The Six-Billion-Dollar Men

George W. Bush, Rick Perry, and Pete LaNey will have the pleasant task of divvying up a huge budget surplus in the upcoming legislative session—if greed, partisan politics, and presidential ambitions don’t get in the way.

January 1999By Comments

SIX BILLION DOLLARS’ WORTH OF SURPLUS. Six billion. Being rich beats being poor any day, but for states, as for individuals, three things are still true: The money is never enough, it doesn’t solve all your problems, and all the relatives want a piece of it. So the 76th Legislature, which begins meeting this month, will find plenty to fight over.

The budget will overshadow all the other issues this session, including such hardy biennials as school vouchers, parental notification of abortions, tort reform (to limit Y2K lawsuits), a turf fight between local and long distance telephone companies, and electric restructuring, which used to be called electric deregulation until some pollster found that the public liked the same idea better if it was called restructuring. The only thing that matters is money, money, money, and the claimants are everywhere: tax cutters, big spenders, universities, highway builders, and children’s health advocates, to name a few. Just about everybody can make a good case. The state parks system is broke. Nursing homes are pleading for more state money, and so are mental health professionals who want the state to pay for expensive new drugs. Schoolteachers could use a pay raise, as always. Somehow Governor George W. Bush, Lieutenant Governor Rick Perry, and Speaker of the House Pete Laney must make the tough decisions at a time when Bush is thinking about running for president, Perry is trying to learn the ropes, and Laney is clinging to the narrowest of margins over Republicans that a Democratic Speaker has had in the two-party era.

We were trying to sort all this out when, wonder of wonders, we stumbled upon what appear to be confidential memos to the state’s three top officials from their political consultants. For your eyes only.

To: George W. Bush

From: Graham O. Partie, Republican consultant

THE FIRST THING YOU HAVE TO DO IS MAKE UP YOUR MIND whether you’re running for president. You’d like to get through the session without tipping your hand—the longer you wait, the less time the media and your Republican rivals will have to shower abuse on you. But you can’t delay much longer, because you can’t settle on a legislative program until you know where you’re headed. This means that your priorities will reveal your intentions. If you come out with a program designed to satisfy national Republican litmus tests—tax cuts and school vouchers—everyone will know that your hat is in the ring. But if you’re planning to stick around Texas for the next four years, you can spend some of the political capital you amassed in getting almost 70 percent of the vote last November to make Texas a better place. You can continue your battle for tax reform, look for more ways to strengthen public education, throw your weight behind the constitutional revision proposed by two leading legislators, Senator Bill Ratliff (Republican, Mount Pleasant) and Representative Rob Junell (Democrat, San Angelo), and help determine which causes are the most worthy to share in the $6 billion windfall.

Which will it be? Your closest political adviser, Austin consultant Karl Rove, let the cat out of the bag at an October forum when he was asked how your race against Democrat Garry Mauro was faring. “The governor’s race is over,” Rove said. “This is all about 2000 now.” What Rove meant was that with victory certain, it was time to concentrate on the size of your margin and your percentage of the Hispanic vote, two elements that are vital to your national image as an inclusive politician who can attract Democratic voters.

As a presidential candidate, tax cuts must be at the top of your list. It is the most important credential for a GOP governor. You should have little trouble winning approval of giving businesses a franchise-tax exemption of the first $100,000  in sales and a franchise-tax credit for high-tech research and development. But your proposal for property-tax relief of up to $2 billion is going to be a tough sell. The Democratic Speaker of the House, Pete Laney, has been your ally in past sessions because he believed you were motivated by doing what is best for Texas. If he thinks your tax cut is motivated by presidential politics, he won’t help you.

Another problem is that the surplus is not as big as it looks. The Texas constitution limits spending increases to the rate of growth of the state’s economy, so although there will be an extra $6.3 billion available to spend in the next budget cycle, the rate-of-growth formula limits the budget increase to $5.3 billion. Much of the remaining billion will go into the state’s rainy-day fund as a hedge against a future tax increase in case our economy nose-dives. Enrollment growth in public schools and the cost of maintaining the current level of state services to a growing population takes up another $3 billion. (The opening of new prisons, for example, will cost $250 million.) Now you’re down to $2 billion, you still haven’t gotten your property-tax cut, and you’re competing against all those interest groups for the balance. And there is always the possibility—if rumor is to be believed—that the new state comptroller, Carole Rylander, might slash the estimate of available revenue, just to be on the prudent side. Poof! The surplus would be gone.

