Carole Keeton Strayhorn Has Guts. Carole Keeton Strayhorn Is Nuts. Discuss.

If anyone wants to tell us what the bomb-throwing, slogan-spouting, governor-antagonizing comptroller of public accounts is up to, we’re all ears.

June 2005By Comments

THE FRAMERS OF THE TEXAS Constitution were not trusting souls. They didn’t trust the governor to act with restraint, so they made his office weak. They didn’t trust the Legislature to be prudent with the taxpayers’ money, so they created the comptroller of public accounts to act as an independent watchdog over the state budget. The weak governor has worked out pretty well (especially, some would say, at this moment), but if you took a poll at the Capitol these days, the idea of an independent comptroller would not get rave reviews. I doubt that the authors of the constitution ever envisioned someone quite as independent as Carole Keeton Strayhorn.

Most politicians abide by the ancient wisdom of the profession that “the way to get along is to go along.” They avoid speaking ill of one another. They try not to pick fights gratuitously. They tie down their ambitions so they don’t flap in the wind. They grab a headline when the opportunity presents itself, but not too obviously and not too often. Strayhorn is the antithesis of a go-along politician. For the past four years she has engaged in a high-risk guerrilla strategy of seizing every chance to blast, waylay, and otherwise embarrass the governor, the lieutenant governor, and, occasionally, the Speaker—all of whom, of course, are members of her own Republican party. They retaliated by stripping her office of two high-profile money-saving programs that were her best source of positive headlines. The Capitol has seen nothing like this kind of continual high-stakes feuding in half a century, since the days when U.S. senator Lyndon Johnson, Governor Allan Shivers, and the champion of the liberals, Ralph Yarborough, fought each other for control of the then-dominant Democratic party.

All of this would be merely cause for amusement and speculation if the calendar was not showing late spring of an odd-numbered year, which means that the days left in the legislative session are few and the path ahead is perilous. A lot is at stake—a $140 billion state budget and reforms of the state’s school finance system and tax structure—and all of it must go through Strayhorn. That’s why she is the  focal point of attention, the talk of Austin’s steakhouses and watering holes. The comptroller has judge-and-jury power over spending. Her constitutional power dates from a World War II—era provision decreeing that “no bill containing an appropriation shall be considered as passed or be sent to the Governor for consideration until and unless the Comptroller of Public Accounts endorses his certificate thereon showing that the amount appropriated is within the amount estimated to be available…” In other words, the budget has to balance, and Strayhorn is the enforcer. She alone determines how much revenue the state can expect to amass during the next two years, and if, in her opinion, it is not enough, she can refuse to certify the budget. And then it is D-E-A-D dead. Her decision can be overridden by a four-fifths vote of the House and Senate, but who, in this fiscally conservative state, is going to cast a vote for profligacy?

This is the prospect that has the entire Capitol in a tizzy: that she’s tough enough and ornery enough and ambitious enough to bust the budget; that even if the leadership triumvirate of Rick Perry, David Dewhurst, and Tom Craddick can agree on taxes and spending and schools—which is no sure thing, since they, and especially Dewhurst and Craddick, aren’t exactly palsy-walsy either—Strayhorn will render their efforts moot. As paranoid scenarios go (and are there any other kind in politics?), this one is not particularly far-fetched, considering that she initially refused to certify the budget in 2003, and only some frantic last-minute deal making caused her to relent.

What is Strayhorn up to? There are two theories. The rational explanation is that she is positioning herself to challenge Perry in the Republican primary next spring—or, if Kay Bailey Hutchison leaves the U.S. Senate to run for governor, she’ll take the best vacancy available, which could be lieutenant governor if Dewhurst chooses to run for Hutchison’s seat. At the same time, the savants around the Capitol argue that her bomb-throwing tactics have hurt her with Republican primary voters. If so, then the rational theory falls apart, leading to the realm of conjecture: that she is a woman scorned and determined to get her due. She is the successor to two powerful and respected comptrollers—Bob Bullock and John Sharp, both Democrats, who reinvented the office to give it a substantive role in state policy—but her ideas, unlike theirs, have been ignored by the state’s leaders, who, it might be pointed out, happen to be of a different gender. The recurring slights, together with the ideological direction in which the leadership has taken the state, drive her to distraction.

