Sunday, September 29, 2013

Clash of Cardinals

Writing a $95 billion two-year state budget takes more time than the 140 days available in the Texas legislature’s regular session.

Preparation of the next budget (FY 2016 - 2017) will actually begin early in 2014 when each state agency develops a strategic plan based on instructions issued by the Governor’s office and the Legislative Budget Board (LBB).  After developing its strategic plan, an agency will then submit a Legislative Appropriation Request (LAR) in the spring of 2014.  LBB will hold hearings with each agency next summer regarding its LAR, and in the fall LBB will prepare a general appropriations bill draft.

The LBB is jointly chaired by the Lieutenant Governor and the Speaker, and the Chair of  the House Committee on Appropriations, House Committee on Ways and Means and Senate Finance Committee are automatic members of the LBB.  Two other House members are appointed by the Speaker, and three other Senate members are appointed by the Lieutenant Governor.  The current legislative members of the LBB are Reps. Pitts, Hilderbran, Branch and Turner; and Sens. Williams, Duncan, Hinojosa and Zaffirini.

All four LBB Senators drew a four-year term and are eligible to continue to serve on the LBB through next session.  However, three of the four House members will not be returning for the 84th Legislature:  Appropriations Chair Jim Pitts is retiring; Ways and Means Chair Harvey Hilderbran is running for Comptroller; and Rep. Dan Branch is running for Attorney General.

Speaker Straus will appoint new committee chairs in January 2015 after the 84th Legislature convenes.  However, because of the seminal role of the House Appropriations Chair in drafting the state budget, the Speaker really needs to anoint someone by January 2014 as the next Appropriations Chair.  Otherwise, power will begin to shift to the Senate in the budget writing process because Chairman Pitts inevitably will be viewed as a lame duck by his senate colleagues and LBB staff.

There are three contenders for House Appropriations Chair:  Rep. Drew Darby (R - San Angelo); Rep. John Otto (R - Dayton); and Rep. John Zerwas (R - Fulshear).  Each is currently a powerful member of House Appropriations and chairs  a standing subcommittee.  In Washington, D.C. parlance, they would be known as “Cardinals” because of the power they possess over the budget.

Initially, it was thought that matters would fall neatly into place and that Rep. Darby would become Chair of Appropriations; Rep. Otto would become Chair of Ways and Means; and Rep. Zerwas would run for the State Senate in a special election to replace Sen. Glenn Hegar if he is elected Comptroller in November 2014.  Now, however, Rep. Otto has made it clear that he prefers to chair Appropriations, and Rep. Zerwas has expressed his desire to chair Appropriations and not run for the Senate.

An intense behind the scenes campaign is underway among the three Cardinals to receive the nod from the Speaker as the next Appropriations Chair.  The winner will likely not be announced by an official appointment, but rather will simply begin attending budget meetings with the Speaker’s imprimatur.  All appropriation eyes are now on the second floor of the west wing as we wait for the white smoke.

Monday, September 23, 2013

Callegari to Retire

State Rep. Bill Callegari (R - Houston), who turns 72 today, will not seek reelection to the Texas House in 2014.  First elected in 2000, Callegari serves as Chair of the House Pensions Committee.  His decision brings to 12 so far the number of House members who will not return for the 84th Legislature as follows:

  • HD 10 - Jim Pitts; not seeking reelection
  • HD 16 - Brandon Creighton; candidate for Agriculture Commissioner
  • HD 23 - Craig Eiland; not seeking reelection
  • HD 50 - Mark Strama; resigned
  • HD 53 - Harvey Hilderbran; candidate for Comptroller
  • HD 58 - Rob Orr; not seeking reelection
  • HD 66 - Van Taylor; candidate for State Senate
  • HD 81 - Tryon Lewis; not seeking reelection
  • HD 102 - Stefani Carter; candidate for Railroad Commissioner
  • HD 108 - Dan Branch; candidate for Attorney General
  • HD 129 - John Davis; not seeking reelection
  • HD 132 - Bill Callegari; not seeking reelection

Sunday, September 22, 2013

2014 Texas Democratic Ticket

Sen. Wendy Davis continues to prepare to announce her candidacy for Governor as a Democrat on October 3. 

Conditioned on her running, you are beginning to see the Democratic ticket fill in around her.  Sen. Leticia Van de Putte will likely run for Lieutenant Governor, and Sen. Carlos Uresti is giving strong consideration to running for Attorney General.  Sen. Jose Rodriguez has also been discussed as an Attorney General candidate.

Van de Putte, Uresti and Rodriguez all drew four-year terms in the Texas Senate, and therefore can run for higher office without having to give up their Senate seat.  This is different from Texas House members who have two-year terms and would have to relinquish their seat to run.  So far, no Texas House Democrats have been willing to take the up or out statewide plunge, although Rep. Trey Martinez Fischer has not ruled it out.

