The Longest Day

Picture this day in the Texas House: A major education overhaul, a new business tax (and several other taxes) to pay for it, a vote on property appraisal caps, another on a statewide property tax, and a vote on expanding gaming in Texas to allow high-tech slot machines and dog and horse tracks.

Attribute that vision to Tom Craddick. The Speaker of the House wants to move the two elephants in the room to the other end of the building, sending education reform and school finance and taxes along to the Senate before mid-March. He's got his tax chefs trying to find a way to make taxes palatable to a conservative Legislature, and his education team now has its plans unveiled. The Senate's education package is working on the other end of the building, but tax bills have to start in the House and the two issues are linked.

The House strategy is a kind of "how much reform can you stand?" While the tax guys are asking members what they'll do and won't do (see below), the education folks are offering up a bill that includes everything from lower property taxes to a later start for the school year.

Rep. Kent Grusendorf, R-Arlington, says his legislation would raise the state's share of the cost of education from the current 38 percent to 60 percent — a shift that would cost around $6 billion. He wants to add $3.2 billion in new funding for education above and beyond what's already in the proposed state budget for enrollment and other growth items. He'd lower local property taxes to $1 per $100 in valuation, and allow districts some room to raise local funds. It wouldn't end Robin Hood — the fund transfers from rich school districts to poor ones — but it would cut the dollar amounts from $1.2 billion a year to about $145 million (a number that would grow each year). Grusendorf's bill would reinstate $1,000 payments to teachers for health insurance and other expenses.

The legislation, he said, would raise accountability standards and make it easier to close bad schools. High performing campuses would be freed from some state regulations. The state would pay for college entrance exams for high schoolers. School districts wouldn't start classes before Labor Day each year.

Districts would get money to pay bonuses to their best teachers, and they'd have to provide "transparent" reporting of their spending, so everybody could see how money is spent on a district and even a campus basis. School board elections would be moved to November — when state officials are on the ballot — and trustees would serve four-year terms.

The education wonks around the state are chewing on the latest stab at a school finance solution, and they'll dribble out their reactions over the next few days. They posted preliminary numbers that show what would happen in each of the state's school districts, at www.house.state.tx.us.And before you read those, we'll pass along a caveat offered by one of the chefs for those numbers: "You'll notice that this sheet has the word 'estimated' on it in at least seven places."

On a Plane? In a Train?

House tax wonks are following a strategy laid out by Dr. Seuss in his highly regarded policy tract, Green Eggs and Ham. They've laid out the meal for House members and begun the questions: Would you like it on a boat? Would you eat it with a goat?

House Speaker Tom Craddick wants to get something to the floor of the House in early March. Ways & Means Chairman Jim Keffer, R-Eastland, set nine hearings — each on a different set of taxes — over the next three weeks. At the end of that exercise, that committee will spit out a bill for House consumption.

In the meantime, House leaders are trying to figure out which taxes are viable and which are radioactive. They're not letting the public see the menu of options, but members generally say they're getting peeks at the price tags on various school finance and education fixes, and then looking at the kinds of taxes that would raise enough money to match those price tags.

Nothing is dead except for personal income taxes and even that's a limited possibility. Some of the business taxes in the mix would hit people in partnerships and sole-owner companies, and that'll look a lot like personal income taxes to the taxpayers.

Discussions on the House side have included almost any taxes and fees you can imagine, including some that have been "dead" in the Lege one or more times: Slot machines (or, if you prefer, video lottery terminals, or VLTs) at horse and dog tracks; business taxes that include taxes on payrolls; split rolls, where property values are capped on residential properties but not business properties; new taxes on alcoholic beverages and; transfer taxes on real estate and sales taxes on commercial real estate leases; increases in sales taxes and extensions of those taxes to items that are currently tax-free. Craddick and Co. have been talking to some legislators in small groups to see what's palatable and what's not, and to see what's more palatable if it's tied to attractive programs.

Keffer's panel starts its slog through the tax thicket next week. The schedule: 2/9, property taxes; 2/10, appraisal issues; 2/16, sales and use taxes; 2/17, sin taxes and motor fuels taxes; 2/22, gambling; 2/23, franchise taxes; 2/24, other business taxes already on the books in Texas; and 2/25, "alternative forms of business taxation."

Number Two, and in the Wings, Number Three

For all the noise about the gubernatorial contests next year, only Gov. Rick Perry has declared outright that he'll seek the GOP nomination. Add two more names.

