Perry: We're Not Gonna Take It

Gov. Rick Perry says the state should turn down $555 million in federal stimulus money tied to unemployment insurance, because the requirements are too strict, prompting some lawmakers to say they'll push to get enough support for the program to go around him.

Perry has been mulling the issue for several weeks but announced at a Houston business that the costs of adding what the federal government requires — the estimated costs are $70 million to $80 million annually — outweigh the benefits of taking the federal money.

"Texans who hire Texans drive our state’s economic engine," he said, announcing his decision. "During these tough times, Texas employers are working harder than ever to move products to market, make payroll and create jobs. The last thing they need is government burdening them with higher taxes and expanded obligations. I am here today to stand with Texas employers and the millions of Texans they employ to resist further government intrusion into their businesses through an expansion of our state’s unemployment insurance program."

Perry said the required changes to UI would "force employers to change their hiring practices" and would raise their taxes, force them to raise prices and make it harder for them to cope with the current economy.

"The math is pretty simple," Perry said. "Employers who have to pay more taxes have less money to meet their payroll, hire new employees, to grow their business. It's really that simple. If Washington really wanted to help... they would send the money with no strings attached, just like they did in 2002." And he said Washington is trying to force the state to accept policy changes the Legislature has repeatedly refused to accept.

"Governor Rick Perry deserves praise for rejecting this money and doing what's right for Texas," said Texas Association of Business President Bill Hammond, an early and loud opponent of the federal UI stimulus. "These funds had strings-attached that would have tied up our state for years to come."

The feds want the state to change the base employment period used to figure benefits, and then to select two things from a list of options that includes allowing out-of-work part-timers to collect benefits if they're seeking new part-time jobs (currently, they have to say they're seeking full-time work to get benefits), allowing "trailing spouses" to get benefits if they lost their jobs following their spouses to new jobs in different locales, allowing people in approved training programs to collect benefits, and so on. Legislative Democrats and labor lobbyists have been pushing for the changes, but the federal money has attracted some Republicans, too.

"If today's decision stands, employers will start paying an additional $555 million in taxes in January, courtesy of the governor, and Texas workers who desperately need help will be left to fend for themselves," said Texas AFL-CIO President Becky Moeller. "In short-circuiting the legislative process, Gov. Perry is telling employers that it is better to pay $555 million extra to keep the current lousy UI system than to pay an incremental increase seven years from now for a better system. Here’s hoping the Legislature sees this issue differently."

If Perry prevails, the rules for unemployment insurance would remain as they are — nobody will lose their benefits. But the changes that come with the stimulus would add unemployed people who don't currently qualify for benefits. That's where the extra costs would come from.

Perry is betting that Texas voters — Republican primary voters in particular — are unhappy taking a partially funded federal mandate and about the federal stimulus package in general. And he can say, honestly, that the increased costs forced on unemployment insurance by new federal standards will eventually be funded with taxes on Texas businesses. After he said he's against taking the money, he appeared on Fox News. They played a sound bite from Vice President Joe Biden: "Six months from now, if the verdict on this effort is that we've wasted the money, we built things that were unnecessary or we've done things that are legal but make no sense, then, folks, don't look for any help from the federal government for a long while. Perry's reaction: "If the message is 'We're not going to help you any more,' I hope we can hold him to that."

The politics aren't simple. A counter argument for voters: Taking that $555 million would significantly lower an impending deficit tax on Texas businesses. State officials estimate UI will be underfunded by $750 million by October, triggering a deficit tax on Texas employers (or state borrowing that would be repaid by those employers). The cost of the changes the feds require in return for that money puts the break-even point on this deal at seven years ($555 million divided by $80 million). In the meantime, it amounts to $555 million in tax money that's being shunned by the state — used wherever else the federal government wants to use it. And it means $555 million in deficit taxes to be collected from Texas employers during a recession.

The governor's likely opponent in next year's GOP primary — U.S. Sen. Kay Bailey Hutchison — voted against the stimulus package, and wasn't particularly critical of Perry's decision: "I hope that the Governor has carefully thought through the potential outcomes of today’s decision. With the state unemployment fund dangerously close to falling below the legal threshold, it is imperative that the Governor does nothing that potentially burdens small businesses with higher taxes in tough economic times or pushes those who have recently become unemployed and their families into further economic peril."

