Thanks a Thousand:
According to George W. Bush's campaign-finance filing, a number of Texas CEOs have contributed $1,000 - the maximum amount allowed - to his nascent presidential bid. Among them:

Monkeying Around
by Paul Burka

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So you'd expect insurance companies and utilities to be regulated according to the "not command and control" approach too, right? Wrong. Those industries are too despised by the public and too likely to get a governor in political trouble to get favored treatment—and they haven't. Bush's first-term insurance commissioner, former state legislator Elton Bomer, hammered the industry twice. The first time was in 1995, after Bush had unwisely vetoed the Patient Protection Act (a.k.a. the Doctor Protection Act), which limited the power of HMOs to run roughshod over doctors. Subsequently Bush directed Bomer to develop rules covering the same issues—and Bomer mollified the medical community by imposing more restrictions on HMOs than the legislation had. Last year, when Bush's opponent, Garry Mauro, tried to make an issue of automobile insurance rates, Bomer ordered a rate reduction and later requested a second one.

The state's electric utilities, which are locked in a battle over the restructuring of their industry, have fared even worse. New competitors want to generate and sell their own electricity (or buy it from the utility and resell it), and customers want the cheapest rates possible. Which is the pro-business side? All of them, even the customers, who include petrochemical plants, high-tech laboratories, and retailers. The fight illustrates clearly why business no longer can maintain a united front in politics: In a diversified economy the biggest business issues pit industry against industry. The Public Utility Commission (PUC), chaired by Bush appointee Pat Wood III, a former attorney for the Federal Energy Regulatory Commission, has weighed in heavily against the utility companies, beginning with a decision on Central Power and Light's 1995 request for a $70.8 million rate increase. Instead, in 1997 commissioners ordered a $32.3 million immediate rate cut, future rate reductions, and a lower return on equity—and made some choice side comments that did not escape notice on Wall Street. The stock of CPL's parent, Central and South West, nose-dived, and the company is now in the process of being acquired by American Electric Power, based in Columbus, Ohio. The inevitable consequence of the merger is that Texas will lose jobs, including high-paying executive positions. After CPL's experience, all of the Texas-based electric companies regulated by the PUC now will do almost anything to avoid a rate hearing. Regulatory Research Associates, based in New Jersey, evaluates the regulatory climates of 48 states from the perspective of investors. Texas is 1 of 6 states rated as below average, and only 2, Louisiana and New Hampshire, are regarded as worse.

In the area of telephone deregulation, Southwestern Bell is unhappy with the commission too. Its CEO, Edward E. Whitacre, Jr., has complained to Bush about the PUC. When I asked the governor about the conversation, he responded that it was "private." Okay, what about the general controversy surrounding the PUC? "We need to be in a competitive environment," he said. "It's good for the consumer. That doesn't mean that the PUC is anti-business. Quite the contrary, competition is good for business." I asked him about the initial plan for electric restructuring that was making its way through the Legislature at midsession, which required utilities to clear the way for competition by giving up 40 percent of their generating capacity and reducing their market share of statewide generation to no more than 20 per- cent. Bush wouldn't be pinned down to a number, but he said, "Do I think that the plan should have some sort of spin-off? Yes, I do." Can the Texas companies survive? "Maybe they will," he said. "Maybe they won't."

Other than tort reform and an expression of support for electric deregulation, Bush has not emphasized business issues in his legislative agenda. Of all the proposals that he has backed in his three sessions, none was more far reaching in its potential effect on business than his 1997 plan to reduce Texas' reliance on the property tax to fund public education. It was a well-motivated, farsighted, and ultimately ill-fated attempt to solve the problems of school finance that have plagued the state for the past thirty years. The flaw in the system is that local property taxes raise a great deal of money in property-rich school districts (those with oil fields and valuable real estate) but very little money in property-poor districts. Bush wanted to replace local property taxes with state tax dollars, thereby eliminating some of the inequities of the property tax.

Where would those state tax dollars have come from? A personal income tax was out of the question. Bush proposed raising the state sales tax, already one of the highest in the nation, by half a cent (to 6.75 cents per dollar) and also embraced a business activity tax, with the industrial sector of the economy that pays large property taxes (oil and gas, petrochemicals, utilities) arguing for it and the service sector that pays little property tax (doctors, lawyers, accountants, architects, consultants) aligned against it. The industrial sector had the better arguments, but the service sector had the most people—that is, voters—and made the most noise. Bush's plan evolved into a face-saving increase in the homestead exemption for school property taxes amounting to $1 billion but worth little if anything to individual taxpayers. School districts wiped out the cut for many taxpayers by raising tax rates or reaping the fruits of higher property values. The ironic result was that, since homeowners had an increased exemption, they didn't have to pay their full share of the higher taxes, and property-owning businesses—the very folks the Bush plan had been designed to help—ended up bearing that burden.

So how does the scoreboard finally read? Has George W. Bush been good for business? Measured by the standards applied to presidents—it's the economy, stupid—he has done well indeed. Even with oil and agriculture hurting, the Texas economy is thriving. Like all incumbents, he gets the credit for the good things that have happened on his watch. He gets credit too for tort reform, which never would have been so far-reaching had Richards been governor. But in just about every other case, you have to ask, "Good for which business?" Remember the 86 percent of CEOs who favored Bush for president? Some of the remaining 14 percent were probably Texans.