Sunday, April 16, 2006

Comptroller is in the Catbird Seat

Strayhorn holds power in session

Strayhorn's control over limits for school funding could put rival Perry in a tight spot

April 16, 2006

WAYNE SLATER
The Dallas Morning News
Copyright 2006

AUSTIN – As lawmakers gather today for a politically supercharged math test on school finance, here's a rule to remember: Comptroller Carole Keeton Strayhorn is the only calculator that counts.

Under state law, the comptroller tells the Legislature how much money the state has – and legislators can't spend a penny more.

That means Mrs. Strayhorn, who is challenging Gov. Rick Perry, controls the numbers in a special session that might reduce property taxes and make sure that schools open on time.
Or, to the governor's detriment, might not.

"In this situation, she is the most powerful player," said Republican consultant Royal Masset. "She controls the variable in this session – the spending limits."

The Legislature convenes today for a fifth try in two years to repair the state's system of funding public schools, which courts have ruled unconstitutional. Mrs. Strayhorn will announce how much money leaders have as they face a June 1 deadline to fix the system.

Mr. Perry, who seeks re-election in November, has his sights on lowering property taxes, and he has a plan to raise business and cigarette taxes to pay for it.

Mrs. Strayhorn, a Republican running as an independent in hopes of unseating the governor in November, has denounced Mr. Perry's leadership, dismissed his plan and chided him for not aspiring to higher goals on education.

She advocates an across-the-board pay raise for teachers and spending on education overhauls to cut dropout rates and raise standardized test scores.

If she announces a sizable surplus today and the Legislature then doesn't tackle education improvements – or simply fails to solve the property-tax issue – she could have a potent political issue in the fall, experts say.

The Perry camp sees a trap.

"She will, without a doubt, try to sabotage this session any way she can because it will be to her political benefit," said Robert Black, the governor's campaign spokesman.

Mrs. Strayhorn said she is required under the state constitution to provide an accurate revenue estimate and to certify whether the budget is balanced.

"The numbers are what the numbers are," she said Friday as she panned the governor's proposal. "I'm straight up. I take that responsibility very, very seriously."

In addition to declaring the state's fiscal health, Mrs. Strayhorn's office will also analyze tax proposals and their long-term effects. Though projections for years down the road can prove wrong as the economy changes, her assessments could create doubt about whether lawmakers are fixing the school finance system or creating new problems instead.

A potential advantage

Texas politics is rich with examples of comptrollers using their fiscal authority for political advantage, either to advance their own programs or damage an opponent.

Democratic Rep. Pete Laney, a former House speaker, recalled an old axiom: "It's real hard to take politics out of politics."

In 1986, Comptroller Bob Bullock damaged the re-election chances of Gov. Mark White, a political adversary, with a dire revenue warning that forced the governor to call a special session and raise $1 billion in sales and gasoline taxes.

"Mark White was probably leading [the governor's race] at that point," Mr. Masset said. "The tax increase did him in."

The political feud between Mrs. Strayhorn and Mr. Perry has escalated in recent years.
Mrs. Strayhorn rankled Republicans three years ago by rejecting a state budget that she said didn't balance, and more recently she stopped payment on a state contract with lobbyists tied to Mr. Perry.

With the governor's backing, Republicans stripped her office of two high-profile programs and conducted an audit of her office's tax rulings and campaign contributors. The Perry campaign is using the audit against her in the re-election race.

On Friday, Mrs. Strayhorn offered a scathing assessment of what she repeatedly called "Perry's tax-increase plan."

Moreover, there were indications she'll announce a healthy budget surplus today, perhaps even double the $4.3 billion lawmakers are already counting on. Experts say that could position her to bash Mr. Perry as raising taxes in times of plenty – or complain if money is spent only to cut property taxes and not give more to schools.

Session outcome is key

Politically, experts say, she would benefit most if the Legislature deadlocks. In her gubernatorial campaign, she says the state needs new leadership.

"She makes or breaks school finance," Rep. David Swinford, R-Dumas, who sponsored the 2003 legislation transferring programs from her office.

"I have never felt that Bullock or [former Comptroller John] Sharp were not a full participant in doing the best thing," he said. "I do not feel that about Carole."

Singer-author Kinky Friedman is also challenging Mr. Perry as an independent. The Democratic nominee is Chris Bell.

Some Democrats, fearing the comptroller's candidacy jeopardizes their party's prospects, have also targeted Mrs. Strayhorn as an opportunist capable of juggling the numbers for political gain.

"The bottom line is that you have two Republicans – Carole Strayhorn and Rick Perry – playing games," said Democratic consultant Ed Martin. "That isn't going to hire another teacher or buy another textbook or put another computer in a classroom or give anybody the property tax relief they need."

Meanwhile, Perry associates are bracing for Mrs. Strayhorn's outsized influence in the special session.

"I'm sure they're all trying to figure out what she's going to pull on them," Mr. Masset said. "They're like monkeys that can't do anything in the shock experiment. All they can do is wait for the shocks and hope they don't hurt too much."

E-mail wslater@dallasnews.com

What to expect

The legislative session on property taxes and school finance will start today. The highlights:
Gov. Rick Perry will reveal the topics for the session, known as "the call." Lawmakers can pass legislation only on the matters the governor deems fit. Fixing school finance will top the list.
Comptroller Carole Keeton Strayhorn is expected to report how much money the state has for lawmakers to spend.

The House and Senate both convene at 2 p.m. The House will hear from John Sharp, chairman of the commission that drafted Gov. Rick Perry's tax-swap plan. He'll take questions from members.

A House and Senate committee will hold a joint hearing on the Texas Alcoholic Beverage Commission's program of arresting people in bars in a public intoxication crackdown, which has drawn a loud public outcry.

© 2006 The Dallas Morning News Co www.dallasnews.com

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