Sunday, May 15, 2011

A Ticking Time Bomb: Low Tax Republicans and School Funding in Texas Under Tom Craddick

In 2010, the University of Texas Press published "The House Will Come to Order: How the Texas Speaker Became A Power in State and National Politics," a book I co-wrote with Dr. Patrick L. Cox. In this passage, we describe how a rigid ideological insistence on no new taxes made school funding a nightmare under Republican House Speaker Tom Craddick and Gov. Rick Perry in the early 21st century.

The partisan bitterness engendered by Congressional redistricting in Texas during the 2003 legislative session came to a head over the issue of school funding. The state’s “Robin Hood” redistribution plan remained in place by 2003 even as it faced legal challenges by wealthier districts. By that year, any district with more than $305,000 in taxable property per student paid into the state system, while districts below that mark received money. Districts experienced a crisis when they no longer qualified as poor districts and hit the Legislature’s imposed limit of $1.50 per $100 property valuation (a limit set to force reduced state spending).

As enrollments expanded and costs increased, more districts found it necessary to balance their books by cutting budgets, reducing staff, and delaying needed repairs and purchases. Some districts tried to circumvent the tax caps by regularly raising property valuations, but anti-tax Republican legislators responded by calling for limits on district’s abilities to raise valuations to 5 percent, down from the current 10 percent, or rolling back the property tax caps by 33 percent to $1 per $100 of valuation.

Local school budget cuts angered residents of wealthier districts, but constantly climbing property tax rates upset voters across the state. Gov. Rick Perry, House Speaker Tom Craddick, and other Republicans leaders tried to tap into this sentiment and made a series of what turned out to be a series of mutually exclusive commitments. “You cannot eliminate Robin Hood, keep equity, reduce property taxes substantially and adequately fund schools back to the level they need to be, and say there will be zero —— neutral taxes in the end,” Michael Boone, a Dallas lawyer and adviser to state Republican leaders on school finance for 10 years, told the Dallas Morning News.

Unable to meet these contradictory demands and unwilling to prioritize them, the state’s top three leaders and the state Legislature ran into a brick wall five times between 2003 and 2005. The Legislature debated and failed to agree on school finance reform during the 2003 regular session, a fourth special session that year (following the three special sessions that wrestled with redistricting), the 2005 regular session, and three subsequent special sessions that year. (Special sessions cost the taxpayers $60,000 a day or nearly $2 million for a full 30-day special session.)

Perry demanded a property tax rollback and called for hikes in so-called “sin taxes” on alcohol and sexually-oriented businesses. Perry refused to agree to a plan called for by Democrats and moderate Republicans to close loopholes in the business franchise tax. Craddick wanted even more tax burden shifted from businesses by raising the sales tax, even though Texans already had one of the highest sales tax rates in the country and the state’s own budget estimates indicated that this move would raise the tax burden for 90 percent of residents.

Less than one week into the second consecutive special session on school finance, House leaders started the session by introducing a motion that would have cut off all debate and amendments to their school finance plan, a high-handed move rejected in a bipartisan vote. The Republican leaders introduced their plan, but members slapped it down in an overwhelming 124-8 vote. Before the vote, 14 rebellious Republicans joined the 62 Democrats to amend the plan to provide more property tax relief, larger pay raises for teachers and twice as much new funding for school districts.

The amendments, which shifted taxes to businesses, lost the support of the bill’s original sponsors, who then allowed members to tack on dozens of additional amendments without debate. The entire bill became a poison pill that no one in the Legislature swallowed. Having rejected the school finance bill. Since revenue bills must originate in the House and since that body was prohibited from introducing new measures that substantially resembled previously rejected bills, the second special session failed before the first week had been completed.

Perry’s call for a third special session in the summer of 2005 clearly irritated the House speaker. When the leadership’s school financing plan went down in flames in July, Craddick declared that members were “worn out . . . They’re kind of fatigued voting multiple times on the same issue.” Craddick expressed a clear preference for waiting until a court ruled on the constitutionality of the state’s current system, believing that a finding in favor of the state’s system would make moves by the Legislature unnecessary and that a court ruling against the current system would supply the needed pressure to force the Legislature to approve a new plan.

Lt. Governor David Dewhurst moved ahead with a plan that increased some business taxes but did not include a cap on property tax dollars that rich districts must pay into the state system, a provision Craddick insisted upon. The speaker took the unprecedented step of using spare campaign funds to buy radio spots across the state criticizing the Senate plan. Craddick’s ads further strained an already tense relationship with Dewhurst. “Speaker Craddick’s time and energy would be better spent on solving the state’s problems than on . . . misleading advertisements,” Dewhurst spokesperson Mark Miner said. The third session failed, however, like its predecessors, after Craddick refused to bring to the floor a tax swap bill that would exchange cuts in property taxes for increases in sales and some business taxes.

The Legislature opened 2006 knowing it faced a looming deadline on the troublesome issue. On September 15, 2005, state District Judge John Dietz ruled the Texas system of paying for schools unconstitutional, declaring that the average 38 percent of local school budgets paid for by the state failed to meet the Constitution’s requirement that the Legislature provide “an adequate suitable education.” Furthermore, he ruled that because budget shortfalls forced an increasing number of districts to tax at the Legislature’s imposed $1.50 cap, local districts had lost “all meaningful discretion” and the state had, in effect, instituted an unconstitutional state property tax. “Texas in 2040 will have a population that is larger, poorer, less educated, and more needy than today,” Dietz warned. “Education costs money, but ignorance costs more money.”

