Just Enough

What do you call the student who finishes last in medical school? A doctor. And what do you call legislation that passes by just one vote? A law, or one step closer to it. 

The House passed the tax bill to support its school finance package by one vote, after a recount, with House Speaker Tom Craddick voting, and with his floor folks throwing what weight they have left in a legislative body weary of voting on tax bills that don't seem to go anywhere. Final approval came a day later, and was, in comparison, a landslide. The bill passed by five votes.

That tax legislation isn't a law yet, but it moved the ball over to the Texas Senate, which will have it on a high-speed train by the time you read this. The legislation survived for a week after being passed by the House Ways & Means Committee, overcoming fears that it would be whittled to death by lobbyists and trade groups and taxpayers over the holiday weekend.

What came out of the House is pretty much what the committee approved. It includes:

• A one-cent increase in the sales tax, to 7.25 percent.
• An increase in sales taxes on motor vehicles and boats to 7.35 percent from 6.25 percent.
• Expanding the sales tax to include car repairs, bottled water, and certain types of computer programming.
• A $1 increase in the tax on cigarettes.
• A fresh attempt to close two loopholes that allow companies to avoid corporate franchise taxes by hiding most of their operations in partnerships and out-of-state affiliates.
• And a requirement that car sellers use Blue Book values when figuring taxes instead of whatever they claim the price to be.

All of that would buy a cut in local property tax rates. The money raised by the tax bill, supporters say, would allow them to cut local school property taxes to $1.23 per $100 valuation the first year and to $1.12 the second year. The current cap on those taxes is $1.50. If voters approve, it would also cover the costs of raising the state-mandated homestead exemption on those taxes to $22,500 from $15,000.

That's on its way to the Senate, which has different ideas. But there is more than a week left in the special session, and advocates of this "School Finance Lite" package say there's still time to get a smaller version of the reforms that eluded lawmakers during the regular session. 

School Finance, Oversimplified 

Lawyers for the state told the eight justices on the Texas Supreme Court that the Legislature — not the court — is the final arbiter of whether the state's schools are providing adequate educations to the children of Texas. The issue simply doesn't belong to the courts, and that's that. If the courts don't take the same position, the argument goes, they've left law behind and ventured into policy matters that are, according to the state's reading of the Texas Constitution, the sole discretion of the Legislature.

Lawyers who are suing the state say the Legislature has trapped schools between rising standards and tight budgets, denying them the ability to raise the resources they need to meet the goals that have been set for the schools. They said the state's accreditation system holds students accountable for test scores without holding school districts and the state fully accountable for the performance of the schools, creating the appearance of improvement without measuring whether the system is providing the "general diffusion of knowledge" required by the constitution.

The judges kicked that around, asking how bad the schools could get without judicial intervention, why they can't set a standard for adequacy just like they do in other areas, why the state says the school districts are asking the court to order lawmakers to spend more money, and whether the schools have to fail before legal remedies are available. They asked whether knowledge is being generally diffused when dropout rates are high and the state ranks near the bottom in the percentage of students who go on to college after high school. They asked whether the districts really have legal standing to sue, and why their side doesn't include any parents of school children or the children themselves. They wanted to know whether the school districts can ask for relief when the students — and not the districts — are possibly getting a raw deal.

The court asked the lawyers on both sides whether the state's cap on local property tax rates had become a de facto state property tax, which isn't allowed by the constitution. They asked whether removing the cap on property taxes would solve that constitutional problem even though it might be unpopular. They asked policy questions, pushing the school district lawyers to guess at whether their positions represent the views or desires of parents with kids in schools. They asked those lawyers whether evidence of steady progress on test scores is evidence that the schools have adequate resources to do their work. They wanted to know whether districts that are both small and poor would do better if they were merged into larger and richer districts.

The question with posting government records on the Internet is like the line in W.P. Kinsella's book Shoeless Joe (the movie was titled Field of Dreams): If you build it, will they come? A test: You can listen to the school finance arguments at the court's own website. Go to:

www.supreme.courts.state.tx.us/oralarguments/audio_2005h.asp.

The case you want is titled "NEELEY, ET AL, v. WEST ORANGE COVE, ET AL" and the audio link is reached by clicking on the case number you'll see on the left on that site.

Want something to read while you're listening? Case files are also online:

www.supreme.courts.state.tx.us/ebriefs/files/20050145.htm. 

