Speaker Tom Craddick is flanked by school finance conferees, from left, Rob Eissler, Kent Grusendorf, Jim Keffer, Charlie Geren and Warren Chisum.

May 29, 2005

Senate Says House Backed Out
on Deal as Blame Game Erupts

By Mike Hailey
Capitol Inside Editor

The collapse of the school finance effort left the Texas Capitol triggered an unprecedented flurry of finger-pointing Sunday as Senate leaders accused House negotiators of backing out of a deal that leaders in the lower chamber say was never made.

At the first of dueling press conferences with less than 36 hours remaining before the regular session ends, Lieutenant Governor David Dewhurst contended that Senate negotiators had a deal at 11 p.m. Saturday with their House counterparts on the school side of the equation contained in House Bill 2. But Dewhurst said that Speaker Tom Craddick vetoed the agreement in principle even though he'd told him earlier that the House conferees had the authority to cut deals in the waning hours before a late-night deadline for printing the legislation in time to let it lay out another day.

Governor Rick Perry is backing Dewhurst's assertion, saying that he too thought a deal was done on the school bill when he left a meeting with Dewhurst and conferees from both chambers.

Dewhurst and key senators earlier Saturday had accused the House of refusing to negotiate on the tax plan after sending an all-or-nothing proposal that essentially mirrored the original proposal that came over from the lower chamber. Then when House conferees did make an effort to reach an agreement on HB 2, the lieutenant governor said they broke that deal after showing it to Craddick.

State Rep. Kent Grusendorf, the lead HB 1 negotiator and sponsor of the bill, agreed that while the two sides had been close, no firm agreement was in hand when he and several other House members returned to the west side of the building to brief the speaker.

To salvage the school finance legislation before the Monday midnight deadline for the session, a two-thirds vote would be required to suspend layout rules. Dewhurst has suggested at least two-thirds of the Senate would agree to do that. But Craddick said a two-thirds vote of the House - especially without printouts on the impact the bill would have on individual school districts - would be next to impossible on a measure that passed the House in March with only three votes to spare.

Besides, the speaker stressed, it makes no sense to pass HB 2 unless the funding mechanisms in HB 3 are also approved. The speaker said the House and the Senate were a "universe apart" on the tax bill.

Craddick said that the Senate negotiators pushed for a business activity tax that the speakers say senators did not have the votes to pass on their own floor. Craddick said he'd made it clear to Dewhurst that the House wouldn't supporting reforming the franchise tax unless the plan offered businesses a choice between taxes on payrolls and capital.

"It's the first time in my life I've ever been for choice," State Rep. Jim Keffer, an Eastland Republican who sponsored the tax bill and led conferees, said half-jokingly about the multiple options business levy.

Once the blame game plays out, House and Senate leaders face a major dilemma on what the next move will be in light of a July court hearing and October deadline on a state district judge's order to overhaul the school finance system, which has been declared unconstitutional.

Craddick suggested that a special session might be needed, but he conceded that time was in short supply if they go that route. Another possibility - one that most lawmakers have shunned until now - is to do nothing and let the courts devise a new school funding plan if the state Supreme Court doesn't side with the state and throw out the lawsuit that inspired the court order.

Governor Rick Perry has indicated that he has no plans to summon lawmakers back into a special session any time soon. To say otherwise might have taken pressure off legislators to come up with a plan in the regular session. Now that they failed, the governor might have second thoughts about a summer special session.