IF YOU DROVE NEAR THE CAPITOL COMPLEX in Austin in mid-October, you couldn’t miss the small white signs that read “Cheer Up.” A Tommy Lee Jones movie of that name was filming nearby, and the signs were placed strategically to tell the crew the location of the day’s shoot, but they could have also been taken as a plea to Texas politicians. This has not been a happy time at the Legislature, where work began in January against the backdrop of a $10 billion budget shortfall and ended nine months later after three special sessions, two quorum-busting walkouts, and a redistricting bill that only Tom DeLay could love. The House and Senate were at war. Democrats and Republicans were barely speaking. Republican leaders were fighting among themselves. And everyone, it seemed, had a bone to pick with Carole Keeton Strayhorn.

By all rights, this should have been a banner year for the comptroller of public accounts. She had dropped more than one hundred pounds and married for the third time, and her “One Tough Grandma” shtick had earned her more votes than any candidate of either party on last November’s statewide ballot, as well as the most votes of any woman running for office anywhere in America. Two of her sons, Scott McClellan and Mark McClellan, had been named White House press secretary and commissioner of the Food and Drug Administration, respectively. A potentially embarrassing book by her first husband alleging that LBJ killed JFK earned her sympathy from women who had had their own marital misadventures. Even the budget shortfall had a silver lining for Strayhorn, whose role as the state’s chief financial officer suddenly took on more significance. Her every utterance on the budget really mattered, or at least was supposed to. The 64-year-old with considerable and very public ambitions was finally a player.

Perhaps because of those ambitions, however, she was also a target. When she announced her pre-session estimate of how much revenue the Legislature could spend, Republicans and Democrats accused her of exaggerating the state’s dire straits as a way of shining a light on herself. When she initially refused to certify that the budget was balanced at the end of the session, in June, the Republican leadership joined forces in attacking her as disloyal; then, 48 hours later, when she certified it after all, they snickered that she looked weak and amateurish. At the end of the third special session, relations between Strayhorn and Governor Rick Perry in particular were so frayed that the Legislature passed a government reorganization bill openly described as “Get Carole,” stripping the comptroller’s office of various powers.

Well, it did get Carole . . . angry, as I learned when I interviewed her in her office on October 16. Unbloodied by the fights of the past year, she insisted that she acted only in the best interest of Texas, and she dropped anvil-size hints about launching a “Get Rick” effort, a challenge to the governor’s likely reelection bid in a campaign of her own for the state’s top job. Republicans may not be looking forward to intraparty warfare in 2006, but for those of us who enjoy good political theater, things are getting interesting. Cheer up.

Think back to November 2002, when you were the highest vote-getter on the ballot. Could you have imagined that your situation would be so contentious a year later?

I don’t believe you ever make decisions by taking a show of hands. You do in your gut what you know is right. So that wasn’t even on my radar screen. I was humbled and honored to have been the top vote-getter, but what I was really pleased about was the fact that I got 64 percent of the vote. To do that you’ve got to have broad bipartisan support. I’ve always prided myself on having bipartisan support; I don’t label anybody. I don’t like labels.

But you do consider yourself a Republican?

Oh, yes!

Once upon a time you were a Democrat. Any plans to become one in the future? Because that’s one thing out there in the rumor mill: that you’re going to switch parties again. Any intention of running as anything other than a Republican?

Absolutely none.

Okay. Let me go back to 2002 again for a second. When Rick Perry, David Dewhurst, and Tom Craddick were candidates for office, were you all on good terms?

I was always on good terms with everybody. I learned long ago, during my mayoring days in Austin, that you can disagree on philosophy or issues, but you charge ahead in the friendship area.

What happened at the start of the session, when you announced the revenue estimate? Your fellow Republicans weren’t happy.

My constitutional responsibility is to the people of Texas, whether it’s giving a revenue estimate or certifying the budget. I do it precisely, and I tell it like it is. I gather the facts, and I listen to people whether they agree with me or not. And then I act independently. I didn’t consult with any of those folks before the revenue estimate. Which was very accurate, by the way—within three tenths of one percent.