By the Hairs on their Chinny Chin Chins 

The lowest reelection percentage turned in by a state senator last year was 57.1 percent -- nothing to worry over. And those senators aren't up for election again until 2008. But several House members won close races and could be called "Most Likely to Have Fine Reasons to Look Over Their Shoulders" while the Legislature is messing around with taxes and school finance. 

We pulled together a list of members who got elected after either a tight primary election and/or a runoff, a tight general election, or both. Rep. Charles "Doc" Anderson, R-Waco, had tight contests in March and November, for instance. So did Rep. David Leibowitz, D-San Antonio, who won a primary runoff and then, like Anderson, went on to beat an incumbent in November.

A couple of caveats before you hit the list. The first is our version of the stockbroker's national anthem: Past performance is not necessarily related to future results. The second: Some of the races on the chart appear to be blowouts; in every such case, you'll find that the owner of the big number squeaked into a runoff and did well, but not without breaking a sweat. And one more: Some of the 2004 elections noted here were downright weird and probably won't be repeated. Several of the Democrats on the list were in tight races because they were running against incumbents. In the future, presumably, most of them won't start the next election cycle as underdogs. On the other hand, the elections were only seven months ago, and school finance is one of those touchy issues that's both important to voters and politically treacherous to solve.

A New Deadline 

The state borrows money every year on Wall Street to cover its cash needs while it's waiting for tax money to roll in. The state also pays the money back quickly; it's strictly a cash flow loan. The instruments are called TRANs — Texas Revenue Anticipation Notes. Bond firms lend the money for a short period, the state makes its payments to schools and employees and all that on time, and when the tax money gets here, the state pays off the notes. It's not a big drama, but it is a lot of money — $6 billion to $7 billion.

The borrowing usually takes place on September 1, and Comptroller Carole Keeton Strayhorn sent a letter to other state leaders telling them the bond folks will want to know the outcome of the school finance budget by August 1. In the letter, addressed to the governor, the lieutenant governor and the speaker of the House, she says the bond rating agencies have told her office they won't provide ratings for the TRANs until they've seen a final state budget, including education. Without the ratings, the notes can't be sold. Gov. Rick Perry's veto of the public education budget, she says, makes it appear that the state has more than $30 billion in its purse, an amount that makes it difficult to justify borrowing a bunch of cash.

Strayhorn says the borrowing can be delayed, but that a delay might raise the costs of the TRANs issue for this year. State leaders hope to finish the special session, and the budget and school finance with it, within the next two weeks. 

The Other Courthouse 

Two men indicted by a Travis County grand jury last year on money-laundering charges have been re-indicted because prosecutors wanted to change the wording of the charges against them.  

John Colyandro and Jim Ellis are accused of illegally converting corporate money, which can't be used in elections, into money that could be used in elections. The indictments say the two, working for Texans for a Republican Majority PAC, or TRMPAC, sent $190,000 to the Republican National State Elections Committee, when then sent checks totaling that same amount to Texas candidates supported by TRMPAC. The word "check" in the original indictment is now replaced with references to "funds."

Another campaign operative and eight corporations were also indicted last year, and four of the companies have gotten their charges dropped in return for telling what they know and also by contributing to an ethics program at the University of Texas that has become a pet project of Travis County District Attorney Ronnie Earle. Representatives of one of the indicted companies, Westar Energy of Kansas, were quoted in The Dallas Morning News saying the company gave the money to TRMPAC to gain access to its founder, U.S. House Majority Leader Tom DeLay, R-Sugar Land. According to the paper, Martha Dickie, an attorney for the company, said in an Austin hearing that Westar hoped to win DeLay's help with energy legislation in Washington.

That grand jury, by the way, is a holdover. It was commissioned at the beginning of April to work on this and other cases for three months. Prosecutors say the term was extended for 90 more days, or through the end of September. That might turn out to be the last grand jury in a long procession that began with the 2002 elections. Prosecutors and grand juries have been working for more than two years on their suspicions that business and trade groups illegally coordinated their efforts with almost two dozen campaigns, and that some of those organizations, and their consultants, used corporate contributions in ways that are prohibited by state election laws. Most of the laws they're relying on carry three-year statutes of limitations, prosecutors have said, and so the deadlines fall between now and November.  