Perry doesn't get the final say-so on this; legislative efforts to work around him are already underway. Mechanically, that would require two-thirds votes in favor of the benefit changes in both the House and the Senate. Two-thirds is what it takes to override a governor's veto (which hasn't happened since Bill Clements' first term). The soft approach — passing legislation that attempts to cut the strings attached to the federal package — is coming from Sen. Kevin Eltife, R-Tyler, Rep. Tan Parker, R-Flower Mound, and others, who've been working with Texas Workforce Commission Chairman Tom Pauken, a Republican and a Perry appointee.

"My efforts have been directed at developing a legislative approach which would allow Texas to get back our tax dollars without imposing any additional financial burden on Texas businesses after the federal funds run out," Pauken said. "The Governor believes that the Obama Administration won't permit Texas to do that. I concur with Gov. Perry that the federal government has no right to dictate to Texans changes in our state law that will last after the federal funds are long gone."

The hard approach got its first look within a couple of hours after Perry announced his opposition: A House committee on the stimulus voted 5-1 to proceed with plans to change UI and use the federal funds over the governor's objections.

"Today, the Select Committee on Federal Economic Stabilization Funding recommended that the Legislature make all necessary changes to receive unemployment compensation funds from the Federal stimulus package," said Rep. Jim Dunnam, D-Waco, the chairman. "...Right now Texans are struggling, and they deserve the Legislature's full attention. I look forward to working with my colleagues in the House and Senate to bring this $550 million in unemployment compensation to Texas."

Voter ID Out of the Senate

Ending a hearing that started 23 hours earlier, the Senate's Committee of the Whole heard its last witness at around 9 a.m. Wednesday and voted 15 minutes later to send the Voter ID bill to the full Senate. It was a 20-12 vote, with Lt. Gov. David Dewhurst voting with the rest of the Republicans against all of the Democrats.

They'll vote on that on Monday — presumably in the same formation, but without a vote from the Lite Guv — and send the bill on to the House. Voter ID legislation has had a better time in the lower chamber in the past two sessions, but there are more Democrats over there now and it's outcome isn't as certain. The House has approved Voter ID bills in each of the last two legislative sessions, voting on (mostly) partisan lines. In 2005, 78 Republicans out-voted a group of 67 members that included four Republicans and 63 Democrats. In 2007, 76 Republicans voted for a Voter ID bill, while 69 members — including two Republicans — were against it. Both of those bills, having passed the House, died in the Senate.

Passing it is a Republican priority. Stopping it is a Democratic priority. And both sides may be at that Hatfields and McCoys moment, where the fight's more important than the reason for the fight: If that's the case, they won't be able to sit down and figure out a compromise that lets both sides win a little bit.

Last week, Republicans in the Mississippi Legislature killed a Voter ID bill there after it was amended to include 15 days of early voting (Texas has early voting already; Mississippi doesn't). Lawmakers here have talked about possible changes to this bill — one, frequently mentioned, would allow voters to register to vote as late as Election Day.

Slow Start

The hyped debate over Voter ID legislation started with a parliamentary debate and then a stall while the Senate decided whether its rules would let the show go on. The hearing started Tuesday morning; the first witness started after 6 p.m.

The debate started with quibbling over whether Attorney General Greg Abbott should come talk to the Senate. An aide to Abbott was quoted saying the AG had been advised by the chairman of the committee to stay away. But the chairman, Sen. Robert Duncan, R-Lubbock, said in response to questions from other senators that that wasn't true: "No, I did not request the attorney general to refuse to appear."

But he also said the AG "shouldn't be a witness in a legislative debate if he might have to defend" the issue later in court.

The main hang-up: Whether a change in the starting time of the debate was officially posted far enough in advance. If not, they'd put it off. If so, they'd proceed, eventually. Duncan ruled they should go ahead and after a skirmish over that, they did.