During the session, you were asked to be part of the weekly breakfast between the governor, the lieutenant governor, and the Speaker. Was the tone of those breakfasts friendly?

It depends on where we were in the session and who was upset with whom. We had some very deliberate discussions. I think that if they had me back for breakfast, I’d take a taster.

Did the breakfasts stop at a certain point?

No, they went on all through the regular session. But they got a little less productive. For instance, one member wasn’t quite as prompt as the others. The breakfasts were supposed to take place at eight o’clock. You may have heard of one week when three of us waited for a good while and then decided that we had things to do and waited no longer. Then, when it came time for the last breakfast of the session, I had a choice to make: I could either go to breakfast or I could go see my grandbabies Kathryn and Michelle, who had a performance at Barton Hills Elementary. I told the boys, “Sorry, I’m not going to be there.” It wasn’t an optional thing.

This would have been before you came out and said, “I’m not sure that I can certify this budget.”

Yes. As a matter of fact, I said the budget was not balanced. And it was not.

Was there any point leading up to your decision to say so at which you thought, “This might be the right thing to do, but, jeez, it’s going to cause a firestorm in my own party”?

I’m Page Keeton’s daughter. I was brought up in a household where it wasn’t the dollars you made; it was the difference you made. It shouldn’t have been a surprise to anyone that I didn’t certify that budget. They wanted me to ignore bills that had already been signed into law and had made the budget not balanced. The constitution of this state mandates a pay-as-you-go, no-deficit-spending budget. The people of Texas expect no less. A budget balances or it does not balance. The issue was not the [overage of] $186 million—

Which people will say was a fraction of the $118 billion budget.

You tell Joe Six-pack that $186 million is a small amount of money. I say $186 million is a lot of money. The comptroller’s office is a constitutional office; there’s nothing like it in any other state. I tell the Legislature what they can spend, and I certify that the budget is balanced. Unless and until I certify that budget, there is no appropriations bill, and there is nothing for the governor to line-item veto. You may remember that they were pounding on me to get that budget certified so the governor could get on with his vetoes. But I could not look the other way and abdicate my responsibility.

So what happened?

I agreed to reconsider—not to certify, but to reconsider—if a series of conditions was met. First, I wanted a letter from the attorney general that said that because of the observance of the Juneteenth state holiday, the House clerk’s office was closed for business, so the budget bill had never been officially received. That gave me another bite at the apple. Second, I wanted a letter from the governor saying, “I recognize that the budget is not balanced.” Third, you remember all the talk about suing me if I didn’t certify? I said, “No more talk about lawsuits. Because if you want to go to court, by God, I’ll go to court, and I’ll win.” The last thing was that the cut [to balance the budget] must not come from education or health care, because we’re not funding those appropriately anyway. And it had to be a real cut, not smoke and mirrors. In fact, I insisted that I would find the cut.

You would come up with the solution.

I had my staff already working on it. We were looking for a bill that had not been signed, one the governor could veto. And we found one in my own shop. It was a $212 million program that had to do with paying back interest on interfund borrowing. It would have affected the comptroller—my office and my office only. I said, “That’s the cut.” After the governor vetoed that legislation, I could certify that the budget was balanced. And I did.

You mentioned not wanting to cut education or health care. Do you have a negative view of how the Legislature dealt with the problems of Texas this session?

Let me tell you a story. After the budget had balanced and we were into the first special session, the governor vetoed line items from the appropriations bill that put us $98 million to the good. Not only that, there were some federal dollars that suddenly became available. We had freed up a total of $700 million. So on July 11, I spoke at a health seminar. I said that I had been inundated with calls from people about severe health care cuts during the regular session, so I had had my staff add up what we could find in this administration’s budget. And we could estimate more than $1 billion in cuts. These were things like a reduction in community services for 158,000 frail and elderly Texans who, as a result, may have had to go into nursing homes. You had 160,000 children who’d lost their health insurance under this administration. You had 175,000 adults on Medicaid who were not going to have eyeglasses or hearing aids over the next two years. So what I said was, “Fix it. The dollars are here. The Legislature is here. Heed the call.” Seven hundred million dollars can’t restore everything, but it can go a long way toward restoring the severe cuts that are impacting Texas lives and livelihoods.

