Location, Location, Location

Geography played as big a role in the primaries as politics. The Panhandle outvoted the Permian Basin again, keeping new Sen. Kel Seliger, R-Amarillo, in office for five years instead of just one. Travis County overpowered Hidalgo County in a congressional race, giving U.S Rep. Lloyd Doggett room to run against a Republican in a heavily Democratic district in November. In another, Bexar County was enough to barely overcome Webb County, and with 126 votes to spare after the unofficial count, U.S Rep. Ciro Rodriguez, D-San Antonio, staved off a challenge from his former buddy in the Texas House, Democrat Henry Cuellar of Laredo. (Keep watching: Cuellar's campaign manager told us "Ciro received a stay of execution, but not a pardon.") Cities outvoted towns in East Texas, sending state Rep. Wayne Christian, R-Center, home in a congressional race that will now pit two Republicans from Tyler and Longview in a runoff.

The big stories were on the Democratic side of the ledger, where a combination of redistricting, revenge over redistricting and revenge over tort reform was played out by Democrats sympathetic to the new Republican management, Democrats not sympathetic to that management, and trial lawyers.

Republicans aimed to knock off a mess of Anglo Democrats with new congressional maps. One changed parties, lowering their requirement. Doggett frustrated their efforts by getting 61.5 percent of the vote against an experienced Latina politico in a district drawn to favor Hispanics. Freshman U.S. Rep. Chris Bell, D-Houston, was swamped by Al Green, a well-known former Justice of the Peace who drew 62.8 percent of the vote. It's a minority district; Green is Black and Bell is an Anglo.

Louis Gohmert and John Graves will runoff on April 13 for the Republican nomination in CD-1. Former judge Ted Poe got out of a six-way contest in CD-2 without a runoff, getting 62 percent. He'll run against U.S. Rep. Nick Lampson, D-Beaumont, in November. U.S. Rep. Ralph Hall of Rockwall was a Democrat in the last elections and a Republican in this one. He got 78 percent of the votes in his first GOP primary. The crowded GOP primary in CD-10 produced a runoff between Michael McCaul of Austin and Ben Streusand of Spring. In CD-17, three Republicans each got a lot of votes: third place went to Dave McIntyre of Bryan, a political novice who got 28 percent of the vote. The runoff will feature state Rep. Arlene Wohlgemuth, R-Burleson, who got 41 percent, and Dot Snyder of Waco, who got 30.5 percent. State Rep. Kenny Marchant, R-Carrollton, coasted to an easy win in CD-24 in his first bid for Congress. Former Public Utility Commissioner Becky Armendariz Klein won the Republican primary in CD-25 and will face Doggett in November.

Nothing changed in the state Senate. The most serious race had former Rep. Yolanda Navarro Flores running against Sen. Mario Gallegos, D-Houston. He had to apologize in mid-race for a 17-year affair with a former stripper who is suing him for loans she says he hasn't paid back, and had to fend off a residency challenge from Navarro. But he got 54 percent and will stay in the Senate.

Houston produced the big shocker of the day, when Rep. Ron Wilson — the fifth most senior member of the Texas House and the most prominent Democrat on Republican Speaker Tom Craddick's team, lost to former teacher and State Board of Education member Alma Allen. Wilson loses his chairmanship of House Ways & Means, the committee that will handle tax bills during a special session, and is also usually the lead on gambling bills, which are supposed to be a major component of that school finance package. His votes with the Republicans on redistricting, and before that, for Craddick, galvanized his fellow Democrats in Houston and they worked hard to beat him. As a friend put it, Houston Democrats apparently don't mind if you're caught in bed with a stripper, but don't want to catch you in bed with a Republican speaker.

Hate the Spin, Love the Spinner

The "what it all means" industry was in full production after the primaries, with Republicans saying the elections proved Democrats don't like bipartisanship, and Democrats saying the elections proved their party's voters don't like Democrats crossing over to help Republicans like House Speaker Tom Craddick. Another spin we heard from Republicans was that trial lawyers own the Democratic Party and proved it with an enforcement campaign aimed at Democrats who voted to limit lawsuit rewards in medical malpractice and other cases.

Democrats countered by saying two of the highest-profile House members on that list won in spite of the opposition from well-financed, trial-lawyer-backed candidates. We're not inclined to take the participants' version as Truth Itself, but there are grains of truth in all of those spins.