Sen. Troy Fraser, R-Horseshoe Bay, fended off questions from his Democratic colleagues, reiterating his position that the bill doesn't suppress Democratic, elderly, and minority votes. Sen. Wendy Davis, D-Fort Worth, wanted to know if the bill would require people to pay for the IDs required to vote, and if that amounted to paying for the right to vote. At one point, Fraser stopped her and said, "I have trouble hearing women's voices." While some in the room tittered, he put on a headset to improve the situation, and continued from there. Sen. Judith Zaffirini, D-Laredo, wondered why the bill has no fiscal note indicating the cost of checking IDs, like similar legislation had two years ago. Fraser said legislative budgeteers had revised their thinking.

It was anything but a speedy hearing. Senators took eight hours to lay out the bill, try to score points for their sides, and to finally get to the first witness — which happened around dinnertime. Their plan: To hear from 15 invited witnesses, give each of those 10 minutes and then open it up for questions. And since this is taking place before the Committee of the Whole — the entire Senate — other committees, like Finance, are blocked from meeting while the Voter ID bill is up for consideration.

The first guy up for the Republicans — Hans von Spakovsky — has some Texas history. In the 2003 redistricting fight, the staff attorneys at the U.S. Department of Justice opined that the Texas political maps were illegal under the Voting Rights Act. They were overruled by their superiors — a group that included von Spakovsky. That plan was later ruled unconstitutional by the U.S. Supreme Court and sent back to Texas for alterations.

He said Voter ID would prevent a type of fraud that goes largely unreported because there aren't Voter ID requirements in place to catch it. He cited a New York grand jury investigation that caught a voter impersonation operation in the mid-1980s.

In the leadup to the debate on Voter ID, both sides were trying to gin up support. Judging by the relatively small size of the crowd in the Senate gallery, this is of more interest to insiders than to the humans outside the Capitol.

• A Friday Twitter "tweet" from Gov. Rick Perry, repeated throughout the weekend: "Citizens needed at the TX Capitol South steps next Tuesday at 7:45 in the morning... wear red & testify for Voter ID."

• The Texas Democratic Party emailed supporters and asked them to stop by the Pink Building to sign cards expressing opposition or to sign up and testify. Their version: "This legislation places bureaucratic hurdles between you and the ballot box and is part of a national Republican campaign to suppress the vote and keep failed leaders in office."

• The Republican Party of Texas got into the act, too, writing, "Just like Colonel Travis drew his line in the sand at the Alamo... the battle lines have been drawn in the Texas Legislature. Despite huge bipartisan support for Voter ID legislation, Texas Democrats are determined to keep it bottled up once again this session." They also asked supporters to stand up and be counted.

• The Texas branch of the American Civil Liberties Union weighed in, too, asking opponents of the bill to show up at the capitol.

• A spokeswoman for the League of Women Voters said at a press conference that the Legislature shouldn't waste precious time in a busy session with this legislation. Scorecard: In the first 55 days of the 140-day session, the House hadn't yet passed any bills out of committee; the Senate had its firs bill of the year on the floor that day.

• We covered the debate with cartoons, believe it or not. See them here, here, here, and here.

Little Kids, Big Bucks

Expanding pre-kindergarten from half-day to full-day would, according to supporters, cut the school dropout rate, help parents hold their jobs, significantly increase student achievement, and yield an economic return of $3.50 for every dollar invested.

It would also cost about $5,000 for each kid in the program.

The Senate sponsor, Sen. Judith Zaffirini, D-Laredo, said the bill would allow districts to voluntarily expand their half-day Pre-K to full-day Pre-K for currently eligible four-year-olds. They wouldn't add to the list of kids currently eligible, at least at first.

Schools could run their own Pre-K programs, but would have to use at least 20 percent of their funding to contract with private providers that meet the program's standards. They'd get a funding boost, too: The regular allocation for a child in school, plus a multiplier of 20 percent (in school finance lingo, they'd add a 0.2 "weight" for each kid).

