Special Session

-

Paul

Funding for Special Session is provided in part by Bernard and Audre Rapoport, Public Strategies Incorporated, managing campaigns for corporations around the clock, around the world. And the MFI Foundation, improving the quality of life within our community. And the Nowlin Family Fund at the Austin Community Foundation. (upbeat twangy music) Welcome to another edition of Special Session, where everyone wants to know if the big-ticket items are falling into place as the end of the session nears.

After all the talk about what the Senate might do regarding school finance, will the end result look a lot like what the House came up with in the first place? Ultimately, is this just House Speaker Tom Craddick's world and you, and I, and the rest of Texas, just live in it?

Letting us know this week are

Christy Hoppe, who covers the state legislature for the Dallas Morning News, as their Austin bureau chief. Ross Ramsey, the editor of the online Texas Weekly. And Clay Robison, political reporter for the Houston Chronicle. So, panelists, we've been covering the state legislature, everything they've been doing, for months now.

Would we have saved a whole lot of time if we'd just asked Tom Craddick back in January what he wanted, and let the rest of the legislators go home? Well, you know, the House always, the House always is a pretty good reflection of where the people are, and if the House is strongly for something, that's probably the way the state's gonna go. What's interesting this session is that everything's been sort of a liner, everything's been within five or ten or fifteen votes, and it's hard to tell that the legislature has any direction, it's hard to tell from that, you know, the state, the people want a particular fix to this thing. I don't know if Tom Craddick's more powerful at this point, but I think the House is gonna have a better reflection of where the people are.

What do you guys think? Is this a situation where whatever Tom wants, Tom gets, or is it a little bit more complex than that? He has a great deal of strength, he doesn't like to lose, but he also has a very strong sense of what can get out of the House, where his membership is, and he's very good at just a gut reaction of what will sail and what won't. The Senate's very collegial, it's back door, it's sipping tea, it's "let's work together," and in the House, you have a tractor pull, and it's sweaty and it's arm wrestling, and by the time they hammer what they have out, I agree with Ross, it's close to the reflection of what the people in Texas want.

The two potential wildcards are Lieutenant Governor Dewhurst and Governor Perry, I mean will they try to do, will Dewhurst try to win the Senate's will this time, I mean the Senate lost about everything to the House two years ago, and consequently, it has given Craddick the reputation as a better leader than Dewhurst, and I don't know that Dewhurst can, will continue to suffer from that, what he views as a, as an unfair comparison. And Perry, I mean, does he really want the legislature to do something during this session? Or he could claim some kind of victory going into his re-election campaign next year. So, it depends on whether those two guys maybe can gang up on Craddick, I don't know if that's possible.

Well, Clay, you've written recently about just the probability of any kind of resolution on school finance and revenue tax plans, what do you think? I think it's highly unlikely, not impossible, but unlikely, without the Senate caving in to the House. So what's, where, what are the differences right now? You know, the big difference is which businesses do you tax and how do you tax them.

And they've had an ongoing argument you know, this will change every five minutes, so I won't go into the particular details, but there's an ongoing argument in the House over how much tax businesses should pay, whether it should be based on their top line or their bottom line or their payroll. And the House wants it based largely on payroll, largely on the bottom line. The Senate's kind of leaned toward top line, and they wanna pull some more money out of it. You know, one of the interesting things here is that Tom Craddick said right up until the session began, that he would prefer to wait for the courts on school finance.

And I think that was actually a pretty good reflection of the House, now when the session began, he's been a good soldier and said, "No, I think we wanna get a solution out by May 30th" and they're working that way. But I think that his first view may turn out to be the view, maybe, you know, let's wait for the courts, see what they want, and it makes it easier to force a tax bill. I think the devil's in the details, and when, as the businesses weigh in, as people see how it affects their district, there is a compelling reason just to wait and see if what the courts do really mandates them doing an overhaul. Dewhurst wants it, he runs state-wide, Perry would like it, he runs state-wide, it would be a victory for Republicans to say we've done away with Robin Hood, but the plan in both the House and Senate is its pass doesn't do away with Robin Hood, it mitigates it somewhat.

