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February 7th, 2006:

Everything takes a back seat to tax cuts

The headline Perry May Put School Reform On Back Burner pretty much says it all.

Gov. Rick Perry wants the Legislature, in a special session this spring, to cut school property taxes by about one-third but postpone action on other education changes until next year, a legislator who met with the governor said Monday.

Sen. Jeff Wentworth, R-San Antonio, said he believed a commission appointed by Perry may recommend increases in sales and cigarette taxes, as well as a new business tax, to pay for the property tax reductions.

“The governor was saying we’re not going to do any (school) reforms this session,” Wentworth said, despite calls by House Speaker Tom Craddick and Lt. Gov. David Dewhurst for changes in how education dollars are spent.


Perry spokeswoman Kathy Walt on Monday confirmed the governor’s meeting with the San Antonio legislators but declined to say what specifically was discussed.

“The governor has indicated that his primary interest and focus right now will be on addressing the Supreme Court ruling,” Walt said.

She said other items could be added to the agenda after the finance changes are addressed. The governor sets the agenda for a special session, which can last as long as 30 days.

Perry already had indicated he wanted to avoid a special session fight over spending tax dollars for private school vouchers, although he and many other Republicans support the idea.

Walt said the governor hasn’t decided whether to include another controversial subject — new limits on property tax appraisals — in the special session’s call. She said he also still supports that proposal, which, like vouchers, has failed in recent sessions.

Walt said the exact size of a property tax cut was still a “point of discussion,” although Sharp has been advocating a one-third reduction.

That would lower the $1.50 per $100 valuation cap for school maintenance taxes to about $1. Many schools districts are at or near the $1.50 cap, which helped prompt the Supreme Court ruling.

Sharp has said a reduction of that size would require the Legislature to raise more than $5 billion a year in new state taxes or other revenue.


Craddick, in a recent speech, continued to push for other educational changes, including a uniform school start date and tying at least some teacher pay raises to performance.

But spokeswoman Alexis DeLee said Monday that Craddick “has said all along it’s up to Perry to determine the call (special session agenda).” She said the speaker also was awaiting the commission’s recommendations.

First things first: Any time vouchers are not on the agenda, it’s a good thing. Same for those bogus appraisal caps. So far, so good.

And if the alternative to a special session that only focuses on property tax cuts is a special session that includes Tom Craddick’s school “reform” agenda, I’d pick Door Number One and not look back.

All that said, my concern is that without the constraint of having to worry about actually paying for schools during the session, the pressure will be on maximizing the tax cuts based the current financial snapshot. Once that happens, their hands will be greatly tied when they finally do get around to fixing school finance, which you may recall was the impetus for the special session in the first place. With the current mood in the Capitol being flush and with statewide elections on the ballot, it’s not at all hard to imagine a shortsighted and irresponsible tax cut getting rammed through. Even if you think that the Lege will have the foresight to keep some money sequestered for school funding, it’s not like there aren’t other things to pay for.

Well, at least this answers my question about how Perry will react to the TTRC’s recommendations. As Linus Van Pelt once said, there’s no problem so big and so complicated that you can’t run away from it.

On a related note the Statesman has an article about how the Democratic gubernatorial candidates are more willing to deal with school finance than Perry is. I’m mostly linking to it for this bit of unintentional comedy:

Perry spokesman Robert Black challenged the Democratic candidates to detail their plans for school finance reform.

“Governor Perry is the only candidate in this race who has put forward a school finance plan and a property tax cut that is paid for,” Black said.

He’s also the only one to have all of his proposals get rejected by the Lege, including one time that was unanimous and represented the “worst shutout ever laid on an Aggie”. But you already knew that.

Howard-Bentzin debate podcast

Now this is way cool, and it’s something I’d love to see the Chronicle do: The Statesman’s Gardner Selby moderated a debate between HD48 runoff candidates Donna Howard and Ben Bentzin, and put it all in a podcast for your listening convenience. That’s what I call campaign coverage for the new century – kudos to all involved. The MP3 file is here, so fire up those iPods and have at it.

By the way, according to the Quorum Report, “the final tab on the special election to fill the seat vacated by Rep. Todd Baxter (R-Austin) in House District 48 is $246,191”. That includes the runoff as well as the original special election, and is “equal to the pay and benefits of four full-time deputies for a year”. Yikes.

Certified email

A few days ago, Kevin wrote about AOL and Yahoo’s implementation of a program to certify and enhance delivery of email from specified senders, with financial institutions being the prime example.

“CertifiedEmail will cost a fraction of a cent to send, which will be generously offset by an order of magnitude ROI in the form of assured delivery, improved open rates, and enhanced click-through rates,” Richard Gingras, chairman, CEO and co-founder of Goodmail Systems, told ClickZ News.

Until that ROI is proven, however, it is likely that the service will be used more for transactional messages — like billing statements or transaction receipts — than for marketing messages. The company has not yet set a price point, but will base it on the number of messages sent. For certain transactional message senders, the value is clear, according to Gingras.

“Ninety-five percent of e-mail users fear identity theft, and nearly 30 percent categorically refuse to open messages from financial institutions,” he said. “Goodmail CertifiedEmail will be distinctly labeled both in the inbox list view and when the message is opened so the user can quickly recognize that the message is certified and thus authentic and safe to open.”

