Is Norquist still the man?

By RICK CASEY
Copyright 2006 Houston Chronicle

THE Texas Supreme Court has ordered Gov. Rick Perry and the Legislature to come up with a new school funding plan before June 1.

When Perry calls a special session to do that after the March primary, we will learn something important about Texas:

Whether Grover Norquist is still in charge.

Norquist's name has come up recently in connection with the Abramoff/Reed/DeLay Gang and their dealings with Indian casinos, but the Washington-based tax fighter became notable in Austin before that.

You may recall that in 2004, before the last regular legislative session, Gov. Perry flew to the Bahamas for three days of serious discussion of school finance and reform.

Not just snorkeling

Voucher advocate and San Antonio hospital bed magnate Dr. James Leininger and Houston businessman Bobby Nau sponsored the trip, which also included Perry's wife and several of his aides.

But the other key guest was Norquist.

We know they discussed school finance and reform policy at length and did not just snorkel and enjoy fruity rum drinks with tiny umbrellas because Gov. Perry said under oath that it was a serious meeting, and included discussions of school issues, as well as appraisal reform, presidential politics and congressional activity.

"I made a decision that in order to best facilitate my office's development of politically viable education policy I would need to get together with a select group of political and technical advisors in a setting removed from daily distractions," he said in an affidavit filed with the Texas Ethics Commission.

Why not Pecos?

The Ethics Commission ruled that Perry violated no rules, since he discussed policy issues and since he disclosed on his financial report in-kind contributions financing the trip, including nearly $3,000 from Leininger for food and lodging.

(A private plane was provided by a Sugar Land businessman who didn't go on the trip and another by Nau.)

Never mind that there are fewer distractions in, say, Pecos than in the Bahamas. Some people find it easier to think serious thoughts on the beach.

I can see why Perry would want to include Leininger and Nau in the group. Nau and his wife already had donated more than $100,000 to Perry and Leininger and his wife more than $75,000.

But why Norquist?

Simple. Norquist runs an operation called Americans for Tax Reform, which persuades state legislators to sign a simple pledge promising "to oppose and vote against any and all efforts to increase taxes."

A number of key Texas legislators had signed the pledge. How key?

House Speaker Tom Craddick, for one. And Jim Keffer, chairman of House Ways & Means, which generates all tax bills.

And Kent Grusendorf, chairman of the House Committee on Public Education and also a member of Ways & Means.

Four senators and 32 other members of the House took the pledge.

So last March, when the Legislature unsuccessfully wrestled with school finance legislation, Norquist was a player.

In the first week of March, he issued a press release regarding a proposed payroll tax to help take pressure off school property taxes.

"Speaker Craddick and the House seem to want to shut down Texas for business," Norquist said.

Two weeks later, Norquist opined that the bill didn't break the pledge, since it reduced property taxes by the same amount it raised other taxes.

Since then, we've had the state Supreme Court decision saying our current school tax system violates the state constitution's ban on a statewide property tax. The reason is that nearly all districts are at or near the maximum rate of $1.50 per $100 of property values just to meet state mandates.

With no local discretionary funds available, it amounts to a state property tax.

Now Solicitor General Ted Cruz, who has to defend legislative action before the Supreme Court, says a revenue-neutral plan such as the one Norquist declared as honoring the pledge will not suffice.

He offered other alternatives, but they weren't very palatable.

The Legislature could remove the cap and allow school boards to tax at higher rates. Not only would voters rebel, but this would require an even stronger version of the unpopular Robin Hood plan to equalize funding between rich and poor districts.

The Legislature and voters could pass a state property tax. Fat chance.

We could raise class sizes and lower expectations in other ways. Not likely.

The only thing left is for the state, which has been reducing its share of educational funding for more than a decade, to put more money in the pot.

Maybe they can get it from prisons, highways and Medicaid, but I doubt it.

The most likely bet: a broader business tax that is not revenue neutral.

And the wrath of Grover Norquist.

You can write to Rick Casey at P.O. Box 4260, Houston, TX 77210, or e-mail him at rick.casey@chron.com.

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