The Honeymoon Is Over

For two years the relationship between George W. Bush, Bob Bullock, and Pete Laney was all hugs and kisses. But now that the Governor has presidential potential and a partisan agenda, the state’s top Democrats aren’t swooning anymore.

January 1997By Comments

Call in the lawyers. Check the prenuptial agreement. Cancel the credit cards and put everything in writing.The political honeymoon for George W. Bush is definitely, irrevocably, terminally over. His once-cozy relationships with the Democratic legislative leaders, Lieutenant Governor Bob Bullock and Speaker of the House Pete Laney, which were so crucial to the success of his legislative program in 1995, are on the rocks. Property tax relief, his number one priority for the legislative session that begins January 14, is all headache and no relief. Everything, including Bush’s presumed presidential ambitions,is now caught up in Washington-style partisan politics—which has now come to Texas.

A few months ago the 1997 session was shaping up as one of the most ho-hum in years. Some long-standing battles figured to be renewed: deregulating electricity, allowing homeowners to borrow against their equity, adjusting the balance of power between doctors and HMOs, continuing the job of tort reform, maybe alleviating water shortages. And that was about it. The treasury will have a sizable surplus, around $3 billion. No taxes had to be raised, no prisons had to be built, no court orders had to be obeyed; just spread the goodies around and go home. Then Bush announced in November that he wanted $1 billion of the surplus to be earmarked for reducing local school taxes, and suddenly, in place of a lot of little issues, there was only a big one.

The reason is one simple word: t-a-x. Anytime it gets inserted into politics, it creates winners and losers. As far as Bullock and Laney are concerned, the governor is the one who inserted it, and he ought to say who the winners and the losers are. “Somebody is going to pay less taxes,” Bullock says, “and somebody is going to have to pay more, and I want to know who the governor thinks it should be.” Bush wants to leave the details to the Legislature. “My job is to think strategically for the state,” he says, “not to engage in number bashing.” Maybe so. But to Bullock and Laney, this sounds as if the governor is positioning himself to take the credit for property tax relief if it passes and duck the blame if it fails or has unforeseen consequences. This is how suspicions begin to creep into political marriages.

Bullock is derisive of the governor’s lack of specificity. “He doesn’t have a plan,” he says. “He just has ideas. He says he’ll give us an outline. When you pass a tax bill, you better know what you’re doing, because Texas is stuck with it for a long, long time.” Laney objected when Bush, without consulting legislative leaders, staked his claim to the billion dollars and thereby put property tax relief ahead of all other state needs: You need to stop listening to your political advisers and start listening to your legislative advisers, he told the governor.

Bush doesn’t want his two-year honeymoon to end. He sounds very much like someone who has been jilted when he professes his personal fondness for Bullock and Laney, his belief in their mutual partnership of bipartisan government, and his puzzlement at their recalcitrance. They were so happy back in 1995, when the three of them stood together and the lieutenant governor and the Speaker praised his legislative program. Why can’t it be that way again? Why won’t they stand by his side?

The answer is that Bush’s situation has changed, his legislative program has changed, and Texas politics has changed. Two years ago Bush was a brand-new governor whose announced intention was to govern as an ideological conservative rather than as a partisan Republican. Today he is on every short list of likely contenders for the next Republican presidential nomination, and everything he does is scrutinized for possible political motives. Such as: positioning himself to compete with other Republican governors, like John Engler of Michigan, Christine Todd Whitman of New Jersey, and William Weld of Massachusetts, who have already cut taxes and spending in their states. Two years ago Bush’s legislative agenda called for lawsuit reforms, more local control of education, cracking down on juvenile criminals, and getting welfare recipients off the dole and into jobs—issues that moderate and conservative Democrats could enthusiastically embrace. This year, by making property tax relief his top priority, he has chosen an issue that very quickly gets to the heart of the philosophical differences between Democrats and Republicans. Such as: whether a budget surplus should be spent on important services like colleges and nursing homes or returned to the taxpayers. Two years ago Texas politics seemed relatively stable, with a gradual trend toward Republican dominance that didn’t threaten the current generation of Democratic legislators. Today, after an election campaign of unprecedented expense and partisanship, the Republican party can claim a majority of the state Senate this session and could take control of the House in 1999 with the help of the right issues. Such as: property tax relief.

