PETE SLOVER and TONY HARTZEL | The Dallas Morning News

Once again, Gov. Rick Perry’s former liaison to the Legislature is working for the Spanish company that won the rights to develop the $7 billion Trans-Texas Corridor.

Lobbyist Dan Shelley worked for the firm as a consultant just before he went to the governor’s office, a connection first revealed in 2004. State officials denied any connection between that circumstance and the decision, three months later, to award Cintra the huge highway contract. Now, Mr. Shelley has left the governor’s office, and he and his daughter have large contracts to lobby for the road builder.

This week, Mr. Shelley had planned to take four state lawmakers – including two Dallas-area senators – on a four-day, all-expense-paid trip to Canada. But the trip was abruptly postponed after The Dallas Morning News asked questions about it.

A call to Mr. Shelley seeking comment was returned by an Austin spokeswoman for Madrid-based Cintra, who said that Mr. Shelley’s contract with the company prohibits him from discussing his work with reporters.

Spokeswoman Rossanna Salazar confirmed that Mr. Shelley was helping to arrange the fact-finding trip to visit a Cintra toll road near Toronto.

“Dan Shelley was going to cover those costs” for the lawmakers’ expenses, Ms. Salazar said. “He would have had to publicly report those costs to the Texas Ethics Commission.”

Though the payment of trip expenses by Cintra would have been legal, companies stand to gain by having lawmakers’ undivided attention for several days, said Tom “Smitty” Smith, director of Public Citizen of Texas, a watchdog group. Lawmakers should use their campaign funds for such expenses, Mr. Smith said.

“That’s preferable from taking money from corporations that stand to make billions in the continuation of this Trans-Texas Corridor project,” he said.

Mr. Shelley resigned his state job in September and struck a lobbying deal with Cintra worth between $50,000 and $100,000 to work from March through the end of this year. In addition, his daughter and lobbying partner, Jennifer Shelley-Rodriguez, will earn between $25,000 and $50,000 from the company over the same period, state records show.

The Trans-Texas Corridor is Mr. Perry’s vision for a statewide network of toll roads, rail lines and utility lines to improve transportation for the next 50 years. Cintra won the development rights in 2004 to the first corridor section that will parallel Interstate 35E.

The corridor has become an issue in his re-election campaign, as rival Carole Keeton Strayhorn has stoked landowners’ opposition to the project.

When Mr. Shelley worked for Cintra before, he never registered as a lobbyist. Instead, he worked nine months as an unregulated “consultant” trying to generate business for the company in Texas – a role that included such functions as making introductions and attending meetings with state transportation officials.

At the time, the governor’s office said Mr. Shelley was never paid by the company, because his fees were to be based on any deals closed. They said that when he left the firm before the contract was complete, he gave up the right to such fees.

Such contingency arrangements are illegal for lobbyists, but the law does not mention consultants.

The law does not restrict former gubernatorial staffers from lobbying, but Mr. Perry has instituted his own rule for former high-level staffers: They can lobby the Legislature and state agencies but are banned from lobbying the governor’s office for a year, or until the end of the first legislative session after they’ve left, which ever is longer.

That means Mr. Shelley has voluntarily committed not to lobby the governor and his staff until after the Legislature’s session next year, said Kathy Walt, the governor’s press secretary.

“Governor Perry has the strongest ethics policy that any Texas governor has ever had,” she said.

Even with those limits, Mr. Shelley has built a healthy lobby clientele: This year, he reported to the state lobbying work worth between $550,000 and $1.1 million.

The director of a group that tracks money in politics said the case demonstrates that the policy and the laws both need tightening.

“The can’t-lobby-the-governor rule is meaningless in the real world,” said Craig McDonald, director of Texans for Public Justice. “It’s a pie-in-the-sky policy that has absolutely no teeth: Texas needs a law to close the revolving lobby door.”

On the Toronto trip, the group would have viewed Cintra’s state-of-the-art Highway 407 Electronic Toll Road. Interviews with Ontario government officials also were scheduled.

Among the lawmakers included was Rep. Mike Krusee, the Round Rock Republican who heads the House Transportation Committee. Also invited were three members of the Senate committee that writes the state budget: Democrats Royce West of Dallas and John Whitmire of Houston, along with Republican Kim Brimer of Fort Worth.

The travel plans changed, though, about 24 hours after The News first inquired about the trip. Transportation department officials said they postponed the trip because a more pressing duty arose.

Mr. Brimer said he knew nothing about how the trip came about and if he had, he would have paid for it with campaign funds.

“I don’t need a handout,” he said.

The other lawmakers did not return calls seeking comment.

Seven top employees of the Texas Department of Transportation were also scheduled to go, though their agency was to pay their way.

“It’s to look at what they do [in Toronto] and the lessons learned there so we can come back and do it better in Texas,” said transportation department spokeswoman Gaby Garcia, who said state employees have gone to California to review toll roads. “We’re not shy about going out and seeing what others are doing.”

Pete Slover reported from Austin and Tony Hartzel from Plano.

E-mail pslover@dallasnews.com

and thartzel@dallasnews.com

Gov. Rick Perry’s diversion last year of federal stimulus cash aimed for schools has prompted Congress to pass a measure that would prevent him from raiding education funds again. Perry says this means the federal government is trying to deprive Texas students of more cash, but his complaint is getting short shrift from educators.

The controversy surrounds rules relating to the new federal job protection measure, which will send $26 billion to the states to allow them to keep paying their workers. On July 2, Austin’s U.S. Rep. Lloyd Doggett and the rest of the Texas Demo­crat­ic congressional delegation added language to the Supplemental Appropriations Bill ordering Texas to ensure that this money is “used to supplement and not supplant State formula funding.” The language is meant to ensure that the $830 million intended for Texas schools will go to protect the estimated 15,400 jobs it is intended to fund. On Aug. 5, the Senate passed the language as part of the Federal Aviation Administration Air Transportation Modernization and Safety Improvement Act. House Speaker Nancy Pelosi recalled Congress from its summer recess to pass the measure on Aug. 10. President Barack Obama signed it into law later that day. In a joint statement, the Demo­crat­ic delegation wrote, “This prevents any further shell games with federal education dollars at the expense of local schools districts.”

In 2009, the federal government allocated $3.2 billion of American Recovery and Reinvestment Act cash to Texas to invest in education. The sum was intended to allow school districts to inject extra cash into the local economy, over and above their normal operating budgets. Instead, Perry and the Republican legislative leadership crafted a budget that replaced regular state funding with federal cash. This shuffle included using federal cash to cover a teacher pay raise that the state’s own Legislative Budget Board had recommended come out of the state budget. The maneuver negated any stimulative effect the cash could have had, while leaving state reserves untouched and depriving school districts of extra cash in the middle of an economic meltdown. At the time, Doggett’s office calculated that Perry’s fiscal sleight of hand cost Austin Independent School District alone $78 million, equal to roughly 9% of its 2009-10 General Fund expenditures.

The measure’s passage brought howls of outrage from Texas Republicans. Predict­ably, Lt. Gov. David Dewhurst has threatened to sue the federal government, while Perry has said rules in the Texas Constitution that prohibit setting future spending prevent him from fulfilling this requirement. In a statement, he said, “That means Texas – the only state singled out with this mandate – might not be able to use any of these funds provided to states.”

But Doggett fired back that the measure does nothing except prevent Perry from signing a budget that makes deeper cuts to education spending than any other section of the budget. Condemning Repub­lic­an opposition as election-year posturing, he said, “They are so eager to be victims of a big Washington government lording over them, that’s why they’ve tried to make this a battle with Obama.” In reality, the White House initially opposed the measure, so, Doggett added, “This is entirely a Texas answer to a Texas problem.”