What was the response?

Obviously it never got added to the agenda for the special session. It hasn’t been addressed still. And we can talk about other things too, like fees. I was also inundated with calls and inquiries after the regular session had ended about new fees that would go into effect on September 1. So, again, this office put together a list of the $2.7 billion in new and higher fees just from the new laws that had been passed. Some of those fees I had recommended. For instance, I wanted a fee on drunk drivers, higher than what the Legislature adopted. They had a $100 fee. I wanted $500, and I wanted the proceeds to go not only to trauma centers but also to Texans with disabilities.

Had you been the governor or the lieutenant governor during the session, would you have approached the budget differently?

I’m not the governor. I’m not the lieutenant governor. I’m the comptroller. But I do care passionately about this state. When I was sworn in, in 1999, my number one goal for this century was developing an educated workforce. In the past decade, higher-education dollars in Texas [adjusted for state population growth and inflation] have dropped 1.6 percent while the budget has increased 39 percent. Let me give you a specific example. Two higher-education funds, the Texas Excellence Fund and the University Research Fund, were set up a couple of years ago. The Legislature appropriated a total of $68 million in the budget for these two funds for 2002-2003 and a total of $45 million for 2004-2005. The money was for research. We need more flagship universities in this state. California has ten, New York has eight, Massachusetts has five, and Texas has only two. The University of Houston and Texas Tech are ready to be flagship universities, so the higher-education funds were terribly important. Well, after the budget was balanced, the governor line-item vetoed those funds. He vetoed $45 million in higher-education funding.

That’s not something you would have done.

Absolutely not. And I’ve said publicly that whether it’s done by adding it to the special session on school finance or whether it’s done under the budget execution authority of the governor, we need to restore those higher-education-excellence dollars.

Talk about redistricting. You were on the legislative redistricting board in 2001 but largely out of the issue this time. Would you have done as the governor did and called a series of special sessions to pass it?

I believe that the administration has been laboring up hills and the mountain is looming. The mountain is school-finance reform. We have got to give relief to homeowners on their property taxes. The state’s got to pick up more of the share of education. Back in the time of Gilmer-Aikin [the state’s first school-finance law, passed in 1949], the state was picking up 60 percent of education and local districts had the other 40 percent. Now local property taxes are picking up more than 60 percent and the state is picking up less than 40 percent. Fifteen billion dollars of local property taxes is going into elementary and secondary education each year. If you were going to replace that with sales taxes, you would have to double the sales tax. Fifteen billion a year is what I already take in in sales tax.

Am I remembering correctly that the lieutenant governor’s plan required an increase in the sales tax?

Yeah. Now, I respect that somebody’s trying to address school finance, but Senate Bill 2 was kind of a laundry list of sales tax increases. It was everything from a tax on higher-education tuition to a tax on haircuts to a tax on babysitters, for goodness’ sake. You know, I can see me as comptroller going out to collect taxes from babysitters. I mean, they’re a little bit old to put in time-out; I don’t know if you’d ground them. Maybe I’d have a seizure of piggy banks.

The original question I asked you was about the hill, not the mountain. Should the Legislature have done redistricting this year?

Again, the administration has been laboring up hills and the mountain is looming.

I need to get you to tell me “I supported this,” “I don’t support it,” or “I’m neutral.” Did you support redistricting?

I have said repeatedly that we need to be addressing school finance.

I’m not going to get you to give me an answer, am I?

The mountain is looming. It’s got to be addressed and it’s got to be addressed now, in a bipartisan way.