Kinky Friedman is now in the hunt, having jumped from "thinking about it" to "running." He declared his candidacy — as an independent — at the Alamo, in a stunt broadcast live on the Don Imus show. By choosing not to run as a Republican or a Democrat, Friedman has to collect 45,540 signatures in the weeks following next year's primaries, and they have to come from voters who don't vote in either primary or in the primary runoffs. Raging against the machine isn't just a gag: It worked for two governors who weren't initially considered serious candidates: Jesse Ventura and Arnold Schwarzenegger. And it almost turned former U.S. Sen. Phil Gramm into the answer to a trivia question, when an unknown, unfunded schoolteacher from Mesquite — Victor Morales — knocked off three serious Democrats in a primary and then came within goose-bump distance of the incumbent in November.

Texas makes it tough to run as an independent for governor. A candidate has to get bona fide signatures from enough voters to have made up 1 percent of the electorate in the last governor's race, and have only two months to pull it off. The 2006 primaries are on March 7, and the deadline for signatures from independents is nine weeks later, on May 11. More rules: Signers have to be registered voters, and cannot have voted in either the Democratic or Republican primary, or in either party's runoff. That means anybody who signs a Friedman petition in March of next year would be disqualified if they then voted in either Party's runoff election in April. In the 2002 gubernatorial election, 4,553,987 Texans voted; that's where you derive the number of signatures needed: 45,540. Friedman will need to have that many certified signatures, and will have to gather somewhat more names to be on the safe side.

And former U.S. Rep. Chris Bell, D-Houston, filed papers with the state that make him a certified gubernatorial explorer. His exploratory committee allows him to raise money without saying absolutely and positively that he's a candidate. He's acting like one, though: Bell hired Bob Doyle of Washington, D.C., as his general consultant, Jason Stanford of Austin to do research and communications, and Heidi Kirkpatrick Hedrick of Houston to handle fundraising. Other Democrats have poked around about running, but Bell's the only one who's signed his work.

Fantasy Politics

Add U.S. Rep. Henry Bonilla, R-San Antonio, to the list of people who'll change courses, if others change courses first.

Bonilla is now openly saying he will run for the U.S. Senate if Kay Bailey Hutchison decides not to seek reelection next year. She's considering a run for governor in 2006, and since she's up for reelection at the same time, she'd have to give up the federal perch to try for the state job.

Bonilla has been talking to Republicans about a possible run for some time, but came out in radio interviews in San Antonio and Lubbock, saying he'd like Hutchison's job if she gives it up. That would be an up-or-out race for him as well.

Hutchison and Comptroller Carole Keeton Strayhorn have been circling Gov. Rick Perry for months (two years, in the comptroller's case) and while they haven't committed to anything, nobody in Austin would be surprised to see a three-way GOP primary a year from now.

The seats emptied by the two most prominent females in state politics would set off two more races. Agriculture Commissioner Susan Combs is already raising money for a comptroller run; others have talked about it but haven't been as active in positioning themselves for a contest in the March 2006 primary, or in the November general election. Two names most often mentioned for Comb's spot — she has said she won't be running for reelection in any case — are state Sen. Todd Staples, R-Palestine, and state Rep. David Swinford, R-Dumas. Other possible candidates include Rep. Charlie Geren, R-Fort Worth, former Rep. Tom Ramsay, D-Mount Vernon, and Democrat David Cleavinger of Wildorado. The job's political attractiveness was considerably enhanced when Perry turned it into a launching pad for his successful run for lieutenant governor in 1998.

A U.S. Senate seat, on the other hand, has always been a plum, and Texans who win those spots tend to hang on to them for two or three or four six-year terms. John Cornyn, who won Phil Gramm's spot in 2002, isn't going anywhere soon. Hutchison, who's been in place since 1993, when she replaced Lloyd Bentsen in the Senate, is ending her second term, as we've said, next year. Gramm held his spot for three terms, and Bentsen was in the Senate for almost four terms (he resigned to become U.S. Treasury secretary). Put it another way: Hutchison is only the third person elected to her spot in the Senate since 1957 (we're leaving out Bob Krueger, who served half a year between his appointment to the job and his loss to Hutchison in a special election); Cornyn is the third holder of the other seat since 1961.

It's the kind of rare opportunity that brings out the ambitions of political people in both parties.

Barbara Radnofsky, a Houston lawyer who's been testing the waters for almost a year, is expected to run for the seat. Ron Kirk, the former Dallas mayor defeated by Cornyn two years ago, is often mentioned as a contender. Former U.S. Rep. Jim Turner, D-Crockett, has said he would like to run for statewide office if the right opportunity opens up, and he has more than $1 million in seed money sitting idle in his federal campaign account.

