Springtime in Austin

Every remaining day of the legislative session is a deadline for something and at the end of Wednesday, May 28, every bill that hasn't won approval in some form in both chambers is dead. The mop-up that follows will reconcile differences in the bills–or not–and it'll all be over a week from Monday, maybe for a while and maybe not.

Gov. Rick Perry, the only guy who can veto bills and call special sessions–two of the coolest tools at this point on the calendar–says he only needs three pieces of legislation to call this session a winner: a budget, a tort reform bill and some new insurance regulations. As the power of the Legislature recedes with every deadline, the comptroller of public accounts is the other state official with a bounce in her step. Carole Keeton Strayhorn's estimate of the state's income over the next two years–a forecast she'll probably make early next week–gives her a lever to use with lawmakers at the end. Her control of the numbers and Perry's control of vetoes make them the power couple of the moment.

But the summer could be long.

A Redistricting Reboot?

Business has picked up lately for conspiracy theorists around the Capitol, and congressional redistricting and how to get it done is a favorite topic. The advantage of bringing it up, for Republicans, is that they have the numbers, apparently, to draw a map that would greatly increase the GOP's share of the Texas congressional delegation. Also, they'd like to get any mapmaking done early so that the courts and the U.S. Department of Justice could have their say before the filing deadlines and elections that begin in January. Three of the GOP's options:

• The governor could call a special session on the subject, force lawmakers to stare it in the face and take a new map and go home. Disadvantage: Special sessions cost a lot and it could be hard to explain spending a mess of taxpayer money on a partisan political project.

• The governor could call up the issue right now by declaring it an emergency and removing the rules logjam that has a Senate bill on the subject stuck upstream. Disadvantage: Friendly senators have been telling him that would shred the Senate's goodwill.

• Find another issue that could be the engine of a special session and make congressional redistricting the caboose. This option has been the subject of some serious talk among lawmakers. The already planned, if undated, session on school finance will come later in the year and wouldn't allow the courts and the feds a lot of time to bless a new plan.

The budget will probably get done in regulation time, and special sessions on budgets aren't any fun. They focus media and public attention on tough spending cuts. Pairing a state budget and redistricting in a special session would be deeply divisive.

That leaves two possible unresolved issues, depending on what happens over the next ten days. Neither of the governor's two declared emergencies–medical malpractice and insurance regulation–has passed both the House and the Senate. If one or both should fail to gel before June 2, it would be easy for the governor to call a quick special to finish things.

It wouldn't be hard to defend hauling lawmakers back on either subject. The lockup on tort reform, such as it is, is over the size of the caps on settlements. The Senate allowed bigger awards than the House and structured them a little differently; the difference might be worth a standoff. The rewrite of the state's insurance regulation–the subject of that $100 million-plus gubernatorial campaign last year, remember?–went through the Senate quickly and then stalled in the House. The upper and lower chambers could disagree on any number of things in that bill.

Absolutely Certifiable

Two years ago at about this time in the legislative session, an aide to Rob Junell–then the Appropriations chairman–got out some masking tape and some crime scene tape to commemorate a confrontation between Junell and Sen. Rodney Ellis, D-Houston, who was then the chairman of Finance. He used the masking tape to make the outline of a body on the floor of the conference room where the two head budgeteers had screamed at each other over the last details of the budget.

The Screamee-Meemees, as mom used to call them, are a regular part of the endgame on state budgets, and the bitching could be over and done by the time you read this. Three pieces need to come together within the week if everybody's going to get out of here alive. First, the House and Senate conferees must agree on the spending plan so it can be printed, at the latest, over the weekend. Second, they have to pass a series of bills making money available to fund that spending plan. And third, they have to see what Comptroller Carole Keeton Strayhorn is offering as her final revenue estimate during the session. At last word, she was going to wait until after the weekend to make that forecast, which gives her time to close some deals and also to see what the legislative budgeteers do.

