May 17, 2004

Somebody cue up Don Meredith singing When The Party's Over:

AUSTIN -- The Texas Legislature signaled the full-scale failure of the special session on school finance today by taking final adjournment with two days remaining in the 30-day session.

The House adjourned first today, followed by the Senate.

Gov. Rick Perry called the session to cut property taxes, eliminate the so-called "Robin Hood" school finance system and restructure public education funding in Texas. He has indicated he will call another session to deal with the issue but has not said when.

The session was marred from the beginning by a lack of consensus and disagreement between Perry, House Speaker Tom Craddick and Lt. Gov. David Dewhurst on how to pay for public schools.

Perry had wanted to pay for property tax cuts mostly by legalizing video slot machines at race tracks and expanding some sin taxes.

House members opposed the expansion of gambling and sought to pay for tax cuts with a new business payroll tax. But Perry torpedoed the new business tax by calling it a "job killer."

The House voted overwhelmingly to reject Perry's proposal after dropping the business tax. What passed the House was legislation with public education financial incentives, but its property tax cuts were small and it lacked the revenue-raising measures to pay for itself.

The Senate gave up the quest for a school finance package last Friday, lacking any clear idea of what tax increases might pass the House and be signed into law by the governor.

Blah blah blah consensus blah blah blah priorities blah blah blah leadership. You know the words, fill in the blanks yourself.

It's my opinion that this session didn't have to fail. Bearing in mind that I disagree with the Governor's stated goals, I'd have done a few things differently if I were interested in enacting them. On the assumption that everyone, even Grover Norquist, agrees that we can't slash property taxes and pay for the schools without finding alternate sources of revenue, this is how I'd have approached it. Let's start with the franchise tax, the one thing that an all-Republican lawmaking machine should have been able to do without tying itself in knots.

Nothing raises the business lobby's defenses like talk of higher taxes, and the business lobby has been out in force, trying to smother one proposed tax after another.

"You've got too many things that people can be against," said [spokesman for Speaker Craddick Bob] Richter.

Noting the lobby opposition to most proposals for higher taxes affecting businesses, he added: "Nobody wants to give. They say this is for the children, but when it comes down to it, it's for 'me.' "

Given the overwhelming public desire to "reform" Robin Hood, and the extreme capriciousness of our existing franchise tax, this should have been a no-brainer. Bob Richter is on the right track here - frame the issue as being about the interest of parents, students, and teachers versus that of the business lobby. How much of that pressure, coming from a united front, would they have withstood? In the end, a tax that was equally applied to all at a lower rate than before is something that would have been easy to accept. All it would have taken was some leadership and the balls to pull on one's leash. Needless to say, our Governor was not up to the task.

Once that is in place, you can then fix the sales tax. Again, if you accept the idea that the basic flaw is that it's not applied fairly to all stakeholders, you can build a coalition to apply it to services like legal consultations, home improvement, barber/beauty services, and so on. Doing so might even let you leave it at the same rate, maybe even consider a small cut. To repeat, this is not the approach I'd take, but if it's the road that I must travel, that's how I'd do it.

Once you've convinced everyone that you're paying for schools via a genuine repair and upgrade of the tax system, then maybe trying to tack on gambling isn't such a travesty. As the Lottery was originally sold, it could be positioned as an enhancement to education funding, maybe to pay for those precious teacher incentive awards that Perry wanted. Yeah, I know, it's a load of bull, but selling slots as a nice-to-have rather than a need-to-have would I believe have removed one of the major objections to them.

That's how I would have done it had I temporarily possessed the body and well-coiffed head of Governor Perry. Given that his actual approach was a total flop, will it cost him politically?

"No question that Perry is the one that is already suffering the most and will take the biggest hit" if the effort ultimately falls short, said Cal Jillson, a political science professor at Southern Methodist University.

Dr. Jillson said Mr. Perry's poll numbers have been slipping for 18 months and noted that a failure on school finance could underscore a perception that the governor is "more partisan than thoughtful."

According to the latest Texas Poll, 50 percent of those surveyed disapprove of the job Mr. Perry is doing his lowest approval rating as governor. Only 40 percent give him positive marks, the survey indicates.

Dr. Jillson said House Speaker Tom Craddick, by contrast, is "invisible" to voters and elected from a "safe" district to a body where he was chosen by a solid majority of members. Lt. Gov. David Dewhurst has overcome low, early expectations to show himself "solid, thoughtful and predictable," the professor said.


"The House showed him they wanted to do their own thing by giving him a reverse consensus," said Tony Proffitt, a lobbyist who has worked for GOP Gov. Bill Clements and Democratic Lt. Gov. Bob Bullock.

"But Perry will get credit for trying. If he had not tried, there would have been some heartburn," he said.

Others said that Mr. Perry is on sound footing and that the public recognizes that school finance is a complex issue, one that deserves deliberate attention.

"This is a first good swipe at the issue. You get credit if something great happens," said Mike Baselice, a GOP pollster whose clients include Mr. Perry. "If not, there's certainly points gained for leadership, opening up debate on the issue."

School finance will not be Mr. Perry's Waterloo, he said.

"He's shown leadership in a number of different areas: insurance reform, the economy, bringing major employers to the state. There are a number of great things happening in the state."

Nice talking points there, but let's face it - way more people would have been affected by lower property taxes and more money for schools. I think he's gonna regret this, and if he calls an encore without at least having Dewhurst and Craddick on the same page, he's gonna look like a clown. We shall see.

Posted by Charles Kuffner on May 17, 2004 to Budget ballyhoo | TrackBack