Capitol Offenses
May 28, 1999
Guv’nor Crunch
BY NATE BLAKESLEE
I
It has not been a good legislative session for the Governor. The
school voucher bill he backed is dying in the Senate, tort reform
has flopped, and parental notification for teenage abortions is
in trouble. A Texas Poll conducted in early May found that forty-five
percent of Texans could not name a major policy achievement associated
with George W. Bush. Comparing his record with that of his brother
Jeb, who pushed a voucher bill and a billion-dollar tax cut through
the Florida Legislature in his first term as Governor, the Wall
Street Journal observed, “Maybe Republicans need a Bush primary
to make sure they’re running the right sibling.While the Journal
is looking at Florida’s Governor Bush, his brother in Texas is
finally getting some negative press at home. The Houston Chronicle
surveyed his appointment records and found that the Governor had
scheduled less than half as many meetings with legislators this
session as he did in the 1997 session. Meanwhile, the Chronicle
found, the Governor has spent almost twice as much time in “private”
appointments — that is, time dedicated to presidential politics
— as he has on scheduled meetings with Texas legislators.
Which is not to say that the Governor’s presence has not been
felt on the floor of the House and Senate. Back in January, when
Comptroller Carol Keeton Rylander announced a revenue surplus
of $5.6 billion for the next biennium, the Governor called for
$2 billion in property tax cuts, plus another $600 million in
sales and business tax cuts and credits. What surplus money remained,
he said, should be applied to a pay raise for teachers. But as
the appropriations process revealed over the weeks and months
to follow, the initial budget prepared by the Legislative Budget
Board didn’t allocate enough money to maintain current service
levels; $3 billion of the “surplus” was not really surplus. Thus
began the crunch, as $5.6 billion was reduced to $2.6 billion.
Yet the Governor held fast to his original tax break, even as
the Republican Senate delivered a school finance bill that included
less than half of what he had called for in property tax cuts.
Teacher pay raises, meanwhile were slowly whittled from $6,000
to $5,000, then $4,000, and finally $3,000.
The Governor had one more card to play. The budget process begins
with a preliminary revenue estimate from the state comptroller’s
office (above which the Legislature cannot spend). But the budget
cannot be completed without a revised estimate, traditionally
delivered at the beginning of May. As May 1 came and went, Chairman
Paul Sadler held the school finance bill in the House Public Education
Committee, waiting for the final revenue estimate so that he could
settle on an amount for teacher pay raises.
May 5 came and went, then May 10, and still no comptroller’s estimate.
With only twenty days left in the session, House Democrats began
to lose patience with Republican Comptroller Carole Keeton Rylander,
who claimed she still needed one more set of mid-April receipts,
in order to make an accurate two-year projection.
The longer Rylander sat on her final revenue certification, Houston
Democrat Sylvester Turner complained, the less likely the extra
money could be used for anything but tax cuts. It is far easier
to vote on property taxes than to move money through the intricate
mathematical equations of school finance. And faced with the Legislature’s
May 31 conclusion, Sadler would be forced to show his hand, determine
an amount for pay raises, hold hearings, and move his bill to
the floor before the final week of the session. Asked if he thought
Rylander was acting on behalf of the Governor, Turner said, “I
don’t want to think that, but every day that goes by I get closer
and closer to that conclusion.”
The Bush-Rylander budget crunch had been further exacerbated by
the Republicans’ May 6 tax revolt on the House floor. Tom Craddick
led the charge, adding additional tax breaks to a bill intended
to eliminate sales taxes on diapers and over-the-counter medicine
for children and the elderly. During the floor debate, House Ways
and Means Chairman Rene Oliveira (who said he had a “clear understanding”
with the Governor and his legislative deputy director, Terral
Smith, that the combined total of sales and business tax cuts
would not exceed $600 million), called Sadler and Appropriations
Chairman Rob Junell to the front mike to remind Republicans of
the deal with the Governor — and to warn them that larger business
tax cuts still in committee might be jeopardized by turning the
sales tax legislation into a “Christmas tree.” When a motion to
table Craddick’s amendment failed by ten votes in a House where
Democrats still hold a six-seat majority, the rout was on. Craddick
succeeded in broadening the sales tax on over-the-counter drugs.
Next, Carl Isett’s amendment doubling the franchise tax cut was
adopted, and the giveaway continued to grow. “The package that
came out that day went from being about $185 million to $455 million,”
Oliveira said. “They’re [the Governor’s office] now denying that
we had a deal, which is unfortunate.”
Bush, who still wants a quarter-cent cut in the sales tax, also
has one more big-ticket item still in Oliveira’s committee: a
research and development tax cut, which has a $613 million price
tag and major corporate support. After the May 6 floor fight,
Oliveira described the status of that bill as uncertain.
On May 11 the four Democratic legislative caucuses held a joint
press conference to call for Rylander to release her numbers and
to return the Legislature’s focus to education spending. Citing
a poll that found the top priority among Texans to be funds for
education, Turner attacked the Governor’s budget priorities. “Teacher
pay is around thirty-eighth in the nation,” he said, “and Texans
are saying that is unacceptable.…
“We began this session with oil and gas tax credits,” he continued.
“That’s not how it should end…. Whether the Comptroller delivers
the numbers on May 30th or May 35th, that money needs to be spent
on education.” Oliveira said that the Democrats support tax cuts
— especially on the sales tax — but only up to a point. “We are
in the waning days of the session, and yet the focus has not been
on the teacher pay raise. We will stand for reasonable tax relief,
and reasonable tax cuts, but we will not stand for those if they
come at the expense of our teachers and our public education system.”
But House and Senate Democrats knew that more cuts would be coming.
With only two weeks left in the session, the House had passed
roughly twice as much in consumer tax cuts as it had in business
tax cuts; and business, in this Legislature, always has the final
word. So before the Legislature adjourns, there will be a research
and development tax credit, an internet sales tax cut, and more
relief for business — plus a property tax cut that will carry
a big price tag, return very little money to homeowners, and devour
much of the surplus. As the Center for Public Policy Priorities
points out, that’s a “surplus” in a state where basic, documented
needs — as a matter of policy — are left unmet. That same “surplus”
billion, the C.P.P.P. reports, could fund a statewide, full-day
kindergarten program, job training for 100,000 workers, and childcare
for 41,000 children of working parents the Governor wants off
the welfare roles.
None of those investments in people will win any primary votes in New Hampshire, where nothing sells quite as well as a two-billion-dollar tax cut. On May 13, Rylander released her report and pushed the recertified surplus up to $6.4 billion. Enough, she said, for “really significant” tax cuts.