Zaffirini, vice chair; Averitt; Gonzalo Barrientos, D-Austin; Brimer; Robert Duncan, R-Lubbock; Janek; Jane Nelson, R-Flower Mound; Ogden; Shapiro; Eliot Shapleigh, D-El Paso; Staples; West; Whitmire; and Williams.

• GOVERNMENT ORGANIZATION: Ellis, chair; Wentworth, vice chair; Armbrister; Bivins; Brimer; Ratliff; and Whitmire.

• HEALTH AND HUMAN SERVICES: Nelson, chair; Janek, vice chair; Carona; Bob Deuell, R-Greenville; Mario Gallegos, D-Houston; Jon Lindsay, R-Houston; Ratliff; West; and Zaffirini.

• INFRASTRUCTURE DEVELOPMENT AND SECURITY: Ogden, chair; Barrientos, vice chair; Deuell; Ellis; Lindsay; Frank Madla, D-San Antonio; Shapiro; Shapleigh; and Wentworth.

• INTERGOVERNMENTAL RELATIONS: Madla, chair; Brimer, vice chair; Deuell; Gallegos; and Wentworth.

• INTERNATIONAL RELATIONS AND TRADE: Lucio, chair; Shapleigh, vice chair; Bivins; Carona; Craig Estes, R-Wichita Falls; Nelson; and Zaffirini.

•JURISPRUDENCE: Duncan, chair; Gallegos, vice chair; Averitt; Bivins; Harris; Lucio; and West.

• NATURAL RESOURCES: Armbrister, chair; Jackson, vice chair; Barrientos; Duncan; Estes; Fraser; Hinojosa; Lucio; Lindsay; Shapiro; and Staples.

Subcommittee on Agriculture: Duncan, chair; Estes; and Lucio.

• NOMINATIONS: Lindsey, chair; Deuell, vice chair; Barrientos; Carona; Harris; Hinojosa; and Jackson.

• STATE AFFAIRS: Ratliff, chair; Staples, vice chair; Armbrister; Duncan; Ellis; Fraser; Harris; Madla; and Nelson.

• VETERANS AFFAIRS AND MILITARY INSTALLATIONS: Van de Putte, chair; Estes, vice chair; Fraser; Madla; and Shapleigh.

Subcommittee on Base Realignment and Closure: Shapleigh, chair; Fraser; and Madla.

Wentworth is the only senator who chaired a committee last session and won't chair one this year. West chaired his own committee last session and now has a subcommittee. New to the middle seats this year: Harris, Fraser (who was an acting chairman during the interim), Whitmire, Ogden, Lindsay, Ratliff, and Van de Putte. Lucio and Duncan, who chaired subcommittees last time, have their own committees now. Shapleigh, with a subcommittee, is also new to the gavel.

A Lucky Bounce for Senate Democrats

Except in redistricting years, only half of the members of the Texas Senate are up for election. And they determine their fortunes by drawings. In redistricting years, like the one just ended, everyone in the Senate is on the ballot. To put staggered elections back in place, they draw straws.

These senators drew two-year terms and will have to defend their positions in November 2004: Teel Bivins, R-Amarillo; Kim Brimer, R-Fort Worth; John Carona, R-Dallas; Robert Duncan, R-Lubbock; Craig Estes, R-Wichita Falls; Troy Fraser, R-Horseshoe Bay; Mario Gallegos, D-Houston; Chris Harris, R-Arlington; Juan "Chuy" Hinojosa, D-McAllen; Mike Jackson, R-La Porte; Eddie Lucio, D-Brownsville; Leticia Van de Putte, D-San Antonio; Royce West, D-Dallas; Tommy Williams, R-The Woodlands; and Judith Zaffirini, D-Laredo.

