No Magic Beans

Some of the state's school finance mechanics are looking — again — at splitting the property tax rolls to put business property taxes into a state fund for all schools while leaving residential property tax revenues in control of local school districts.

That would hit the so-called Robin Hood system by using the business property tax to level funding in rich and poor districts while letting the locals use their own money on their own schools. Throw in the money already contributed by the state — increasing it some with budget cuts of up to $1 billion and new income from voter-approved video lottery terminals and higher cigarette taxes — and the state might be able to hobble along without facing 1) angry school districts in court, or 2) voters heated up by the sweeping tax reform and tax increase program a full solution would require.

The split roll is the idea of the week. Everybody with an elected job in Austin, Texas, is trying to find some magically palatable solution to one of the longest-running problems in state government. Some are looking at raising homestead exemptions to $50,000 or $60,000, effectively shifting much of the burden of property taxes from residential to commercial property owners and giving poorer property owners a huge break.

Split rolls aren't a new idea, and business groups have traditionally opposed the structure for the simple reason that they think they'd get hosed if they weren't grouped with more sympathetic taxpayers, such as voters with homes. Many politicians like the idea, and most homeowners in Texas, given the choice, would rather let someone else pay for schools.

There's some history behind that. Texas property taxes were plagued with unfair appraisals in the 1970s (and before); local officials kept houses, which are filled with voters, under-appraised. Commercial buildings, which feature fewer angry votes per tax dollar collected, were appraised at something closer to real value. The result: Businesses paid taxes on the full value of their properties (or more) while residential property owners paid on the basis of a huge discount. Even if the values are all fairly recorded on the property rolls, homeowners can get a relative advantage from homestead exemptions and from different rates that might be set for the new state and local taxes.

Splitting the rolls would make it easier for politicians at every level — from the school boards to the Legislature — to raise taxes without enraging too many actual voters. They could soak commercial property owners on the grounds that education is an economic development tool and businesses have a vested interest in better schooling and so on and so on. Voters are more tuned to changes in residential property taxes, and a split roll makes it easier to leave them unruffled.

A split roll has a couple of advantages. It insulates the people voting for higher taxes from the people voting for those people. Elected officials have less exposure to angry voters, since most voters look first, or mostly, at the residential levies. There's the economic development argument.

It soothes a second and less talked about school finance hotspot, by letting people's residential property taxes remain in local schools instead of in a state purse or in an envelope on its way to a poor district somewhere else in the state. It potentially creates problems at the extremes, as when a small town like Glen Rose loses the nuclear plant that dwarfs the rest of its tax base, or when a suburb or village like Highland Park has relatively little commercial property to tax. Lawmakers seeking to gain the most revenue with the least amount of meaningful screaming will have it in their bag of options when school finance comes around, along with higher exemptions and taxes on VLTs and smokes.

Nothing Special

Until the rumor got loose and the Guv stomped it out, some of the people in the Pink Building were seriously talking about a special legislative session before the end of the year on the subject of asbestos. The idea? Get a quick vote in favor of new limits on asbestos lawsuits and go home.

The companies and trade groups on the sour end of those lawsuits have been lobbying for limits all year, but couldn't break a deadlock in the Texas Senate, where they have 19 or 20 of the 21 votes they need (absent senators could change those numbers, to either side's benefit).

A year-end special session on the subject would create a couple of pressure points.

One would be on Sen. John Carona, R-Dallas, who's got legislation of his own on the subject. The lobbyists seeking the lawsuit limits don't like his version, saying it leaves too much room for the trial lawyers who sue on behalf of injured workers and others. Carona is up for reelection next year, and a December special session would come before the end of the filing deadlines for candidates. That could be an incentive — or a threat — to Carona to get in line or get an opponent for the March primaries.

But do voters in that district care enough about asbestos or anything else in play to throw out their incumbent for someone new? Carona says this is not a voter-moving issue in his district, and in any case, he says he's for reforming the law. (His main difference with the tort reformers' version: Carona thinks the question of someone's impairment shouldn't be settled in statute, but in the legal arena.) He's got a different version of reform, but an opponent would have a hard time tagging the incumbent. Carona's for some brand of reform, and adds that he'd like to see it worked on in a December session. The folks holding a gun to his head forgot to load it.