Strayhorn had one last press conference before she was ready to unveil the number everybody really wants to see. She listed ways to raise money to balance the budget, coming out for the first time in favor of adding a dollar to the tax on a pack of cigarettes. She didn't try to say that's not a tax, but said it's a tax most people can live with (recent polls seem to support her on that point). The GOP brass over at the Pink Building nixed the idea within a couple of hours, and that's that. For now. One reason to take that publicly popular tax off the table now is to keep it available for later, when state leaders will need to raise oodles of money to lower the burden on property taxes.

Strayhorn had a couple of dead issues on her list, including a recommendation that would have forced school districts to bring their costs in line with average districts around the state. That would have been based on what they spent in the past–not on what they were doing now or in the future. The school districts squawked. The Legislature listened. They spiked it: That's $432 million the state won't be saving. Another would have changed the funding formulas for hospitals that care for indigent patients. It would have increased the size of the state's purse by $192 million, decreasing the funding for the hospitals by the same amount. Squawk. Listen. Kill.

Strayhorn included the numbers for the video lottery and a multistate lottery, too. Those aren't definitively dead, but they're on that school finance list mentioned above.

She said the state would get $124.3 million by extending a fee on phone bills that was supposed to expire. The Telecommunications Infrastructure fund fee was set up eight years ago to pay for upgrades to wiring in schools and hospitals and such. And she included $231 million she says could be raised by patching the state's corporate franchise tax. Big companies have reorganized to take advantage of a loophole for partnerships, legally avoiding the tax. The state wants the money and is trying to recapture those companies, but business lobbyists have battled back. They say the patch is a tax increase on a lot of businesses that never paid franchise taxes to begin with.

She included a pet project–moving the property tax division of her own office–a political road hazard if there ever was one–into an agency all its own. That's where it was when then-Comptroller John Sharp took it in. He saved money by closing an agency. Now, Strayhorn says she can save $8.5 million by releasing the division back into the wild. Strayhorn has personally lobbied the House and the Senate to create a new program that would pay for two years of tuition, required fees and textbooks for Texas high school grads who go to community colleges or technical schools. She has told lawmakers that Texas Next Step, as she calls it, is her top legislative priority. It has had trouble in the House, but the Senate moved it this week, so it's still alive.

Ebb Tide

Gov. Rick Perry says he'll be happy with the session if the budget, insurance and tort reform are passed. All three issues are still alive. We're not calling anything completely dead–it's revivification season–but some of these bills are starting to smell funny.

• It does not appear that the Texas Legislature wants to pull voters out of the first stage of judicial selection. Chief Justice Tom Phillips of the Texas Supreme Court and others want governors to appoint statewide judges who could then be thrown out of office only if voters kick them out. A booted judge would be replaced by an appointee, and so on. That one's been in an oxygen tent for some time (even with a Rush Limbaugh relative, Missouri Supreme Court Chief Justice Stephen Limbaugh Jr., making visits to raise the idea's profile).

Texans for Public Justice released a study this month saying lawyers–the folks who depend on courts on an ongoing basis–contribute 72 percent of the money in judicial campaigns. That group looked at 73 races for "intermediate appellate judges." Democratic justices got 82 percent of their political money from lawyers. Republican judges got 65 percent of their campaign money from lawyers. The same group also says just under a third of those races were closely contested in 2002. Sixty-five percent of the intermediate appellate judges had no opposition in those elections. (District judges and district attorneys were even less stressed; only 23 percent of the former and 14 percent of the latter drew opponents in last year's elections, according to TPJ.)

Meanwhile, a new Texas Poll from Scripps Howard says most Texans would support a switch to appointment/retention elections. In that poll, 85 percent of the respondents said they believe judges' decisions are influenced by contributors, and 57 percent think elected judges are more subject to political pressure than appointed judges would be.

That kind of stuff bolsters Phillips' argument, but it's late and the legislation that passed the Senate three weeks ago is stuck in the House Committee on Judicial Affairs.

• The Texas Senate has been sitting on the House-passed ethics bill for a couple of weeks and already delayed hearings once. Sen. Rodney Ellis, D-Houston, copied the House's assembly method and met separately with two large groups of senators to work through the pieces of self-regulation they like and those they don't like. We're not saying it's dead, and we're not calling anybody an assassin, but the bill is on the same track that has killed ethics legislation in previous sessions: The changes are taking place in secret, late in the session, and with little time left to settle differences between the House and Senate versions.

