By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By Eric Nicholson
Everybody cracks up.
Bush sailed through his first legislative session with help from his pals Bullock and Laney. His next would not be quite so easy, and it would demonstrate just how dependent the governor is on the good will of the Legislature's two most powerful men.
On a November afternoon in 1996, two months before the legislative session began, Bush gathered reporters on the front lawn of the governor's mansion and announced that he wanted the Legislature to use state budget savings to reduce local school property taxes by $1 billion over two years. He called it a "down payment" on his promise to provide Texans property-tax relief, and the moment became a milestone in Bush's gubernatorial tenure. It marked the beginning of an intrepid journey for the play-it-safe governor--the only time he would venture out on a political mission without the direct or implicit blessings of Bullock and Laney.
The pup governor was weaning himself. For the first time, he was exerting his gubernatorial power by staking his claim on a function that in Texas is reserved for the Legislature--formulating the budget.
The "down payment" Bush called for in November evolved in January into a detailed plan to reform drastically the state's tax code so that the state's public education system would rely more on financing from state taxes and less on local property taxes. His grand plan of tax shifts would have reduced local property taxes $2.8 billion while creating new business and sales taxes to make up most of the difference.
During a debate with Mauro earlier this month, Bush said his attempt at tax reform proved that he is "willing to make bold decisions and be a bold leader."
One problem: His bold plan failed to the extent that Bush has resolved not to push for tax reform during the 1999 legislative session--even though he stands by his belief that an overhaul is necessary to ensure sufficient and equitable funding of Texas public schools. "He came up with a poor plan," says state Rep. John Hirschi. "I don't think he had any constituency supporting him on the plan he came up with. He had a popular issue, tax reform and lowering property taxes, but a very weak vehicle for accomplishing a popular idea."
The motor started sputtering from the day he announced his intentions on the mansion front lawn. By making his announcement the way he did, Bush jeopardized his relationship with Bullock and Laney. The media was hearing about Bush's tax cut proposal before Bullock and Laney, and that went against form, especially for Bullock, who hates surprises.
Bullock and Laney responded in kind, but not too kindly. Each sent out terse statements to the media hours later that revealed their displeasure. "We won't know if the governor's proposal is feasible until we have seen the details of his plan," Laney wrote.
"I've been working on property taxes, and I've given a rough draft of the plan to the governor and his staff," Bullock wrote. "I have not received a plan from them."
Bush says he kept them in the dark because "I didn't feel like they were going to be supportive of it. It wasn't personal. I think they were trying to protect the legislative prerogative of how to spend the state's money. And I was the executive branch, laying claim to part of it.
"I think I semi-strained the relationship--strained is too strong of a word--I think I disappointed them by announcing my plan the way I did. I immediately marched over and told them about it after I did it."
During his state-of-the-state speech two weeks after the legislative session began, Bush dropped his second bomb. He no longer was going after just a $1 billion tax cut, but an overhaul of the state's tax code that would result in $2.8 billion in cuts. While a 30 percent drop in property taxes sounded good to lawmakers, Bush's approach to pay for it did not. Bush sought to initiate a new 1.25 percent tax on total business sales over $500,000, along with raising the state's 6.25 percent sales tax and motor vehicle tax by one-half cent each. His plan put him on the opposite side of powerful lobbying interests at the Capitol and many legislators of both parties.
Bullock and Laney were also skeptical. A business tax similar to Bush's had been a bust in other states. Liberals began complaining that increasing the state sales tax was regressive taxation and showed favoritism to Bush's rich Republican friends. If tax reform was going to happen, something other than Bush's plan had to be introduced.
A few days before Bush's state of the state speech, Laney had already seized the tax issue from Bush without the governor's even knowing what hit him. Bush wanted and expected his tax plan to be hammered out in the House Ways and Means Committee, chaired by Rep. Tom Craddick, a fellow Republican and Bush friend. Instead, Laney--without consulting Bush--formed a special committee to examine the state's tax code and public education financing. He put Rep. Paul Sadler, a Democrat whom he could trust more than Craddick, in charge of the committee.