Pressure point number two would be on the management in the Senate, where Lt. Gov. David Dewhurst administers the two-thirds rule (or, as he prefers, the two-thirds tradition). The Texas Senate typically requires assent from two-thirds of its members to consider a piece of legislation. Dewhurst decided in July that he wouldn't employ that supermajority on the subject of redistricting, and a mess of Democrats left the state. We're reminding you of that to remind you of this: The events of the last four months convinced a subgroup of the Senate's Republicans — and some folks outside the Senate, including Gov. Rick Perry — that the two-thirds idea should be chucked aside altogether.

An impasse in a session over asbestos — the timing wouldn't matter, since Dewhurst isn't up for election and this issue doesn't move a lot of his voters, either — could give them an opportunity to press their case, though Dewhurst has so far said he wants the two-thirds rule left in place on all matters save redistricting. He's still working to smooth out the waves from redistricting and doesn't want to extend the mess he's already got. Even so, some proponents of the asbestos bill think they have a chance if Dewhurst got lobbied both by people outside and by Republican senators inside.

The whole thing had a shelf life of about three days before aides to Perry said he's got no plans to call a special session on any subject before he asks lawmakers to take up school finance reform. That's vaguely timed for next April, and asbestos legislation could easily be added to the agenda if the people who want new law can muster the support.

New Management

Put Robert Howden in the driver's seat of the Texas Asbestos Consumers Coalition, a union of trade groups seeking limits on lawsuits involving asbestos and related materials, like silica. Howden, a former aide to Gov. Rick Perry, left the Texas Automobile Dealers Association earlier this year after the board passed him over in a hunt for a new top executive there.

The asbestos group has been led by Ron Dipprey and he's still in the middle of things. But he's now running the Texas Chemical Council (James Woodrick left at the end of the legislative session). The chemical group is one of the members of the asbestos gang.

Eeney-Meeney-Miney-Moe

More than two dozen Texas counties are getting ready for two different kinds of congressional elections. The three-judge federal panel hearing the state's redistricting case told the state to get set for an election under the current maps, and for an election under the new maps drawn by the Legislature.

In 28 Texas counties, that translates into two different sets of lines, and it means voters won't know their precinct numbers and their voting places until January.

For candidates, it just puts the uncertainty on paper. The judges said the current map is the only legal one until the new version is approved by the U.S. Department of Justice. They're reviewing it now, and have to rule by mid-December. That's about the same time the three-judge court will start hearings on the legality of the new map, so the calendar is getting jammed up. (This isn't unusual: Redistricting lawsuits produced a Christmas Eve map in 1991.) The courts hate to mess around with elections that are already underway, so they told everyone to get ready to hold contests using either map. Candidates can file under the current plan and switch later if the new plan becomes law.

That affects 28 counties, including the big ones, which have more precincts and thus, more complications. Harris, Dallas, Bexar, Travis, Tarrant, El Paso, and the suburban counties that surround some of them will all be affected.

• The Texas Secretary of State's budget for elections is skinnier than it was last year, and SOS Geoff Connor is telling local party officials they'll get only 83.5 percent of what they got from the state last year. Harris County Democrats got $1.1 million from the state last year and Republicans there got $905,217. With the cuts, those amounts would drop to $898,143 and $755,856. Some version of that will happen in each of the state's counties, with variations. In some places, Democrats get more money and in some places, Republicans get more. Some amounts are small: Andrews County Republicans got $1,452 last year and would get $1,212 this time. Democrats there sent their money back last year.

For the 28 counties drawing two sets of lines, there won't be any state help. The local folks will have to bear the brunt of those costs themselves.