• The Senate stalled on a bill pushed by the Guv and sponsored by Sen. Kyle Janek, R-Houston, that would limit asbestos claims to people who already are sick. Current law allows people who have been exposed to asbestos, but who have not shown symptoms of related diseases, onto a registry. That's set up that way because the diseases often incubate for years; Janek and other tort reformers say claimants shouldn't be on the registry until they're sick. He tried for weeks to get a vote, and when he finally got the bill to the floor, his support crumbled. "It has come to my attention that I don't have the votes. I thought I did. Lord knows I've counted to 20 enough times in the last two months." Perry rushed over to confront Sen. Eddie Lucio, D-Brownsville, about moving his vote from the "aye" to the "nay" column (Perry didn't leap over the rail that separates senators from civilians, as rumored; he stepped over it). Lucio stuck with the nays, and Janek pulled down the bill.

• The House wants another crack at the caps on damages in the tort reform bill and they sent it to conference committee instead of agreeing with the Senate. The Senate, at our deadline, had not named its negotiators, but these state reps will be there: Joe Nixon, R-Houston; Dan Gattis, R-Georgetown; Phil King, R-Weatherford; Beverly Woolley, R-Houston; and Vilma Luna, D-Corpus Christi. The constitutional amendment that goes along with that came out of the Senate just as the House left it; it's next stop is before Texas voters on September 13.

A Surprise in that Last Amendment

The immediate complaint when the Democrats went to Oklahoma was about HB 2, the big government reorganization bill that croaked while they were out. It's been reincarnated as SB 1952 by Sen. Rodney Ellis, D-Houston, in time to rescue the budgeteers. Everybody else should read it, though. The bill shakes loose about $315 million that can be used to fill the budget shortfall, including $90 million from delaying new employees' entry into the Teacher Retirement Systems benefits, cutting the office space allotted on average to each state employee from 153 square feet to 135 square feet, killing the "liars affidavit" that allows people to pay sales taxes on used cars based on the price they report instead of the actual sales price, and raising licensing fees for landscape architects and interior designers, land surveyors and property tax consultants.

Ellis waded through 65 amendments, adding some things you wouldn't expect along the way, like a fix to a court decision on campaign advertising and what words have to be used to constitute actual support of a candidate. Then, he surprised almost everyone with a 37-page amendment at the end.

That surprise would wipe out the Texas Legislative Council, a House-controlled agency that drafts bills and works as the Legislature's (limited) in-house law firm and research arm. TLC has senators on its board, but they're vastly outnumbered and outvoted, and the Senate has had the knives out for the agency for years. It would be replaced by an "information" agency and many of its duties would be handled separately by each chamber. The Legislative Budget Board would take over financial audits now done by the state auditor (that improves the Senate's standing in that equation).

And the Sunset Advisory Commission would be replaced by a Performance Review Commission and would be able to go into everything from state agencies to university systems to look for ways to improve performance and efficiency and all that jazz. That would put the agency into competition in some ways with the comptroller's office, which already does performance reviews. But the bill doesn't take any of the comptroller's power away.

A Lose-Win Situation

The Texas Association of Business lost another court fight over their campaign advertising, and promised another appeal. If the goal was to keep the issue on the back burner during the legislative session, you'd have to consider it a success, but the group has lost in every court so far.

Travis County District Attorney Ronnie Earle and a grand jury are investigating the group's political mailers leading up to the November elections. Their question: Did the mailers use corporate money to advance some candidates? TAB's answer: No, and the inquisitors are barred from looking to see who contributed the money that TAB used to design and mail the ads. TAB wants the investigation cut short on 1st Amendment grounds. Earle says the group is trying to block a legitimate criminal investigation that might or might not find criminal activity. The Texas Court of Criminal Appeals, like the courts below, ruled in the DA's favor. TAB is asking the U.S. Supreme Court for another opinion.