• Texas Democrats, for the first time, had a concerted plan to knock off incumbents in their own party who didn't toe the line. House Democrats who didn't go to Ardmore for the first redistricting walkout last year were targeted, and those who went got at least a little bit of backing. The House Democratic Caucus gave money to several representatives who went to Ardmore even when those people were targeted by trial lawyers an others. Two cases in point: Reps. Dan Ellis, D-Livingston, and Allan Ritter, D-Nederland, both of whom were high on the trial lawyer hit list. Both men won.

The purification exercise is new for House Democrats; former Speaker Pete Laney, D-Hale Center, formed the Texas Partnership to protect incumbent Democrats. He was trying to fend off Republican efforts — led by Craddick — to win a GOP majority in the House. State reps tend to stick with incumbent speakers whether they like them or not, and Laney's efforts won him at least one extra term and maybe two. Now that the Democrats are in the minority in the House, they're doing what Republicans used to do: Republicans regularly try to weed out what some call RINOs — Republicans in Name Only — and the Democrats have apparently embarked on a parallel DINO eradication effort to keep members of their pack from siding with the new management.

• Trial lawyers were organized and bent on revenge, and they were mostly successful in their efforts to knock off Democrats who voted against them on Prop. 12, last year's constitutional amendment limiting lawsuit damages. Their misses were big ones: Ritter beat former Sen. David Bernsen, who lost the land commissioner race in 2002 and who originally recruited Ritter for the Democrats. Ellis beat Nancy Archer, whose husband is a prominent attorney.

Rep. Glenn Lewis, D-Fort Worth, was on the House Democrats' hit list. He was one of Craddick's early supporters and chairs the House County Affairs Committee. Marc Veasey, a former sportswriter who worked for U.S. Rep. Martin Frost, beat him. Another chairman, Jaime Capelo, D-Corpus Christi, lost a race he blamed on trial lawyers. Abel Herrero and Nelda Martinez will be in next month's runoff. And Rep. Roberto Gutierrez, D-McAllen, made a runoff, but would have lost if Veronica Gonzales had only 55 more votes; some of his friends were urging him to surrender.

Rep. Miguel Wise, D-Weslaco, also lost a reelection bid. He lost the old-fashioned way, to a fireman who went door-to-door looking for votes. Former Rep. Tracy King, who narrowly lost a runoff to Rep. Timo Garza, D-Eagle Pass, in 2002, won the rematch with 61 percent of the vote. Rep. Gabi Canales, D-Alice, finished second going into a runoff with Yvonne Gonzalez Toureilles, a trial lawyer favorite. Rep. Robby Cook, R-Eagle Lake, survived his primary after considering a party switch. He got 65 percent, and will run against the winner of a GOP runoff between Jean Killgore and Jay Yates.

Rep. Tommy Merritt, R-Longview, lost a special election for Senate earlier this year, but he won his won primary for reelection without sweating, getting 67 percent. Former Rep. Billy Clemons won the GOP primary for a chance to challenge Rep. Jim McReynolds in East Texas next November. Rep. Jack Stick, a freshman Republican from Austin, drew two challengers for his first reelection primary, but beat them easily. He's got a race in November, too.

And Charles "Doc" Anderson won the GOP primary for the right to face Rep. John Mabry, D-Waco, in November. Anderson lost the primary in 2002, and Mabry went on to win what many believe is a Republican seat in the House.

• Voters didn't turn out in the numbers expected by Secretary of State Geoff Connor, but he was close. He expected about 1.7 million Texans to vote out of the 12.3 million registered to vote. As it turned out, the Democratic primary attracted 840,777 voters and the Republican primary drew 686,924 (Disclaimer: Those are unofficial returns, and we used the number who voted for president, which is the office, on both ballots, that got the highest number of votes). add it up, and about 12.5 percent of the state's registered voters — one in eight — showed up to vote March 9.

Put Your Hand on the Radio

Gov. Rick Perry has signed onto a property tax movement pushed by Houston radio talk shows and picked up by a few Republican House members during the 2002 campaigns, saying he wants to reform the appraisal process and limit the growth of homestead appraisals and of local government. Perry's second education-related proposal — there will be four when this is done — would cap annual increases in taxable homestead values at 3 percent.

Commercial properties, including apartments, would be on the property tax rolls at their full appraised values. Sales prices of properties would become a required part of the public records — real estate agents, developers, and commercial property owners have fought such disclosure in the past. Appraisal boards would be reconfigured, with five locally elected officials presiding over property values instead of appointees. The idea is to give voters a way to vent; the state comptroller would remain in the position of making sure those boards don't undervalue property to reward local voters.