So, and there's not a lot of new money for schools, that isn't eaten up by the mandates and both of these bills. So the school districts are opposed to it, so it still has some very contentious uphill battle left to go. Legislators like to complain that we're not gonna let the courts tell us what to do, but at the same time, they love for the courts to tell them what to do, when they have to pass for it, when they have to vote for a tax increase, which is what they're going to have to do so they can... -

Paul

Letting us know this week are

So they can blame it on the courts. They can blame it on the courts. Well, let me ask you this, you know, this is all, to a certain extent, an inside baseball, who's gonna win, Craddick, Dewhurst, you know, which plan, which businesses are gonna get taxed. But when we're talking about school finance and school reform, to a certain extent, one would think we're also talking about how to be able to solve the public education, perhaps crisis or at least problems in Texas.

In the last couple of days, I read a report, that half the high school graduates in the state of Texas, when they go to college, they're so poorly trained they have to take remedial classes. Correct me if I'm wrong about this, Clay, but the Houston Independent School District has a proposal out there that would say that they can't offer math or science classes for the last two years of high school. Do any of these plans that are in the legislature right now actually address education? They do, but they don't address it in the way that you're talking about, I mean, Christy referred to it, there are a bunch of mandates, and they change, the House would change the way students are tested, and, you know, they move some things around but there's no real sweeping education reform here, and there's no real sweeping change in the things you're talking about, remedial math, remedial, you know, tracking these students toward college level courses.

That's not in this bill, this is mainly about school finance, property taxes, one of the refrains that we've heard the entire session has been, you know, every dime in tax that we raise will go toward property tax relief. It's not toward remedial mathematics or toward remedial English. If Texas already spent enough money on education, it would be different, but Texas doesn't. So one of the complaints that the House has about the Senate tax bill is that it raises too much money for education, when education is already underfunded.

And one of the things that both bills do is it makes testing an incentive, so your test scores, if anything, it puts more emphasis on student testing. Which isn't as well rounded education as a lot of people would like to see. So, what you've got is just, teacher salaries tied to incentives, what school district's making money tied to incentives, and even whether school children can transfer out and go to private schools based on whether they're testing poorly. So, everything built into the bill is about that testing level.

Is the legislature actually dealing with the, these larger problems, or are they putting it off to a court decision in totality? My hunch is that they're putting it off. You know, you can't predict the future, but you can say that in the past, whenever we've had major education reform, or reform prisons, or reform of mental health, mental retardation centers, it's always been court driven. And there's no reason, at this point, to think that this won't be court driven at least in some measure.

Even if they make a decision or come to some conclusion by the end of May in this legislative session, the court still comes in in July. And that court could still make a ruling that requires more legislative action. So I think, ultimately, this is in the hands of the courts. I mean in a revenue neutral world, is there really any solution to any of these things or essentially we're just sort of getting by?

Revenue neutral is part of the problems that the court will address, it's the factor that the schools are inadequately funded. That's what the court's saying. And what the legislature is saying right now is, "No, people are paying too much in property taxes, "we need to figure out tax swap, "so that they're paying more equal share across the board, "and we can lower property taxes." So, even the argument in and of itself doesn't seem to address the question of school adequacy. You know, if you go poke your mic in a bunch of faces over there, there are plenty of people who will tell you that we're spending enough on education now.

We're just spending it in the wrong areas, and we need to realign those kinds of things. Even at that level, that's not a question that's being addressed, though. They're not addressing education reform, either on the level of spend more money or redirect the money you're spending now. It's just not really part of the issue here.

Well, let's go back to the topic that I started out with, the idea that this is Tom Craddick's world, I mean, obviously, in the very beginning of the session, Texas Monthly had its finger on the pulse of this deal when they put Craddick on the cover of their magazine, with the word power across it. I'm assuming that Lieutenant Governor David Dewhurst noticed this when he got his subscription in the mail. This hasn't been a very good couple of weeks for the Lieutenant Governor. He was bashed in the Wall Street Journal as a taxes spender, then with the state property tax, which has been held out there for the entire session, he couldn't even get on the floor of the state Senate.

What's his deal right now? I mean, does he have influence? He has the opportunity to stand firm, if he wants to, the question is whether he will. I think the Wall Street Journal editorial bashed him for some taxes that were passed by the House, actually.

Sounds about right. But he got credit for all of them. And the state-wide property tax, I think they read, you know, and other people may disagree with me, but I don't think that would have passed the voters anyway, I mean, you're asking the voters to vote a new tax upon themselves, when this is a property tax relief session. I'm not sure they would they would really understand it.