The money would go directly to the school districts and not to private childcare providers — a change that Zaffirini said was meant to placate opponents of school voucher programs. That caught the attention of Sen. Florence Shapiro, R-Plano, who chairs the Senate Education Committee and who has tried unsuccessfully to pass school voucher bills: "We will utilize that language at other opportunities."

There's another difference between this and a voucher program. Here, school districts would decide which private providers were admitted to the programs, and the choices would belong to the districts. In a traditional "school choice" bill, that choice would belong to parents of a student, who'd be allowed to choose between public and private institutions, using state money to pay for it.

The biggest obstacle is the cost. The legislative fiscal note says Pre-K would cost $623.1 million in the first two years. The costs would rise from there, reaching $426.4 million in year three, $506.2 million in year four, and $515.3 million in year five. "It is a very costly, very expensive piece of legislation," Shapiro noted. The estimators think about 89,000 of the 200,000 kids in the current Pre-K program would be eligible for full-time Pre-K; their school districts would have to participate (it's optional), and then each parent would decide what to do — stay in half-day, go to full-day, or opt out.

"The committee substitute will reduce that," Zaffirini said of the fiscal impact, since it delays implementation of the full-day program by one year (which moves half the cost out of the budget being written now and into the next one). She also said she could tweak the funding formulas to make them less expensive to the state (and less lucrative to local school districts) than those in the regular bill.

Zaffirini has 10 co-sponsors in the Senate. The House version of the bill — sponsored by Rep. Diane Patrick, R-Arlington — has 64 co-sponsors, including Rob Eissler, a Republican from The Woodlands who chairs the Public Education Committee that will hear the bill as early as next week. The Senate committee left it pending, because of the fiscal note.

Flotsam & Jetsam

This week marks the end of the bill-filing period in the Legislature (though members who ask for late filings are rarely denied). And it's the end of the first 60 days of the session, when the full House and Senate can't consider legislation unless the governor declares it an emergency.

Nothing's made it to the floor of the House yet other than memorial and congratulatory resolutions (only three bills have been reported out of House committees; the first one would put live broadcasts of the State Board of Education on the Internet). And the Senate has passed exactly one bill — an initial run at repairing the state's badly broken safety net for developmentally disabled Texans (the upper chamber's committees got started earlier and have approved 69 bills for consideration by the full Senate).

The Texas Legislative Service has been keeping a running tally and finds bill filings up 20 percent — 1,011 bills — over this same point in the 80th Legislature. The breakdown: 4,071 bills have been filed in the House, an 18 percent increase, and 2,075 have been filed in the Senate, up 24 percent from two years ago.

• The U.S. Supreme Court decided in a North Carolina case that states are not required to protect minority voters in districts where they aren't in the majority. And they quickly got into the sort of parsing we'll all be interested in two years from now, when Texas is redrawing maps. To wit: You've got Majority-Minority Districts, where minorities are in the majority. Still protected, if certain conditions exist. You've got Influence Districts, where minorities are able to influence the outcome of an election even if it doesn't go to a member of that minority. Those aren't protected. There are Coalition Districts, where more than one ethnic minority can combine to elect a minority legislator. And there are — this is the category central to this new decision — Crossover Districts. That's where a minority is relatively close to, but still below, 50 percent of the voting age population. And states, according to the Supreme Court's new 5-4 decision, aren't required to draw those districts or to protect them.

• After Attorney General Greg Abbott dodged the Senate Committee of the Whole's hearing on Voter ID, Rep. Mark Homer suggested the state's top lawyer be replaced on the Legislative Redistricting Board. Abbott's out on the COW meeting was that he shouldn't testify since he might have to represent the state on Voter ID if it should ever land the state in court. Homer, D-Paris, sees that as fodder for a proposed constitutional amendment that would replace the AG on the LRB, putting the Texas Commissioner of Agriculture in his place. That's the five-member board (AG, Lite Guv, Speaker, Land Commissioner, Comptroller) that decides the state's redistricting maps when the Legislature locks up. And redistricting maps — no matter who draws them — always, always, always end up in court.

