By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
Sadler and Laney were genuinely interested in tax reform, but the House committee did not take long to scrap the Bush plan and begin drafting its own. State Rep. Mark Stiles, a Beaumont Democrat and influential House member, said at the time that killing the Bush bill was necessary because it had no prayer of surviving the House.
The tax bill that ultimately passed the House bore little resemblance to Bush's original plan. The governor's proposed new business activities tax was scrapped, while the House bill would tax doctors, lawyers, accountants, and other professional partnerships that previously had been exempted.
Bush wholeheartedly supported the House bill anyway, as it would have cut property taxes $3.8 billion, or 40 percent. It also would have drastically shifted the burden of public education financing from local school districts to the state. Under the House bill, the state would have been responsible for 80 percent of the funding vs. the current 47 percent. It wasn't his plan, but the House bill met several of Bush's objectives, including the elimination of the so-called Robin Hood school finance system that takes tax money from property-rich school districts and redistributes it to property-poor ones.
The Senate, however, would have none of it. Even at his charming best, Bush could not persuade reluctant senators, many of whom were in his own Republican party, to support even a compromise bill. In 1995, Bush spent many hours in the governor's mansion with Sadler hammering out the details of education reform. When each of the four reforms passed that session, Bush visited the House and Senate floors and shook the hands of lawmakers to thank them for the support. But in 1997, he mostly sat on the sidelines during the tax reform debate in the House, except to make public nods of approval for new schemes of taxation that the House committee had settled upon. As the bill perilously held onto life in the Senate, he took a more personal approach. But by then, it was too late. One by one, he called senators into the governor's conference room adjacent to his office on the second floor of the Capitol. With a silent Bullock beside him, Bush asked the senators for their vote. Too many of them would not give it. The governor's first dalliance into serious legislative politics cratered nine days before the legislative session ended.
While Bullock disagreed with Bush's approach to tax reform, "he gave him full run of the Senate," says Proffitt, Bullock's aide. "But the Senate worked its will and said no."
Patterson says that "if anyone submarined the tax bill, it was the Republican members of the Senate"--senators whose loyalty Bush miscalculated.
Yet Bush emerged from the 1997 session with legislative leaders calling him courageous for taking up the fight of tax reform instead of a failure for losing it. Bush's friends, Bullock and Laney, led the chorus. The good will of 1995, the breakfasts, the football game, the hospital visits, they all were paying dividends for the governor when he needed them most. Although the Legislature killed Bush's hopes for tax reform, it did throw him a bone by passing a voter referendum that was designed to save homeowners $1 billion in property taxes in two years. Voters overwhelmingly approved the measure in August 1997.
If Bush runs for president, he will promote himself to the American people as the Texas governor responsible for the largest single tax cut in state history. What voters ultimately approved, however, was to raise the homestead exemption from $5,000 to $15,000. In other words, homeowners are able to deduct an additional $10,000 on their primary home's appraised value, which is used to calculate property taxes. School taxes paid by homeowners statewide were estimated to be cut by an average of $145 a year as a result.
On the campaign trail, however, Mauro has contended that most Texans are seeing none of those savings. He has called it a phantom tax cut, noting that 22 of the 35 largest school districts in Texas raised their tax rates in 1997 (the Dallas Independent School District was not one of them), effectively negating whatever savings a homeowner would have experienced through the higher homestead deduction. Bush argues that Texans' tax bills would be even higher if he had not pushed for the $1 billion cut.
As Mauro sees it, Bush has had one test under fire in the last four years. "The test he put in place for himself was tax reform," he says, "and he failed it miserably, both substantively and tactically."
George W. Bush is inside the library at Heights Elementary School in Laredo, the second stop in his three-city South Texas campaign swing. He is sitting in a rocking chair that is draped with a blanket featuring the design of an American flag. He is looking quite presidential, no doubt, to the 30 or so fourth-graders who sit before him on the floor with their legs crossed.
They ask him questions. What's his favorite book? "The Bible." How many languages does he speak? "Dos." What's the first thing he does in the morning? "Feed the dog and cats." How does somebody become governor? "You run for office. If you get the most votes, you win. If you don't get the most votes, you go watch baseball games."