That's always been a dangerous political position for comptrollers; having local boards in place with county judges and mayors and tax assessors in charge puts future comptrollers in danger of skunk fights with local politicos, and on the wrong side of the fight, where voters are concerned.

Cities, counties and hospital districts would be barred from raising property taxes beyond what's needed for population growth (measured by construction permits) and inflation. If they wanted more money than that, they'd have to ask voters. A ban on unfunded mandates from the state would protect them from getting a cap on income while the state is piling new and expensive duties on them. Who would put a cost on those mandates? The state comptroller.

A proposal to cap property tax appraisal increases at 5 percent failed last session, but the comptroller put a number on it, saying it would have cost about $300 million a biennium. A lower cap would cost more, but the governor's office doesn't have an exact number yet.

Sand in the Oyster

It creates two potential imbalances that will have to be worked out in legislative committees that look at the governor's proposal. One is a disparity between residential and business property; the other is a disparity between homes that are appreciating and those that aren't.

Business lobsters screamed loudly, and with some success, when gubernatorial aides floated the idea of splitting business and residential property into state and local property tax rolls, respectively. The property taxes on businesses would be used for the state's share of public ed and the residential rolls would finance the local portion. Businesses like having their property tax values and rates tied to residential rates, since that links their fate to the fates of voters, which is a form of protection in this racket.

On first blush, the Perry proposal creates a modified split roll, since it caps increases in residential homestead values at 3 percent and leaves business properties to the market. In a rising market, businesses would shoulder a greater share of the load. That would leave them paying a bigger share of local property taxes than homeowners. The counterpoint: business property values can drop faster than home values, and that would give them a bigger break in bad years.

When home values are rising faster than 3 percent, homeowners would be free from paying higher taxes based on the rising value of their homes. In a county where homes in one spot appreciate quickly and other spots where values remain relatively flat, the people with the increasing values pay less of their share over time. Put another way, they get a benefit others don't get. If the value of a home doubled in a decade — it happened all over Austin during the 1990s — it would take another 14 years for appraisals capped at 3 percent to catch up. It can set up a weird situation familiar in some parts of the state, where property values fall for several years before property appraisals begin to fall. It takes a while for the price that's falling to meet the appraisal that's still rising.

Do Not Be Alarmed: This is Only a Test

Start with the warning right here on the side of the package: House Speaker Tom Craddick hasn't endorsed the stuff he's been showing to House members. He had his staff pull some things together so people could look at numbers and start figuring out what they like and dislike. If you've been around for tax bills before, you'll remember that then-Comptroller Bob Bullock used to give lawmakers a peek at what various changes in various taxes might produce in new revenue. The lists weren't endorsements — just information. So it is with these.

Some of the numbers might be worth keeping in the back of your head while this conversation about public school finance is underway. For instance, the people who did the lists for Craddick start with $1.5 billion they think will be needed in any school finance bill to cover enrollment growth and the hold-harmless agreements that keep districts from losing money as a result of changes in the formulas. Then they add in what various taxes would raise. Some examples:

• A $1 state property tax would raise $10.4 billion a year.

• Raising the state sales tax rate to 8.5 percent from 6.25 percent would bring in $4.3 billion annually (and with local taxes would bring the overall sales tax rate to 10.5 percent). The same increase in the motor vehicle sales tax would raise $884 million a year.

• Whoever crunched the numbers for the House thinks a patch on the so-called "Delaware Sub" hole in the state's business franchise tax would bring in $238 million a year.

• Video lottery, by these estimates, would bring in $561 million a year.

• A $1 increase in the tax on a pack of smokes would bring in $854 million annually.

• Some "third rail" taxes, like the $1.3 billion you'd bring in by taxing food for home consumption, the $245 million you'd get with a tax on water and the $566 million a tax on residential gas and electricity would bring into the state treasury. They've got the $411 million the state could collect with a sales tax on legal services, and so on.

The House had a bunch of numbers run, and the bottom line number is interesting just because it's consistent on each of five sheets that describe different scenarios for tax bills. Each package totaled close to $17.3 billion. That's enough to cover enrollment growth and to level out local enrichment programs in local districts and to wipe out local property taxes altogether.

What Does Each New Dollar Buy?

The adequacy study done for the Legislature didn't get any of its numbers changed, as was rumored, but some of the things that might have been in that report at one time didn't make it into the report that got to the Pink Building for release. The authors of the study estimated what it would cost to get 55 percent of the kids in Texas public schools through the new standardized tests, and we told you about that last week. What the report didn't include was any estimate of what it would cost to get more than 55 percent of the students over that hurdle.