Even if Earle wins there, TAB's lawyers get a political victory: By the time the feds are done with this, there's no chance of a grand jury running simultaneously with a regular session of the Legislature.

While we're scribbling about TAB, that group ran full-page newspaper ads blasting proposals for an additional dollar-a-pack tax on smokes. TAB says the tax increase would lead to an increase in smuggling and that the state would lose millions in tax receipts as a result.

The comptroller's numbers include discounts for smuggling and for reduced smoking rates. The number-crunchers say the difference in the price of smokes in neighboring states and Texas would, in fact, increase the incentives for smuggling. And they have another factor in their formulas to account for the drop in smoking that comes with any increase in the price of smoking. Even with those things in the mix, however, the added dollar in tax would raise $1.5 billion, the comptroller says.

TAB's newspaper ad features the business group's logo prominently. Less prominent was the fine-print disclaimer at the bottom, which said the advertising was paid for by the Texas Association of Business and Phillip Morris USA. That's the only reference to a tobacco company on the page.

Going... Going... Gone

The latest sales period for the state's prepaid tuition program is coming to a close–and it might turn out to be permanent. With a couple of days left when we checked, the enrollment numbers for the Texas Guaranteed Tuition Plan (formerly called the Texas Tomorrow Fund) were running 40 to 50 percent ahead of the previous year's. About 12,000 kids were added by parents and grandparents wanting to lock in college tuition rates in advance. As we wrote back in February, rising tuition rates and proposals to partly or fully deregulate tuition could put the program out of business.

The rising rates of future tuition raise the price of getting a kid into the program. When it started in 1996, parents could buy four years of tuition and required fees in advance for less than $10,000. The comparable figure now is $17,460. The program's administrators will poll Texas colleges this summer so they can set new rates in September. Big jumps in tuition will lead to big jumps in the numbers.

Tuition deregulation is another bug in the soup. If public colleges and universities in Texas are allowed to set their own rates–instead of relying on the Legislature, which has held them relatively low (compared to other states)–the widely held assumption is that tuition will rise. Again, the price of prepaid contracts would rise in parallel.

That makes the current contract holders feel smart. State taxpayers, on the other hand, are on the hook for the difference between what those contract holders paid and what the tuition actually costs. Voters passed a constitutional amendment guaranteeing the program will cover tuition and required fees even if the costs of going to college outrun the gains in the tuition plan's investments. That difference, if there is one, will come out of the state's general fund.

There are 134,000 kids enrolled in the program, and another 15,000 to 20,000 will probably be added to that when the final numbers from the current enrollment period–which ends Friday, May 23–are counted next week. Tuition deregulation was still in play when we went to press–the House was pushing for it and the Senate was resisting, in budget talks. Failing that, the budgeteers were looking at new, higher tuition rates for the schools; prices will rise even if the Legislature and not the schools are setting them.

Flotsam and Jetsam

The state's settlement with Farmers Insurance survived a court challenge–at least the first round. A state district judge in Austin–Scott Jenkins–gave a preliminary nod to the deal, saying he couldn't find anything wrong with what the state and the company agreed upon. State regulators say customers could get as much as $117 million in rebates and lowered rates as a result of the deal. Coincidence department: That preliminary ruling came down as the House was considering an overhaul of home and auto insurance regulation. Both that legislation and the lawsuit tie back to the last elections: Gov. Rick Perry and his opponent, Democrat Tony Sanchez Jr. of Laredo, hammered each other over high insurance rates and what to do about them for almost a year.

• Budget writers could build themselves a safety net in case the comptroller's numbers and a few remaining bills don't fill in the hole between what they want to spend and what they'll have available to spend. The budget might revive a provision that forces the comptroller to make unpopular across-the-board cuts herself; she thinks that's the Legislative Budget Board's job.

• The budgeteers cut the bonus to schoolteachers in half, lowered the amount for part-time teachers to $250 a year, and took the money away from principals and other administrative and service people in the public schools. If that holds, teachers will get $500 a year instead of $1,000.