And Not a Drop to Drink

Lt. Gov. David Dewhurst set the table for a water fight during the next legislative session, naming a special Senate committee on water policy. Every senator on that panel has some kind of water fight or water problem or concern back home. Dewhurst also asked a subcommittee to look at leasing of state water rights. That's aimed at the General Land Office's conversations with a Midland group that wants to buy state water in the Chihuahuan Desert for use elsewhere. Those state lands are on the western end of the area represented by Sen. Frank Madla, D-San Antonio, and he's the chairman of the subcommittee. The main panel will be chaired by Sen. Ken Armbrister, D-Victoria.

Dewhurst wants them to look at environmental regulation of water contracts, the roles of local water districts and the Edwards Aquifer Authority, and third-rail issues like the rule of capture and interbasin transfers and junior water rights and water marketing.

Part of the impetus came from Dewhurst's old agency, the GLO. He left behind the West Texas deal, and his successor, Texas Land Commissioner Jerry Patterson, has been negotiating with the investors in private, eschewing bids and hearings to see if he can work out some way to sell water and increase the amount of money going into public schools. For keeping the talks private, he's been blasted by fellow Republican Susan Combs, the state's agriculture commissioner, and by others who think it looks shady to work in secret. She thinks he should bid it out in a most public way.

That's thawing, a little bit. The "form" of the contract between the state of Texas and the investors will be public before the actual numbers are public, Patterson says. He still doesn't want to publicly discuss the terms of the contract, but says the general outline of the deal — sans prices and other numbers — will be out within a couple of weeks. Numbers, he says, will be plugged in by the end of the year. The group, Rio Nuevo Ltd., wants to buy rights to pull 50,000 acre-feet of water per year out of the ground, put it in an as-yet-unbuilt pipeline, and ship it to as-yet-unnamed customers.

War, cont.

Capitol budgeteers are leaving the LBJ Building's budgeteers out of their school finance and budget talks. They're afraid Comptroller Carole Keeton Strayhorn will sideswipe them if they include her and they're trying to do their revenue and tax calculations without her. She doesn't have any more standing than anyone else to do school finance, but she's the only official allowed to officially say what a given tax bill or other revenue measure would bring in.

The folks in the Pink Building are doing their own guesstimating, and they might even get close to the real numbers. But when it's time to actually do something, they'll have no choice but to go to the comptroller and hope her numbers — the only numbers that really count — match their guesses.

Strayhorn is working on school finance plans of her own and the denizens of the Capitol building don't want her shooting at their stuff or stealing ideas before they're ready. She's doing the same, holding her cards close. But there are already some rumblings. Some examples:

• The Capitol gang wants to attack property tax appraisals in a way that's potentially damaging to her, since her office is charged with making sure the appraisals are fair (that keeps appraisers in one part of the state from shorting their values to push taxes off on other parts of the state). Strayhorn asked lawmakers to take the property tax division out of her office and even said it would save money to create a new state agency for that purpose, but they ignored the request.

• She and they differ on the amounts that would be brought in by allowing video lottery terminals at racetracks. They think her numbers are too high (though some in the business think her numbers are far too low).

• Strayhorn opposes the split rolls under discussion in some councils in the Capitol.

Overlay that with legislative animosity towards a comptroller who's slapped them at every opportunity, and with gubernatorial animosity towards a fellow Republican who's got an eye on the governor's office. Both sides are wary, and they're not talking, and that could make a special session on school finance later this year very interesting for spectators.

Political Notes

It's not time to file for office yet and the endorsements are already flying. Paul Green, an appeals court judge seeking a spot on the Texas Supreme Court, got the thumbs-up from U.S. Sen. John Cornyn, himself a former high court justice, and from Agriculture Commissioner Susan Combs.

Green is running against Stephen Wayne Smith, who upset establishment favorite Xavier Rodriguez in the GOP primary in 2002. It's unusual for statewide officials to endorse people running against incumbents in their own party primaries, but virtually all of the state's top Republicans were against Smith the first time he ran.

• Put Kingwood Republican George Fastuca on the list of people running in CD-2, a congressional district that runs to the east from suburban Houston. He's a former Enron manager (who left well before the company self-destructed). We had him on the tire-kicking list, but he's telling people in the district he's ready to run.