Ironically, property tax relief itself is not controversial. No one could dispute that Texas is too dependent on local ad valorem taxes to fund education. (The state provides just 47 percent of the cost of running public schools; school districts collectively have to come up with 53 percent.) Overreliance on property taxes caused the Texas Supreme Court to declare the state’s school-finance system unconstitutional in 1989 because it enabled rich districts to raise and spend far more money than poor districts. That crisis was eased by the notorious Robin Hood law of 1993, which takes money from the rich districts and gives to the poor, but a new crisis looms in the distance: In a few years, maybe as soon as 2000, most school districts in the state will be taxing at the maximum rate allowed under the Texas Constitution and will be unable to raise more money. It would, of course, be noble, farsighted, and responsible to act before the emergency arrives. But it is always risky in politics to be right too soon.

The risk is that property tax relief is just the first domino. There is the matter of who gets it, homeowners or businesses. There is the matter of who pays for it, because the revenue that schools lose from local property taxpayers has to be replaced by new money from state taxpayers. Then there is the matter of finding a method of giving the money back to the schools without hurting any school districts or reopening the gap between rich and poor. Finally, there is the question of how to prevent school boards from wiping out the whole thing by raising the newly lowered property taxes.

In other words, property tax relief is not just tax relief, something all politicians are for in principle. It includes a tax increase (to make up for the lost revenue) and a new school-finance formula (to distribute the money)—two of the most difficult and dangerous issues in Texas politics. It includes a budget “cut,” because of Bush’s insistence that part of the surplus—which is already being eyed hungrily by the needy and the greedy—be used for tax relief instead of spending programs. And it includes restrictions on local school boards’ power to tax, something that will have far-reaching effects on education for decades to come. Whether it passes or whether it fails, property tax relief will be the big issue in the next elections. It is, in the words of a mixed metaphor once used in legislative debate, “a time bomb headed for a banana peel.”

“It is an interesting question,” George W. Bush says, jabbing at an air molecule with an index finger. “Can government act prior to a crisis? Property values have declined over the last ten years, but property taxes have doubled. We have people sixty years old who are losing part of the American dream because they won’t be able to live out their lives in their homes.” He leans forward, closing in, canting his head to the left in deference to his invasion of the neutral ground above the coffee table that separates us. “Can we react and do something about it? Or do we have to wait until the storm is upon us?” As quickly as he advanced, he withdraws, collapsing so far back into a green leather sofa that his torso is almost horizontal. “I hope you’re taping this,” he says. “This is as eloquent as I get.”

For all the speculation about Bush’s future, he still acts like a person who does not take himself too seriously, in contrast to just about any national candidate you can think of (although, come to think of it, the tie that he is wearing—royal blue with widely spaced white stars—does look very presidential). He banters with everybody who crosses his path, interrupts a policy discussion to talk about the American League championship series between the Rangers and the Yankees (“The fourth game was the greatest public event of my life”), and in general seems to be having a grand old time. One hears a lot of grim comments around the Capitol about the likelihood of a legislative meltdown, including a few from Bush’s own advisers—but none from the governor himself. “I’m more sanguine than they are,” he told me, invoking a word not often heard from politicians in the soundbite era. Maybe his baseball background as president of the then-hapless Rangers instilled in him the eternal optimism of the underdog: In spring training, every team thinks it has a chance to win.

Still, Bush is dead serious about property tax relief; he kept the issue alive for a year when no one else around the Capitol, including his own staff, saw much future in it. The reason has everything to do with his political ambition—but not because of the presidency. Bush’s basic approach to politics is that the way to success is to do what you said you were going to do, and as a candidate for governor in 1994, Bush said that the state needed to pay more of the cost of education. It is not hard to figure out where Bush’s philosophy about cam-paign promises comes from. Remember “Read my lips, no new taxes?” Few politicians in America have had such intimate experience with the cost of failing to keep a campaign promise as George W. Bush.

But he is equally adamant that he will not recommend a specific plan to the Legislature. Publicly, he takes the high road—“My job as governor is to anticipate the problems and elevate the discourse,” he said last January—and leaves the low road of dealing with the details to the Legislature. Privately, however, he has been known to say in front of staffers, “Your governor is no fool,” and then he launches into a lecture about how a thousand lobbyists—and at least that many school superintendents and politicians—are just waiting for a chance to shoot down the first proposal that surfaces.

This much is known about the governor’s “outline.” He wants $4 billion to $5 billion of property tax relief, enough to raise the state’s share of education costs from the current 47 percent to the neighborhood of 60 percent. He has embraced Bullock’s suggestion to raise the $5,000 homestead exemption, so that the first, say, $25,000 of a home’s value would be nontaxable. He would make up for the lost funds with $1 billion from the surplus, a one-half-cent sales tax increase (alert! alert! Republican legislators have been telling the governor that they can’t support it), and some sort of business tax (red alert!). As for what sort of business tax and as for how the funds can be redistributed to school districts in a way that is fair and equitable (abandon ship!), well, that’s why the Texas Constitution created the Legislature. And that’s why Bush needs his political honeymoon to last one more session.