The collision between ideological purity and depressing fiscal reality ended in Legislative failure and fierce criticism of Perry, Craddick and Lt. Gov. Dewhurst from the usually complacent state press and fellow politicians. Critics charged that the Republican insistence on tax cuts in all political circumstances painted the party leadership into a corner. “They’re up against a painful reality here, and that is you can’t have a decent —— let alone quality ——education system without paying for it,” said University of Texas political science professor Bruce Buchanan.

A looming scandal clouded the speaker’s efforts during the redistricting and school financing battles. Travis County District Attorney Ronnie Earle indicted U.S. House Majority Leader Tom Delay and three of his associates for the fundraising activities of Texans for a Republican Majority Political Action Committee, a group largely responsible for funneling $190,000 in legally questionable campaign funds to Republican candidates in key state House races in the decisive 2003 general election campaign. Texas law prohibits direct corporate contributions to political candidates. Earle charged that DeLay laundered the funds by transferring the cash to the Republican National Committee, which then distributed the money to Republican legislative candidates.

In September 2004, Earle convinced a Travis County grand jury to return 32 felony indictments against several corporations, including Sears and Roebuck, Cracker Barrel Old Country Store and Bacardi USA, and three individuals with close ties to Tom DeLay: John Colyandro, former executive director of TRMPAC; Warren DeBold, a top DeLay fundraiser; and Jim Ellis, a key DeLay political aide. DeLay himself was indicted on conspiracy and money laundering charges in connection with TRMPAC’s activities in September 2005. The indictment forced DeLay to temporarily step down as U.S. House majority leader, a move made permanent in early 2006 after revelations of DeLay’s close relationship with Jack Abramoff, who pleaded guilty to charges of conspiracy to bribe members of Congress, mail fraud and tax evasion.

The DeLay scandal, frustration with the Iraq War begun in 2003, a sexual scandal involving Congressional pages in Washington, D.C., and anger over mismanagement of relief and rebuilding efforts in New Orleans after Hurricane Katrina in 2005 created a bad electoral climate for the GOP in the 2006 elections. In Texas, partisan resentments stirred by the redistricting and frustration concerning the epic battles over school finances further complicated Republican political ambitions.

The first sign of trouble came on February 14, 2006, when liberal Democrat Donna Howard easily beat Republican Ben Bentzin 58 percent to 42 percent in a runoff to fill the unexpired term of retiring GOP lawmaker Todd Baxter. Howard’s win, some observers noted, was particularly significant since it came in one of the “Tommy-mandered” districts drawn by the House in 2003 to guarantee a Republican win. During the March 7, 2006 Republican primaries, a key Craddick ally, Public Education Committee Chair Kent Grusendorf of Arlington, lost to challenger Diane Patrick, a former Arlington school board member and one-time member of the state education board whom the 19-year incumbent derided as an “educrat.” Voters, however, blamed Grusendorf for the ongoing school financing fiasco.

Michael Phillips has authored the following:

White Metropolis: Race, Ethnicity and Religion in Dallas, Texas, 1841-2001 (Austin:  University of Texas Press, 2006)

(with Patrick L. Cox) The House Will Come to Order: How the Texas Speaker Became a Power in State and National Politics. (Austin: University of Texas Press, 2010)

“Why Is Big Tex Still a White Cowboy? Race, Gender, and the ‘Other Texans’” in Walter Buenger and Arnoldo de León, eds., Beyond Texas Through Time: Breaking Away From Past Interpretations (College Station: Texas A&M Press, 2011)

“The Current is Stronger’: Images of Racial Oppression and Resistance in North Texas Black Art During the 1920s and 1930s ”  in Bruce A. Glasrud and Cary D. Wintz, eds., The Harlem Renaissance in the West: The New Negroes’ Western Experience (New York: Routledge, Taylor and Francis Group, 2011)

“Dallas, 1989-2011,” in Richardson Dilworth, ed. Cities in American Political History (Washington, D.C.: CQ Press, 2011)

(With John Anthony Moretta, Keith J. Volonto, Austin Allen, Doug Cantrell and Norwood Andrews), Keith J. Volonto and Michael Phillips. eds., The American Challenge: A New History of the United States, Volume I.   (Wheaton, Il.: Abigail Press, 2012).

(With John Anthony Moretta and Keith J. Volanto), Keith J. Volonto and Michael Phillips, eds., The American Challenge: A New History of the United States, Volume II. (Wheaton, Il.: Abigail Press, 2012).

(With John Anthony Moretta and Carl J. Luna), Imperial Presidents: The Rise of Executive Power from Roosevelt to Obama  (Wheaton, Il.: Abigail Press, 2013). 

“Texan by Color: The Racialization of the Lone Star State,” in David Cullen and Kyle Wilkison, eds., The Radical Origins of the Texas Right (College Station: University of Texas Press, 2013).

He is currently collaborating, with longtime journalist Betsy Friauf, on a history of African American culture, politics and black intellectuals in the Lone Star State called God Carved in Night: Black Intellectuals in Texas and the World They Made.

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