• State Sen. Bob Deuell had his eyes on Congress before he ever ran for state Senate, but he says he won't be interested in a congressional run next year, however things come out. The Greenville Republican lives in U.S. Rep. Ralph Hall's district, and Hall, D-Rockwall, hasn't said yet whether he'll seek another term in Washington, D.C. Deuell has said all along he wouldn't run against Hall, but adds now that he won't run for Congress even if Hall decides not to do so.

• While we're on the subject of people who aren't running, add Nate Crain to the No list for chairman of the Republican Party of Texas. Rumors had the Dallas County GOP chairman vying for the state job at the GOP convention next summer. He says he's been approached but is happy where he is and will run for reelection to his current job in March.

Good News, Bad News

Three foundations, including those started by computer magnates Bill Gates and Michael Dell, are matching $65 million from the state to increase high school graduations, cut dropouts, turn more high schoolers into college students. The $130 million program involves the Dallas-based Communities Foundation, the Bill & Melinda Gates Foundation and the Michael & Susan Dell Foundation.

They'll target at-risk high school students to push them to graduate and to go on to college, and in the longer term, they'll fund programs to redesign high schools that don't work. Gov. Rick Perry says he wants to get to a point where schools get more funding if they bring more students up to standard.

• The state's budget cuts have already pushed 49,000 kids out of the Children's Health Insurance Program, according to the Austin-based Center for Public Policy Priorities, and will eventually cut the number of insured kids by one third, to 347,000 from 512,986. That outfit cites numbers generated by the state's Health and Human Services Commission to get its estimate, and says HHSC's numbers anticipate a 32 percent reduction in the number of kids in the program.

• Comptroller Carole Keeton Strayhorn, updating a report started by her predecessor, says the state's border counties continue to lag behind the rest of the state in areas like income, children in poverty, high school graduation rates, unemployment, diabetes, and a number of other measures. The 14 counties that actually border Mexico have about 10 percent of the state's population (it doubles if you include all 43 counties south of I-10 and west of I-37. People in that larger area, compared to the rest of the state, are younger, less likely to divorce, less likely to have college educations, less likely to have high school diplomas, make about $10,000 less per year, get raises less often, and have lower death rates from AIDS/HIV. The whole chart is on the Internet, at www.window.state.tx.us.

• Texas spending on tobacco prevention ranks 40th among the states, according to a coalition that's been pushing for a bigger anti-smoking effort. Texans Investing in Healthy Families says the state spends 35 cents per Texan on tobacco prevention. The state spent $12.5 million in 2003 and has budgeted $7.4 million for the current fiscal year, according to the group. As they've done before, they're urging the state to add a dollar-a-pack to the tax on cigarettes and to spend a nickel of that new tax on anti-smoking programs.

Flotsam & Jetsam

A federal appeals court has no problem with the stone block featuring the Ten Commandments on the Texas Capitol grounds. The 5th U.S. Circuit Court of Appeals backed up a lower court that said the monument doesn't breach the church-state barrier. The court said that and other monuments on the grounds have more to do with the culture of the state than with state-sponsored religion.

• More staff moves in the Guv's office: Deirdre Delisi is now the senior deputy chief of staff, Eric Bearse moves up to director of communications, John Esparza is now the deputy director of community affairs, and Bill Noble joins the staff as a senior advisor to the governor specializing in communications.

• Gov. Rick Perry named Joe Max Green to the board of regents at Stephen F. Austin University. He's an insurance company owner from Nacogdoches and an alumnus of the school.

• That Internet photo auction we told you about — the one benefiting the Sam Attlesey scholarship fund at the University of Texas — raised $3,700 (you can still contribute in the normal way, however, through the website at www.friendsofsam.org). What's interesting is how much people paid for which photo, especially since the audience tilted towards political people and newsies. Autographed pictures brought more than unsigned ones. The top price went to a signed shot of Nolan Ryan's seventh no-hitter, followed by a portrait of the guy who was his boss at the time, president George W. Bush, followed by a picture of Byron Nelson and Ben Hogan.