• If you run out of booze on Sunday, it's against the law to replenish your liquor cabinet. And a new poll says most Texans want to keep it that way. Austin-based Baselice and Associates, polling for the Texas Package Stores Association, found that 53 percent of Texans oppose Sunday liquor sales and 30 percent support ending the prohibition (801 registered voters, February 24-26, +/-3.5 margin of error). Three-fifths of those folks (61%) said the liquor stores should be closed on Sundays for religious and moral reasons, and 81 percent say the current hours for those stores give people "enough time and convenience to shop for liquor." Did we mention the package stores don't want to stay open on Sundays?

• The new version of the Texas Tomorrow Fund — the state's prepaid college tuition fund — attracted $239 million in contracts during the six months ended February 28, according to Comptroller Susan Combs. That's almost 13,000 kids.

• Semi-quietly underway: Railroad Commissioner Michael Williams, a Republican contender for the U.S. Senate if and when Kay Bailey Hutchison gives up the chair, will be in Washington, D.C. raising money for that effort next week. State officeholders can't raise money during a session for state political accounts, but they're not barred from raising money for a federal race.

• File this under things we didn't imagine we'd ever see. A direct and entire quote from an email: "The Texas Education Agency is now Twittering. Follow us at: http://twitter.com/teainfo."

Political People and Their Moves

Dan Bartlett, who's been at Austin-based Public Strategies since he left the Bush White House in 2007, is now the president and CEO of PSI. He's replacing Jeff Eller, who becomes a vice chairman of the firm (like Mark McKinnon) and who'll focus on its Washington operation.

John Tintera is the new executive director at the Texas Railroad Commission; he's been the interim since the beginning of the year and replaces Rich Varela, who retired. Tintera has been at the agency since 1990 and was a petroleum geologist before that.

Anita Givens is the Texas Education Agency's newest associate commissioner, with a portfolio that includes standards and programs, curriculum, textbooks and such. She's been "acting" in that position for the last several months.

Troy Alexander, the health and human services policy wonk for former House Speaker Tom Craddick, landed as director of the Center for Program Coordination, Policy and Innovation at the Department of State Health Services.

Matt Mackowiak is leaving Kay Bailey Hutchison's Washington office, where he's been a spokesman, to return to Texas. He says more details are forthcoming.

Recovering: Freshman U.S. Rep. Pete Olson, R-Sugar Land, after a fainting spell at the gym resulted in a heart pacemaker installation. He's 46, and reportedly doing fine.

Quotes of the Week

Adam Skaggs, an attorney with the Brennan Center for Justice, on the sort of cheating that would be prohibited by Voter ID legislation: "It doesn't happen because the odds of getting caught are extremely high, the penalties are extremely serious and the payoff is miniscule."

Sen. Troy Fraser, R-Horseshoe Bay, introducing the bill: "Voter fraud not only is alive and well in the U.S., it's also alive and well in Texas."

Sen. Royce West, D-Dallas, questioning Fraser about the bill: "Have you talked to any ethnic minorities about the bill?" Fraser, replying: "I don't want to get cute, but you are an ethnic minority, and I've talked to you about it."

Fraser, having difficulty making out questions from Sen. Wendy Davis, D-Fort Worth, during the Voter ID debate: "I have trouble hearing women's voices."

Sen. Kel Seliger, R-Amarillo, talking to the Austin American-Statesman after an all-night debate on Voter ID: "I'm just gonna email my wife and tell her I just spent the night with [Sen.] Leticia Van de Putte."

Keith Wells, Fort Worth's assistant emergency coordinator, quoted in The Dallas Morning News about helping victims of Gulf Coast hurricanes: "Everyone wants to do the right thing. But sometimes, it's a case of, 'It's not our disaster.' We're going to do the best we can to help folks. But we would like to get compensated."

House Speaker Joe Straus, quoted by The Dallas Morning News after a hernia operation: "If I were going to spill my guts on the floor of the House, I didn't want it to be through that procedure."

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Texas Weekly: Volume 26, Issue 10, 16 March 2009. Ross Ramsey, Editor. Copyright 2009 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 (512) 302-5703 or email biz@texasweekly.com. For news, email ramsey@texasweekly.com, or call (512) 288-6598.