Most of those senators are in pretty safe districts. We don't consider anyone endangered, but Carona, Estes, Hinojosa and Van de Putte could all draw opponents next time, Estes and Hinojosa because they're not fully established as incumbents, Carona because of his non-endorsement support of Democrat John Sharp against David Dewhurst, and Van de Putte because of her strong support of unsuccessful gubernatorial candidate Tony Sanchez Jr. But this isn't a list of hot races—it doesn't present either political party with great opportunities to gain seats in two years.

These senators drew four-year terms and won't be on the ballot until November 2006: Ken Armbrister, D-Victoria; Kip Averitt, R-Waco; Gonzalo Barrientos, D-Austin; Bob Deuell, R-Greenville; Rodney Ellis, D-Houston; Kyle Janek, R-Houston; Jon Lindsay, R-Houston; Frank Madla, D-San Antonio; Jane Nelson, R-Flower Mound; Steve Ogden, R-Bryan; Bill Ratliff, R-Mount Pleasant; Florence Shapiro, R-Plano; Eliot Shapleigh, D-El Paso; Todd Staples, R-Palestine; Jeff Wentworth, R-San Antonio; and John Whitmire, D-Houston.

A few on that list—Barrientos and Wentworth, for instance—would probably have drawn serious opponents in two years, but will have four years to let things cool down. The four-year list also holds the best chances—on paper, anyhow—for GOP gains in the Senate. Armbrister has been winning for years in a district that would probably flip to the GOP if he quits, and Republicans think they might be able to edge out Barrientos, although a well-funded effort failed last year. For now, the GOP remains two seats away from the two-thirds Senate majority that would give them full control in that chamber.

Catching the Runaway Budget

After the state's top two officials have been sworn into office on Tuesday, they'll send a notice to most state agencies, telling them to freeze their hiring and to surrender any money they haven't already spent. Gov. Rick Perry and Lt. Gov.-elect David Dewhurst, and Speaker Tom Craddick will spend the next five months trying to stay afloat without the use of the life preserver of new taxes.

They start with several problems that separately would cause much pain; in combination, they produce a fiscal migraine. First, the state needs more money in the current budget to do the things the last Legislature said it would do; programs already in place—most of them in health and human services—are costing more than expected. We're told it would cost $400 million to $500 million to cover the costs of higher than expected caseloads and higher than expected drug and medical prices.

That's a spending problem. But it has a counterpart on the revenue side. Comptroller Carole Keeton Strayhorn says state revenues won't be as high this year as she had predicted and that, at current spending levels, the state will end the fiscal year in August with a $1.8 billion deficit.

That's $2.2 billion, if you're keeping score, and we're not nearly finished with the current budget. The state has a constitutional spending cap, and spending is dangerously close to the fence line. Every two years, the Legislative Budget Board picks a forecast of growth in personal income. That becomes the limit on the biggest chunk of discretionary spending in the state budget. And two years ago, the Legislature spent almost as much as it could spend without voting to break the spending cap.

Sum it up and you get this: Lawmakers have to find about $459 million to meet their obligations this year in health and human services programs, and have to cut an additional $1.8 billion in spending if they want to end the current budget without a deficit. Raising that much revenue and adding the spending is theoretically possible, but politically improbable: it would require a tax or revenue bill of some kind and would force lawmakers to vote to increase state spending faster than the average personal income of Texans has risen.

Actual Mileage May Vary

Strayhorn says the budget shortfall will be $9.9 billion. But she was using her own estimate of what the state needs to spend to keep up current programs at current benefit levels. The LBB has worked up a current services budget that would indicate a budget shortfall of $10.5 billion. And the Center for Public Policy Priorities—a number-crunching think tank that leans to the left but generally can make a reasonable argument for its figures—says the number should more mind-boggling still: $15.6 billion.

That's the only group that included increasing public school enrollments in its numbers. Strayhorn and the LBB both assumed that changes in local property values will lower the state's share of school finance and that the money thus left in the state's purse can be used to cover the costs of educating more students. That's nice if you're Texas, but it would shift almost $1 billion to the local school districts and they're already screaming bloody murder.