You also have some spending plans of your own. Your proposal to end the social promotion of students who can’t pass the TAAS test carries a $200 million price tag for summer schools and other remedial programs, and your idea of refurbishing Texas courthouses isn’t cheap either. The cost of your own proposals, including tax cuts, is more than the $2 billion that is thought to be available. It looks as if you are headed for a repeat of 1997, when you settled for a face-saving increase in the homestead exemption that was worth $1 billion instead of the property-tax overhaul you really wanted.

Your status as the front-runner for the presidential nomination, though, might prove to be your secret weapon for exceeding expectations. Two years ago most of the opposition to your property-tax-reform plan came from legislators in your own party. This time, GOP members won’t be so quick to oppose you. Many of them are already dreaming of going to Washington as part of the Bush administration. Remember, the legislator you ask for help may envision himself the next White House chief of staff.

To: Lieutenant Governor Rick Perry

From: L. E. Fant, Republican Consultant

CONGRATULATIONS AND CONDOLENCES. You have knocked off the state’s top Democrat, John Sharp, but now you are on the hot seat. You have by far the toughest job of the three leaders. You have to prove that you can handle a job everyone still thinks is the most powerful position in the Capitol—but it isn’t, not anymore. So you face high expectations, from the media and the lobby and your friends, that you can’t possibly satisfy. To make matters worse, you are the number one target of partisan Democrats. They can’t lay a glove on George W. Bush, and they don’t want to; it’s in their best interest for the eight-hundred-pound gorilla to get elected president so that they can get him out of Texas and have somebody their own size to pick on. That’s you, buddy boy, since you’ll be governor if Bush runs and wins in 2000.

One thing in your favor is that a lot of folks underestimate you. You’ve undoubtedly heard the joke that’s making the rounds about the familiar nickname for lieutenant governor: “Rick Perry gives a whole new meaning to the phrase ‘lite guv.’” What do they expect from someone whose former job, agriculture commissioner, wasn’t exactly a training ground for the state’s big issues? The last ag commissioner who thought he was a big shot was Jim Hightower, and it led to his defeat—by you. Don’t fall into the trap of trying to prove that the folks who think you’re a lightweight are wrong. Just make sure that you don’t prove that they’re right. Your goal in your first session should be survival, not stardom.

The main thing that you have to understand is how two-party politics has weakened your office. Just six years ago, Bob Bullock was an all-powerful lieutenant governor presiding over a Democrat-dominated Senate. No one dared to cross him. But as Republicans gained numerical strength and eventually a majority over the next four years, GOP senators realized—and so did Bullock—that the lite guv’s power over Senate procedures sprang from custom, not law. If, say, Bullock did not give the GOP enough committee chairs, GOP senators could, if they wished, rewrite the Senate rules, strip him of his powers, and name the chairs themselves. They could do the same to you, and many of them want to. It’s not personal. It’s just hard to resist power that is there for the taking. So while nothing has changed—you have all the powers a lieutenant governor has always had, at least for now—everything has changed, because the secret of the lieutenant governor’s vulnerability is out in the open. Bullock knew it; that’s one reason why he stepped down. Perception is everything in politics, and the perception among many senators is that the Senate no longer needs a heavy-handed lieutenant governor. Forty-eight states—all but Texas and Georgia—get along with a weak one or none at all. Why should Texas be different?

The worst thing you could do under such circumstances is throw your weight around. Yet soon after you were elected, a rumor swept through the Capitol that you were thinking about taking a chairmanship away from Senator David Sibley of Waco (a respected veteran Republican and a close ally of Governor Bush’s) because you deemed him insufficiently enthusiastic about your campaign. The rumor was followed by spin from your defenders that nothing of the sort was ever contemplated and that the rumor must have been started by your enemies. More likely, it was the product of some loose talk by your friends. Just think of this episode as a refresher course in one of the fundamental lessons of politics: Your friends can hurt you a lot worse than your enemies can.