“Did you ever get in trouble and want somebody to share your troubles with you?” Bob Bullock asks. “Well, the governor is in trouble and he wants Pete and me to share his troubles with him.” He is sitting at a long table in his Capitol office, accompanied by an ever-present cigarette that he stuffs straight down into an ashtray designed to stifie smoke. In contrast to Bush, who conducts a conversation as if it were a symphony, Bullock is a man of great economy of movement. Even his smiles are slight, if eloquent; the difference between pleasure and irony is just a slight lift of a brow. At the moment, the brow is up.

“I’m genuinely fond of him,” Bullock says of Bush. “He’s a fine person. He says that when he makes a campaign promise, he’s given his word. I admire that a lot. But he wants Pete and me, without a bill, to say we’re with him without knowing who is affected and what it would do.”

One reason that Bullock isn’t likely to be moved to share Bush’s troubles is that he has ample troubles of his own. He is the highest-ranking Democratic officeholder in a Republican state and will be the GOP’s number one target in 1998. He presides over a Senate whose majority will soon be Republican. (The GOP emerged from election day with a 15 to 14 lead and is favored to win the two seats that must be decided in special elections.) His power to run the Senate—to appoint chairmen and committee members and to control the daily agenda—stems from tradition, not law; the GOP majority could take it for themselves and will be under pressure from party leaders to do just that. But they won’t. At 67, Bullock knows everything about Texas politics and politicians that there is to know—and he isn’t shy about using that knowledge. He has already fired one broadside at Republican senators for being too partisan. He later backed off, and he will make it up to them (Republicans already have two of the three major committee chairmanships and, Bullock says, they will get their first majority on the budget-writing committee), but the message was sent and received.

Property tax relief, as they might say in the Legislature, is the fiy in the ointment that could upset the applecart. The last thing someone in Bullock’s position needs is to bear the responsibility for a tax bill to address an issue that he doesn’t believe currently exists. (“I haven’t had any senators coming in here saying that we’ve got to do something about property taxes,” he says.) A former state comptroller, Bullock understands the ins and outs of taxes better than anyone in the Capitol; during our interview, he rattled off fiaw after fiaw in the ideas coming out of the governor’s office—this one was unconstitutional, that one was uncollectable, another one was tried in Florida and had to be repealed. Right now, no one is equipped to challenge him on tax policy, which is one big reason Bush wants the Legislature to take the lead. No dice. “Until the governor says, ‘This is what I want,’” says Bullock, “and shows me how these proposals will work, I’ve gone as far as I can go.”

The situation in the House is more emotional than substantive. Laney and his conservative Democrat lieutenants were the target of a Republican drive to win a majority of the 150-member House. The GOP gained only four of the twelve seats they needed, but the scale, coordination, and intensity of the effort were astonishing. GOP challengers routinely spent more than $100,000—a sum that is almost unheard of in House races, especially for opponents of well-funded incumbents. Many of the targeted Democrats had supported Bush’s legislative package; yet, they were attacked for voting against some of the hundreds of amendments that were offered—amendments that the sponsors of the bills, who were working with the governor, also opposed. All but two incumbents won, but those who survived return with bruised feelings. And that includes Laney. Bush’s grab at the surplus didn’t help. It was seen as unilateral and partisan; the bipartisan approach would have been to consult first, act later.

The Democrats now know that they are fighting a war of attrition: They will face the same sort of Republican effort every election year until they lose or retire; either way, their successor will, in all probability, be a Republican. They know, too, that if the property tax relief bill gets onto the fioor, the Republicans will come up with amendments, just as they did in 1995, that have no other purpose than to create campaign issues in 1998—for example, making it all but impossible for local governments to raise property taxes, period. And Bush won’t be able to stop it. The conservative Democrats, for all practical purposes, are extinct.

Can there be a second honeymoon? Bush insists that it is possible. “I believe that this session is going to be much more harmonious than people think,” he says. “All we have to do is find common ground.” Perhaps that is a signal that he will end up settling for Bullock’s suggestion of homeowner property tax relief and a sales tax increase. If, somehow, he gets everything he wants—if he emerges from the session with tax relief and spending cuts and the friendship of Bullock and Laney—and positions himself for a run at the presidency, he deserves it.

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