On the Republican side, the 800-pound gorilla is probably Lt. Gov. David Dewhurst: He's wealthy enough, apparently, to self-fund a race if he had to; he's won two statewide elections against strong opponents; and he hasn't stepped in any of the sorts of potholes that spoil political fairy tales. Putting Dewhurst in the race would likely scare off other Republicans. But without him, there are tire-kickers galore, including two Bonilla colleagues, U.S. Reps. Kay Granger, R-Fort Worth, and Pete Sessions, R-Dallas.

Sidebar: The Dallas office of Vinson & Elkins snagged Kirk from Gardere & Wynne, and he says he'll be working there some, in Austin some, and in Washington some. Kirk says he's not thinking about running at the moment, but he leaves the door ajar: "We [politicians] always have the virus, but I like to think mine is in remission right now."

Two of his new colleagues have some interest in the answer to that question: Ray Hutchison, of V&E's Dallas office, is married to U.S. Sen. Kay Bailey Hutchison, and Radnofsky, a partner at V&E's Houston office, is running for Hutchison's seat as a Democrat next year.

An Overrated Launching Pad

Washington political experience is valuable in some states, but Texas voters have not been kind to members of their congressional delegation who seek statewide office.

Without regard to party or to popularity in Washington, D.C., or in their home districts, the voters usually treat past and present Persons of Congress as also-rans.

Among the state's 11 non-judicial statewide officeholders, none has served in Congress. Only two, Kay Bailey Hutchison and Carole Keeton Strayhorn, ever even ran for the U.S. House. Both failed, and both got over it and eventually ran successful statewide campaigns.

Former U.S. Sen. Phil Gramm made the jump from the House, but had a national reputation as a result of his efforts to help then-President Ronald Reagan from the Democratic side of the congressional aisle. He also got a huge boost for his well-publicized party switch, when he resigned the seat he won as a Democrat and then won the resulting special election as a Republican. A contemporary with a similar reputation — Kent Hance — won a spot on the Texas Railroad Commission after losing the Senate race and then hit the wall when he ran for governor in 1990.

And there's a good-sized list of pols who discovered the historical difficulty of converting popularity in one Texas congressional district into statewide success. Six have tried in the last decade or so: Mike Andrews, D-Houston; Joe Barton, R-Ennis; Ken Bentsen, D-Houston; John Bryant, D-Dallas; Jim Chapman, D-Sulphur Springs; and Jack Fields, R-Humble. Each ran for Senate and only Barton, who lost in a special election and thus didn't risk his House seat, remained in Congress after losing statewide.

Wheel of Fortune

David Kleimann, a Willis businessman who grew up in Montgomery County, says he'll be in the race to replace Sen. Todd Staples, R-Palestine, if there is one. Staples hasn't said he's leaving, but has quietly shown some interest in the Texas Department of Agriculture, where Commissioner Susan Combs is serving her last term. Combs wants to run for comptroller, if that's open, but gave the political world the signal that she won't be back to her current post.

Staples is concentrating on Senate stuff for now and keeping his head down, but the pack to replace him is forming. Bob Reeves of Center wants to run if it's open, and Frank Denton, a Conroe businessman, has shown some interest. Denton ran for mayor of Conroe last year and lost; a Senate race would be Kleimann's first contest.

A Chancellor, a Commissioner, an Election

Texas Railroad Commissioner Charles Matthews, named a few weeks ago as the sole finalist for chancellor of the TSU System, now officially has the job. That done, he resigned from the RRC, freeing Gov. Rick Perry to name former Rep. Elizabeth Ames Jones, R-San Antonio, to the commission.

Matthews is replacing Lamar Urbanovsky as chancellor of the system that includes Texas State University in San Marcos, Angelo State University in San Angelo, Sul Ross University in Alpine, Sam Houston State University in Huntsville, Lamar University in Beaumont, and all of the other campuses of those schools. Matthews, a former Garland mayor who's been at the RRC since 1994, got his undergraduate degree at the University of Texas at Dallas, a master's degree from Texas State University, and is finishing his doctorate at UT Austin.

He's taking one employee with him; Melissa Columbus will leave the RRC to work at Matthews' executive assistant at TSUS.

Glen Starnes, one of two Republicans in the running to replace Jones in the state Legislature, can't get off the ballot. But he told the San Antonio Express-News he'll campaign for the other Republican in the race: Joe Straus III. Starnes is apparently afraid the Republicans will split the conservative vote and open an opportunity for Rose Spector, a former justice on the Texas Supreme Court and the only Democrat in the special election to replace Jones. There's an independent in the running, too: former state Rep. Paul Silber. Straus also picked up an endorsement over the quick campaign's last weekend from Gov. Perry. The two share support from several Republican financiers who live in HD-121.