The question, then, comes down to this: Is Carole Keeton Strayhorn crazy like a fox? Or is she just plain crazy?

“BOB BULLOCK TOLD ME, ‘Never trust anybody.’” Strayhorn is sitting at the end of a long table in her office, talking about the two conversations she had had with Bullock before he died, during her first year in office. If Texas comptrollers had a patron saint—and if the obstreperous Bullock had had a single cell that qualified for sainthood—he would be it. It was he who lifted the agency out of the green-eyeshades era by recognizing the power inherent in its constitutional mandate. He foresaw that the Legislature would always arrive at the end of the session desperate for more money to meet the state’s manifold needs and that the comptroller was the person who could give it to them. So he would lowball his revenue estimate, leaving something on the table that he could give the Legislature in its hour of need—for a price, of course. “Do you know how this office got computers?” Strayhorn asks me. “It was the evening of sine die [the last night of the session], and he went to the Capitol to tell the Legislature the revenue estimate was a little short. ‘What can we do?’ they wanted to know. Bullock told them, ‘Give us computers. We can increase our tax collections, and I’ll raise the revenue estimate.’” One year, she tells me, Bullock made the same play to give his enforcement staff, the folks who raid businesses that are delinquent in paying their taxes, the status of peace officers. He failed. Strayhorn chuckles. “I’m the one who got that done,” she says.

“Did he give you any advice?” I ask.

“Just one thing,” she says. “Don’t overshoot the runway.” Translation: Don’t ever buckle to pressure and overestimate the revenue. A comptroller can be pessimistic, can hold money back until the end of the legislative session—and, as Bullock showed, it can be in the comptroller’s interest to do so—but if she pumps up the revenue estimate and the economy suddenly cools, the state is in a deficit-spending situation. “A revenue estimate has to be conservative,” Strayhorn says. “I will always be conservative.”

As she talks, her torso is still, but she bursts with energy. It escapes her body in the speed of her speech and the perpetual motion of her hands. She doodles as she talks: straight lines, one underneath the other, as if to underscore her points, and big rectangles that she fills up with smaller ones, as if to box in her opposition. Her words spill out famously fast, with few hesitations, sometimes incorporating language from her own press releases. After saying, “I did battle last time, and if we have to do it again, we will,” she tosses in “One tough grandma, and all that.” Or, after assailing the budget cuts of 2003, some of which could have been ameliorated by adopting her proposal to raise the tax on cigarettes—“With $1.5 billion, we could have restored all the health care cuts”—she tacks on another well-worn line: “Texas should be leaner, not meaner.”

If a single word could sum up Strayhorn on this day, it would be “embattled.” Tension between the comptroller and legislative leaders, including the governor, is inevitable; the issue is not whether she is lowballing (of course she is) but how she plays the game. What she says is right—she does have to be conservative, and the 2003 budget was mean—but in politics, it can be offensive to be right. And it’s seldom right to be offensive.

A DOWN-BALLOT statewide office in Texas is a mixed blessing for a politician with designs on higher office. It’s like being a young actress in L.A.—you’re where the stars are, but that doesn’t make you one. Both current U.S. senators, Hutchison and John Cornyn, moved up from lesser statewide offices, as did future governors Perry, Ann Richards, and Mark White. The problem for any down-ballot officeholder in Texas is how to make yourself known to the public. Pop quiz: Name the land commissioner of Texas and something about him. (It’s Jerry Patterson. He’s a Vietnam veteran and a former state senator who sponsored Texas’s concealed- handgun law.) Comptroller of public accounts is a more visible office, but not by much. Bullock was a legendary figure inside the Capitol, but outside, his name identification in a 1997 Texas Poll, after decades of public service, was just 16 percent; he got as far as announcing for governor (against incumbent fellow Democrat White) but abandoned the race for lack of support. Bullock viewed White much like Strayhorn must see Perry: as a good-looking guy who had managed to be a career politician without doing anything substantive before he got to be governor. But he couldn’t beat him.