Let’s move to the end of the third special session, when there was a debate over a government reorganization bill that would have stripped two programs from the comptroller’s office—what came to be known as the “Get Carole” bill.

“Get Carole” started long ago. It started in the governor’s office and it ended in the governor’s office.

Why do you think people thought of it as “Get Carole”?

Because that’s what it was. And it was passed because I was telling the truth. A message was sent over here repeatedly—you know, “Be quiet. Be a good girl. Don’t say anything. Don’t tell the people of Texas what’s going on and we won’t mess with you.” Well, I told them, and regrettably, this is what happened.

Did you call the governor or the lieutenant governor and tell them to lay off?

I repeatedly talked to the administration about this. And then I went directly to the state representatives, because this was a done deal in the Senate. Before the bill went to the floor of the House, I called Republicans and Democrats. And at one point, I had a large number of Republicans who were going to vote against the bill. But during the last few days of the special session, the governor’s office added to the bill an amendment exempting school-board members from the financial disclosure rules in the ethics bill passed during the regular session. Then the governor’s office called school-board members all over the state and told them that if they wanted to get rid of the ethics rules, they should call their state representatives and tell them to support the government reorganization bill. So a lot of representatives who knew it was wrong to take these programs away from me, who were going to vote no on the government reorganization bill, were all of a sudden told by folks back home, “Oh, you’ve got to vote for it.” And these representatives were called into the governor’s office and were lobbied on the floor by the governor’s office. I had many calls from members telling me, “I know this is wrong, but this is what I have to do.”

The perception around the Capitol was that this was about you and Lieutenant Governor Dewhurst—that he was driving this train.

It started and ended in the governor’s office. I’ve been told by a number of sources that the governor went behind closed doors to meet with the House Republican Caucus and saidand I quote“It is personal.” My telling the truth is apparently what is personal to the governor. Well, I’ll tell you what’s personal to me. What’s personal to me is that we’ve lost the dignity, the honor, the effectiveness, and most important, the spirit of bipartisanship championed by our former governor and now president, George W. Bush.

You sound like a candidate for governor. Frankly, you sound like a candidate for governor of a different party.

I’m the comptroller 24-7.

Right, but there’s going to be an election in 2006.

Sam Houston is one of my heroes. Right before the Battle of San Jacinto, he said, “We are nerved for the contest and must conquer or perish.” Well, I too am nerved for the contest. I really believe that Texas belongs to no special-interest group and no special political credo and no special individual, and I think Texas wants government that’s free from back rooms and free from special-interest groups and free from good-ol’-boy, go-along-to-get-along politics. This administration can take every desk, every chair, and every table out of this office and I’m still going to tell the truth.

But you’re not saying you’re going to run.

I never say never.

You’re not saying you’re not going to run.

That’s correct. I never say never.

Is there a scenario involving Senator [Kay Bailey] Hutchison’s returning to run in a primary against Governor Perry that would cause you not to run? Will you say that you won’t run if she does?

I never say never. I want to be where I can make the most difference in this state. Any decision I make will be based on where I can make the most difference, not on what anyone else is doing.

So Senator Hutchison’s plans have no bearing on yours?

I have great respect for Senator Hutchison.

Do you have great respect for Governor Perry?

[Pauses] I like everybody. I like everybody. This is about how we can be leaner and not meaner—now we’re leaner and meaner. Texas is great, but we can do better. We have the highest percentage of children without health insurance. We’re forty-fifth in immunizations. I’d rather spend $500 immunizing a child for a lifetime than $6,700 hospitalizing that child one time, just as I’d rather spend $2,100 educating a young Texan for a year than $15,000 incarcerating him.

What about running against Lieutenant Governor Dewhurst? Would you like his job?

That’s not even on my radar screen. I love what I’m doing. I want to be where I can make the most difference. Now let’s go back to your first question. The first question was . . .

About the governor’s race.

[Laughs] Today is not the time to make any announcements. But as I say, when the people of Texas ask me to serve, I never say never.