Jones dropped fundraising efforts because of questions about whether she is or is not an officeholder. She was reelected to the House in November. Gov. Perry, anticipating Matthews' resignation, said he intended to appoint Jones to that post. Jones then declined to take the oath of office for another term in the House, since doing so would have barred her from the appointment.

Since she wasn't in office, she was told she wasn't subject to the fundraising ban that prevents state officeholders from raising money during a legislative session. Jones, who has some $238,000 cash in her political accounts, started pulling together a fundraiser. But then the lawyers squirmed. Some state officials — appointees, mainly — remain in office even after their terms expire until their replacements are named. Since Jones' replacement hadn't been elected and sworn in, that created a question about whether she's still technically an officeholder. If so, no fundraiser. They called it off and she'll wait, with everyone else in office, until the session is over.

Flotsam & Jetsam

U.S. House Majority Leader Tom DeLay's legal defense fund is close to the $1 million mark, according to Public Citizen. That group says DeLay, R-Sugar Land, raised $439,550 of that amount during 2004. You can see details — and the group's opinion — at their website on the subject: www.DethroneDeLay.org. He's raised $352,500 from other members of Congress. Two Texans are among the top givers in that category: U.S. Rep. Henry Bonilla, R-San Antonio, contributed $15,000, and Lamar Smith, also R-San Antonio, donated $10,000 to the fund. Seven other House members from Texas gave, as did U.S. Sen. Kay Bailey Hutchison, who donated $5,000.

Three DeLay associates are under indictment as part of a Travis County inquiry into Republican fundraising and campaign efforts in the 2002 elections. DeLay has not been accused of any wrongdoing in that investigation, which is still going on. Travis County prosecutors dropped charges against another of eight companies indicted in that investigation. Cracker Barrel Old Country Store was charged with making illegal campaign contributions. The company admitted no wrongdoing, but agreed to go forth and sin no more, to post its political contributions over the next two years on its website, and to give $50,000 to the University of Texas for programs in ethics. Sears Roebuck and a third company, Diversified Collections Services, Inc., made similar deals late last year. Five companies remain under indictment.

• The Talmadge Heflin-Hubert Vo election contest comes to a head next week, starting with a report from Rep. Will Hartnett, R-Dallas, who listened to two days of inch-by-inch testimony from the lawyers trying to whittle away at — or, on the other side, enhance — the 33-vote margin in that race. Heflin, the chairman of the appropriations committee in the House, lost to Vo in November but contends his opponent rode illegally counted votes to victory. In fact, both sides turned up some hinky votes and the question is whether Hartnett and then the House will see a clear advantage for one candidate or the other. He reports to a committee, which then passes its work to the House. He told the Houston Chronicle that his report will "implicitly state a winner." It's expected on Monday; the committee meets Tuesday.

• Comptroller Carole Keeton Strayhorn, asked for a title for a talk at the University of Texas at Austin, offered up "The State of the State." An aide says there's nothing to it, that that's the title she always uses for speeches about how Texas is doing. Maybe, but this speech is different: It comes just a week after her nemesis, Gov. Rick Perry, gave his official State of the State speech to legislators.

• Lt. Gov. David Dewhurst is getting roasted by Gov. Rick Perry and a panel of senators and reporters to raise money for a journalism scholarship fund named for late political reporter Sam Attlesey. They're expecting several statewide elected officials to show up to watch. Presidential adviser Karen Hughes lent her name to the event, and Sens. Florence Shapiro, John Whitmire and Judith Zaffirini, and Austin bureau chiefs Christy Hoppe of The Dallas Morning News and Clay Robison of the Houston Chronicle will help with the roasting. Until his death two years ago, Attlesey was the Dallas paper's chief political writer and one of the best and best-liked reporters in Texas politics. His family and friends set up the scholarship fund in 2003, and the goal of the fundraiser is to boost the size, number, and prestige of the scholarships. They're coordinating contributions and tickets and such through the College of Communications at UT, or you can get a copy of the invitation by clicking here. The roast is on March 16 at the Austin Club in Austin.

• Comptroller Carole Keeton Strayhorn told state budgeteers she could bring in another $435 million in tax money if she's allowed to keep her current budget and, with it, her current staff of tax auditors and enforcement people. The comptroller's office, like most other state agencies, was ordered to show lawmakers what would happen if budgets this time were five percent lower than last time. In Strayhorn's case, the cuts would cost about $420 million more than they would save.