Kevin wondered if this is another front in the network neutrality wars. John, who has a (legitimate!) background in bulk email, applauds the initiative here and here. Among other things, he says, this should be a huge boon for ISPs:

AOL gets a lot of spam because it’s AOL. It’s an enormous domain with millions of email addresses, so naturally spammers are going to send all kinds of crap to it. There are lots of ways for spammers to get AOL addresses, from monitoring their chat rooms to trying random letter combinations and so on, and they work fairly well. So AOL blocks a huge amount of stuff that’s obviously crap (based on the IP address it’s coming from, message characteristics, how often that server is sending them mail, and so on).

The filtering rules change all the time, and they’re not perfect; some things that you want to get never make it to you because they look too much like spam. And of course other things get through. What I find interesting about the Goodmail deal is that AOL is basically outsourcing something they do already: monitoring the kinds of email they get and figuring out what’s spam and what’s not.

Their idea, I suspect, is that since legitimate marketing email – stuff that you ask to get, like emails from Amazon and newsletters from places you shop and all that – is making money for the people sending it, there’s no reason for AOL to spend money sorting it all out. You want to send stuff that looks like spam, but isn’t? Pay Goodmail, and we’ll accept that it’s legit. Don’t pay, and take your chances with everybody else.

Instead of AOL having to deal with companies complaining that their valid email is getting blocked, Goodmail picks up some of that task – and AOL winds up getting paid for it. It’s a smart move for them.

I’m not sure that does anything to quell the slippery-slope fears, but it certainly does make sense for AOL and Yahoo to unload part of this onerous function onto someone else. Dwight isn’t convinced, in any event.

I’ll say this: I don’t think we’re going to make headway on the spam problem with current technology and paradigms. Technology Review magazine’s recent cover story was entitled The Internet Is Broken, and while I’m not sure I’d go that far (nor that I’d necessarily endorse their proposed solutions), I think it’s clear that a new mechanism for email delivery has to be adopted. Some form of sender verification, which is essentially what Goodmail is, is certainly one way to do that. Is it the best way? I don’t know, but let’s try it and see if someone else can come up with something better. I don’t see that we have much choice.

Enron trial: It’s time to play Impeach The Witness!

The defense got its first crack at a prosecution witness yesterday, and it went about as you might expect.

Daniel Petrocelli, lead defense lawyer for former Enron CEO Jeff Skilling, repeatedly asked [Mark] Koenig about his plea agreement with the government and if he ever confronted anyone else at the company about lies he earlier testified were told during analyst meetings and conference calls.

“You never said, ‘Mr. Skilling, why are you spearheading a criminal conspiracy,’ did you?” Petrocelli asked.

“No,” Koenig replied.

“And you never saw a single e-mail or memo that said Mr. Skilling broke the law? Or Mr. Lay?” Petrocelli asked, referring to former Enron chairman Ken Lay, who is also on trial.

Koenig said he never read such a document and didn’t know if one existed.

“You’re still in a mode of trying to protect yourself, aren’t you?” Petrocelli asked.

“I don’t feel in the last three days I’ve protected myself,” Koenig said, noting that he is still subject to shareholder lawsuits and will probably lose the $5 million in assets he still owns. He forfeited $1.5 million to the government last year.

Admit it: You could imagine this exact dialogue on almost any episode of Law & Order. The names and crimes may change, but the dynamic – “Why should we believe you when you’ve already told us you’re a crook and you took a deal to save your sorry hide?” – is the same.

I think in the end, all the mind-numbing technical details aside, that’s what this case will come down to. Who will the jurors believe, Koenig, Rice, Causey, and Fastow, or Skilling and Lay? Fastow is a huge wild card here. He has the potential to say the most damaging things, but he’s also clearly the least honest person involved. As I said before, I think that’s where this trial will get interesting. If the jurors can stay awake that long, we may be able to get a feel for how they’re leaning after Fastow finishes.

That appears to be the view of Samuel Buell, a former Task Force member who’s now joining in the Legal Commentary blog, and it’s noted in this story about media indifference as well. Even we bloggers are apparently falling down on the job:

The much-ballyhooed blogosphere has barely weighed in on the opening of the trial.

The Truth Laid Bear, a Web log monitor, confirms that Enron cannot qualify as anything close to a hot topic, notwithstanding periodic mention by local blogs such as blogHouston, Houston’s Clear Thinkers and Slampo’s Place, the latter of which offered readers what may prove to be an appropriate invocation to a trial struggling to make its mark in the competitive world of current events:

“Friends, as we gather here today to pass judgment on these two once-glib sons of the Great Midwest, let us resolve to never, ever forget the bitter lesson of Enron. And the lesson of Enron is, of course … is … um wait, it’ll come to us … the lesson was … hold on … lessee … lesson … Enron … uh … .”

I guess my mentions weren’t periodic enough. Well, I knew the risks when I went out of town this past weekend.

And finally, Tom gives a little context to Jeff Skilling’s famous “asshole” comment. As always, it’s good stuff.

Interviews with Bell and Gammage

This is going to be a week to focus on Democratic gubernatorial candidates Chris Bell and Bob Gammage. Philip Martin at BOR will be doing his 40/40 coverage on them – he gives the coming attractions here. If you can’t wait until tomorrow for his interviews, get started today with this one at Political State Report by Vince Leibowitz. There will be a part two of this one up tomorrow. I’ll update this post when it is. I sadly doubt that any newspaper will do something similar, so check these out and get to know your candidates.