The dilemma, then, for Strayhorn has always been—and continues to be—how to make herself known to the world outside the Capitol and position herself for a major race. As important as the comptroller is, she holds center stage only twice in two years: when she gives her revenue estimate before a legislative session and when she decides whether the budget is balanced afterward. The rest of the time she has to fight to be heard above the crowd.

When she was elected comptroller, in 1998, Strayhorn brought two assets to the office that elevated her name recognition. One was that inspired nickname—One Tough Grandma—which captured her feisty personality. The other was her maiden name. Her late father, Page Keeton, was a highly regarded dean of the University of Texas law school for 25 years, known to generations of Texas lawyers; a street near the school bears his title and surname. (“I have two heroes,” she told me. “Page Keeton and Sam Houston.”) In her political career, which has spanned 33 years, she has served under the names of three husbands: McClellan, Rylander, and Strayhorn, while Keeton remained a fixture. She won the comptroller’s job as Carole Keeton Rylander and took the name of Strayhorn when she married again, in 2003—a revealing personal decision for a politician who had invested millions in raising her name ID for a suddenly defunct name. One prominent pollster told me that in order to get an accurate idea of how voters view her, he has to use the name Carole Keeton Rylander Strayhorn.

But a nickname and a maiden name alone do not a future governor make. Nor does a résumé, even one impressive enough to earn her a place on the Women’s Chamber of Commerce of Texas’s list of the state’s one hundred most influential women of the twentieth century, alongside the likes of Lady Bird Johnson, Barbara Bush, and Barbara Jordan. Now 65, Strayhorn started her career as a teacher, a root she tugs at frequently. When I went to her office to interview her, she saw that my attention had been diverted by a series of charts leaning haphazardly against a wall. “I’m an old schoolteacher at heart,” she said, “still doing show-and-tell.” She owes her place on the top-one-hundred list to a careerful of “first woman to be elected to” designations: president of the Austin school board, president of the Austin Community College board, mayor of Austin, and, statewide, railroad commissioner in 1994 and then comptroller.

Her first legislative session, in 1999, provided little opportunity to build a record for a future race or even enhance her visibility. The entire Capitol was caught up in Governor George W. Bush’s then-unannounced race for president. He wanted a $2 billion tax cut from the Legislature, but Democrats, who still controlled the House, wanted to spend some of the money for a teacher pay raise. A lot depended on the comptroller’s final estimate of available revenue. Would it be enough to accommodate Bush’s tax cut and the teacher pay increase? This time she was a team player: At the end of the session, she hiked her revenue estimate by $800 million. Bush got his tax cut and teachers got a $3,000 raise.

The trouble started in 2001. Bush had gone to the White House, Perry was governor (having moved up from lieutenant governor when Bush left), and Hutchison was talking about running against Perry in 2002. A lot of offices figured to be open that year, and there was plenty of speculation, even in news stories, that Strayhorn was looking to move up too. That had been her history. In 1986 she had become a Republican to run for Congress against the incumbent Democrat, Jake Pickle. The Reagan realignment was going full throttle in Texas—but not in Austin (then or now), and Pickle, a folksy ex-LBJ hand who was hugely popular, rolled up 72 percent of the vote. Nonetheless, she had established her Republican credentials. The first president Bush rewarded her with an appointment to the National Petroleum Council, which gave her the inside track to run for an unexpired term on the Railroad Commission, the body that regulates oil and gas, in 1994. She won the race and won again two years later for a full six-year term. But when Sharp vacated the comptroller’s office in 1998 to run against Perry for lieutenant governor, she opted to run for his job. Paul Hobby, her Democratic opponent, ran ads criticizing her continual office-seeking, but she edged him by 20,000 votes. Now, three years into her first term as comptroller, she was looking again. The press release before the 2001 session that contained the announcement of her revenue estimate was more politics than substance: “As a mama and a grandmama, I know that our Texas family must budget like any other family—spend wisely, invest wisely, and save for a rainy day.” It was the sound of ambition flapping in the wind.