Particularly, after they've been barraged by a variety of tax schemes coming out of the legislature now, in this tax trade off measure, so. I think that Texas Monthly article may have a lot to do with how this session ends, perhaps. I mean, if, I don't think Dewhurst wants to be seen as caving in to Craddick again. That could very well have an effect before this session's over.

Tom Craddick looks at what he can get through the House. David Dewhurst looks at public policies that he thinks will be good for Texas. They're coming from different spaces, really. And, one of the things is that Tom Craddick's negotiating style is saying, fine, take it or leave it, if not, we'll come back next session, we'll come back in special session, I don't need your bad bill.

And, so it leaves Dewhurst in a position of either taking the House side and getting a quarter loaf or half loaf, or walking away and letting the whole thing fall. So, it's gonna be interesting whether he's willing, in this game of chicken, to let the whole thing fall. I think ultimately, you make a decision based on, both of these guys will make a decision based on what do we wanna have happen, as opposed to how do I wanna be perceived. If it, you know, if you're basing it on how do I wanna be perceived and then you get, then they lock up.

The problem here is that there's also a fair number of lock ups on policy. I mean, even if this was just a policy thing, no egos involved, I still think you've got these significant differences like Clay was talking about, between the House bill and the Senate bill. And we have very little time to reconcile those differences. And what are the top things to reconcile, one more time?

It's how to tax, you know, which businesses and which people to tax, and how to tax them. And then, on one hand, and on the other hand, exactly how to spend those tax dollars, exactly how are we gonna engineer a property tax, what kind of property tax relief, does it go to residential people, does it go to business people. Okay, last thing on this topic. People are talking about if there was a special session, if there wasn't a resolution on school finance, how this would affect the re-election chances of our governor.

You know, with the idea that Kay Bailey Hutchison, Senator, might challenge him. Given the dynamics right now, in terms of revenue raising, in a revenue neutral world, even if Kay challenged Governor Perry, you know, in the next election, what difference would it make in terms of school finance? I don't think any. Because she could offer a different plan that it would just be some kind of variety of the plan we're talking about now, some higher business taxes, some higher consumer taxes, the only different plan that somebody could throw out there would be a personal income tax.

And Kay Bailey Hutchison is not gonna be the first Republican to do that. Any more than Rick Perry is. Okay, why don't we switch topics over here, I wanna finish up this program with talking about what I'm describing as the "Four T's". The telecom bill, the Trans-Texas Corridor bill, the top ten bills dealing with higher education, and finally, Tom DeLay.

With the telecom bill, let's try to get a handle on it by taking a look at some of the ads that are flooding your airwaves at this very moment. -

Narrator 1

Letting us know this week are

Wonder why cable doesn't wanna let local phone companies compete in the TV business? To protect their growing dominance. Nationally, since '99, cable rates have increased, on average, over 40 percent. Consumers are limited when choosing a TV service provider.

And cable wants to keep it that way. -

Narrator 2

Letting us know this week are

SBC wants to pick and choose who gets access to new digital technologies. And who doesn't. Right now, SBC is trying to convince legislators to pass special laws to limit competition, and let SBC decide who gets new technologies. Many people don't understand what they're actually seeing, Ross.

What's actually going on in this conflict? A bunch of what legislators do, in real life, is referee battles between big businesses. You know, sometimes it's, you know, this time it's the cable companies that wanna do phones in addition to cable, versus the phone companies that wanna do pictures in addition to phones. And they're basically fighting over competitive advantage that they can get in the legislatures.

Both of them say they want a level playing field, both of them want a table that tilts toward them and away from their competitor. So, in particular, people in Austin, but to some extent, people around the state have seen this battle between the cable companies and the phone companies over, you know, who's telling the truth and who wants you to get better service and everything. For the most part, most of what's in these bills don't touch normal people, it's a business to business fight at this level that probably won't affect much the services that we could all get. One of the things it would affect, is if you're laying fiber optics.

Whether you would have to go ahead and serve the entire city, or just those people you think would be most willing to pay for the high end services. And, as a business plan, they want the fiber optics laid in the high-end parts of the city. As a overall public policy, we've always had, you have to lay out these services equally. So it's, some of the battle is about who you serve, and how much money you can take in.