Perry has “been rebuked by the United States Congress and by Congressman Lloyd Doggett,” said Education Austin President Louis Malfaro. “Good for him and good for them, and good for the kids in Texas.” While Perry, Dewhurst, and Education Commis­sion­er Robert Scott have savaged the Texas Demo­cratic delegation for supporting this measure in the House, Malfaro said that what should be criticized is the decision of the state’s two Republican senators to vote against it. “It should have been [John] Cornyn and [Kay Bailey] Hutchison doing this, and not the two senators from Maine, because Texas is going to benefit hugely from this.”

This is far from Perry’s only example of attempting to use federal education cash as a political kickball. Earlier this year he turned his back on up to $700 million when he decided not to submit an application for Race to the Top cash (see “Fed School Funding: Texas Out of the Race,” Jan. 22). At the time, Perry claimed that the application would require the state to sign on to the federal Common Core State Standards Initiative, which he painted as the first step to a national curriculum. However, Texas Classroom Teachers Association President Brad Willingham and Texas American Federation of Teachers President Linda Bridges, who sided with Perry in rejecting those funds, have both backed the Doggett amendment. They joined with the heads of five other Texas teachers’ organizations, as well as AISD Superintendent Meria Carstarphen and 32 other superintendents, to sign a letter on June 22 backing the congressional measure. In a statement, Association of Texas Professional Educators governmental relations director Brock Gregg said, “The reality is that the pledge the governor has been asked to make is no different in effect than the pledge he made when taking $16 billion in federal stimulus dollars during the last session.”

Doggett echoed that stance: “Compliance is very easy,” he said, “unless there remains a hidden Republican agenda to avoid accountability and to engage in more of the shenanigans of last year.”

Mike Ward | The Austin American-Statesman

The advocacy group Texas Civil Rights Project on Wednesday called for a former Texas Youth Commission official to be brought to trial quickly, almost six years after he was accused of molesting at least four teenage boys in what became a statewide abuse scandal.

Scott Medlock , an Austin attorney who represents one of the four victims in separate pending civil litigation, said at a news conference that it is unbelievable and outrageous that former West Texas State School Principal John Paul Hernandez is still awaiting trial.

“More than three years after the public learned about these disgusting assaults, Hernandez’s victims are still waiting for justice,” said Medlock, director of the organization’s Prisoners’ Rights Program. “Prosecuting these men shows that if you abuse kids in TYC, you will be held accountable. Further delay undermines creating a culture of accountability.”

In a statement, the victim — now 25 — said he wants to “stop what happened to me from being covered up.”

“I need to move on with my life, and I can’t do that until the man who violated me faces justice,” the victim said in the statement. “I’m still struggling and I need some closure.”

According to court filings, Hernandez engaged in oral sex with several boys at the state-run juvenile correctional center and was charged with sexual assault.

Ray Brookins , the lockup’s former assistant superintendent, was also charged with sexually assaulting incarcerated youths. He was convicted in April and sentenced to 10 years in prison.

Hernandez was indicted in April 2007 on one count of sexual assault, a second-degree felony; nine counts of improper sexual activity with a person in his custody, a state jail felony; and nine counts of improper relationship with a student, a second-degree felony, officials said.

If convicted, Hernandez faces a maximum sentence of 20 years in prison.

Neither Hernandez, who has maintained his innocence, nor his attorney could be reached for comment.

As a result of the scandal and allegations that top officials covered up the sexual abuse allegations, most of the Youth Commission’s administrators were fired or forced to retire, the agency was placed in a form of receivership, and its operations were downsized. The West Texas State School in Pyote, where the alleged attacks occurred, was closed in June.

Texas Attorney General Greg Abbott took over prosecution of the abuse cases after the local prosecutor did not file criminal charges for more than two years, even though a detailed investigation by the Texas Rangers confirmed the attacks.

Medlock said the case against Hernandez is pending in a state District Court. District Judge Jay Gibson could not be reached for comment Wednesday on why the case is taking so long to go, and court clerks declined to answer questions about the case.

“Judge Gibson should be ashamed this case hasn’t been heard yet,” Medlock said.

AUSTIN — Democrat Bill White blamed Republican Gov. Rick Perry on Thursday for failing to persuade the federal government to provide enough money to secure the Texas-Mexico border and accused him of making an irresponsible statement by saying bombs are going off in El Paso.

“Rick Perry has failed — failed — in nine and a half years to get the federal resources that Texas needs. Eight of those years (Republican) George W. Bush was president,” White said after a speech to the Texas Association of Broadcasters. “There comes to be a point when the governor himself needs to be accountable.”

White acknowledged that the Mexican drug war is a “real issue” affecting Texas and said drug and human traffickers near the border need to be intercepted. But he said that despite the instability and violence in Mexico, a spillover effect hasn’t happened in the United States. He said Perry is exaggerating the impact in Texas with some of his comments, such as when he said in a television interview that bombs had exploded in El Paso.

Perry’s aides say he was referring to a car bomb that exploded in July in Juárez.

No one uninvolved in the drug or smuggling trade has been known to have been wounded or killed in the U.S., and El Paso was named by Congressional Quarterly last year as America’s second-safest city of its size.

In a separate speech to the broadcasters, Perry said it’s only a matter of time until spillover violence comes into Texas.

“The fact of the matter is a

line on a map is not going to constrain those individuals,” Perry said. “The fact is our citizens’ safety is not negotiable.”

Perry said the manpower the federal government is sending is not enough — that of 1,250 National Guard soldiers being sent to the border region, only 20 percent are heading to Texas, even though the state has most of the U.S.-Mexico border territory.

His campaign spokesman, Mark Miner, responding to White’s criticism of Perry failing to secure enough federal funding, said Perry has made border security a top priority and made sure the state provided $230 million for border security because the federal government hasn’t done enough.

“The governor is being critical of not just this (president’s) administration but previous administrations,” Miner said. “It’s a federal responsibility. They clearly don’t understand the need that Texas and other states have.”

Here’s something I bet you didn’t know. If we let the Bush tax cuts for the wealthiest two percent of Americans expire at the end of this year as scheduled, everyone still gets a tax cut. Yes, everyone.

Right now, the entire panoply of massive Bush tax cuts is set to disappear 141 days from now. Though those cuts were skewed heavily to the very wealthy, they did lower tax rates for everyone. Which means that if the all the cuts expire as scheduled, everyone’s taxes will go up. President Obama and Congressional Democrats don’t want that to happen. They have pushed to keep the tax cuts in place for everyone making less than $250,000, but to let them expire for the wealthiest two percent of Americans.

Anyone who was paying attention during the 2008 presidential election knows that Obama has been extremely consistent on this particular point. Congressional Republicans, however, don’t seem all that willing to allow the tax cuts for the middle class to stick around unless the wealthy get to keep theirs too.

The Republicans are simply wrong on the merits, but it’s important to note that rich people will still pay lower taxes under the President’s plan than they would if all the tax cuts expired. In other words, even with the expiration of the high-end Bush tax rates, the richest two percent still get to keep some of their tax breaks.

An excellent chart in the Washington Post yesterday, based on a recent analysis from the non-partisan Joint Committee on Taxation, illustrates this pretty clearly. As you can see, under the Democratic plan, millionaires will still get a tax cut of more than $6,300. That’s about six times as much as the median household.

How can this be? How is it that letting the Bush tax cuts expire on the richest two percent nevertheless results in a tax cut for those very same people? The answer can be found in our progressive income tax system.

The top income tax rate — currently 35 percent — that everyone talks about is a marginal rate, which means that someone in the top tax bracket only pays 35 percent on the top part of their income. In 2009, for example, that rate applied only to each dollar after the first $372,950 of taxable income (for married couples). For dollars earned up to that limit, rich people pay the same rates as people who make far less.