She followed up by unveiling a list of policy proposals that she wanted the Legislature to pass. They included some novel ideas that deserved consideration, like reforming the Texas Department of Transportation (TxDOT), long a bureaucratic nightmare, and privatizing the troubled Texas Workers’ Compensation Fund. But the lawmakers ignored them, a frequent fate of novel ideas in the Capitol. They did accept some of her money-saving proposals, but rather than declare victory, Strayhorn chose to focus on her defeats. She hammered TxDOT, an agency with entrenched support in the Legislature, for resisting her reforms (“I am deeply concerned that this antiquated agency is so mired in the past and so afraid of reform that it would deny the people’s plea for help to protect its good-old-boy way of life”). Then, before certifying the budget, she slammed the Legislature for employing $5.1 billion in accounting gimmicks to balance it—in effect, borrowing from the next budget cycle. Strayhorn told the Austin American-Statesman, “I’ve been somewhat disappointed in what I see as a lack of leadership this legislative session.” The feeling was mutual.

THE STRAINED RELATIONS between Strayhorn and the leadership would evolve into total estrangement in 2003. Before giving her official revenue estimate in January of that year, she scolded lawmakers again about the ’01 budget, saying that they had “thrown a party” and “left the taxpayers with a hangover.” Then she hit them with the bad news: The 2003 Legislature faced a whopping $9.9 billion shortfall that had to be made up just to maintain the current level of state services. This included the $5.1 billion hole the ’01 Legislature had dug for itself. Strayhorn chided lawmakers like a schoolmarm: “The Legislature should make a commitment to the people of Texas that they will never again spend every last dime of taxpayer money, nor establish program after program while leaving an IOU for the next generation of lawmakers.”

It was impossible to imagine Bullock or Sharp talking this way. (The latter used to joke that the difference between Republicans and Democrats was that they both spent every penny they could find, but Republicans felt worse about it afterward.) Strayhorn was just getting started. Her deliberate use of inflammatory language set her up as the guardian of fiscal responsibility against the spendthrift whims of the Legislature. “I’m telling it like it is,” she said at the time. “I will not abdicate my responsibility.”

As the legislative leadership—by this time totally Republican—saw it, this was a declaration of war. Since the 2002 elections had come and gone without offering her a realistic chance to move up to higher office, she knew that 2006 would be her last chance. She was in good shape politically, having won reelection with 2.8 million votes, more than any other candidate on the ballot, but she still faced the quandary of how to get her name before the public and keep it there. Now she had found a way to do it—at the leadership’s expense.

But it wasn’t only politics that caused the rift. Behind the battle between the comptroller and the top state officials, namely Perry and Dewhurst, lay a philosophical disagreement over the constitutional role of the comptroller. Strayhorn sees herself as holding a policy position—CFO of Texas, chief fiscal officer, the anointed watchdog of the state. If she proposes ways to improve the state’s economy (and, therefore, tax collections), the Legislature should enact them into law. If she thinks the Legislature is spending and budgeting unwisely, it is her duty to speak out—as she did to criticize the Senate’s version of the ’03 budget, overseen by Dewhurst: “[It] is riddled with one-time payments, delays, deferrals, and seriously raids the Rainy Day Fund,” a Strayhorn press release read. “God help us if there is a true emergency in this state.” But the leadership—especially Dewhurst, who was already rankled by talk that Strayhorn had targeted his seat in 2006—sees the comptroller as a bean counter, a clerk, a functionary, whose job is to add up the numbers and deliver the answers to two questions to the Legislature: (1) How much revenue do we have to spend? (2) Does the bottom line balance?

