The Games Begin
What does the 2005 legislative session have to do with the 2006 elections? Everything. Oh, boy, is this going to be fun.
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IN OCTOBER, a few days before the presidential election, I drove to Lubbock—through the Hill Country, into the empty West Texas ranch lands, and then onto the Plains, where late cotton waited in the fields to be picked. In all that time, from the moment I left Austin to the moment I returned, I did not see a single John Kerry yard sign or bumper sticker. The election returns verified my informal survey: George W. Bush won 61 percent of the vote in Texas, a two-point gain over his showing in 2000, and down-ballot Republican judicial candidates raised their previous floor by the same amount. The state, it’s widely acknowledged, is more Republican than it has ever been.
But the question that always must be asked in politics is, To what end? Elections change the balance of power, but outside the Capitol, our problems remain the same. Texas today faces two intractable crises: an outmoded—and, according to a recent court ruling, unconstitutional—method of financing its public schools and a system of raising the revenue to pay for state government that bears little relation to the modern Texas economy. What is the state’s majority party going to do about them? It is still struggling to create an identity for itself, to find the ideal balance between ideology and governing. If the Republicans’ numerical superiority is assured for the foreseeable future, their aptitude for leading the state is less certain.
This is the dark cloud hovering over the legislative session that begins on January 11. The same question that faced the first GOP legislature two years ago is still awaiting an answer from the second: Can the Republicans govern? The best description of the feud-filled 2003 session was that the Republicans didn’t know how to act like a majority and the Democrats didn’t know how to act like a minority. The GOP was successful in passing its ideological agenda—restrictions on abortion, sweeping tort reforms, deep budget cuts, congressional redistricting—but when the fun and games were over, the eight-hundred-pound-gorilla issues of state government were still on the loose.
In fairness to the Republicans, the Democrats tinkered with school finance and the tax structure for decades without fixing them, but at least their patches on leaky tires did an adequate job of keeping enough air inside to enable the contraption to move forward. So far, in one regular session and one special session on school finance, Republicans have done little more than check the pressure. Guess what: It’s high—and it’s going to get higher. Looming ahead are the 2006 elections, when the GOP faces the prospect of no-holds-barred battles for the major statewide offices in its own primary. Everything the Legislature does or does not do in the upcoming session is a potential hot button for incumbents.
Especially school finance. Even without the adverse court ruling, the calls for changing the system have been loud and long. The politics of the issue should be familiar by now. The impetus for change comes from property-rich school districts, which, under the so-called Robin Hood law, in force since 1993, have had to share their property-tax revenue with poorer school districts. The solution is to reduce the disparity between rich and poor districts by finding other sources of revenue to replace property taxes. Easier said than done. Even a tax shift that is revenue-neutral—a dollar-for-dollar shift from property taxes to something else—might be hard for Republicans to vote for.
Then there is the matter of what the “something else” is going to be, a question that goes to the heart of what’s wrong with the state’s current tax structure. In agricultural Texas and in oil-boom Texas, land was the major source of wealth. But today it is professional services (doctors, dentists, lawyers, architects, accountants, consultants), which depend on brains, not land. A state income tax makes the most sense, but that’s not going to happen on the Republicans’ watch. Raise the sales tax? Getting rid of Robin Hood will require a big increase, and we already have one of the highest rates of any state. Amend the state constitution to allow a statewide property tax? Just try and get a two-thirds favorable vote out of a Republican legislature and then try and get a majority of the voters to approve it. Impose a new business tax? Oh, that’s a swell incentive for new businesses to locate here. There’s a reason this stuff is hard.
It gets harder. All of these scenarios assume a revenue-neutral tax shift. But that is not acceptable to education advocates—particularly superintendents, who have a lot of clout with legislators from midsized towns and rural areas, most of them Republican. Consequently, the usual solidarity of GOP legislators doesn’t exist in school finance. Lawmakers from the suburbs typically want to get rid of Robin Hood and are hesitant to vote for more educational spending, while those from rural Texas, whose districts benefit from Robin Hood, are just the opposite. Their superintendents say that the schools need more money to do the job state law requires them to do.
