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March 17th, 2004:

County plays hardball on Enron building

When last we met, the County Commissioner’s Court was wreaking havoc on the proposed sale of the Enron building to ChevronTexaco by playing coy about a tax abatement for improvements. We see today that they haven’t changed their tune.

Harris County commissioners didn’t discuss a policy on tax incentives at a Tuesday meeting, signaling ChevronTexaco may not get the tax break it wants in exchange for buying the newer of the Enron buildings.

The commission was expected to discuss its policy on granting tax breaks to businesses and perhaps whether to give the California-based company a break, just as the city did. But it put off any discussion after its staff recommended not giving the tax break.

“We’re going to take that to mean they are not going to address it. So with something like that, we’re left in limbo,” ChevronTexaco spokesman Mickey Driver said. “We have to move ahead, so right now we’re looking at our options.”

Moving forward with buying the 40-story building could mean renegotiating closing requirements for the deal, said Driver, who would not say what any new negotiations would involve.


Houston City Council has agreed to give ChevronTexaco a tax break on $64 million in building improvements and furnishings, reducing the company’s payments to the city by $350,000 a year for 10 years.

The company would still have to pay full taxes on the building’s current assessed value of $79.3 million, which would bring the city $520,000 a year.

“I am confident that our community will do what it takes to bring more jobs to Houston. I and other civic leaders should get this deal done,” Mayor Bill White said through a spokesman.

Driver praised the city’s efforts to facilitate the deal but said the county was not so accommodating.

“We’re not mad at the county or the commissioners. We just found it very, very difficult to work with county staff,” Driver said, adding that “to this minute we don’t understand what we did wrong.”

David Turkel, the county’s director of community and economic development, said his office had again reviewed ChevronTexaco’s application and still is recommending against granting the oil giant a tax break.


Commissioners didn’t actually consider ChevronTexaco’s request for a tax incentive Tuesday.

Such a request would make it to the court’s agenda only if Turkel’s staff recommends approval.

The commissioners did direct Turkel to review the county’s criteria and policies on tax breaks, with particular attention to the way requests are coordinated with other local governments.

During the discussion of the guidelines, Commissioner Steve Radack suggested that Harris County consider buying the downtown tower if ChevronTexaco backed out.

It was clearly intended to send a message to ChevronTexaco that Radack, for one, did not care if the company pulled out of the real estate deal.

You know, I’m still not sure if the Commissioner’s Court is sticking it to the new Mayor, or if he genuinely screwed up by jumping the gun and/or not following known protocol correctly. I did a search through the Chron archives “Harris County Commissioners” and either “tax break” or “tax abatement”, and found two examples of tax abatement denials, one in 1997 when a chemical plant was turned down (at least at the time) for being a polluter, and once in 1996 when Albertson’s grocery stores was rejected for being unfair to existing grocers – the full story is beneath the More link for those who are curious.

It would seem, therefore, that denying such a request is unusual; at least, it would seem unusual enough to be newsworthy. What I don’t know is if this type of request is itself unusual. It’s not the kind of abatement request that was created in 1987 to lure businesses – it appears to be more discretionary. Looking around more, it appears that any taxing agency can grant such a requst, then other taxing agencies who have a piece of the action have 90 days to decide whether or not to go along.

Anyway, for what it’s worth, my gut says the following:

1. The denial of a tax abatement requested in this fashion is uncommon, though perhaps not as a percentage of the request total.

2. The Commissioner’s Court is playing hardball, but it’s more of a turf thing than a partisan thing, since neither El Franco Lee nor Sylvia Garcia seem particularly upset.

3. Mayor White probably screwed up, though it doesn’t appear to be terribly damaging to him so far and it may have been more in reading the Court than in dotting I’s and crossing T’s. I’ll bet he never makes this mistake again.

Probably more than you wanted to know. Sorry about that. Got a bit carried away.


Felo de spam

Here’s a new variant on malevolent email that I at least haven’t seen before:

Dear user of “” mailing system,

Your e-mail account has been temporary disabled because of unauthorized access.

Advanced details can be found in attached file.

Have a good day,

The team

Now, obviously, if my email account had been disabled, I wouldn’t be able to log in and see this message. Plus, all the stuff from my webhost is very clearly identifiable as coming from them, and more specifically from their domain. Still, it took me a second because the message is a bit shocking, and it’s not like I’ve never experienced mail issues before.

The attachment is a PIF file, which those of you who don’t remember the Win 3.1/DOS days may not realize is basically a command file for DOS. I didn’t bother looking too closely, but it probably does something pleasant like delete a bunch of files or some such. Many corporate email servers block PIFs because of this.

So consider this a public service warning. You’ve probably heard it often enough to block it out completely, but never open an attachment in email unless you know what it is and why it was sent to you. Don’t be the cause of your PC’s implosion.

Whoever said snarkiness couldn’t be a force for good?