Isn't there also a question in terms of the fees that are usually paid by the cable companies, and that being part of city budgets, so if that money disappears, the cities have more problems than they have now? There's an issue over whether, cities have always charged phone companies and cable companies franchise fees for the right of way they use for their telephone poles and the cables and stuff. And there's been some talk of getting rid of those franchise fees that are based on actual poles in actual places and just say, "We're gonna put a tax on all of it". That's really what that arguments about.

It's a separate bill, and I think it's probably got last chance, particularly in line of all the tax bills we're arguing about over school finance. And what are the chances of anything coming out of this? The House and the Senate, is there a disagreement on this at all? Or agreement?

The House passed a big omnibus bill in an effort to get around the cynic, maybe, that's been stalling the thing, so we've got a, you know, the two rams are on the hill about to bang heads, and we'll find out in the next ten days. I would say 50/50 chance it passes. What about the Trans-Texas Corridor? There was a report by an organization called Campaigns for People, about the fact that several million dollars were paid by contractors into the political coffers of some of our elected officials.

Personally, as somebody from New Jersey that has a grand history of public works projects, and contributions to politicians, legal and illegal, I'm totally shocked by this. And Clay, what's going on with the Trans-Texas? Imagine, imagine that. Imagine contractors being interested in what happens with highway construction.

-

Paul

Letting us know this week are

It's hard to believe. But, there are a couple of pitfalls there for Perry. One is that it's heavily into toll roads, or has the perception that it's going to be heavily into toll roads. And toll roads are unpopular, even among Republicans.

And secondly, rural Texans are particularly concerned about the government coming in and taking their land, right of eminent domain. And there was a protest at the capital, I think a week or so ago, from some people out in southeast Texas, who were up in arms over this. And these are conservative, I would think, Perry voters normally. And whether this would become an issue in his re-election campaign, I think it has possibilities.

They're already tussling over tollways, Carole Strayhorn on the bond issue managed to put a provision in there that said this can't, toll money cannot be raised from existing highways. You have Kay Hutchison in Washington also offering a similar amendment that says you can't toll existing highways. And you have Perry coming out and saying, "I never wanted to toll existing highways!" but nevertheless, people are gonna notice that a lot of these, the fast money, is to get a toll road going, and they're gonna see them pop up in their communities, and when this happens, somebody's gonna get mad. You know, the thing in rural Texas is, you know, when you look at the maps for this thing, look at the blueprints for this thing, the road includes a highway, a railway, a bunch of area right of way for telephone polls and stuff, it's a quarter mile wide.

And runs through these farms and everything, so, you know, it's a huge project, it eats up a ton of land and that's, that I think ultimately is one of big fights here, you know, this is gonna be a bunch of land deals, buying out this farmer, eminent domain stories, endless rural people standing, you know, tearfully as their land gets chewed up by, you know. It's politically, it's politically dangerous, I think. How long would it actually take to happen? That's one of the questions, I mean, that's, you know, one of the questions here, and one of the controversies here, is the speed they're running at.

Texas Department of Highways, or Texas Department of Transportation is moving these things at an incredible pace. I mean, they're flying through these things, and that's why they're into alternative forms of financing like toll roads and the bonds that Christy's talking about, and trying to speed all this stuff up so that it's not 20 years out, that it's rather ten years out. And of course it would affect traffic patterns, they're huge roads, they divert a ton of the traffic, get some of the trucks out of your way on 35. You know, that's the positive side of this, that's the part of this that, you know, if they could pull this off without the rurals and the toll roads and some of these other things tripping them, that's where the win is.

Will this be Governor Perry's legacy, if he's actually able to pull this off? Absolutely. It will be a quarter mile swath of highway that cuts through Texas like we haven't seen since any public highway was placed into Texas. But, it is a quarter mile that will separate the east from the west and there, and chop up the private property rights, and that's a refrain you hear with the Republicans all the time, private property rights.

And so, it'll have that debate going for the entire ten years that they're building these things. Which I predict will still stretch into 20. Well, let's take the exit road on this one and go to our third topic. And Clay, you've been writing about the top ten battle.

The House has passed their version of this, the Senate has passed their version, what are the versions and what's liable to happen, what's the battle over top ten in higher education? Well, the House has passed a version that says the top ten rule of allowing a student in the top ten percent of his graduating class to get into the state university of his choice can be limited only 50 percent of the school's enrollment. This is mainly at the request of UT Austin, where it's becoming a big problem. UT Austin now is admitting like...