Political People and Their Moves

Al Gonzales' nomination as U.S. Attorney General won Senate approval on a 60-36 vote. He's a former Texas Secretary of State and justice on the Texas Supreme Court and the second member of George W. Bush's cabinet to have once been on the Texas state payroll (Education Secretary Margaret Spellings is the other).

Rep. Jim Dunnam of Waco will do another term as chairman of the Texas House Democratic Caucus, and Rep. Dawnna Dukes of Austin will stay on as vice chairman. Rep.Terri Hodge of Dallas was reelected as treasurer, and the one newbie in the group is freshman Rep. Veronica Gonzales of McAllen, who will replace Rep. Jessica Farrar of Houston as the group's secretary. None of those elections were contested.

After finishing third in an important preliminary vote, former U.S. Rep. Martin Frost, D-Dallas, dropped out of the running for chairman of the Democratic National Committee. The other Texas candidate in that contest — former Dallas Mayor Ron Kirk — dropped out in the very early rounds and never mounted a serious campaign.

Austin lawyer Lynn Sherman, a water specialist who worked at the Lower Colorado River Authority before getting into the water development business, is signing on with the government relations shop at Winstead Sechrest & Minick.

State Auditor John Keel got an award named for his former boss, getting the "Bob Bullock Award for Outstanding Public Stewardship" at the Government Technology Conference in Austin. Keel only recently got the auditor job; he was staff director of the Legislative Budget Board for 10 years and worked for Bullock, among others, during his career in state government.

Bob Loftin, formerly with the Texas Legislative Reference Library, left state employment for the private sector, joining the Austin-based consulting firm Strategic Partnerships Inc.

Ray Hymel left the Employee Retirement System, where he worked in intergovernmental relations, to join the Texas Public Employees Association, for which he'll lobby the legislature on some of the same issues.

Deaths: Henry "Moak" Rollins, an engineer and businessman who served on the Texas Public Utility Commission during Gov. Bill Clements' first term, back when the PUC set utility rates and was in the public eye all the time. He was 83... Stewart Davis, a former Austin reporter for the Houston Chronicle and The Dallas Morning News, and then a spokesman for the state's old Department of Human Services. He was 67...

Quotes of the Week

Independent gubernatorial candidate Kinky Friedman, telling the Fort Worth Star-Telegram he's got no skeletons in his closet, and then proving it by recounting war stories from his band days: "When Eric Clapton offers you a toot of cocaine, what are you going to do? Say, 'No thanks, I had an apple on the train?'"

Friedman again, in that same article: "More than $100 million was spent in the last gubernatorial race by the two candidates for a job that pays $115,000. That smells fishy to most of us. Something is wrong with that picture. I've always said a fool and his money are soon elected. But not this time around. The guy with the most money shouldn't always win."

Gov. Rick Perry, telling reporters he hopes Texans in Washington, D.C., will overcome their ambitions for higher offices such as his: "I hope our delegation becomes a very, very powerful and tenured delegation."

Texas Insurance Commissioner José Montemayor, in a report to the Legislature: "Credit scoring is not unfairly discriminatory as defined in current law because credit scoring is not based on race, nor is it a precise indicator of one's race."

Sen. Rodney Ellis, D-Houston, reacting to news that state regulators won't block insurance companies from basing premiums on customers' credit ratings, in The Dallas Morning News: "It doesn't matter if credit scoring is actuarially justifiable, it is morally unacceptable."

Sen. Florence Shapiro, R-Plano, in an Austin American-Statesman story about teachers who converged on the Capitol to argue for more money for education and pay raises: "Who's paying for all the substitutes?"

Sen. Bob Deuell, R-Greenville, before the Senate nominations committee approved the appointment of Weatherford car dealer Roger Williams as Texas Secretary of State: "We need to go talk to our sales manager before we vote."

Rep. Fred Hill, R-Richardson, talking to The Dallas Morning News about his committee's interim report on appraisals, which the paper said was stuck in House Speaker Tom Craddick's office: "I can't tell you what they're doing with it, other than they're probably not real happy with its recommendations with regards to caps."

Dan Mindus, a spokesman for a food industry group fighting junk-food taxes, in the Houston Chronicle: "If you're going to tax people because of behavior that might incur a future health care cost, are we going to tax people who don't floss? Are we going to tax people for their sexual behavior?"

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Texas Weekly: Volume 21, Issue 32, 7 February 2005. Ross Ramsey, Editor. George Phenix, Publisher. Copyright 2005 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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