The Poor Man has decided to harness the power of honest competition and good old fashioned trash talking for the purpose of raising funds for John Kerry. Dean and Clark supporters in particular should take note. Check it out.

Select Committee report

The Select Committee on School Finance has issued its final report (PDF) for your perusal. Individual pages load really really slowly for me, so I haven’t given it more than a quick glance as yet. I will note, as the Quorum Report did, that none of the Democrats on the committee, not even Ron Wilson, signed the thing. More on that in a bit.

There’s some news coverage of the report now. First, from the Star Telegram.

A joint committee of House and Senate members worked on the report for more than six months. But Sen. Eddie Lucio of Brownsville, one of four Democratic lawmakers on the panel, said the report still leaves too many questions unanswered. “In terms of eliminating Robin Hood — we are concerned about what system is going to take its place,” Lucio said. “Will we have as much or more equity as what we have now? The direction we’re going is vague. It has not given me enough information.”

Committee co-chairwoman Rep. Florence Shapiro, R-Plano, said the report represents a road map — not a final destination. Over the months, she said, panel members managed to eliminate some taxing options while focusing attention on others.

“I would have liked for us to be much more specific in our proposals, but I think we needed to be general,” she said. “I think the specificity needs to come from the Legislature itself when we create the new system.”

In other words, the report is basically another recapitulation of the problem and some general hand-waving at solutions, but no actual policy recommendations. We’re still a long way off from anything resembling consensus, let alone legislation.

The report by the Joint Select Committee on Public School Finance calls for a reduction in local property taxes and an end to the share-the-wealth school finance system that redistributes tax revenue from property-wealthy districts to property-poor ones.

It said that the state should increase its share of funding for education and that lawmakers should consider cutting local property taxes in half. Such a move would require the state to find another $7 billion in annual revenue, Shapiro said.

The report does not state how to accomplish those goals, but it restates various funding options that have been considered for months.

Among them: increasing the sales tax, expanding the sales tax to include various services, creating a statewide property tax, creating separate tax rates for individuals and businesses, increasing taxes on cigarettes, and allowing video lottery terminals at horse and dog tracks.

None of that is anything like new information.

More reasons why the Democrats demurred in the DMN:

Sen. Leticia Van de Putte, D-San Antonio, said the report very forcefully called for elimination of “Robin Hood” provisions in the current finance law but was less specific on what will be used to preserve equity once Robin Hood is gone.

“I have problems with making Robin Hood the villain when more than 80 percent of our students in the state benefit from that requirement,” she said. “The committee should have outlined an equity standard in its goals.”

The senator also said she had concerns about proposed relaxation of class-size limits in elementary schools and the possibility that one recommendation could be used to justify a new voucher program for private schools.

Rep. Vilma Luna, D-Corpus Christi, said she was unhappy with a funding adequacy study done for the committee that was based on a standard of 55 percent of students passing the state achievement test.

“One of the things we need to do is boost student performance across the board,” she said. “We need to look at the full spectrum of students.”

The DMN also gives some numbers:

Of the various revenue options, there has been widespread support for raising the state cigarette tax – now 41 cents a pack – and authorizing video gaming at racetracks. A $1 increase in the cigarette tax would raise an additional $1 billion a year, and the new gambling option would raise another $600 million.

Those two revenue-raising proposals were the only ones listed in the report as sources of new funding for schools. The others, such as higher sales taxes, would be used to replace revenue lost through a reduction in school property taxes of up to 50 percent.

A spokesman for low-wealth school districts questioned whether the $1.6 billion in new money would be enough.

“It will not generate enough money to do what needs to be done,” said Wayne Pierce of the Equity Center, which represents hundreds of low and medium-wealth districts.

I’ve said it before and I’ll say it again: Cigarette taxes and gambling are just too volatile to be dependable annual revenue sources. Haven’t we learned anything from the history of our state Lottery?

The Longview Journal has some more specifics on the numbers, while the Tyler Morning Telegraph has an interview with Sen. Todd Staples on the report. Check out the Telegraph’s headline, which really doesn’t fit the story they actually print at all.

Getting back to QR, it also has this interesting nugget:

Last week, Governor Rick Perry laid a proposal on the table capping local property tax appraisals at 3% a year. The cap barely covers the historical rate of inflation.

We asked Stuart Greenfield, Ph. D. to comment on the current effort to address the various proposals facing a likely special session of the Legislature. Greenfield brings excellent credentials to the table. He was the Chief Revenue and Economic Forecaster for the Comptroller’s office from 1977-1986. He returned to the Comptroller’s office in the 1990’s to work on the Texas Performance Reviews.

Two of Greenfield’s more startling conclusions are that property tax cuts could actually result in higher taxes for most homeowners and rather than the rich subsidizing the poor, most of the proposals currently on the table would have the middle class subsidizing the rich.

