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1.04.2005
Dewhurst Calls Meetings with Senators on School Finance Strategy for Session Speculation Centers on Possible Package for Voters that Could Include Shift to Gross Receipts Taxes

By Mike Hailey
Capitol Inside Editor

Lieutenant Governor David Dewhurst is expected to start meeting with state senators on an individual basis this week in an attempt to determine what it will take to marshal a unified show of support in the Senate this year on the critical issue of school finance.

Dewhurst's meetings with senators come at a time when lawmakers on both sides of the Texas Capitol appear divided on whether to pass a sweeping school finance bill or to make changes incrementally in a way that would keep the public schools in business without the need for a major shift or increase in state taxes. There's been speculation that the Senate might toy with the idea of taking the lead on school finance in the regular session with a potential plan that could involve a single constitutional amendment that senators could act on ostensibly without having to wait for a tax bill to originate in the House.

One potential scenario that's reportedly under discussion would rely on an overhaul of the state's business tax system with the imposition of a minimum gross receipts tax that would be levied on businesses across the board as a major source for revenues that could be used to reduce local property taxes and fund schools. Whether a plan proposes taxes on gross receipts or business activity, there's a feeling among some in the Capitol's east wing that members might find it more difficult to pick apart a school finance plan if a vote against certain revenue measures would sink the entire proposal. Under such a scenario, senators might opt to consider video lottery gambling as a source of education revenue in a separate measure apart from an all-encompassing school finance package that would be ultimately approved or rejected by Texas voters.

The timing of the meetings offer Dewhurst an opportunity to exercise some of the powers he holds as the Senate's presiding officer as leverage with members who might be reluctant to get on board a school finance and tax program early in the 140-day regular session. The lieutenant governor, for example, will be announcing his choices for committee leadership posts at some point fairly soon after the session convenes on Tuesday next week. With that thought in mind, senators might be less inclined to resist appeals for support for a particular proposal that the lieutenant governor might favor and hope to have on a fast track when the session opens for business next week.

Dewhurst associates say the options are still open and that the Republican lieutenant governor is simply trying to ensure that the lines of communication are open and a dialogue is under way on the state's most pressing issue by the time the curtain goes up on the 79th regular session in seven days. They dismiss any notion that Dewhurst might be planning to play political hardball in the meetings with senators by holding committee appointments or other potential incentives over their head to leverage support for whatever his preferred proposal may be.

The biennial gathering of legislators at the Capitol this year will be Dewhurst's second regular session since winning the job as the Senate's presiding officer in 2002. But it won't be the first time he's initiated talks with individual senators before gaveling them into a regular session. Dewhurst won widespread praise two years ago after meeting with each of the Senate's 31 members before the Legislature convened and using the good relations that were established as a foundation for a session in which the Senate was united for the most part on major issues such as homeowners insurance reform, medical malpractice liability limitations and, above all, school finance. The upper chamber's finest moment of 2003 arguably came when all 31 members banded together to approve a comprehensive school finance bill on which every single senator was listed as a co-sponsor. Senators were able to attach their plan as a substitute to a stopgap education finance bill that the House sent over in order to comply with the constitutional provision requiring tax bills to be heard first in the House.

But Speaker Tom Craddick and House leaders refused to consider the Senate's proposal amid concerns that senators had rushed into it after being swept up in the fanfare over the speed and ease in which they were able to put together and pass a major school finance plan. House leaders, with encouragement from Governor Rick Perry, decided that it would be wiser to hold off on a school finance plan in order to give a select committee time to further investigate the potential options for replacing a system that a state district judge would end up declaring to be unconstitutional last year. Senators, as a result, were left having to defend votes for higher taxes while members in both chambers had to go back to square one on the issue of school funding.

Senators appeared more united on school finance than House members during a special session that Perry called last spring. But when the House sent over a school tax plan that had been scaled back dramatically during the floor debate, senators didn't like the idea of having to rebuild the measure with additional votes for higher taxes then face the prospect of having the measure fail in the House once again. The Senate didn't vote on the House plan before the special session ended - and District Judge John Dietz turned up the pressure with a September ruling that found the current system in violation of the state's constitution. Dietz told the state to fix the problems by the fall semester or face the prospect of having the schools closed.

Dewhurst is among those legislators who believe that the Legislature should overhaul the school finance system in a single major sweep. House and Senate education leaders such as State Rep. Kent Grusendorf of Arlington and State Senator Florence Shapiro of Plano - and Craddick have also indicated support for a comprehensive approach toward resolving the issue.

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