To understand why this system means that rich people will still get a tax cut, let’s look at a hypothetical example. Imagine a wealthy couple – let’s call them the McDucks – who will bring home half a million dollars in taxable income next year. Under the Democrats’ plan, the tax rates for all income below about $250,000 would stay the same. That would mean the McDucks will pay 10 percent on the first $17,000, 15 percent on the next $40,000, 25 percent on the next $80,000 and 28 percent on the next $100,000. Only after that would they start paying more than they did this year. Their total income tax bill under this plan, would be just over $154,000 — $6,000 lower than it would be if all the tax cuts expire.

Let’s be clear: if the GOP gets its way, the tax cuts for rich people will be much bigger than this. The McDucks, for example, would get another $10,000. But that’s precisely the point. This fight regarding the Bush tax cuts is entirely over whether or not we want to borrow $31 billion next year just so millionaires can get a bigger tax cut than the one the Democrats are already proposing.

If Sen. Robert Deuell, R-Greenville, has his way, Texas’ Planned Parenthood clinics won’t be allowed to contract with the state to provide family planning and preventative health services to thousands of low-income and uninsured women through the successful Women’s Health Program, a Medicaid-waiver project; the move would threaten access to preventative health care for many of those women.

In a July 23 letter to Attorney General Greg Abbott, Deuell writes that 12 Planned Par­ent­hood entities have received $5 million in funding from the state’s Health and Human Services Commission to provide care as part of the Women’s Health Program. And Deuell wants to know if those contracts pass legal muster. At issue is whether a portion of the statute that bans the HHSC from contracting with entities that perform or “promote” abortions or are “affiliates” of groups that do is constitutional. More specifically, Deuell is asking Abbott to decide whether the state can exclude from government funding groups it deems affiliated with abortion providers – even if those groups aren’t legally affiliated with any abortion provider.

Confused? Let’s back up: After several years of trying to pass a program to expand health care access for poor women, lawmakers in 2005 created the Women’s Health Pro­gram, a Medicaid-waiver project that provides funding for family planning and preventative health screenings to women ages 18 to 44. These women would otherwise be ineligible for Medicaid but nonetheless lack access to health care. The program was finally passed as a five-year demonstration project after a bit of last-minute tinkering that added language preventing funding from going to any groups affiliated with abortion providers. Ostensibly, that would seem to bar the state’s Planned Parenthoods, some of which operate clinics that provide abortion services, from participating in the program. But it didn’t turn out that way. In that same year, Sen. Steve Ogden, R-Bryan, sought to ban Planned Parenthood from receiving family planning funds based on the idea that PP’s family planning clinics were affiliated with sister clinics that provide abortion care. Ogden’s attempt to defund the group led to litigation in which a federal court ruled the state could not block the group from providing government-funded family planning services, though it could refuse to fund an abortion provider. (As it stands, federal money cannot be used to fund abortions.)

The ruling caused the state’s 71 Planned Parenthood clinics to deaffiliate themselves from one another: Each now has its own branding, board of directors, and bank account. Importantly, each service provider participating in the Women’s Health Program must agree not to provide abortions or affiliate with abortion providers.

But Deuell still isn’t satisfied. In his July letter to Abbott, Deuell notes that the 2005 lawsuit concerned whether the state could bar Planned Parenthood from receiving Title X family planning funds but not whether it could block PP from receiving WHP funds, which are administered through Title XIX of the federal Social Security Act – the section that concerns Medicaid funding. According to Deuell, Title XIX “specifically authorizes restrictions on who may participate in a state Medicaid plan.” In his letter, Deuell says that when he asked former Health and Human Services Commissioner Albert Hawkins about the exemption, he was told the commission had already imposed as many restrictions as would pass constitutional muster.

In essence, it appears that Deuell’s approach here is twofold: Either Title XIX could allow the state to bar Planned Parent­hood’s participation in the WHP for no stated reason, or perhaps the state could adopt a new definition of “affiliate” – one that would still define Planned Parenthood as an abortion provider despite the work the clinics have done to differentiate themselves from one another.

According to Deuell’s chief of staff, Don Forse, the senator wants Abbott to weigh in on the HHSC’s legal interpretation and determine whether the “affiliate” provision applies to Title XIX grants. “HHSC has taken the position that the same federal eligibility restrictions that apply to Title X also apply to Title XIX,” Forse said in an e-mail. “Senator Deuell does not believe that to be the case and has asked [Abbott] to clarify the matter.” (As a matter of law, it does seem that the same provisions do apply to Title XIX. Generally, an entity engaged in a legally protected practice cannot be punished just because another party disagrees with that practice.)

Deuell did not respond directly to questions for this story, but he has said he wants the state’s limited pool of women’s health funds funneled first to so-called “federally qualified health centers,” which would essentially serve as one-stop health care shops, with less emphasis on women’s reproductive health issues. “I’m trying to set up a system of family planning that’s more complex than giving birth control pills and testing for STDs, which is what Planned Parenthood does,” Deuell told a Dallas TV station.

That characterization isn’t entirely accurate: Planned Parenthood also provides screenings for cervical and breast cancers, hypertension and diabetes, among other services. According to a preliminary count reported in an internal HHSC document, Texas Planned Parenthood clinics serve nearly 300,000 clients annually and in 2009 served 41% of all clients enrolled in the Women’s Health Program, at an average cost of $99.42 per client (this preliminary count does not include numbers from San Antonio). The same year, federally qualified health centers served just 7% of WHP participants, at an average cost of $150.23 per client.

While it may be advantageous to designate federally qualified health centers as the primary health care provider for uninsured women in Texas, the reality is that in the years since Deuell’s 2005 rider took effect, the state’s FQHCs have not been able to use all the funding allocated to them, returning nearly $1.2 million to the state this year alone. Moreover, the FQHCs have spent considerably more to serve far fewer clients than the state’s public health providers.

It would likely be detrimental to the existing state structure to remove Planned Par­ent­hood as a major provider in order to steer work to the FQHCs – Deuell’s preferred provider. “It is unfortunate that one politician’s personal agenda could jeopardize our clients’ ability to continue to rely on our health centers to keep them safe and healthy,” said Sarah Wheat, vice president of community affairs for Planned Parenthood of the Texas Capital Region, which operates three local clinics, including the Seventh Street clinic – a provider of family planning and health screenings for low-income women and a participant in the Women’s Health Program.

Deuell’s request comes on the heels of an HHSC report that touts the success of the nascent Women’s Health Program. According to the report, in 2008 the WHP reduced Medicaid-paid births by more than 10,000 (more than half of Texas’ births are paid for by Medicaid), saving the state more than $40 million – $20 for every $1 invested in the program. The program is up for renewal next year, and some advocates fear that Deuell may be trying to lay groundwork to dismantle a successful model of frontline health care for poor women. “I find it astounding that a legislator that claims to be fiscally conservative would even consider [dismantling] a program that saved Texas … $40 million last year,” says Fran Hagerty, CEO of the Women’s Health & Family Planning Association of Tex­as. “That to me is just ludicrous.”

Abbott’s decision is expected early next year.

EL PASO — Texas Democratic gubernatorial candidate Bill White released an ethics reform proposal to bring “transparency and openness in government.”

White arrived in El Paso on Wednesday afternoon from Fort Worth, where he first released his proposal for ethics reform.

White’s plan has eight points involving rules for appointments of staff and openness of campaign contributions. He said that, if elected, he would not use state positions as a “self-serving, partisan political machine.” He said his proposal for ethics reform would require the government to disclose more information than Gov. Rick Perry’s does.