72 percent, something like that, for the freshman class. The Senate has passed a bill that basically would require students to qualify for the top ten to take advanced college courses and have a standardized state-wide way to compute grade point averages. The House rejected that version as an amendment. Now the Senate, also an amendment to its bill, rejected a version of the House bill, however it was a very close vote, and about three Senators were absent.

So, the question is, if Royce West can tag the bill when it comes over for committee meeting, he's the primary opponent in the Senate and can get it down to the closing days of the session, he could filibuster it again like he did two years ago. It was either a filibuster by Senator West or the threat of one that killed it two years ago. It's probably too close to call, but it's, that's the issue and it may come right down to the wire. Senator Royce West passed a bill in the Senate, basically, they didn't wanna pass it just, as Clay said, raise the standards, that you have to take these classes in order to be into the top ten percent.

But, he doesn't want any bill. He likes the top ten percent, he thinks it's working, like a lot of Democrats said, it's added diversity, it's added hope to a lot of rural and urban cities, school districts, and so, he doesn't want any bill. The House has passed a much more restrictive bill when it comes over to conference, I wouldn't be surprised to see Royce try and kill it dead. What's the motivation, at this point, for changing us?

Well, the schools, as Clay said, you know, UT in particular, but the schools really wanna change it. They want some more leeway on this stuff. It's interesting to note that the Senate bill passed in a bipartisan manner, and the House bill was on party lines, so. You know, if there's a compromise, I think it's probably toward the Senate bill.

Well, is there a lot of pressure coming from again, Republican constituencies on this? Because I'm assuming it's not only the schools that are in favor, are pressing the legislators to change this rule. There is to some extent, but I don't see this changing any elections, I don't know if you all have. I haven't seen this changing anything up in an actual election yet, being part of the argument.

There have been stories over the years, how these students, some of these top rates high schools, who has, you know, super SAT scores, but he's in the top 12 percent of his class because it's a very competitive school. And there have been those stories, but most of the pressure for this is coming from UT Austin, as it was in the tuition deregulation bill two years ago. Okay, why don't we get to the fourth T, and that T is Tom DeLay. Tom "The Hammer" DeLay.

This last week there was a dinner honoring him over in Washington D.C., he's had some trials and tribulations in the last couple of months. Where is he at right now? Are we liable to see him? Are we liable to see him go?

That old cat poster, you know, it's the "Hang in there, baby", he's sort of pulling a Bill Clinton defense, and it's working very well, I mean, you can stand in the wind for a long time, Clinton showed these guys, and DeLay is doing that. I, you know, the way to bet right now is that he's still in power, he's still there. And unless something new comes along, I think he stays. He's a gift to both the Republicans and the Democrats, in terms of fundraising for the Democrats, in terms of public policy for the Republicans.

So, he is a lightning rod, but he has some sure sting power. Clay, does he really have any problems for re-election in that district over in Sugar Land? Now, I don't think serious ones, I think, I think he's been dented a little bit, and been bruised, but if the election were held today, I think he would win pretty easily in his own district. And any advanced word as to what's gonna happen with Ronny Earl's investigation after the legislative session ends?

Nope, so, you know, they've been working for two and a half years, it's sort of chirp or get off the perch. It's gonna be this year, I think. Let's leave it there for this week. As we listen to the version of "If I Had A Hammer," played live at the dinner honoring Congressman DeLay last week, you can learn more by going to our website, at www.klru.org.

And as the series moves into its final weeks, with the end of the session in sight, we'd also like to hear from you, you can write us at [email protected] and after you write, please make sure to tune in next week, as we track the latest developments in your state legislature, on another edition of Special Session. He's a hammer of justice He's a hammer of freedom He's a hammer of love between My brothers and my sisters all over this land -

Woman

Letting us know this week are

Ladies and gentlemen, join in and let's sing, We've Got a Hammer! Now who got a hammer? We've got a hammer Any hammers in the evening (twangy music fades out) -

Paul

Letting us know this week are

Next week, on Special Session. This session of the Texas state legislature is drawing to a close. What's gonna pass, and what isn't? Join me, your host, Paul Stekler, on the next edition of Special Session, to find out why you should care.

(upbeat twangy music) Funding for Special Session is provided in part by Bernard and Audre Rapoport. Public Strategies Incorporated, managing campaigns for corporations around the clock, around the world. And the MFI Foundation, improving the quality of life within our community. And the Nowlin Family Fund, at the Austin Community Foundation.