The defining issue of the legislative session isn’t school finance or taxes or gay marriage—it’s Dewhurst versus Craddick.
IN HIS THIRD VOLUME about the life of Lyndon Johnson, Master of the Senate, Robert Caro writes of the indifference of the United States Senate to the great issues of war and peace as World War II reached its climax, in 1944. To describe the lethargy of the Senate in those days before Johnson was a member, he cites the diary of Allen Drury, a reporter who covered the chamber for the United Press. Thinking of the millions of Americans in uniform, Drury wrote:“[A] kind of desperation sometimes rests upon the heart. No one here is talking their language, no one here is inspiring them or giving them purpose. Nothing is planned to help bring forth tomorrow’s world, or if it is it will be referred to committee and hearings will be held and someday if it is really lucky, it will appear upon the floor and become the center of a bitterly partisan fight that will presently rob it of all its heart and spirit.”
I came across this passage one night in early May, as the realization began to settle over the Texas Capitol that unless something dramatic happens in the final days, this legislative session is likely to fail in its mission to fix the state’s school finance system and tax structure. Drury’s words expressed what I had been feeling: Nothing is planned to help bring forth tomorrow’s world.
This was supposed to have been—and still could be—the session that laid to rest any doubts that the Republicans could govern. The two biggest problems facing the state, education and taxes, are in play. No one needs to be reminded that Texas has relied too heavily for too long on local property taxes to fund education. The shortcomings of the tax system, too, are a familiar refrain; the state still raises money according to the nineteenth-century notion that wealth is land-based rather than on how Texans earn their living today. If things break right, this could be a historic session, one that addresses these two long-festering problems. But where is the political will to find an enduring solution, rather than pump more air into leaky tires? Robbed of all its heart and spirit.
The biggest obstacle, but far from the only one, facing the Republicans is that the leaders of the House and Senate, Speaker Tom Craddick and Lieutenant Governor David Dewhurst, respectively, despise each other. Their mutual animosity dates back to the 2003 session, when they clashed over issues ranging from the level of state spending to tuition deregulation, with Craddick and the House generally regarded as having prevailed (although Dewhurst hotly disputes the point). Craddick views Dewhurst as someone who is motivated mainly by a desire for good publicity, while Dewhurst views Craddick as someone who has few motivations at all beyond his Midland district and his business interests. Ill feelings between the two chambers and their leaders are as old as the idea of a bicameral legislature, but the Craddick-Dewhurst feud runs deep. Craddick, for example, would not allow his key subordinates to engage in early discussions with their Senate counterparts in order to pave the way for future compromises, which is not surprising, since his history indicates that he doesn’t believe in compromise. Dewhurst, meanwhile, put the school finance and tax bills into a deep freeze for more than a month, keeping the House (and the Senate) guessing about his intentions. What chance exists that the two antagonists will be able to set aside their personal differences to work out an agreement?
There are those in the Capitol who blame this magazine—and this author—for sabotaging the relationship between Dewhurst and Craddick. Lobbyists whose bills have been killed because one of the presiding officers is using them as a chip against the other approach me with baleful stares. “It’s all your fault,” they say. They refer to our February 2005 cover, on which Craddick is portrayed as heading the list of the 25 people with the most political power at the Capitol, a list on which Dewhurst, like Governor Rick Perry, did not appear. In writing about Dewhurst, we described him as “the Mack Brown of the Capitol” who “won’t be regarded as a powerhouse until he can win one against his biggest rival, Tom (Oklahoma) Craddick.” The story had been all but forgotten several weeks later, but then, as luck would have it, Mack Brown himself showed up on the Senate floor to shake hands, causing wags to joke that the lieutenant governor and the coach should pose for pictures together. More baleful stares. Don’t blame me: The relationship between Dewhurst and Craddick had soured by the middle of the 2003 session.
Another troublesome obstacle for the Republicans is their own ideology. When their party was in the minority, they were anti-tax, anti-regulation, and for local control. Now, in order to wean the schools from property taxes, they will have to vote for new taxes—billions and billions of dollars’ worth—to provide property tax relief. What gives Republican legislators “heartburn” (the voguish term for fear of a primary opponent) is that GOP voters will not buy the argument that the new taxes (presumably, an increase in the sales tax and a recrafted business tax) represent only a shift away from property taxes, rather than, well, new taxes. The House version of the school finance bill imposes new regulations on public schools, mandating that each district devote one percent of its budget to teacher pay increases based on merit. Meanwhile, local control has been seriously diminished. The final version of the school finance bill, if one is agreed upon, is likely to place sharp restrictions on the ability of school districts to raise extra local funds. The House plan dictates such traditionally local matters as when the school year starts (the Tuesday after Labor Day) and when school board elections are held (on general election day in November). Even more than taxes, these kinds of nasty surprises about things that people have taken for granted—especially a little-publicized action that affects family winter and spring break vacation schedules—can boomerang on lawmakers at election time. Pro-tax, pro-regulation, anti—local control is not the preferred record on which to run for reelection in a Republican primary.
A third obstacle to Republican success is substantial opposition to what they are trying to accomplish. The entire school community is united against them. “We just can’t put enough money in to please them,” Craddick has said, but the real cause for concern among educators is that the entire tax package, whatever it eventually encompasses, is designed to achieve only one thing: a corresponding reduction in local property taxes. Not a penny of the new taxes will be directed toward the schools. That’s why most Democrats will not support the bill either.
This is the third time in a little more than twenty years that Texas politicians have set their sights on changing the way we fund our public schools and on reforms to improve their performance. What is striking about this occasion, in contrast to earlier reform efforts led first by Ross Perot and later by George W. Bush, is that there is scant enthusiasm for the attempt, either inside the Legislature or outside it. And why should there be? The vast majority of the property tax relief goes to wealthy homeowners in wealthy school districts. Lawmakers know that they will soon be coerced by their leaders to vote for an education bill that will have no support from educators back home and a new business tax that will have little support from businesses back home, especially those targeted to be taxed for the first time.
If this exercise has proved anything, it is that the time is not yet ripe for school finance and tax reform. The ill will between Craddick and Dewhurst, their stubborn adherence to their own plans, and their determination to best the other, combined with the vacuum of leadership from the governor’s office and the fears of individual legislators, render a successful resolution unlikely. The best course is to do what Craddick has wanted to do all along: Wait. Wait for the Texas Supreme Court to rule on the decision last fall by an Austin court that the current school finance system is in violation of the state constitution. If the Supreme Court sets a drop-dead date by which the schools will close if the Legislature hasn’t fixed the system, lawmakers can tell the folks back home that they had no choice but to vote for what needs to be done.
And what might that be? Here’s what the Legislature should have learned from two years of wrestling with the school finance issue:
(1) The ultimate end of school finance reform is not property tax cuts but better schools. When the Legislature adopts a new tax structure, some of the money has to get to the classroom.
(2) Since property tax cuts primarily benefit owners of expensive homes, they should be accompanied by an increase in the homestead exemption for homeowners who won’t benefit much from lower property taxes.
(3) Beware of change for change’s sake. Ideas like merit-based pay for teachers may sound good, but if merit is going to be defined by student performance on standardized tests, you have to ask whether you are providing a financial incentive to cheat. Start with pilot programs, not wholesale change.
(4) The fairest tax is a broad-based tax. The search for a golden mean that doesn’t hurt retailers or petrochemical plants or law firms is doomed in the long run.
(5) The answer is staring everybody in the face: a flat-rate personal income tax. The payroll taxes that have been proposed this session are just a less efficient and less fair (to certain businesses) way of taxing compensation.
(6) Never forget: You are bringing forth tomorrow’s world.