“It’s important for people to know how their government works, who has influence and who may have influence,” White said.

White said Perry has appointed 42 people to various positions who each have contributed more than $100,000 to Perry’s campaign. He said their contributions total about $9.7 million. White said Perry’s finance committee has 120 members, and more than 100 have been appointed to boards and commissions.

“The people he’s appointed on his finance committee have contributed $5.3 million,” White said. “He’s made over a thousand different appointments of his donors to boards and commissions, and they all tend to be overwhelmingly of one political party.”

Catherine Frazier, spokeswoman for the Perry campaign, said it was hypocritical of White to accuse Perry of appointing people who have contributed to his campaign when White has also appointed a number

of campaign donors to positions.

“The governor appoints people based on qualifications and nothing more,” Frazier said. “People contribute to his campaign because they believe in his leadership, and it is their First Amendment right to believe him. People have a right to believe in his leadership.”

She said that White’s accusation is being used to deflect attention from a lack of policy initiatives, and that White has been accused of some questionable business ethics and has refused to release all of his tax returns.

But White says he has released more of his tax returns while in office than Perry has. White said he expects accusations to continue because Perry always runs negative campaigns.

The latest attack against White was released by Rob Johnson, Rick Perry’s campaign manager, in a statement Wednesday asking White to apologize for a statement he made Tuesday in Dallas to a group of African-American leaders. Johnson said White made “racially motivated remarks” when he said, “We need a governor who’s a servant, as opposed to Rick Perry, who wants to be treated as master.”

White said that his remark had no racial connotation, and that he uses the line in his speeches all the time. He said no one was offended or asked him to apologize.

“This is the most far-reaching ethics proposal applicable to the governor’s office that’s been proposed in the state of Texas that I have seen,” White said. “We need more transparency and openness in government.”

Caylor Ballinger may be reached at cballinger@elpasotimes.com; 546-6156.

Less than a year ago, Texas universities and medical schools were clinging to a sliver of hope they may be able to gain ground on competitors in other states.

With other state budgets in the toilet — especially California’s — universities touted Texas’ relatively stable budget to poach high-caliber students and faculty from other states. But with an $18 billion budget shortfall looming in the upcoming legislative session, the sliver of hope is gone, said university presidents at Thursday’s meeting of the University of Texas board of regents.

Earlier this year, Gov. Rick Perry ordered a 5 percent budget cut for all state agencies and has asked them to plan for an additional 10 percent cut over the next biennium.

“There was a sense a year or so ago that we were at a competitive advantage, and I think there was some truth to that. That has changed,” said William Powers, president of the University of Texas at Austin. “I would trade my budget from all sources with UCLA’s budget, and we all know what is going on in California. We are still behind them and these cuts will put us further behind.”

As the state’s top-ranked national research university, UT Austin is competing with institutions that spend nearly double what UT does per student.

According to the Delta Cost Project, public research universities in California spent an average of $22,489 per student in 2008, compared with $12,218 in Texas.

For the state’s seven emerging research institutions, including the University of Texas at San Antonio and the University of Texas at Dallas, cuts will inevitably slow progress toward becoming Tier One universities.

To chop $8.8 million from its budget, UTSA has said it would forgo salary increases and hiring.

“Budget cuts make it more difficult to reach Tier One, but we have said all along this is a marathon, not a sprint,” said UTSA spokesman David Gabler. “It needs to be carefully planned and executed over time. Yes, cuts will make it slower, but we can’t take our eye off that prize.”

David Daniel, president of UT Dallas, said he sees no relief on the horizon and planned for the cuts by raising tuition and private fundraising.

“Our tuition is higher than UT Austin and we don’t apologize for that,” he said.

Robert Nelsen, president of University of Texas-Pan American in Edinburg, said his border-region school had little money to begin with. Further cuts will spell the death of recruiting in high schools, sustainability initiatives, increasing bandwidth on campus, faculty development, conferences and travel, to name a few.

“We are going to kill some of those scared cows because that is the only way to do it,” Nelsen said. “I can no longer keep my promise that I made when I went down there, which is no layoffs. We are at the point now where the layoffs begin.”

Despite hard times, Chancellor Francisco Cigarroa said the system cannot abandon its two-pronged mission of excellence and service. Leaders must find a way to invest in strategic hires at the top and expand medical education along the border, all while wringing more efficiency out of the operation.

For instance, regents approved $35 million for a program called STARs to attract and retain researchers. So far, UT has spent $85 million on STARs faculty, who have in turn hauled in more than $345 million in research grants and clinical trial support.

“We have no option but to be stellar in order to transcend the issues of our time,” Cigarroa said.

At the meeting, regents approved a $12.8 billion budget for the system’s nine universities and six health science centers. Overall it was an increase of 7 percent, but the portion from state coffers decreased by 4.4 percent.

The budget did not include a pay raise for Cigarroa, at his request.

The flooding in Pakistan is an immense catastrophe and has overwhelmed the ability of the Pakistani government to respond. As the Progress Report today explains, “massive monsoonal flooding continues to ravage the country, leaving one-fifth of Pakistan underwater. After weeks of flooding, about 14 million people have already been affected by the floods — including six million children — and estimates of the dead have ranged from 1,200 to 1,600.” While the world has been slow to give, the US has been proactive, providing the most assistance thus far. Helicopters have been sent to the area and have “evacuated 3089 people and delivered 322,340 pounds of relief supplies,” with more on the way. Naval vessels have been parked off Pakistan’s coast to provide logistical assistance. Tanvir Ahmad Khan, a former Pakistani foreign secretary noted from Islamabad that:

The American assistance has been considerable, it has been prompt, and it has been effective.

Not only is helping people in desperate need a very good and moral thing to do, but as Larry Korb and I have argued previously, providing foreign assistance and humanitarian relief in the wake of a disaster is fundamentally in the US national interest. Rahm Emanuel’s statement that one “should never allow a crisis go to waste” is a reflection of the opportunity for change and transformation that a sudden crisis brings about. While this can be viewed cynically, the fact is that the same applies to the floods in Pakistan.

While working with Pakistan is vital to broader US counter-terrorism aims, the Pakistani public has an immensely negative view of the United States. Providing disaster assistance won’t automatically make everyone love us, but it will have an impact. Being on the ground providing aid and assistance in desperate situations following natural disasters, is something that is not soon forgotten. After an initially slow start following the Tsunami disaster in 2004, the US military and US aid agencies mobilized. The military essentially created a sea base, involving a flotilla of ships, of the coast off Indonesia. The US had 15,000 troops in the region and went about urgently ferrying needed supplies to the destroyed coastal regions that were unreachable by land due to the destruction of infrastructure. Following this effort, a Pew Survey found that 80 percent of the citizens of the world’s largest Muslim-majority country had a more favorable opinion of the United States after our response.

The US needs to think more strategically about how to make disaster response a core function of its foreign policy mission than an after thought. In short, the US should embrace being the world’s first responder.

Principally, the US military should make disaster response a core mission. Some may rightly worry about the militarization of aid, and there is no doubt that any disaster response would have to be a multi-agency activity with the expertise of USAID and State taking the lead roles. But no other agency, or frankly country, can provide the logistical reach and capabilities as the US military. As the Joint Chiefs of Staff chairman, Adm. Mike Mullen, commented during the Tsunami response, “We literally built a city at sea for no other purpose than to serve the needs of other people.” Yet disaster response remains an afterthought and is rarely taken into account in procurement decisions and in the design of new systems.

Some may see the mantle of global first responder as a distraction from “hard” security concerns. But this is nonsense. Responding to natural disasters helps promote stability, improves the image of the United States, and often improves ties and coordination with the affected country’s government. Finally, responding to natural disasters is the price of being the world’s largest superpower. As the guarantor of global security, the U.S. is looked to not just for its ability to deter threats but also for its ability to help when countries are in need. If we are going to have a global military presence, it would make sense for this presence to be seen globally in as positive a light as possible – and being seen as a global first responder is one such way to make this happen.