• DEPARTMENT OF CORRECTIONS: The Texas Tomorrow Fund has sold more than 140,000 contracts with around 78,000 families since it was started. We used a one-year number in place of that total last week, and we remain sorry, sorry, sorry.

Political People and Their Moves

Gov. Rick Perry grabbed a new member and an old one for open spots at the Texas Department of Housing and Community Affairs, reappointing C. Kent Conine of Frisco and appointing Patrick Gordon of El Paso to the board. Perry also tapped board member Elizabeth Anderson to chair the panel. Anderson is an information technology consultant. Conine is a homebuilder. Gordon is a lawyer... Perry named Luann Roberts Morgan, who works for a Caterpillar dealer in Midland, to the Texas Commission of Licensing and Regulation... The Sabine River Authority Board will have two Connies instead of one: Perry reappointed Connie Ware of Marshall to that board and named Connie Wade of Longview to fill an empty spot. Ware heads Marshall's chamber of commerce; Wade worked as a scheduler for Agriculture Commissioner Susan Combs and works for a dental group in Longview... Texas Southern University is getting three new regents. Harry Johnson, a Missouri City lawyer, Belinda Griffin, a Plano banker, and Robert Earl Childress, a Methodist minister from Missouri City, were named by Perry to that panel. Johnson and Griffin both have degrees from TSU.

Quotes of the Week

Lt. Gov. David Dewhurst, telling the Dallas Morning News he and the Texas Senate are finished with congressional redistricting even if Attorney General Greg Abbott can't fend off legal challenges to newly drawn maps: "I know I'm going to take some criticism of this, but if it's not defensible, we are not going to take this up again this decade."

Dewhurst, in the same story, on the differences between what passed and what didn't: "I preferred the map that came out of the Senate, in which we would have elected the same numbers [of Republicans] in Congress as we do in the Senate right now, 19 or 20, and not touched any of our minority districts. I think that's better public policy and, quite frankly, better politics."

Former U.S. House Speaker Jim Wright, D-Fort Worth, quoted in the Dallas Morning News on redrawing congressional maps when it's not required: "If a state legislature can be free to pick and choose to get rid of members of Congress that it doesn't want, you have violated the fundamental principal of the Constitution, which is that people choose the officials, not the other way around."

U.S. Rep. Eddie Bernice Johnson, D-Dallas, quoted in the Dallas Morning News on why she hired her own redistricting attorney instead of relying on U.S. Rep. Martin Frost, D-Dallas: "I've never been against him winning. I'm just against him abusing me, and I will not allow it anymore. There's no point in my hiding it. I'm as grown as he is, and he's getting elected on the votes of my people."

U.S. Rep. Rush Holt, D-New Jersey, quoted in The New York Times about kinks in electronic voting: "Someone said to me the other day, 'We've had these electronic voting machines for several years now and we've never had a problem.' And I said, 'How do you know?' and he couldn't answer that."

Comptroller Carole Keeton Strayhorn, "not ruling out a bid for governor" in the Marshall News Messenger: "I love being comptroller. I'm a 24/7 comptroller of this state. But, when the people of Texas ask me to serve, I never say no."

Texas Democratic Party Chairman Charles Soechting, in a San Antonio Express-News story on fundraising by top state Republicans: "If I was Rick Perry, I'd be worried. I don't put Carole Keeton Strayhorn in the same category as the other three. She's been a good public servant for a lot of years. She was a good Democrat for a lot of years."

Rep. David Swinford, R-Dumas, in a San Antonio Express-News story on school districts suing the state over school finance: "I don't know that you can sue anyone into reality."

Sen. Robert Duncan, R-Lubbock, in the San Antonio Express-News: "Agriculture needs to rethink its political position and strength with regard to water. No longer can we pump all we want to produce 20-cent cotton. It makes no sense."

Rep. Robert Puente, D-San Antonio, on how to treat people affected by water transfers, in the San Antonio Express-News: "There has to be adequate mitigation to the affected areas. Essentially that means be nice to them when you screw them."

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Texas Weekly: Volume 20, Issue 22, 17 November 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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