Two other Democrats have indicated they will run statewide.  Michael Collier, a Houston accountant, will run for Comptroller; and former El Paso Mayor John Cook will run for Land Commissioner.

I have not seen a strong Democrat surface to take on U. S. Sen. John Cornyn, who will be the first name on the 2014 ballot.  One of the difficulties is money.  Federal races are subject to contribution limits of $2,600 per person and $5,000 per PAC, whereas Texas state races have no contribution limits.  For example, Fort Worth investor Sid Bass recently gave Sen. Davis $100,000, and Attorney General Abbott has numerous $100,000 contributors.  It is easier to raise money for a non-federal race.

Additionally, U. S. Senate Democrats are playing prevent defense nationally in an environment where most pundits believe the Republicans have a credible chance to pick up the six seats necessary to take control of the U. S. Senate.  There is simply no Democratic national money to spare for a long-shot U. S. Senate race in Texas.

The legal filing period for Texas federal and state offices opens November 9 and closes December 9.  For the Democrats, the de facto filing period opens October 3 when Sen. Davis formally announces her candidacy for Governor.

Sunday, September 8, 2013

City of Houston Mayoral Runoff?

Eight candidates have filed to oppose Mayor Annise Parker in the November 5 City of Houston general election.  The last time there were nine candidates for Mayor was in 2003, when Mayor Bill White was elected for the first time.

Many people assume that because nine candidates are on the ballot, Mayor Parker will automatically be forced into a runoff because each candidate will get at least 1% to 2% of the vote.  That is not necessarily true.  In the November 4, 2003, election, Mayor White received 37.54%; County Treasurer Orlando Sanchez received 32.78%; and Rep. Sylvester Turner received 29.02%.  The other six candidates each received from 0.06% to 0.13% for a combined total of 0.63% of the vote -- less than 1% of the vote for six candidates.

In the November 4, 1997, election there were eight candidates on the ballot for Mayor.  Mayor Lee Brown received 42.26%; Rob Mosbacher received 28.84%; the next three candidates received a combined 27.42%; and the final three candidates received respectively 1.21%; 0.19%; and 0.08%.

Looking at these two elections, we know that unknown and unfunded candidates can draw minuscule vote percentages.  However, in 2011, five unfunded challengers to Mayor Parker received a combined 49.22% of the vote.

Mayor Parker has one politically significant challenger this time:  Former City Attorney Ben Hall.  If there is a runoff, it will be with Mr. Hall.  The question is whether the seven other candidates will pull enough votes to force a runoff.  None of the other seven have held elective office, and they had only spent a combined $24,057 as shown on the July 15 finance reports.  Will the election this November be like 2003 when the six unknown candidates received less than 1% of the vote, or will it be like 2011 when the five unknown candidates received 49.22% of the vote?

If no candidate receives 50% +1 of the vote on November 5, a runoff election will be required.  State law provides that City Council will canvas (i.e. count and report) the vote not earlier than the 8th or later than the 11th day after the election.  Not later than the fifth day after the canvas, City Council shall order the runoff election.  The runoff shall be held not earlier than 20 nor more than 45 days after the date of the final canvas.  In other words, the soonest the runoff could be held would be Monday, December 2, and the latest would be Monday, December 30.

Historically, the runoff election is held on the first or second Saturday in December.  With a November 5 general election, the most likely date for the runoff is Saturday, December 7.  

I expect that we will begin seeing published news media polls in the near future, and we will then have more data to begin assessing the likelihood of a December mayoral runoff election.

Monday, September 2, 2013

Mother's Milk of Politics

On August 29, all statewide candidates were required to file campaign finance reports detailing their contributions accepted from June 26 - July 30.  This report is in addition the semiannual reports candidates were required to file on July 15, which included all contributions accepted during the first six months of 2013.

The August 29 report is an anomaly in Texas campaign finance.  Usually, in odd-numbered years, statewide candidates are only required to report their contributions accepted in six month increments.  The report covering the first six months of the year is due July 15, and the report covering the last six months of the year is due January 15 of the next year.  The difference this year is the special session.  While lawmakers are prohibited from accepting contributions during the regular session and continuing through the Governor's veto period, they are allowed to accept contributions during a special session.  The catch is that each contribution accepted during a special session must be reported to the Texas Ethics Commission by 30 days after the end of the special session.  This year, Governor Perry called three special sessions.  The second special session, which ran from July 1 - July 30, triggered a campaign finance report for each of these candidates that was due August 29.

Historically, candidates work hard at the end of a reporting period to receive as many contributions as they can to make their numbers look good.  In addition to pushing up the fundraising numbers (used by members of the public, including this author, as one indication of a candidate's relative strength or weakness), this also results in a deflated fundraising period in the months following the end of a reporting period.  This is especially true in the summer, when larger donors are frequently on vacation and therefore unreachable by candidates, resulting in fewer contributions during the period.