WASHINGTON — Determined to show a commitment to stopping the flow of illegal immigrants, the Senate convened a special session Thursday and passed a $600 million bill to put more agents and equipment along the Mexican border.

The voice vote in the nearly empty Senate chamber sends the legislation to President Barack Obama, who planned to sign it into law today.

Sen. Chuck Schumer, D-N.Y., the chief sponsor, said the measure would provide Obama and Homeland Security Secretary Janet Napolitano “with the boots on the ground and the resources necessary to combat the crime and violence.”

House Democrats had also called a special session, summoning lawmakers back from their summer break Tuesday to pass the border security bill and a $26 billion aid bill to keep teachers and other public workers from being laid off.

Both issues — jobs and border security — are among those expected to be on voters’ minds when they go to the polls in November.

Senate historian Donald Ritchie said it is only the second time since the August break became official policy in 1970 that the Senate had reconvened. The first time was after Hurricane Katrina in 2005.

The border security measure would fund the hiring of 1,000 Border Patrol agents to be deployed at crucial areas, 250 more Immigration and Customs Enforcement agents and 250 more Customs and Border Protection officers.

It provides for new communications equipment and greater use of unmanned aerial surveillance.

Seven such drones are now deployed along the border with Mexico.

The bill will be paid for by raising fees on foreign-based personnel companies that use U.S. visa programs, including the popular H-1B program, to bring skilled workers to the United States.

“This increase in support for our border enforcement officials is a good start,” said U.S. Sen. Kay Bailey Hutchison, R-Texas. “However, we must do more to secure our borders and keep Texas communities safe.

“I introduced legislation that would have given law enforcement officials the resources and the manpower to monitor all 2,000 miles of our southern boundary every single day using [unmanned aerial vehicles] and other high-tech tools. We must take a 21st-century approach to keep our nation safe.”

Staff writer Anna M. Tinsley contributed to this report.

I come to you this morning from the Renaissance Hotel, where both Gov. Rick Perry and Democratic challenger Bill White will address the Texas Association of Broadcasters. Separately. The program starts early, so FR will be shorter than usual.

But we’ve got an exclusive: Perry will not meet with newspaper editorial boards leading up to his faceoff with White, Perry spokesman Mark Miner said.

“We’ve made the decision that a better use of the governor’s time is to talk directly to Texans and reporters throughout the state,” Miner said, adding that the Perry campaign will also continue to use social media extensively.

Perry will field questions from reporters after his public events and in interviews. What he won’t do is go to newspapers around the state and spend an hour or more at each stop answering questions from editorial writers, editors, publishers and whoever else sits in on those meetings.

Perry did not meet with any editorial boards in the March Republican primary, and it worked out pretty well for him. He beat his chief rival, U.S. Sen. Kay Bailey Hutchison, by 20 percentage points. The question is, will his decision to snub the top brass at the state’s newspapers make more of an impact in a general election?

The Perry camp doesn’t appear to think so. But there is some danger here in light of the fact that Perry also says he will not debate White until White meets his demands, which are that White release tax returns from his years in the U.S. Department of Energy and as chairman of the Texas Democratic Party.

White has been highly critical of Perry’s decision to skip editorial boards in the primary, suggesting that the decision shows Perry’s arrogance. And White is making a thorough effort to meet with those boards. He recently stopped for an endorsement interview at the Killeen Daily Herald, which isn’t exactly a traditional stop for gubernatorial candidates.

Miner said Perry isn’t afraid to take questions. “Governor Perry’s the most scrutinized governor in the history of Texas,” Miner said.

Perry met with editorial boards in his 2006 re-election. That year, the Dallas Morning News, San Antonio Express-News and Austin American-Statesman were among the newspapers that endorsed him.

But he’s skipping some conventional campaign practices this year. Remember, this is the guy who won the primary without any yard signs or direct mail.

• From the Statesman’s Tim Eaton: “GOP Gov. Rick Perry’s campaign on Wednesday accused Democrat Bill White of making a racially charged statement, setting off a flurry of defensive reactions from White’s supporters in the African American community. It was the first time this year that the governor’s race, the most competitive Texas has seen in 16 years, fully waded into the issue of race. White upset the Perry campaign when, according to The Dallas Morning News, he said in southern Dallas on Tuesday, ‘We need a governor who’s a servant, as opposed to Rick Perry, who wants to be treated as master.’ Perry campaign manager Rob Johnson said White’s comments to an African American audience in Dallas were ‘insensitive’ and ‘racially motivated.’”

• In my print column this morning, I discuss how a group of U.S. Sen. John Cornyn’s allies in Texas have assumed leadership of, and revitalized, the Associated Republicans of Texas. “By 2009, Democrats were within two Texas House seats of a majority, and the party’s two biggest Texas names — Gov. Rick Perry and U.S. Sen. Kay Bailey Hutchison — were fighting for the governorship. Many in the Republican establishment spotted ART as a good vehicle to prepare for life after the Perry-Hutchison primary and help the GOP push back against recent Democratic gains. Operatives and donors with ties to Cornyn saw this opening and assumed a larger role. Todd Olsen, who worked for Cornyn during his Senate re-election in 2008, is the group’s main consultant, while Dallas investor George Seay III, the grandson of former Gov. Bill Clements and a key member of Cornyn’s 2008 finance team, became one of ART’s key fundraisers. Karl Rove, the former adviser to George W. Bush, has also taken a renewed interest.”

• From Dave Michaels at the Dallas Morning News: “Jeb Hensarling was a career political aide when he decided it was time to leave politics for business. Fresh from eight years with Sen. Phil Gramm, Hensarling quickly landed a job with a hedge fund managed by Sam and Charles Wyly , the Dallas brothers and loyal GOP donors. The young politico hitched his financial future to the entrepreneurial duo, investing his own wealth in the hedge fund and several other Wyly-owned companies. Despite a working relationship that spanned nearly a decade, Hensarling has rarely touted his work for the Wylys. The relationship was mostly a profitable one for Hensarling, whose experience with the Wylys helped him launch a consulting business and achieve a level of corporate success that would make him an attractive candidate when he ran for Congress in 2002. But those ties may become a liability for the Dallas congressman. The U.S. Securities and Exchange Commission accused the Wylys on July 29 of insider trading and using offshore entities to hide $550 million in trading profits that should have been disclosed to investors.”

• Interesting story in the student newspaper at St. Edward’s University: “St. Edward’s University released a statement Wednesday explaining its decision to say no to a White House request to consider the campus as the venue for President Barack Obama’s speech in Austin earlier this week.”

• Houston Chronicle: “Homing in on what he sees as a potential Rick Perry weakness, Bill White unveiled an ethics-reform package on Wednesday that he said would clean up the appointments process, place a two-year prohibition on lobbying by former government employees and increase financial disclosure from the governor and his senior staff.”

• Texas Tribune: “Democratic gubernatorial candidate Bill White is again attacking his Republican opponent, incumbent Gov. Rick Perry, for accepting campaign contributions from political appointees — but the former Houston mayor is no stranger to the practice, according to a Texas Tribune analysis of campaign and city records. White has raised nearly $2 million over his years in public life from people he appointed to boards and commissions. In numerous instances, he would have exceeded the limits his own campaign recommended in a proposal unveiled on Tuesday.”

Countdown

66 days until the first day of early voting.

82 days until Election Day.

Everything else

Austin weather from News 8 Austin’s Maureen McCann: Partly sunny, hot, and humid. Slight risk of a brief afternoon shower. High of 101.