Some legislators are still asking for that information, but it got left out of the report after people in the top three offices at the Capitol got a look at what it would cost to get 75 percent of the students through the test, or 85 percent. The numbers were big — several billion dollars more, according to one person who got a look — and, in the eyes of some, way too speculative to put in a report that would be used to figure out how much money the schools need.

Asked directly about it, Rep. Kent Grusendorf, the Arlington Republican who chairs the House Public Education Committee, didn't say he'd seen any such numbers. But he did say, "It's like looking in a crystal ball" to compute them. He said some of the experts who've talked to his committee think $1 billion in incentives for good performance would go further than ten times as much in new funding for schools. That makes him wonder, he says, whether another dollar in the system would produce a predictable outcome in student test scores.

Grusendorf's Senate counterpart, Florence Shapiro, R-Plano, says she and others in the Senate want to see the numbers — she says she's not aware they were ever computed — so they can figure out how much bang they'll get for each new buck.

Prosecutors Add Democrats to the Mix

Republicans defending the architects of the 2002 GOP takeover of the Texas House have suggested Travis County prosecutors shouldn't be looking solely at House Speaker Tom Craddick and the groups that helped elect the Republicans who then voted to make him speaker. So far, that investigation has apparently been focused on the Texas Association of Business, Texans for a Republican Majority, and other groups that were trying to get a Republican House.

But the grand jury wants to see if other campaigns for speaker were run the same way Craddick ran his. DA Ronnie Earle issued subpoenas asking for records from former House Speaker Pete Laney, Rep. Edmund Kuempel, R-Seguin, former Rep. Barry Telford, D-DeKalb, and Barry Miller, Laney's former chief of staff. Laney, after ten years in the corner office, lost to Craddick after Republicans won an overwhelming majority in November 2002. Kuempel was a candidate for speaker until then. The announcements from the DA didn't mention others who ran for speaker that year, including Reps. Warren Chisum, R-Pampa, Toby Goodman, R-Arlington, and Brian McCall, R-Plano.

If you were to hold a new race for speaker today, you'd get roughly the same list of candidates, starting with Craddick and Laney.

Add those to roughly five dozen other subpoenas that have already been filed and the boxes are piling up. There's also a civil lawsuit filed by some of the Democrats who lost to some of those Republicans, and there's apparently some overlap between what's being filed publicly in the civil suit and what's not available publicly in the criminal case. And there may well be more subpoenas we don't know about: They're filed for public viewing at the discretion of prosecutors, and don't have to be filed at the same time they're served. Some of the five dozen mentioned above were served months ago, but only became public a couple of weeks ago.

College Loans, If the State Can Afford It

Public universities are complaining to lawmakers about funding for the B-on-Time college loan program we wrote about last week. One problem, as we said, is that there isn't enough money in the system to make the loans to all the kids who qualify. They and their parents are finding out in the next month whether they'll get the loans.

But two other problems are nagging lawmakers and higher ed folks alike. First, the Legislature did a last-minute, slap-dash job last session — lawmakers described it that way — that would fund the program in the 2006-07 school year with five percent of the discretionary tuition charged at public universities. In simple and inexact terms, that's the money schools raised as a result of newly deregulated tuition.

Two problems: it's not nearly enough money to fund the program. And the public universities are peeved that students at other schools — including private universities —can use the grants funded by tuition raised at public institutions. It's not an issue just yet, since the startup of the loan program is funded with other money. But the schools are making lots of noise, it's the subject of an interim study, and lawmakers are already scrambling to find new money or cut the private schools out of the formulas. Keep watching.

The Sludge Report

Gov. Rick Perry waited five or six weeks for unsubstantiated rumors about his marriage and private life to go away, long past the time when a rumor would usually spend itself and long after the time when most public figures would have stepped forward to say something, if indeed they decided to say anything at all. The unsubstantiated rumors, widespread on the Internet and in conversation in the political community, told of a Perry affair with, variously, one of half a dozen women and men, of First Lady Anita Perry moving out of the mansion and into a house or apartment in one of at least three cities, and filing for divorce in one of at least four counties. Perry would resign as a result.

Political reporters chased the rumor for five weeks — and in the absence of facts or sources to back up the claims, kept it out of their papers and off their airwaves. A couple of publications — the Austin Chronicle and the Quorum Report — made reference to the rumors without spelling them out, and apparently to point out they knew what was going on and didn't want to have anything to do with it.