And speaking of friends, one of yours is already causing you some problems. I’m talking about school-voucher advocate Jim Leininger of San Antonio. This little-known figure, who made his fortune developing a hospital bed, has become the most extraordinary campaign contributor in Texas history. Others give thousands; he gives millions. Leininger gave you a line of credit reportedly in the seven digits—money you used to match Sharp on television in the closing days of the campaign. Payback time started with your “late train” fundraiser on December 8. The “late train” refers to the last chance for lobbyists who supported a losing candidate to get on board with the winner. What made your late train different—although your defenders deny it—is that your fundraisers, instead of allowing lobbyists to decide for themselves how much to donate, told them how much their tickets for the late train would cost. (The most expensive seat, for $100,000, was reserved for the Texas Farm Bureau, with whom you got crosswise as ag commissioner; they elected to miss the train.) This hardball tactic engendered a lot of ill will, especially since lobbyists knew that their quotas were set for the purpose of paying back Leininger.

The question that ought to worry you is, How, as commissioner of agriculture, did I allow my relationship with the Farm Bureau to deteriorate to the point where I lost its support? You say that you had to tell them no now and then, and they didn’t take it well, but a skilled politician should have been able to avoid total estrangement from his core constituency. You’re a great electoral politician, Rick, but you’ve got a lot to learn about the inside game (which is all the lieutenant governor’s job is) and not much time to learn it. You are in a highly visible job now, and you have to start worrying about appearances—and that doesn’t mean how good you look on TV. Owing Leininger a fortune looks bad, and it’s going to look worse if you get heavily involved in trying to pass vouchers. Partisan Democrats who oppose them will have a field day attacking you.

The best advice I can give you is to let the Senate work its will. Your biggest strength is that you are an easy person to like. Use it. Get as many senators as possible, Democrats and Republicans, on your side, offer them help, and ask them for advice. And whatever you do, don’t try to be a model of Machiavellianism (or Bob Bullock). Remember, all you want to do is survive. If you’re lucky—and Bush is too—your first session will be your only session, and you will move up to governor. Then you can start worrying about the rumor that Kay Bailey Hutchison intends to come back to Texas in 2002 to run for governor, regardless of who else is in the race.

To: Speaker of the House Pete Laney

From: Don Key, Democratic consultant

YOU’RE THE LAST SURVIVOR, THE ONLY Texas Democrat with a statewide portfolio. The opportunity to become the spokesman for the party is yours by default. Your West Texas accent alone is enough to get ordinary people to identify with you. You could position yourself to make a run for statewide office—say, lieutenant governor—in 2002. But what’s the use of telling you this? It would be completely out of character. You’re an inside player who shuns the limelight, has no higher ambitions to pursue, and doesn’t have an ideological agenda—the exact opposite of Rick Perry.

So let’s concentrate on the upcoming session. To anyone who looks at just the numbers, it would appear that your fourth term as Speaker will be a rough one. The Democrats’ margin in the House has dropped from fourteen seats to six (78—72) as the result of last November’s elections. Not to worry: It’s going to be a breeze. The Republicans have spent the past four years—and millions of dollars—trying to win a majority of House seats (76 of 150). They thought they had it this time. But something went awry: Bush’s coattails didn’t extend down to legislative races. Now the steam has gone out of the GOP campaign. Its chief architect, Tom Craddick of Midland, cannot serve another term as chairman of the House Republican Caucus. That job is slated to pass to Kenny Marchant of Carrollton or David Swinford of Dumas, both of whom have milder personalities than Craddick does. In another changing of the guard that should produce less partisan rancor, the leadership of the bipartisan Conservative Coalition has passed from a fiercely ideological Republican to a rural Democrat, Bob Turner of Voss. Unfortunately, turnover has hurt you as well: You lost four top lieutenants to retirement. You’re going to have to rebuild your A team.

It has always been your style to play your cards close to the chest, and that won’t change. You don’t exercise power in any visible way, but strange maladies seem to inflict bills that you don’t like—long delays, susceptibility to points of order, and other small but often fatal afflictions.This knowledge has to worry Rick Perry. You have never liked the idea of school vouchers, and if you don’t want Perry’s pet project to pass, chances are, it will have a wreck somewhere along the line—and it will look like an accident.

One more thing: What about all that money? As the only Democrat left standing, can you keep the entire surplus from being eaten up by Republican tax cuts, with nothing left for teachers, nursing homes, and other supplicants? Let me put it this way. In the eighties, before Perry switched parties and you two were Democratic House colleagues from rural West Texas, you were never close. You’re not likely to get any closer this session.

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