Yankees 7, Rangers 6

Saw the first five minutes of the season premiere of “Hard Knocks,” this year starring the New York Jets. And now I get why everyone loves head coach Rex Ryan.

Send me an e-mail at jembry@statesman.com if you want a link to First Reading as soon as I post it. Also, you can follow me on Twitter for news updates around the clock.

Get more Legislative coverage inside the Virtual Capitol

EL PASO — Healthy populations and gainful employment are the fundamental keys to protecting the nation’s borders, experts said Wednesday at the 7th Annual Border Security Conference.

Health care, especially with the expected U.S. reforms, can provide an engine to boost economic activity and create jobs on both sides of the border, they said, which will reduce the need for illegal crossings. The subject was discussed on the first day of the conference, which continues today at the University of Texas at El Paso.

“Instead of building walls and defenses, build bridges,” said Eva Moya, a UTEP assistant professor with the College of Health Sciences. “Health is not a private good. Instead it should be referred to as a public good.”

Obstacles include poverty, illness, drug-cartel violence, crime, pollution and personal loss, Moya said.

“We seem to have families who are losing hope,” she said. “In health there is hope.”

Mexican health-care providers offer less expensive options, some that match U.S. quality, and create jobs, said members of a morning panel. Medical schools and teaching hospitals on both sides of the border inject money into the local economies and provide trained workers, they said. And U.S. health-care reform will significantly increase demand for health-care workers, said Dr. Jose Manuel de la Rosa, the founding dean of the Texas Tech University Health Sciences Center Paul L. Foster School of Medicine.

“There will not be sufficient physicians to attend the

newly insured,” he said.

The recently created four-year medical school in El Paso, at about 30 percent capacity, already has injected hundreds of millions of dollars into the region’s economy, de la Rosa said.

Across from El Paso, the Universidad Autónomo de Ciudad Juárez is also training medical personnel, said Dr. Hugo Staines-Orozco, director of the university’s Biomedical Sciences Institute.

“We are in continuous growth,” Staines said. Even with the drug-cartel related violence in Juárez, the number of students and faculty has been growing, Staines said. Many of the 4,791 students studying at the institute are rising out of poverty. About 60 percent of the students receive some type of financial scholarship, he said.

Most of the students at a Juárez nursing school run by the Mexican Federation of Private Health and Community Development, or FEMAP, are also on partial scholarships, said Dr. Enrique Suárez, FEMAP’s executive director for Juárez programs. And the school is turning out graduates whose scores are among the best in Chihuahua state, he said. The school has produced 850 nurses in 17 years, he said, and 500 students are enrolled for the 2010 academic year.

However, a lack of resources forced the school to turn away 200 qualified applicants for lack of space, he said.

More skilled Juárez medical workers also will boost medical tourism, Suárez said. Many El Paso residents cross the border for dental and medical care and to buy prescription drugs, all of which are generally cheaper there.

But violence is discouraging that activity.

Dr. Juan S. Rios has a dental practice in Juárez that caters to U.S. customers. He has seen a 70 percent drop in U.S. customers, he said.

“I’m only one block from the bridge. There haven’t been any problems around the bridge,” Rios said in a phone interview.

Bad economic times are bringing some back. “My prices are quite a bit lower,” he said.

Prescription drugs typically cost less in Juárez, according to a recent study co-written by Thomas M. Fullerton, a UTEP professor of economics and finance. In 2006, according to the report, U.S. consumers bought nearly $285 billion in pharmaceutical products. Escalating prices pushed people into Canada and Mexico where the “savings are frequently quite large,” the report states.

There too, cartel-related violence has changed people’s habits, Fullerton said.

“Anecdotal evidence suggests that fewer trips are being made to (Juárez) pharmacies,” Fullerton said in a phone interview. “What is not clear is whether those trips are translating into larger purchases.”

Although no hard data exist, he said, the recent closings of several Juárez pharmacies that catered to international customers indicate that people are buying less.

Despite the obstacles, some are finding binational solutions.

Sistemas Médicos Nacionales provides health-care coverage for Mexican citizens who live in Mexico and work legally in the United States, said Chief Executive Officer Francisco Carrillo, a panel member.

California allows such cross-border ventures, but Texas, New Mexico and Arizona do not, he said. The care is provided in Mexico, which creates jobs, and premiums are, on average, 50 percent to 60 percent lower for equivalent coverage, he said.

“Employers can save millions of dollars,” Carrillo said. “For many California employers, it is the only way to provide benefits for all their employees.”

Quality is monitored both by the state of California and the insurance companies, he said.

“Our care is comparable to care in any system in the United States and anywhere in the world,” Carrillo said.

And allowing U.S. retirees living in Mexico to use their Medicare at qualified facilities would provide a significant economic boost, he said.

“Mexico will no longer be a poor country,” Carrillo said. “It will no longer require aid from the United States. We will no longer have illegal crossings.”

Chris Roberts may be reached at chrisr@elpasotimes.com; 546-6136.

Ralph K.M. Haurwitz | The Austin American-Statesman

Six hundred staff and faculty jobs would have to be eliminated during the next two years or so and the quality of the educational experience would decline if the state Legislature cuts funding for the University of Texas by 10 percent, the school’s president warned Thursday.

The job losses would be in addition to positions already being shed as a result of a previously imposed 5 percent cut in state funding. Layoffs in the current budget year, which ends Aug. 31, total 288 so far.

Legislative leaders have directed public universities and agencies to submit budget plans incorporating an additional 10 percent reduction, but lawmakers won’t settle the matter until they meet next year in Austin.

UT President William Powers Jr. told the UT System Board of Regents that a 10 percent cut in appropriations of state tax dollars would erode the university’s ability to hire and retain faculty members, to attract top graduate students and to sustain its student-faculty ratio, now at 18 to 1.

“These cuts are not coming off excessive budgets in any way,” Powers said. “At the end of the day, we will have larger classes. We will have fewer sections of required and basic courses. It will slow our increase in advising in undergraduate studies. Ultimately, it will have an impact on the quality of the educational experience.”

Powers said he didn’t know how many of the 600 positions would be eliminated by layoffs and how many would be taken off the books through retirements and other forms of attrition. Some tenured faculty members could be offered buyouts to retire, an approach already under way in UT’s largest academic unit, the College of Liberal Arts.

Tenured and tenure-track faculty members have been spared in the current round of layoffs, with most of the pink slips going to staff members. Some teaching slots held by lecturers and graduate students also have been eliminated.

“It would be hard to imagine a 10 percent cut without some actual layoffs,” Powers said.

The university has about 25,000 employees.

The grim projections for the UT System’s flagship campus came on the second day of a two-day Board of Regents meeting at which officials sought to emphasize the economic value to the state of a robust higher education system. The message was somewhat similar to that delivered earlier in the week at UT by President Barack Obama, who declared education to be “the economic issue of our time.”

UT System officials said they have spent $85 million in six years to recruit and retain top faculty members at the system’s academic and health campuses, with those faculty members obtaining $345 million in research grants and clinical trial funding, primarily from the federal government.

Officials said they would carry the message that higher education is a wise investment to the Legislature. Colleen McHugh , who leads the Board of Regents, said she would be active in representing the UT campuses’ interests before lawmakers.

Regent James Dannenbaum said it might be time to break out bumper stickers with the following message: “If you think education’s expensive, try the cost of ignorance.”

Other UT Board of Regents action

The University of Texas System regents also:

Reinstated a provision of the ethics code for their investment unit that had been dropped two years ago. Under the tightened rule, the University of Texas Investment Management Co. and members of its board of directors are barred from putting money into the same private equity and hedge funds.