There's another budget on the way. Gov. Perry—hoping he's moving in harmony with Dewhurst and Craddick—will unveil a budget of his own within the next couple of days. If everyone sticks together, that'll be the real starting point for the Legislature as it tries to climb out of this budget mess while satisfying the "No New Taxes" campaign promises of the three top leaders: No new taxes.

The comptroller's estimate of revenues for the next two years was grim. There's a lot of detail to it, but the basics are simple: The state brought in almost exactly what she predicted during the first year of the two-year biennium, and then the economy began to crater. Sales tax revenues didn't hit the mark in that fiscal year—other taxes made up the difference—and sales tax revenues are down for this year. That two-years-in-a-row decline spooks the budgeteers. That means revenues won't make the mark during the current budget and won't be great during the next one. It's a deep, deep hole.

Pinching Pennies

The comptroller's e-Texas program won't fill the hole, but it's a start. Strayhorn says the package would save or bring in another $3.7 billion (including $1.7 billion in general revenue funds) to help balance the next budget, and she's got her rocket scientists looking for how much could be saved in the current budget if some of those things went into place immediately. A couple of items, like delaying a Medicaid simplification measure to save $282 million, got a lot of press, but a couple of big-ticket items slipped through the nets. Among them:

• Add more than 100 auditors and enforcement people to the comptroller's staff, which along with a tax amnesty program, could bring in about $225 million over the next two years.

• Add a multi-state lottery, such as Powerball, to the Texas mix, bringing in $101.5 million.

• Increase distributions from the Permanent School Fund—the investment pool for education money—by $83 million. This is similar to the "non-tax revenue" Lt. Gov.-elect David Dewhurst has mentioned as a way to balance the next budget.

• Cut $137.3 million from the state's "institutional enhancement funding" for public colleges and universities. The report says those funds aren't serving their original purpose anymore.

•  Save $205.2 million by increasing the co-payments made to doctors by state employees and by delaying health insurance for new employees until they've been on the payroll for 90 days.

• Thin the management ranks in state agencies by attrition and firings over five years, saving $156 million in the first two years. Save another $54.2 million by cutting the number of human resources employees in state agencies. That recommendation would cut $1 million from Attorney General Greg Abbott's budget—his is one of eight agencies that would have cuts ranging as high as $3.6 million.

• Pay state employees a bonus equal to three-months pay if they retire the first month they're eligible. That incentive would net a savings of $59.6 million.

• Issue bonds to make money available earlier to build highways, a measure that would bring in almost $1 billion for the biennium, which would then be paid back over time.

It wasn't out in time for our deadline, but the Texas Conservative Coalition put out a report of its own, detailing ways to cut the budget. Both the House and Senate will have committees set up to "reform" state government, trying to massage it into an effective but cheaper machine.

Political Notes

• After all the noise about insurance and regulators and all that, Gov. Rick Perry surprised some by reappointing Jose Montemayor as the commissioner of the Texas Department of Insurance. The governor apparently wants some continuity while the state is figuring out how to get a leash on insurance for homeowners and drivers.

• The House Democratic Caucus elected Rep. Jim Dunnam, D-Waco, as its chair. Rep. Dawnna Dukes, D-Austin, who ran against him for the top post, was elected vice chair.

• As expected, Perry made May 3 the date for the special election to replace U.S. Rep. Larry Combest, R-Lubbock. Candidates have to file by April 2, and the winner will take over when Combest leaves office May 31.

• The Sunset Advisory Commission amped up a staff recommendation to fold the Texas Department of Economic Development into the governor's office, voting unanimously to do more cutting at the agency—and getting more savings—before handing it over to the governor. Couple that with a recommendation from the comptroller's office to kill the perennially fouled up agency and you start to get a trend.

• It was a little noisy, but Texas Democratic Party Chairwoman Molly Beth Malcolm held onto her post at the State Democratic Executive Committee meeting. A handful of members tried to unseat her—blaming Malcolm for the schooling Texas Democrats took in the November elections. But most backed her and after she survived the vote to unseat her, she won a vote of support with only one vote of dissension. The regular election for her post is well over a year away.

