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Deal? No deal? Who knows?

You know the old joke about Texas weather (if you don’t like it, wait a few minutes, it’ll change)? That’s what the news on the special session over the last few days feels like to me. Feel free to try and make sense of all of this.


Gov. Rick Perry and the top House and Senate leaders met for three hours late Monday to try to salvage agreements on school property tax relief and education funding during the closing hours of the special session.

The governor’s office announced that an “agreement in principle” had been reached between Speaker Tom Craddick and Lt. Gov. David Dewhurst on an education bill.

But with lawmakers facing an adjournment deadline on Wednesday, expectations nevertheless increased that Perry may call a second special session, beginning as early as Thursday, to achieve his goal of school property tax relief.


Spokeswoman Kathy Walt said Perry would call another special session, beginning on Thursday, if the tax trade-off is killed by a filibuster.

She said he may also call another session if his goal of property tax cuts fails for any other reason.


The only way Perry might not call a special session is if the entire House votes down a tax trade-off bill, two Senate tax negotiators — Sens. Steve Ogden, R-Bryan, and Ken Armbrister, D-Victoria — agreed.

Craddick issued a written statement, saying he was “hopeful” that the House could pass both the education and tax compromises, if Senate negotiators agreed.

But there was widespread speculation that there weren’t enough votes in the Republican-dominated House to pass a tax agreement that would give Texas one of the highest sales tax rates in the country — 9 cents per dollar, including local sales taxes in cities such as Houston.


Tobacco giant Philip Morris has been running a radio ad campaign against the tax package, which includes a $1 per pack increase in the cigarette tax.

And a number of refineries and oil and gas companies were lobbying against the tax package because — by merely closing loopholes in the franchise tax — it continued to single out corporations rather than broadening the business tax base to most partnerships as well.

One business lobbyist, who didn’t want to be identified, even speculated that Craddick could instruct the House conferees to strike a deal on the tax bill and then allow the full House to kill it.


Lt. Gov. David Dewhurst and state senators abruptly left the Capitol on Monday night without a deal on overhauling the state’s school finance system, fueling speculation that Gov. Rick Perry will call another special session if a deal is not reached before midnight Wednesday.

The senators’ decision came about an hour after Perry and House Speaker Tom Craddick had reportedly signed off on a plan that would raise the state sales tax to 7 percent, up from 6.25 percent. Senators have repeatedly rejected such a steep increase, saying it would hurt low-income Texans.

Dewhurst was asked Monday night if the Senate would approve such a plan.

“No,” he said as he was leaving the Capitol.

“We’re leaving tonight. We’re going to send them a good bill in the morning, a bill that doesn’t raise the sales tax higher than it should be and does not unfairly shift taxes from businesses to consumers.”


Sources close to the negotiations said Perry and Craddick had also agreed on the tax swap plan in the meeting and that Dewhurst agreed to review it with senators.

“The ball is in the Senate’s court,” said a source, who did not want to be identified for fear of disrupting the negotiations.

But senators’ responses were swift and severe.

“They’ve got people trying to box the Senate in, and the Senate is not going to be boxed,” said Sen. Ken Armbrister, D-Victoria and a key negotiator. “No one ever got hurt in an election year by killing a tax bill.”


“The governor has said if they don’t finish their work, we’re coming back,” Perry spokesman Robert Black said earlier Monday. “This is the number one issue the Legislature faces, and they must deal with it.”

Asked when Perry would call them back, Black said, “One step at a time, but Thursday looks like a good day.”

Morning News

Mr. Perry met with Lt. Gov. David Dewhurst and House Speaker Tom Craddick Monday evening at his Capitol office to try and find a way to break the logjam. But the school bill has virtually no support from educator groups, and opposition to the tax-swap bill was mounting.

“I’ve got 98 school districts. I haven’t had one call me and say, ‘Man, we’ve got to have this,’ ” said Sen. Ken Armbrister, D-Victoria.

Rep. Tony Goolsby, R-Dallas, said he’s hearing only criticism of the tax bill.

“I’m getting a lot of calls from smokers and people who just don’t want the tax bill,” he said.


Sen. Eliot Shapleigh, D-El Paso, told reporters he had soft-sole shoes ready to wear if he launches a filibuster to try and kill the tax bill. […] Citing nonpartisan studies indicating that the tax-swap bill would benefit only Texas families earning more than $140,000 a year, the Democrat said: “This legislation is a tax increase on nine of 10 Texans, just so one in 10 Texans – the wealthiest in the state – can have a tax cut.”

He also complained about the Legislature’s decision to abandon an overhaul of the state’s main business tax, the franchise tax. “The business lobbyists have come in here day in and day out, and stripped business taxes from every bill,” Mr. Shapleigh said.