Approved a $12.8 billion operating budget for the 15-campus system for the budget year starting Sept. 1. That amounts to an increase of 6.9 percent, or $829 million, over the current budget. Revenue sources include state appropriations, tuition and fees, research grants and health care.

Authorized spending $17.7 million to build athletic department offices in vacant space at the north end zone of UT-Austin’s Royal-Memorial Stadium. Debt from bonds issued to pay for the work will be paid back with athletic revenues. Space at Bellmont Hall currently used for athletic offices will be used for academic programs.

rhaurwitz@statesman.com; 445-3604

AUSTIN – Gov. Rick Perry’s appointee as chairman of the Texas Alcoholic Beverage Commission is soliciting contributions for the governor’s re-election campaign from the owners of bars and restaurants he regulates.

In an e-mail to hundreds of restaurants that serve alcohol, José Cuevas seeks donations of $1,000 to $5,000 for a Perry fundraiser next month at an Austin steakhouse.

Cuevas, a Midland restaurateur, was appointed by Perry to the commission in 2004 and was named chairman last year. The agency regulates all phases of the alcoholic beverage business in Texas, including the restaurants whose owners he asked to give money.

Cuevas was not identified as chairman of the commission, but he acknowledged that those receiving the e-mail would have known who he was. Both he and the governor’s campaign defended the solicitation as coming from a fellow restaurant owner, not as someone who regulates restaurants.

“In this case, you have a letter from someone who is a longtime restaurant owner who is soliciting money from people in the same business,” said Perry spokesman Mark Miner.

The solicitation violates no laws, as it came from Cuevas personally and not under the official auspices of the Alcoholic Beverage Commission. Members of state boards and commissions receive ethics training, but Miner declined to say whether the Republican governor has a policy on political activity by his appointees.

Craig McDonald of Texans for Public Justice, which tracks campaign contributions, said the notion that Cuevas was acting solely as a businessman isn’t good enough.

“The people receiving this letter, the restaurant and bar owners, can live or die by his actions,” McDonald said. “The recipient thinks, ‘Do I have to give or do I not have to give?’ This is totally a conflict of interest.”

The fundraising e-mail went to more than 200 people in the restaurant business, including owners, suppliers and attorneys. It included a reply form for donors to e-mail the Perry campaign with their pledge.

The solicitation, signed by Cuevas and three other Perry supporters, touts the governor’s stewardship of the state as “good for business, plain and simple.”

In a veiled reference to Perry’s challenger, Kay Bailey Hutchison, the fundraising appeal denounces “Washington politicians” and repeats a campaign theme that Perry is responsible for job creation and economic development.

“The only thought I gave is that these are the guys who are usually politically involved in restaurant issues,” Cuevas said. “They understand politics and are always involved.”

The fundraising appeal raised eyebrows among several lobbyists and restaurant owners, who said they could not recall a similar solicitation.

“It’s certainly a little odd. It’d be like the racing commissioner sending out a fundraising letter to all the tracks,” said one Austin lobbyist, a Republican who spoke on condition of anonymity because of concern his clients might be punished.

Said a Democratic lobbyist, who also asked not to be identified: “It’s the only letter I’ve ever seen from a regulator to a group of people [he regulates] asking for this kind of support.”

Ralph Sheffield, a restaurant owner from Temple who is a Republican member of the Texas House, said Cuevas probably signed the fundraising e-mail out of loyalty to Perry.

“He wears a couple of hats,” Sheffield said. “Probably José is wearing the restaurant hat, not the regulator hat, when he signed that letter.”

Miner said that although Perry has no problem with Cuevas’ solicitation – “None at all” – he would not say whether the governor has a general policy on state regulators soliciting those they regulate.

“I’m not going to comment on hypotheticals,” Miner said.

The Texas Restaurant Association has supported Perry in the past, although the trade group has not chosen sides between Perry and Hutchison, who will face each other in the March Republican primary.

Campaign records show that Perry has received more than $400,000 from restaurant interests since he became governor in 2000. In addition, he has raised nearly $800,000 from beer and liquor interests regulated by the TABC.

As a candidate seeking statewide office for the first time in 1990, Perry called for an investigation of his Democratic opponent, Agriculture Commissioner Jim Hightower, because a grain and seed regulator under Hightower was soliciting campaign contributions from those he regulated.

Perry’s campaign manager denounced “the shakedown of people regulated by the Texas Department of Agriculture” and said that “this kind of political strong-arming is reprehensible.”

Two major teachers’ unions in Texas released comments yesterday about the $813 million appropriated for our schools, thanks to the hard work of Congressman Lloyd Doggett.

Linda Bridges, president of the 65,000-member Texas AFT (the statewide affiliate of the American Federation of Teachers), released the following statement, urging Rick Perry to accept the money without delay (emphasis mine):

“With a new school year beginning this month for our budget-squeezed school districts and with more education job losses looming, Texas Gov. Rick Perry should do nothing to imperil the $830 million in federal aid for Texas public schools that won final passage in the U.S. House today.“Misplaced partisanship and unfounded concerns about state prerogatives cannot be allowed to put this urgently needed assistance at risk. Our schoolchildren need to be the priority, and they need their teachers and school support staff in their classrooms, not on the unemployment lines.

“There is no excuse for rejecting this help for our schools, as Gov. Perry has threatened to do. Texas teachers and educational support employees call on the governor to rethink his stance on this issue and make sure that the aid flows to Texas school districts without delay.”

A statement from Texas State Teachers Association President Rita Haecker praised Representative Lloyd Doggett and Congressional Democrats for doing right by Texas teachers:

“Texas educators say, ‘Thank you!’ With Texas’ public schools already under-funded, and the Texas Legislature facing an $18 billion revenue shortfall next year, this extra money couldn’t have come at a better time.”Some teachers are losing their jobs. Others are faced with higher health care premiums to help school districts balance their budgets. It is time for Governor Perry and other Republican leaders, who have been hyperventilating over political hyperboles, to quit playing political games with Texas teachers and school kids.

“What the Doggett amendment is attempting to do is make it clear that Texas will use the federal funds in the way the bill intends them to be used – maintaining current programs, retaining current staff and, where possible, hiring additional staff to handle the still-growing Texas student population.”

An estimated 1,000 to 2,000 Texas teachers lost their employment contracts this year. An additional, unknown number of teacher positions were lost to attrition amid a flurry of school district budget cuts throughout the state.

This funding will help prevent further job losses by educators, and help protect our kids’ education. The children of Texas need to be our priority, to make sure we have a workforce able to innovate and compete for good jobs now and in the future. Education is the bedrock of our society, the foundation of the American dream.

The children of Texas–the future of Texas–are depending on our government to accept and utilize these funds as intended immediately. A quality education can’t wait.

Yesterday, the U.S. House approved legislation that will reduce the budget shortfall in Texas by $850 million. Now, granted, that’s a fraction of the $18 Billion dollar deficit created by Rick Perry’s decade of failed leadership. Specifically, Texas will receive $850 million for its Medicaid program. An additional $813 million will go directly to Texas school districts for teachers and education staff support. But it’s a great start, especially since the Texas funds are allocated towards education and Medicaid, where they can do the most good for those who need the help most.

Seems like a no-brainer, right? Who doesn’t like lowering deficits? Who’s against investing the money in education and public health, where it will pay dividends in human capital for generations? Who would deny our schools and teachers the funding needed to educate the next generation of Texas leaders?

Texas Republicans, that’s who.

That’s why they all voted against it. Every single one of them. They voted against every teacher in their district, every hospital worker. They voted against putting more cops on the streets and more firemen in the firehouse all across America. Texas Republicans are so against helping average Americans, they voted against closing corporate tax loopholes for folks who ship jobs overseas, voted against helping to fund education for all Texas children.