Bell's "New Mainstream" 

Texas Democrats need to shake off the "Austin insiders," stop trying to "out-Republican the Republicans" and make education the centerpiece of their campaigns, Chris Bell writes in a speech prepared for a party meeting this weekend.  

Bell, a former congressman and city councilman from Houston, says the State Democratic Executive Committee needs to try something new: "First, we can't afford another two years in which the people in this room are treated like props while Austin insiders pick our nominees like they're casting another sequel to Cannonball Run."

He takes a couple of swipes at Gov. Rick Perry, and says the Democrats should take in moderate Republicans who Perry "is trying to kick out of the [Republican] Party" and "independents who are getting scared about what's going on."

Bell, who's exploring a gubernatorial race but hasn't decided whether he'll run next year, takes a whack at "test-driven" education and suggests putting "principals and teachers back in control of schools and classrooms, give them textbooks that aren't censored by partisan ideologues, the materials they need to teach, [and] the technology needed for kids to learn."

And he saves some harsh words for his own party: "We've tried to out-Republican the Republicans, and all we've gotten for it is a demoralized base, demoralized donors, demoralized activists, and demoralized leaders... our struggle is to build a majority party that articulates a positive vision of the future that unites the majority of Texans, and we do this by talking about Democratic values, not abandoning them at the first report of gunfire."

He apparently plans to make a decision about whether to run within a month.  

Wiring Around the Establishment 

A new website — www.stepuptexas.com — is trying to attract Democrats who'll nominate, endorse, and promise to work for candidates for Texas offices from the county level to the U.S. Congress. The name on the effort is Trei Brundrett, who's identified as an Austin software developer. They let visitors nominate and endorse candidates after providing contact information, and encourage those endorsers to pledge time and money to the people they support. In early returns, Chris Bell had a three-to-one lead over John Sharp in the small sampling of "votes" in the governor's race (others with mentions: Lance Armstrong, Kinky Friedman, Paul Hobby, Ann Richards, and Roy Spence). The handful of Democrats who've shown up so far have put four names in the column for U.S. Senate, four more for Lite Guv, three for attorney general, two for comptroller (including Republican Carole Keeton Strayhorn, the incumbent). 

Run. Shake It Off. Repeat. 

Austin attorney Diane Henson, a Democrat, got 48.4 percent of the vote running for the Austin-based 3rd Court of Appeals last year. Republican Bob Pemberton, the incumbent, won that contest. Henson is taking another shot, this time for the seat that'll be left open when Bea Ann Smith opts against a reelection bid. Henson and Smith used to work together in an Austin law firm.

Taking the Organization Private 

The state's Health and Human Services Commission will close 99 offices and fire 2,900 people over the next 16 months in an attempt to save $646 million it now spends delivering services to people on Medicaid, CHIP, TANF and other state and federal programs. 

Much of that estimated savings — a five-year number, by the way — is supposed to come from privatization. A private company, Accenture, will run four call centers that will handle client traffic over the Internet, by phone, by fax, by regular mail, and in person.

Add Midland — hometown of House Speaker Tom Craddick — to the list of three locations for those centers. Two will be in central Texas — in Austin and in San Antonio — and another will be located in East Texas. The location of that East Texas center is still up in the air, though, according to officials with HHSC. Accenture and the agency are looking at three places: Longview, Athens, and Kilgore.

In addition to the four statewide call centers, HHSC will have 167 fulltime offices around the state and another 44 "satellite" offices open only during certain days of the week. But 99 offices are closing and their employees will likely have to relocate to keep jobs with the state or as private sector workers for the new state contractor.

The employee math works like this. HHSC has 5,800 people working in eligibility jobs for programs like Medicaid, Children's Health Insurance Program, and long-term care. About half of them — 2,900 — will lose their state jobs. Accenture is hiring 2,500 people, most of whom will work in the new call centers, and the company, according to HHSC, is giving hiring preference to the displaced state workers. The state, meanwhile, is looking for about 2,500 new people for adult and child protective services. Those hires weren't in the original plan, but after the state understaffing and lax enforcement led to abuse and deaths of elders and children, lawmakers poured in money and ordered the agency to beef up its army of caseworkers.

Whether either of those hiring options is viable for current employees is an open question. But it's not an immediate question. The "transition" starts in January, and will last about 10 months. It's entirely possible that someone working for the commission now will still be there in a year even if they're not in line for a job in the newly reorganized agency.