“I love the independence of this office,” Strayhorn told me during our interview. “Of all the offices I’ve held, I’ve enjoyed this one the most. There’s not a facet of state government this office doesn’t touch. You’re OMB [in the federal government, the president’s Office of Management and Budget], comptroller, tax collector, all rolled into one. My responsibility is to the people.”

But her critics believe her responsibility is to the Legislature—the proper fiscal watchdogs, who are accountable to the people through their votes. Whether to dip into the Rainy Day Fund or to use accounting gimmicks or to manage the economy through new laws is no business of the comptroller’s. The check and balance in the system is not the comptroller but the collective wisdom of 150 representatives and 31 state senators, with the governor having the final say through his veto power.

The battle lines were set, and Strayhorn was no match for the firepower of the Legislature. Lawmakers killed her pet project, TexasNextStep, which, like most of her proposals, is an idea that would be good for Texas: free tuition and books for all students attending community colleges, helping ensure an educated workforce for the future. But Bullock himself couldn’t have gotten legislators to pass a $150 million spending program in a year when his own revenue estimate put them $10 billion in the hole—especially if he had previously criticized lawmakers for going on a spending spree.

The next crisis was the certification of the new budget, which Strayhorn declared did not balance. She was right: Inadvertently, budget writers had removed almost $200 million from a fund for highways. For a day or two, well after the session was over, there was frantic lobbying and maneuvering and threats of getting Attorney General Greg Abbott to ask the Texas Supreme Court to compel her to certify it. “They wanted me to look the other way,” she told me. In the end, a compromise was reached and she certified the budget—but not before getting letters from Perry and Abbott validating her claims that the budget was not balanced and that she was fully authorized to act as she did.

The payback was not long in coming. In the summer of 2003, Perry called the Legislature back to the Capitol to tackle congressional redistricting, giving rise to an epic battle that stretched into the fall. But another item on the agenda was a catch-all bill that proved to be the vehicle for the leadership’s revenge on Strayhorn, with Dewhurst in the driver’s seat. He inserted a provision to strip the comptroller’s office of two of its most visible and successful programs: reviewing state agencies for ways to save money and scrutinizing local school districts for the same purpose. Strayhorn testified against the proposal in the Senate, defiant to the end: “I believe that Texas taxpayers and Texas schoolchildren and the Texas comptroller’s office are being penalized for me telling the truth,” she said. “I was telling the truth when I said we had a budget shortfall. I was telling the truth when I said the budget did not balance.…And I was telling the truth when I said new fees, charges, and out-of-pocket expenses were going to cost Texans 2.7 billion dollars over the next two years.…And you can take away every desk and every chair and every program in the Texas comptroller’s office, and I will still tell the people of Texas the truth.” Unmoved, the Senate passed the bill easily. The House was harder—Perry made a personal plea for the votes of reluctant Republicans—but in the end, the bill passed. The power base that Bullock and Sharp had built was dismantled.

STRAYHORN LOST THE BATTLE, but the war goes on. As the current legislative session nears its conclusion, speculation in the halls of the Capitol has already focused on how she might try to strike back at the leadership by busting the budget and forcing a special session. Perry would be under tremendous pressure to demonstrate leadership on his promise to cut property taxes, with a GOP primary looming next March against…none other than Carole Keeton Strayhorn. The Legislature, however, has plan B in place if she should fail to certify the budget: a provision that triggers an automatic across-the-board cut for all expenditures, down to the level of available revenue. Strayhorn scoffs at the tactic. “It makes certification meaningless,” she told me. “The only way they can oppose the independent comptroller is to change the constitution. I’d just be delighted to take that position to the people of Texas.”

Just how easily the comptroller can throw sand in the gears became apparent—as if anyone in the Capitol needed reminding—back in March. Craddick and several of his lieutenants were working behind the scenes on a new business tax structure with members of the comptroller’s staff, who were figuring out how much money various proposals would raise. Much of what happened next is disputed: on what terms the comptroller’s staffers left Craddick’s office, whether they had seen everything that was in the bill (including amendments), and, most important, whether they had given assurances that the bill raised sufficient revenue to balance $6 billion in property tax reductions. At one point, early in the process, the comptroller’s office did affirm that the tax increase and the tax cut balanced, but the bill changed several times before the House passed it. All was well—until Strayhorn sent Craddick a letter the following week. The House bill, she informed him, fell $4 billion short of the mark. That isn’t just missing the target. That’s missing the barn.