Mr. Armbrister, who has served in the Legislature since 1983, predicted that a filibuster would be thwarted by Mr. Perry calling another session.

“If we’re this close, we could be here Thursday for a three- or five-day session,” he said. “It’s happened before with different governors when we’ve had very close deals.”

Representatives, who earlier this month approved their tax bill by only one vote, appeared buffeted by opposition from oil and gas interests and heavy industry, which would see their business tax loopholes closed and not as much property tax relief as they had hoped.

“I just heard there’s 89 votes against it,” Mr. Goolsby said of the tax bill. The House has 150 members.

Sen. Steve Ogden, R-Bryan, the Senate’s lead negotiator on the tax-swap bill, said: “The business lobby is actively trying to kill this bill over in the House.”

Mr. Ogden said the only way to dissuade the governor from calling another special session immediately would be for the tax bill to be “voted down decisively” on the House floor.

He said enough senators support his chamber’s version of tax legislation for it to pass, and he scoffed at widespread reports that any version would be soundly defeated in the House.

“I’ve never seen a case where the speaker couldn’t round up the votes – ever,” said Mr. Ogden, who spent eight years in the lower chamber.

Express News

House Bill 3, the tax proposal, meanwhile, was kicked by powerful business interests for its proposed expansion of the state franchise tax, settled on at Perry’s urging after a more ambitious business-tax overhaul failed in the recent regular session.

Business lobbyists weren’t alone. Advocates for low- and middle-income Texans voiced concern that for such families, higher state taxes would outstrip any advantage of lowering property taxes.

“I think it’s dead,” said Sen. Juan Hinojosa, D-McAllen, a Senate negotiator on the tax measure. “It’s just a matter of who’s going to point the finger at who.”


The bills have GOP opponents as well in the Republican-majority Legislature.

Sen. John Lindsay, R-Houston, who once voted for a version of the school funding bill, said he now plans to oppose it if a final vote is called, complaining the new plan would erode too much local control of schools.

In addition, Lt. Gov. David Dewhurst, who presides over the Senate, no longer can count on Sen. Eddie Lucio, D-Brownsville, for school funding and tax bill votes.

Lucio alerted Dewhurst that he’s returning to South Texas to prepare “for the impending disaster that Hurricane Emily threatens to inflict” on the region he represents.

Star Telegram

Even if they do get a deal, advocates pushing for long-awaited textbook funding worry that children will be heading back to school without the books they need.

At issue are about $295 million for new fine arts, foreign language and health textbooks scheduled to go into Texas classrooms next month. The State Board of Education has approved the books, and publishers have printed them.

“They are in the warehouse and ready to ship now,” said Charlie Evans, a former Tarrant County legislator who is a lobbyist for textbook distributors in Texas.

Negotiators from both the Senate and House have agreed to pay for the books, but the legislation is being held up while lawmakers argue over school finance.

“Anytime a child doesn’t have a textbook in his hands at the start of school, it is a concern,” said Rep. Bob Griggs, R-North Richland Hills, a former Birdville school superintendent.

The delay could have other consequences. An extensive telecommunications bill may not make it out of the special session. Although the House and Senate have approved versions of the bill, Lt. Gov. David Dewhurst has said he won’t consider the final negotiated version of that bill or any other noneducation bill until the school finance issue is resolved.

State Sen. Troy Fraser, the Horseshoe Bay Republican who sponsored the bill in the Senate, said he’s willing to agree to House changes to the bill. But he remains unsure whether Dewhurst will let him bring it up on the Senate floor before the session ends.

Lufkin Daily News

Unless the Texas Legislature manages to “pull a rabbit out of its hat,” it doesn’t look like its members will reach any type of agreement on public school finance before the current special session ends at midnight Wednesday, state Rep. Jim McReynolds, D-Lufkin, said Monday.

McReynolds said even if state lawmakers come to a consensus, House bills 2 and 3, which deal with school reform and property taxes, respectively, are bad for school districts like Lufkin, Central and Huntington if they remain unchanged.

“We’ve got some immensely serious problems that we have to address,” McReynolds said. “When I talked to Gov. Perry the other day, he asked me what we need to do to make school finance work. I told him that we need to come up with a school bill that 150 of us can agree on.

“That’s not impossible — we just need to make sure our children get an adequate and equitable education. If we do that, the tax bill will follow.”


Once HB 2 went to the Senate, McReynolds hoped its members would change the parts that troubled him.

“They got worse,” he said.


While Perry could call another special session Thursday, McReynolds said many state lawmakers think the Legislature should wait until the Texas Supreme Court makes its ruling on the school finance issue so that they can get an idea just how far out of compliance the state’s public school system is.

All clear now? Good. We’ll check back later to make sure.

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