Then, the Austin American-Statesman taped Democratic Party Chairman Charles Soechting fueling the rumors for a Houston crowd. With that, Perry decided to talk exclusively to that paper to deny the particulars and to try to put the gossip to rest: "I don't think a rumor can just get to critical mass by itself. I think you have to have a well-thought-out, organized effort to disseminate that kind of information and keep it going day after day after day after day."

Soechting gave Perry the opening to talk with these comments: "Ladies and gentlemen, I ask you to stay tuned. There's a lot of things happening in Texas. For those of you that know, there's a lot of stuff happening at the state Capitol. And you're going to be excited when you learn more and more about it. So I wish I could tell you more, but I think if you've got someone sitting next to you (who) knows what's going on, just get them to whisper it to you. How many of you all know? Raise your hands up. That's right. They had a rally up there in support of the governor today. Some of his friends said, 'Come out, Rick, and we'll support you.' Anyway, it's a good time for us."

Texas First Lady Anita Perry, in a statement faxed the next day to reporters who were chasing the Statesman story: "It's very sad that some people believe that spreading false, vicious and hurtful rumors is acceptable behavior. Rick and I are both outraged that people would drag our family into such ugly, politically motivated nonsense."

Political People and Their Moves

Anne Whittington, a well-known Republican fundraiser from San Antonio who led Republicans and Independents for Tony Sanchez, the Democrat who ran against Gov. Rick Perry in 2002, is doing fundraising for Comptroller Carole Keeton Strayhorn, who has been elbowing the governor for months and might challenge him in next year's primaries...

The Guv appointed three people to the Texas Real Estate Commission, which licenses agents and brokers. Realtors Elizabeth Leal of El Paso and Mary Frances Burleson of Aubrey, and William Flores, a Sugar Land accountant, will all join that panel. Perry also designated John Walton of Lubbock to chair the board...

Gov. Perry, his wife Anita, and their daughter are off to Italy on what his aides say is an economic development trip on behalf of the state. The state gets it for free, though: he's decided to pay the travel costs out of his campaign accounts instead of the state-run private foundation set up for eco devo expenses. That foundation runs on private donations and not taxpayer money, but it's still a state-owned operation, and Perry decided to pay for the trip with non-state money...

Deaths: Ed Wendler Sr., a liberal stalwart involved in Democratic politics — mostly from Austin — for decades, of heart failure. Wendler never won office (he tried twice), but helped a lot of Democrats who did. He died in Dallas at age 72...

Mark Smith, a Motorola lobbyist who started his career working on environmental issues for former Speaker Pete Laney in the House and at the old Texas Air Control Board, of ALS. He was 40...

Jim Baker, a former member of the Capitol press corps and city editor for papers in Dallas and Austin who also worked on several campaigns and for Texas Railroad Commissioner Jim Nugent before returning to journalism at the Beaumont Enterprise. Nugent's nickname was "Snake." A friend of Baker's remembered that the two were referred to as "Snake and Bake." He was 64.

Quotes of the Week

Gov. Rick Perry, in a speech to cattle raisers reported by the Fort Worth Star-Telegram: "The worst thing that we can do is to come into a special session and create a whole bunch of new taxes in the name of educational excellence." Comptroller Carole Keeton Strayhorn, on Perry's proposal to limit property tax increases: "Homeowners want their property taxes reduced, not just capped."

Rep. Ron Wilson, D-Houston, blaming the Democratic Party and trial lawyers for his reelection defeat, in the Austin American-Statesman: "They wanted to make an example of me because I was kind of a runaway slave. Get me back on the plantation, I guess."

Texas Democratic Party spokesman Mike Lavigne, talking to the Fort Worth Star-Telegram after a concerted intra-party effort sunk Wilson and Rep. Glenn Lewis, D-Fort Worth, among others: "When you make a deal with the devil, that's what happens."

Texas Railroad Commissioner Victor Carrillo, talking to the Houston Chronicle on the eve of an election that sent him to an April runoff (he nearly won outright): "The question does remain whether in a Republican primary 'Carrillo' is an asset or a liability."

Congressional candidate Michael McCaul, before winning a spot in a runoff for CD-10, talking to KLBJ-AM in Austin as votes were being counted: "I would love for this evening to be over tonight."

Rice University engineering professor Dan Wallach, telling the Dallas Morning News that voters should get printouts to verify how they voted electronically: "A bunch of computer nerds are telling you that paper's a good thing. The purpose of an election is not to name the winner — it's to convince the loser they lost... With paper, a recount means something."

---

Texas Weekly: Volume 20, Issue 37, 15 March 2004. Ross Ramsey, Editor. George Phenix, Publisher. Copyright 2004 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.

---