Craddick felt ambushed. Later, the two principals issued dueling press statements. “Maybe she is playing politics,” Craddick’s said, “or maybe she and her staff are inept.” Strayhorn fired back: “Last week I told the members of the Texas House of Representatives the truth about the tax increase bill they approved.…My heart truly does go out to those lawmakers. They passed the largest tax increase in Texas history and it does not balance.” I have barely scratched the surface of all the intrigue that surrounded this episode, which was the talk of the Capitol for days. Only the result is certain: Craddick was the one person in the Republican leadership who hadn’t been mad at Strayhorn—and now he is.

THIS BRINGS US BACK to the original question: Crazy—or crazy like a fox? On one level, Strayhorn’s antagonistic stance toward the Republican leadership makes perfect sense. Call it the martyr strategy. It worked for Phil Gramm back in the early eighties, when he was a young Democratic congressman who broke with his party’s leadership to work for Ronald Reagan’s budget cuts. The Democratic leadership was so enraged that they vowed to punish him, and they stripped him of his position on the House Budget Committee. But Gramm had the last laugh. He resigned from his congressional seat and ran for the vacant post in a special election as a Republican. When he won, he was ideally situated to run statewide, and he went on to serve three terms in the U.S. Senate.

Starting in 2003, Strayhorn has been following a similar path, consistently criticizing the leadership of her own party and positioning herself as a staunch fiscal conservative who has been pilloried for telling the truth about reckless budgets. It makes for compelling copy, but there are three problems. First, it’s not clear how widely her martyrdom is known, or whether this is just inside baseball. Second, her game plan sounds like a great general election strategy, not a great primary election strategy; it appeals to independents, the kinds of voters who don’t show up for primaries and who care more about messages like “one tough grandma” than ideology. Finally, Gramm wanted to be run out of the Democratic party so he could switch. It’s hard to imagine the mother of White House press secretary Scott McClellan and chief Medicare and Medicaid administrator Mark McClellan switching parties to run as a Democrat, although you can find people in the Capitol who think she will—or even run as an independent. (At a recent Republican state convention, delegates were greeted with “Switch Back, Carole” placards, presumably placed by pro-Perry forces. Strayhorn insists she never was a Democrat, that all her races prior to the one against Pickle were for nonpartisan offices. But she was on the Travis County steering committee of Walter Mondale’s 1984 presidential campaign in Texas. Doesn’t that count?)

In the past year, except for the incident involving the House tax bill, Strayhorn has redirected her attacks from the Legislature to the governor, accusing Perry of “callous disregard” for children and assailing him for not seeking $1.6 billion in federal funds that could have alleviated some of the cuts of 2003. After his State of the State speech in January, she quoted herself as having said previously, “[There is] not a shortfall in the budget this session but a shortfall in leadership from the governor.…In a time that cries out for substance, this governor’s speech is a stone skipping on the surface of the state’s most critical issues.”

But how can she beat him? I pointed out that she has raised $5.7 million, whereas he’ll have four times that much if he wants it. And he has the support of the Republican party base, which is likely to be decisive in the primary.

“Hogwash on Perry having the base locked up,” she said, interrupting my speculations. “They’re believing their own news releases. I do not mind rough-and-tumble. Texans are ashamed of what is going on now in their state.”

But hasn’t she been reduced to seeking contributions from trial lawyers?

“Hogwash on trial lawyers,” she said.

“When are you going to announce?” I asked, trying not to sound too eager for the answer.

She stared at me. “We view ourselves on the eve of battle,” she said. “We are nerved for the contest and must conquer or perish.” I should have recognized it, but I didn’t. Sam Houston, before San Jacinto.

Well, they said Sam Houston was crazy too.

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