• The legal beagles who represent the makers of WD-40 take issue with the use of that product name to represent political groups. In a letter to Rep. Chuck Hopson, D-Jacksonville, the lawyers ask him to stop using the name of the lubricant to refer to White Democrats over the age of 40, as he and others have been doing (they're even wearing lapel pins sent to them by the company before it knew what they were up to). The lawyer letter is cordial but firm, insisting "you cease referring to yourselves as the WD-40s immediately and discourage any use by the press or others of this name."

Political People and Their Moves

Gubernatorial appointees named during a legislative session have to be confirmed by the end of the session or they don't get to keep the jobs, so these are either sure bets or short-timers: Gov. Rick Perry named Barry Thomas Smitherman of Houston to the Texas Public Finance Authority's board. Smitherman is an assistant district attorney and former investment banker... The Guv named Jesse Adams of Helotes to the Texas Racing Commission for a six-year term. Adams went to Texas A&M University at the same time Perry was there...

President George W. Bush has filed officially for reelection, and the campaign team–as you'd expect–is salted with Texans. Among those named so far: David Herndon of Austin will reprise his role as campaign treasurer. Among those from last time who aren't on board this time: Joe Allbaugh, the former chief of staff to then-Gov. Bush who was campaign manager in 2000. That role will be filled by Ken Mehlman–Karl Rove's deputy at the White House...

In the game, but just for a minute: Clark Kent Erwin, the inspector general at the U.S. Department of Homeland Security, was named to find out why that agency was called in by Texas state police to help find Democratic lawmakers who finally turned up in Ardmore, Oklahoma. Erwin, a former assistant attorney general, assistant Secretary of State and a failed candidate for a congressional seat from Houston, pulled out of the investigation after Texas Democrats cried foul...

Quotes of the Week

Gov. Rick Perry, quoted by the San Antonio Express-News on what he wants from lawmakers: "Now, when the governor makes two issues an emergency, he or she obviously has more than just a passing interest in those issues. So from my perspective, the budget, tort reform and homeowners' insurance–if those three get to my desk, then I think we will have had a successful legislative session. Everything else is gravy."

Perry, asked whether budget cuts in Medicaid and the Children's Health Insurance Program would force uninsured Texans to seek care in hospital emergency rooms, as he has contended in the past: "I don't buy into that argument."

Perry, on the comptroller's push for a larger cigarette tax: "It ain't going to happen."

Rep. Warren Chisum, R-Pampa, deflecting a question on the floor of the House about a legal issue in a piece of legislation: "Well, I'm not a lawyer, but I am a legislative engineer."

Comptroller Carole Keeton Strayhorn, on why she suddenly endorsed an increase in cigarette taxes: "I am adamantly opposed to tax increases that will adversely affect jobs and opportunities for the people of Texas. This is one revenue stream that would have a beneficial impact. As a momma and a grand momma, I want to deter young people from smoking."

A Department of Public Safety order sent to captains in an email from Special Crimes Service commander L.C. "Tony" Marshall, and first reported by the Fort Worth Star-Telegram: "Any notes, correspondence, photos, etc. that were obtained pursuant to the absconded House of Representative members shall be destroyed immediately. No copies are to be kept. Any questions please contact me."

House Speaker Tom Craddick, who said he talked to the DPS, but didn't direct the hunt for lawmakers: "I'm afraid that those who are pursuing a conspiracy are drilling a dry well."

Rep. Phil King, R-Weatherford, telling the El Paso Times how history will view the Killer Ds: "We have all these major issues plus a first Republican majority ever, a new speaker and a whole bunch of us who were committee chairs trying to feel our way around and learn how to be committee chairs. A lot of emotions came together. The perfect storm is the best analogy. Historians will look back and say they're surprised that we got anything done."

Rep. Garnet Coleman, D-Houston, in a Waco Herald Tribune story on Waco Democrat Jim Dunnam's role as leader of the Killer Ds: "Jim is probably going to be one of the most famous people to come out of Waco since, what was that guy's name? David Koresh."

Texas Weekly: Volume 19, Issue 46, 26 May 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.