Waiting for the Railroad

Gov. Rick Perry appointed a new Railroad Commissioner, but because he waited until the legislative session had begun to name Victor Carrillo, the new appointee can't take the job right away. The Taylor County Judge is Perry's pick to replace Tony Garza, who quit the commission to become the U.S. Ambassador to Mexico. That term has two more years on it.

The appointment would require Senate approval either way, but when the Legislature isn't in session, appointees are allowed to serve until the Senate comes to Austin to consider their nominations. Appointees named during a session, like Carrillo, aren't allowed to take their positions until they've won the Senate's approval. If he'd been named three days earlier, Carrillo would be able to serve right away. As it stands, he was appointed before the Senate even had a Nominations Committee; it'll take several days at best to get his nomination through committee and the full Senate.

So? There will only be two commissioners at the next regular meeting of the Railroad Commission, and one of the items on the agenda is the election of a new chairman. That was added to the schedule by Commissioner Charles Matthews, who was hoping he would be elected to succeed Michael Williams, who wasn't planning to relinquish the seat. It's too late to take it off, and it's reasonable to expect that the vote to dethrone Williams and crown Matthews will be a 1-1 tie. Carrillo's first task, if he gets the job, will be to break that tie. Or to try to win the middle seat himself. Williams has been chairman since September 1999. Matthews said he put the item on the agenda because it seemed logical at the end of an election cycle. Williams said the session ahead might include finance and reform fights and the RRC shouldn't change leadership now.

The new appointee became Taylor County Judge in September 2001. Before that, he was on the Abilene City Council. From 1994-96, he was an attorney in the General Land Office's energy section. After the commissioners get their pecking order settled, they'll be back in the Pink Building to defend themselves: Comptroller Carole Keeton Strayhorn, a former member of the TRC, has proposed merging the agency with the Public Utility Commission, a move that would save the state about $12 million while throwing utility and oil and gas regulation into the same bin.

Political People and Their Moves

Mark Borskey, after eight years as chief of staff to Rep. Mike Krusee, R-Round Rock, is going to work for Gov. Rick Perry, where he'll be a liaison to the House. Borskey worked on the governor's election campaign... Christy Payne is the new deputy director of the Dallas County Republican Party, after a two-year run at the state party's offices. Trey Ditto, who previously worked for the Associated Press, will get her communications job in Austin. Frank White had the Dallas GOP job before Payne; he's now working for state Rep. Jim Pitts, R-Waxahachie...

We have been remiss in not including the new hire at the Dallas Morning News' Austin Bureau: Bob Garrett, who did a tour covering government in Austin 25 years ago for the late Dallas Times Herald, has joined the News. He'd been working for a sister paper in Riverside, California...

Lt. Gov.-elect David Dewhurst is getting a permanent press secretary to replace the interim press secretary he named a few weeks back. Mark Miner, press secretary for California gubernatorial candidate Bill Simon, and before that, for Virginia Republican Jim Gilmore, who was AG, governor and head of the Republican National Committee. Mr. Interim, David Beckwith, says he'll stay around for a month or two until Miner is acclimated, and will then return to his family in Washington, D.C...

Alan Ware, one of the redistricting gurus at the Texas Legislative Council, is leaving the state payroll to join the lobby operations of former Sen. David Sibley. Ware's been at TLC for 14 years...

Gov. Perry appointed Mary Ceverha to the Texas Board of Health; she served a previous term there that ended two years ago. She's the wife of former Rep. Bill Ceverha, a Dallas Republican who's been helping Speaker Tom Craddick organize his staff. Perry also tapped George McCleskey of Lubbock, already a member of that board, to be its chairman...

The Guv appointed Uvalde banker William Dillard to the Nueces River Authority board, and picked another banker, Victor Ray Pierson of Jamaica Beach, for the Coastal Coordination Council.