The workers' median tenure is 12 years, and HHSC plans to keep people partly on the basis of seniority and partly on the basis of whether they're willing to do whatever job is offered to them.

The agency has a website that shows what's happening in every region of the state, so you can see what's changing in a given area. The address: www.hhs.state.tx.us/maps/listing.shtml. 

Matters of Size 

Only California has added more people than Texas since the 2000 census. The U.S. Census Bureau says there were 22,490,022 here on July 1, 2004, or 1,638,232 more people than four years earlier. For a little perspective, try this: If those people had created a new city for themselves instead of sneaking in here and there, it would be the second-largest city in Texas. It's enough to populate more than two congressional districts (at their current sizes), or 11 statehouse districts (with the same asterisk). California added 2.0 million. Florida grew by 1.4 million. No other states added more than a million (or were even close) and two places — the District of Columbia and North Dakota — lost population during the first four years of the decade.

But those new Texans didn't form their own city. Three Texas cities were among the 20 fastest-growing cities in the country. San Antonio added 84,978, and ranked fourth nationally. Fort Worth added 61,988 residents — ranking it fifth on the fast growth list. And Houston added 55,743, enough to get it to sixth place on the national list. The top three were Los Angeles, New York City, and Phoenix. Dallas and Austin each added about 21,000 people — about the same as Brownsville and behind places like El Paso (+28,442), Arlington (+26,505), Laredo (+25,812), and Plano (+23,397).

Last on the numbers beat, the ten biggest cities in the state: Houston (2,012,626), San Antonio (1,236,249), Dallas (1,210,393), Austin (681,804), Fort Worth (603,337), El Paso (592,099), Arlington (359,467), Corpus Christi (281,196), Plano (245,411), and Garland (217,176). 

Quotes of the Week 

House Speaker Tom Craddick, asked whether bills under consideration by the Legislature would remedy the school finance lawsuit pending in court: "As far as a total fix I think, that was your question, I don't think it does that. It fixes some pieces of that, I don't think it's a total fix."

Craddick again, in a written statement sent to reporters after his first comments caused some of his colleagues to throw vases at the walls: "I have been asked whether I think HB 2 and HB 3 will cure all the problems in the lawsuit. I want to emphasize that I am not lawyer. Nevertheless, I do think that together the two bills will establish a fair and constitutionally sound school finance system, and we hope that it will pass muster with the courts."

Clayton Downing, director of the Texas School Coalition and a former school superintendent, in The Dallas Morning News: "Nearly everybody I know has given up on the Legislature and is ready to take our chances with the Supreme Court."

Sen. Mike Jackson, R-La Porte, talking about the special legislative session on school finance in the Houston Chronicle: "I don't think people are overly enthusiastic about being here. The mood I sense is everybody's pretty skeptical about being successful, and that creates the mood of, well, I hope we're not just here wasting our time."

Sen. Jane Nelson, R-Lewisville, in the Fort Worth Star-Telegram: "If the lieutenant governor, the speaker and the governor had gotten together... worked out those kinks [and] called us back, we could have been through in a week."

President George W. Bush, on U.S. Attorney General Al Gonzalez, a former justice on the Texas Supreme Court: "And all of a sudden this fella, who is a good public servant and a really fine person, is under fire. And so do I like it? No, I don't like it. At all."

Gubernatorial candidate Kinky Friedman, talking to a crowd about immigration at a book signing and quoted by the San Antonio Express-News: "We divide 679 miles of border into five jurisdictions. To each jurisdiction we appoint a Mexican general. To each of them, we hold $1 million in a bank account ... And we withdraw $5,000 every time we catch an illegal alien coming through his jurisdiction."

Kurt Wimmer, a media lawyer, in The New York Times: "When the Supreme Court says there's nothing wrong with forcing reporters to testify and go to jail, other lawyers are looking at that and saying, 'Why shouldn't I subpoena a reporter?'"

Political scientist Richard Murray of the University of Houston, asked about term limits by the Houston Chronicle: "The Legislature might be slow or even dumb, but they are not going to start limiting their own political futures in that way." 

Texas Weekly: Volume 22, Issue 6, 11 July 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 info@texasweekly.com. For news, email ramsey@texasweekly.com, or call (512) 288-6598.