The recent ruling against the current school finance system backs them up. Noting that the Texas Constitution requires a “general diffusion of knowledge,” state district court judge John Dietz pointed out that the minimum state requirement for student performance on standardized tests—a rating of “acceptable” for schools—requires a passing rate of only 25 percent, which is hardly a “general diffusion.” Dietz also ruled against the state on another key issue: that the high percentage of districts that have reached the maximum property tax rate allowed by state law ($1.50 per $100 of valuation) means that Texas effectively has a statewide property tax, which the state constitution forbids. The Texas Supreme Court will have the final say on the constitutionality of the current system, and it is quite possible that lawmakers will elect to wait for the court to rule before venturing into the political thicket that lies ahead.
The Legislature can afford to play the waiting game, but the governor can’t. No one has more at stake in the 2006 elections than Rick Perry, who vowed to get rid of Robin Hood when he ran and won in 2002. His potential Republican primary opponents include Comptroller Carole Keeton Strayhorn, a frequent Perry critic, and U.S. senator Kay Bailey Hutchison, no Perry admirer herself. The likelihood of a Hutchison challenge soared recently when Congress reinstated a provision that allows funds raised for federal campaigns to be used in state races. The Perry camp has always doubted that Hutchison would run—“Those who are going to run, run,” one Perry insider told me. “Those who aren’t going to run, talk”—but a $6.7 million war chest speaks louder than words. The conventional wisdom among Republicans holds that Strayhorn has hurt herself with the GOP base by her strident attacks on the governor, but the failure of the Legislature to address school finance would give her a formidable issue.
A Perry-Hutchison or a Perry-Strayhorn primary race would be a battle for the soul of the party. Perry has close ties to the GOP ideological and big-donor base, while Hutchison and Strayhorn cast themselves as fiscally conservative but more pragmatic, more supportive of government programs, and more moderate on abortion. Hutchison and Strayhorn have been critical of the governor for supporting cuts in social services that affect children, such as Child Protective Services, where state workers’ caseloads are huge and children have died from abuse, and CHIP, the Children’s Health Insurance Program, where budget cuts caused 159,000 kids to become ineligible for health insurance (although in some instances other health care was available). To overcome Perry’s strength with the Republican base, Hutchison or Strayhorn needs two things to happen: a bigger-than-usual primary turnout, including crossover Democrats and independents, and a two-person race. A three-way battle would likely result in a runoff, in which the low turnout would be dominated by the party faithful who favor Perry.
A decision by Hutchison to challenge Perry would set off a high-stakes game of musical chairs among the major GOP officeholders. Lieutenant Governor David Dewhurst, who has set his sights on succeeding Perry in 2010, would face the decision of whether to stay put, counting on a Perry victory, or run for Hutchison’s Senate seat. That race could also attract George W. Bush’s longtime friend Don Evans, the former Secretary of Commerce, and South Texas congressman Henry Bonilla. Strayhorn could then shift gears and run for Dewhurst’s old job, and Attorney General Greg Abbott might do the same. Agriculture commissioner Susan Combs has already announced her interest in Strayhorn’s current job. What an amazing political year 2006 could turn out to be.
But what happens next year will be heavily influenced by what happens this year. If the upcoming session is like the last one (and the special sessions that followed)—divisive, mean-spirited, and petty, on both sides of the Capitol, on both sides of the aisle—getting something done on the big issues of school finance and tax reform will be all but impossible. It shouldn’t take long to find out. Three Republicans who lost to Democrats in November decided to challenge the outcome of their elections in the House of Representatives, where their party holds an 87—63 majority. The most important of these races took place in Houston, where Democrat Hubert Vo upset Republican Talmadge Heflin, the chief House budget writer, by 33 votes. The process calls for a member to be in charge of gathering evidence and for the House to determine the winner or order a new election. The Republicans have the votes to do whatever they want, evidence or no evidence, but Democrats in the Capitol, outside it, and on the Web will go berserk if they think three seats have been stolen from them. How the House—and especially Speaker Tom Craddick, a polarizing figure who had a politically fruitful but personally rocky first session—handles the challenges will go a long way toward determining the success of the session.
The Republicans have mastered the art of campaigning. I hope they do as well with governing, if only so I won’t have to write another column two years from now asking the same old question: Can they govern?