More People, More Moves

Tom Suehs, who's been working on health and human services and budget issues for 30 years, has signed on as deputy commissioner for financial services at the state's Health and Human Services Commission. He's been working as a private consultant, but spent years in various state agencies working on similar issues. He's the replacement for Don Green, who left HHSC to sweat over budget issues for Speaker Tom Craddick. Charles Stuart is leaving HHSC to become a lobbyist for Blue Cross/Blue Shield of Texas. He was at the state agency for 8 years, handling legislative and media relations there. And while we're on the subject, there's one more: HHS Commissioner Albert Hawkins named Rose Hayden to be his chief of staff. They worked together at the Legislative Budget Board and she has most recently been working as a private consultant...

Patricia Hicks, chief of staff to Lt. Gov. Bill Ratliff and a former staff director of the Senate Finance Committee, has moved to the Higher Education Coordinating Board, where she's the new liaison to the Council of Public University Presidents and Chancellors...

Cindy Alexander, a policy analyst who's been at the comptroller's office for 11 years working on performance reviews and other projects, is moving two blocks to the South to work on "government reform" issues for Lt. Gov.-elect David Dewhurst...

President George W. Bush appointed Mark Everson, a Texan who was deputy director at the Office of Management and Budget, to be Commissioner of the IRS. Clay Johnson III, a Bush buddy who worked in the Bush Administration when it only took in one state, will move to the OMB job Everson is leaving. Johnson has been heading the personnel department at the White House. He'll be replaced by his deputy, Dina Habib Powell, a UT grad who worked for the Republican Party and for former U.S. Rep. Dick Armey, R-Flower Mound...

Jennifer Banda signed on as a lobbyist with the Texas Hospital Association. She most recently worked on health and human services issues for former Speaker Pete Laney, and had worked before that for then-Sen. David Bernsen and for then-Rep. Patricia Gray...

Allan Horne, who's been lobbying for Tenet Health Systems for almost three years, is changing labels: He'll lobby in Austin and in Washington, D.C., for Caremark RX, a pharmacy benefit management firm...

Ty Embry, the general counsel for the Senate Natural Resources Committee, will do some lobbying and some water law in the private sector for the Austin law firm Lloyd Gosselink, Blevins, Rochelle, Baldwin & Townsend...

The insurance guru on the governor's policy staff—Mike Geeslin—is leaving that post to become deputy commissioner at the Texas Department of Insurance. That's the job left open when Karina Cassari went to work for Lt. Gov.-elect David Dewhurst. Geeslin previously worked for Sens. Florence Shapiro, R-Plano, and the late Tom Haywood of Wichita Falls.

Quotes of the Week

Sen. Kim Brimer, R-Fort Worth, notifying the House that the Senate had officially convened: "Mr. Speaker, we're back. The lights are on. The fire is lit, and we're fixing to slaughter the hog. The Senate is ready to do bidness."

Rep. Tom Craddick, R-Midland, after he was elected Speaker: "We are faced with billions of dollars in shortfalls, the retirement of 16 committee chairs after the last session of the legislature, and 75 percent of our House members have never served with a deficit. There will be a learning curve."

Rep. Lon Burnam, D-Fort Worth, talking to the San Antonio Express-News after casting the sole vote against Speaker Tom Craddick, R-Midland: "I think Craddick is ethically challenged. And I think he needs to be put on notice by the media that they're going to watch him more carefully. It's no longer Midland—it's the entire state."

Lt. Gov.-elect David Dewhurst, on what will happen after he's sworn in: "The governor, the speaker and I are going to be issuing a letter next Wednesday to put certain freezes on spending on state government because we must balance our budget."

Lobbyist Robert Spellings, quoted in the Austin American-Statesman: "When I started back in 1966, there were maybe 100 registered lobbyists. There were less than 10 who really knew what they were doing. There's a lot that still don't."

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Texas Weekly: Volume 19, Issue 28, 20 January 2003. Ross Ramsey, Editor. George Phenix, Publisher. Copyright 2003 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.

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