I presume that it’s a combination of a reduced property tax, which necessarily means a smaller federal income tax deduction, plus an increased and/or expanded sales tax, which generates the higher tax burden overall. I’m a little too lazy to work through the math on the effect of just the property tax reduction, but I have a hard time believing that the concurrent increase in one’s income taxes would completely offset it.

And before anyone asks, the reason the rich make out better in these proposed schemes is simple: They spend less of their money percentage-wise on items that fall under the sales tax than the rest of us do. Combine that with a proportionally bigger break on property taxes, and voila.

Thanks again to Brandy for the heads-up on the report.

Off to Washington Monthly

Kevin Drum has made his move over to Washington Monthly, where he will be blogging under the title “Political Animal”. (Is it just me, or is anyone else surprised to realize that no one else had claimed that moniker before now?) Anyway, I’ve put that link under the Pros on the sidebar. I’m keeping the old Calpundit link on the main blogroll for now, since he says he’ll still post there occasionally. Update your links as you wish.

The Chron still doesn’t get this whole “blog” thing

The Chronicle now has a spring training “blog”, continuing the great tradition of “blogs” that it started with Rachel Graves in Crawford. This is what, their fourth or fifth try at it and they still haven’t figured out that real blogs, the kind that I refer to without scare quotes, have permalinks and archives. I’ll let them off with just a warning on things like blogrolls and RSS feeds since these efforts are always designed to be temporary, but that still doesn’t excuse the other items.

And as long as I’m engaging in a little gratuitous Chron-bashing this morning, would someone please tell whoever compiles their weekly TV guide that HBO and Encore haven’t been channels 66 and 68 for, like, months now? I know that AOLTimeWarnerOfBorg moves channels around like a Martha Stewart wannabe on speed rearranges her living room, but this isn’t a recent change. Get with the program, guys.

Barack Obama

Congratulations to Barack Obama, the clear winner of the Democratic primary for Senate and presumptive favorite in the general election. He overcame opponents who were well-connected and well-funded, not to mention his own unusual name (a nontrivial handicap in Illinois Democratic primaries) and scored a much bigger victory than the Republican nominee did in his primary. Obama’s a bright, young, respected lawmaker with a great bio, and I think he’s going to be a star. It would not surprise me at all if he’s a contender for President or Vice-President in 2012 or 2016.

Nonetheless, Josh Marshall notes that there may yet be a downside to Obama’s ascension, at least in the short run. He quotes from Charlie Cook’s “Off to the Races” column:

Republicans might actually get a bit of a break in Illinois. Jack Ryan, an attractive and wealthy former investment banker who was teaching in an inner-city school until recently, is expected to win the GOP primary. The likely Democratic nominee, state Sen. Barack Obama, is equally, if not more, impressive, yet does not have the personal fortune Ryan has. Blair Hull, the fabulously wealthy Democrat, was expected to win the nomination until revelations about his messy divorce and cocaine use in the 1980s doomed his chances. National Democrats had counted on this seat to be the best of all possible worlds, an easy pickup by a self-funding candidate. Now it is likely to be very close and will have to be funded through more traditional — read difficult — means.

The thing is, I’d rather have the right nominee than the rich one. This is just a gut instinct on my part, but I believe that self-bankrolling first-time candidates are way more vulnerable to personal failings on the campaign trail than career politicians are. I think a lot of these guys’ appeal comes from their personalities, and when they have trouble withstanding the scrutiny, they have no record of accomplishment in the public sector to fall back on. Look at Blair Hull’s implosion and be thankful it happened before the primary.

I also think that Obama won’t really need much from the DSCC in order to win in November. Like I said, I believe he’s a star, and I don’t think he’s going to have any trouble raising funds on his own – in fact, he seemed to do that just fine during the primary race. He may wind up giving more help to Jon Corzine than the DSCC gives to him.

Congratulations, Barack Obama. I look forward to seeing you in Washington, DC next year.

UPDATE: For further proof that Obama will raise money easily, I point you to this.

Campaign finance records show U-S Senate candidate Barack Obama got a large contribution from a high-profile citizen — Michael Jordan.

The basketball superstar donated 10-thousand dollars to Obama’s campaign.

Obama says he debated whether to frame the check or cash it.

Since he began campaign fund-raising more than a year ago, Obama has collected about four-point-three (m) million dollars.

Gadflyer Charlton McIlwain, from whom I discovered that tidbit, seems to agree with my thesis:

Expect: A treasure trove of [Jack] Ryan money. We’ve already seen it, and we’ll probably see millions more. I’m not sure what the going price for an Illinois senate seat is these days, but I expect whatever it is, Ryan will pay it.

Don’t expect: Obama to lag too far behind to be competitive. We’ve seen Michael Jordan’s 10k already. No doubt he’s only the first in a long line of other celebrity, big-money black and other minority donors just itching to help a brotha out.

I fully expect to see more stories like that about Obama’s star power. Stay tuned.