Below is a chart showing the fundraising totals for each of the announced statewide candidates, broken down into three different periods.  The first period is January 1 - June 16, when only those candidates who are not currently statewide officeholders or sitting legislators may raise money.  The second period is June 17 - June 30, which is the big fundraising push when all sitting officeholders are able to raise money (these figures were reported on the candidates' July campaign finance reports).  The third period is July 1 - July 30, which is covered by the special session report.

Office Sought
Jan. 1 - June 16
June 17 - June 30
July 1 - July 30
New Loans
Total 2013
Greg Abbott
Wendy Davis
Governor (Expected)
Tom Pauken
David Dewhurst
Lt. Governor
Dan Patrick
Lt. Governor
Jerry Patterson
Lt. Governor
Todd Staples
Lt. Governor
Dan Branch
Attorney General
Ken Paxton
Attorney General
Barry Smitherman
Attorney General
Glenn Hegar
Harvey Hilderbran
Debra Medina
Raul Torres
George P. Bush
Land Comm.
David Watts
Land Comm.
J. Carnes
Agriculture Comm.
Brandon Creighton
Agriculture Comm.

Eric Opiela
Agriculture Comm.
Becky Berger
Railroad Comm.
Malachi Boyuls
Railroad Comm.
Stefani Carter
Railroad Comm.
Ray Keller
Railroad Comm.

After reviewing the numbers, there are a few takeaways:

Attorney General Greg Abbott is a fundraising powerhouse.  General Abbott, who announced he had approximately $21 million in the bank as of June 30, has been known for years as a prolific fundraiser. This was put on display with his June fundraising totals, where he raised nearly $4.8 million, smashing all fundraising records during the period in Texas. What is just as impressive, however, is that he has been able to keep up his fundraising during July, pulling in an additional $1 million--for a total of nearly $5.8 million raised in 44 days.  This number is even more impressive by comparison: General Abbott raised almost as much during July as the other 22 candidates on this list did combined.  In case anyone had not been paying attention at all, this shows that General Abbott will be a fully funded candidate for his race next year.

Senator Wendy Davis is a strong fundraiser as well. Senator Davis, who is expected by most to announce her candidacy for Governor in the coming weeks, rose to national attention with her June filibuster of abortion legislation on the floor of the Senate.  She raised almost $1 million in the first 14 days of fundraising, followed up by another $413,588.55 in July.  Should Senator Davis decide to run for Governor, it appears she has the ability to raise significant sums of money, making her competitive (at least financially) in such a race.  Despite her fundraising success, General Abbott is still out-raising her 4:1.  Nevertheless, her ability to raise money makes it easy to see why Democrats, both in Texas and across the nation, have been discussing her possible candidacy with optimism.

The Lieutenant Governor's race will be an expensive affair.  Lt. Governor David Dewhurst, a three-term incumbent, has the ability to self-fund his campaign. Governor Dewhurst raised more money than each of his competitors, both in the June fundraising period and in the month of July.  Though he has a significant financial advantage, both from his fundraising and his personal wealth, his challengers appear able to raise money on their own to be competitive.  Leading the pack is Agriculture Commissioner Todd Staples, the only challenger to break the $1 million mark.  Unlike General Abbott and Senator Davis, the four Lt. Governor candidates saw their fundraising totals drop precipitously between the last 14 days of June and the first 30 days of July, which is to be expected for reasons already mentioned.

Representative Dan Branch continues his monetary advantage in the race for Attorney General. Representative Branch raised almost twice as much as his two opponents (Senator Ken Paxton and Railroad Commissioner Barry Smitherman) raised combined in June, and doubled their July take as well. Rep. Branch has long been a successful fundraiser, and he will be a fully funded candidate in 2014. Senator Paxton and Commissioner Smitherman both raised respectable amounts in June, though they saw a July drop-off in fundraising similar to those seen by other candidates during that period.  (Disclosure:  The author serves as campaign treasurer for Commissioner Smitherman.)

The money race for Comptroller has Sen. Hegar and Rep. Hilderbran far ahead of the other candidates, Debra Medina and former Rep. Raul Torres.  Many view Sen. Hegar as the favorite in this race because of his ability to raise money--if he wins, he's Comptroller, and if he loses, he's still a state senator. Rep. Hilderbran reported no contributions received in July.

George P. Bush will be fully funded.  Surprising no one, Mr. Bush, who is running for Land Comm., put up big numbers this year.  Look for him to continue collecting cash throughout the election cycle.  If he does not have a serious opponent and is therefore able to conserve his funds, Mr. Bush could enter the 2015 session as a sitting statewide officeholder with one of the largest war chests in the state.

Representative Brandon Creighton leads the pack in the fundraising race for Agriculture Commissioner, far eclipsing his opponents.

In the Railroad Commission race, Malachi Boyuls is the only candidate currently showing the ability to raise serious money.