(By the by, two Republicans did vote for the package–Rep. Cao of Louisiana, the sole Republican vote for health reform, and Mike Castle of Delaware, stuck in a tight race for Senate in a traditionally Blue State.)

It’s disgusting and callous to see Republican partisanship rear up and oppose such basic good government measures such as this. Thankfully the Democratic Congress was able to pass the package, and make sure that states have the funding they need to keep the lights on.

State Representative Garnet Coleman released a statement in support of the state aid package:

I’m thankful to the Democratic congressional delegation from Texas for securing these funds for our state. It’s sad that not a single Republican from our state’s congressional delegation was concerned about the budget shortfall in Texas.Governor Perry, who last year accepted $12 billion in federal stimulus dollars to help balance our state budget, did not lift a finger to help Texas get these funds.

In case you’re following along at home, Rick Perry didn’t try to get these funds because Rick Perry’s only in it for himself. He doesn’t give a damn about the schoolchildren of Texas. And neither, apparently, does any Texas Republican in Congress.

I guess the Republican Party has expanded their platform on this one to include no support for our schools and teachers, no funding for cops and firemen, and no common sense that reducing the deficit in Texas might actually be a good thing. But from the Party of No, that’s no surprise.

Yesterday, the House of Representatives passed a state aid package that will help 160,000 teachers keep their jobs, and also provide funds for more cops and firemen. Despite strong Republican objection, our Democratic Congress passed aid to help protect the jobs of these professionals who do so much to uphold the fabric of our society.

In this package is a Texas-specific amendment that will force our state to spend education aid on schools and teachers, preventing Rick Perry from using it to plug budget gaps elsewhere. Kudos to Lloyd Doggett for making sure this money goes where it’s intended–into our local schools and classrooms, making education better for all Texans.

Video of Representative Doggett’s comments below, with full text (emphasis mine) following:

“Listening to the concerns of parents, the hopes of students, and the needs of our local Texas school leaders, today we are responding with essential federal aid to education, fully paid for by closing international corporate tax loopholes that should never had been there in the first place.“Because we believe in local control of education, we require that the State of Texas, specifically, forward this new federal aid to our local school districts, not divert it or spend it on something else. The Texas Association of School Boards, Texas teachers, principals, and school administrators support this legislation and this approach.

“Now those, who have never wanted Texas or any other place in this country to receive a dime of additional federal aid to education, they complain that because we are holding Texas Governor Rick Perry accountable for proper use of these taxpayer dollars.

“There is absolutely no Constitutional limitation on doing right by our Texas schoolchildren.  Instead of concocting phony legalistic arguments Governor Perry and his cohorts here in Congress ought to be joining us in supporting quality public education.

“You can be sure that Texas is singled out by this legislation-it was singled out by the Governor who grabbed $3.2 billion of federal aid to education to bailout a mismanaged state government-that’s the bailout that occurred. It occurred last year in the State of Texas.  We didn’t send that federal aid for education to Texas to plug a mismanaged state budget; we sent it to help our schoolchildren.

“Today, in order to avoid history from repeating itself, we demand accountability, we demand support for quality public education and local control of education and not more mismanagement and interference from the State of Texas.”

Any Republicans have problems with this? Using education money on education, not to cover up fiscal mismanagement? Actually funding our schools and teachers, in order to provide our children–all of our children–with the best education possible? What about closing the tax loophole that benefited corporations shipping American jobs overseas? Anything?

You go, Lloyd Doggett! You may only represent a portion of our state, but your amendment has ensured a brighter day for schoolchildren all across Texas.

Houston trial lawyer Steve Mostyn will open a new front in his election-year war against Gov. Rick Perry today by launching a television commercial that criticizes Perry’s pursuit of the Trans-Texas Corridor.

Mostyn is fast becoming the pre-eminent donor in Texas Democratic politics and a key player in the race for governor. He has put more than $2 million into Democratic causes and campaigns in this election cycle and appears poised to spend several million more.

Much of that money has gone to the Back to Basics Political Action Committee, which has already aired two statewide television commercials critical of the governor.

In the group’s third ad, which will launch statewide today, a rancher says Perry “would bulldoze half a million acres of private land — and give it to a Spanish company to build toll roads and let the company set the tolls. When lawmakers tried to stop him, Perry vetoed the law.”

The 500,000-acre figure is a reference to early plans for the Trans-Texas Corridor, a long-range plan for 4,000 miles of cross-state tollways, passenger and freight rail lines, and utilities that Perry first laid out in 2002.

The corridor ran into considerable criticism in rural Texas, and members of Perry’s administration long ago, even while they were actively developing an Interstate 35 corridor plan, admitted that nothing close to that 4,000 miles would ever be built.

Later, in January 2009, transportation officials declared that the corridor concept was dead.

A few legal remnants of the plan are still on the books, and the state is still working on Interstate 69 from the Rio Grande Valley to Texarkana, which was a key part of the corridor. But the current plans for I-69 are vastly different from what the corridor plan envisioned, Texas Department of Transportation spokesman Chris Lippincott said.

“We’re not going to develop Trans-Texas Corridor projects,” Lippincott said.

Cintra , a Spanish company, never had a contract to build every road in the corridor, Lippincott said. Also, he said a private company would never have been able to set tolls because the state Transportation Commission would have had final say.

Back to Basics director Clifton Walker said Perry could try to revive portions of the corridor if voters re-elect him.

“Our land, homes and family farms just aren’t safe with Rick Perry as governor,” Walker said.

Back to Basics has relied heavily on Mostyn’s money to pay for statewide television ads knocking Perry for taxpayer spending on his western Travis County rental home and on his 2007 attempt to require schools to offer a human papillomavirus vaccine.

The group’s latest ad buy cost about $900,000.

Democratic gubernatorial nominee Bill White said recently that he isn’t coordinating with Back to Basics. But if the group’s ads are effective, they could prove a tremendous benefit to White: The spots would bruise Perry without costing White any of his own campaign money.

Perry spokesman Mark Miner dismissed the ad.

“Baseless attacks from Bill White’s front groups aren’t going to solve problems,” Miner said.

jembry@statesman.com; 445-3572

WASHINGTON – Texas would have to preserve its current education spending levels through 2013 to qualify for more than $830 million in federal aid under a Texas-specific provision signed into law Tuesday by President Barack Obama.

The mandate passed the House on Tuesday afternoon as part of a $26 billion jobs protection bill, despite strong opposition from Texas Republicans. Several said the amendment unfairly singled out the state and jeopardized its ability to receive the funds.

“This is another example of President Obama and the Democratic leadership messing with Texas,” said Rep. Joe Barton , R-Arlington.

Gov. Rick Perry said the provision, which applies only to Texas, is unconstitutional because state officials can’t guarantee future spending. And only days after Lt. Gov. David Dewhurst threatened legal action over the requirements, Perry promised to “fight this injustice.”

“It is unfortunate that Washington continues to play partisan games with Texans’ tax dollars and the very future of our children,” Perry said.

Rep. Lloyd Doggett, who authored the mandate, said he was trying to prevent a repeat of last year, when the Texas Legislature diverted nearly $3.2 billion in federal stimulus money from education spending to shore up the state’s budget.

“We have good reason to include in this legislation Texas-specific safeguards to prevent more such shenanigans,” said the Austin Democrat.

The political jousting might all be for naught, depending on how strictly the Obama administration interprets the provision. Scott McCown, a former Democratic state judge, said a “reasonable” reading would allow Perry to simply give assurances similar to those he made last year to receive stimulus money.

“All the governor has to do is promise in good faith that he’s going to aim for this target and that he thinks Texas can hit it,” McCown said. “If he does that, we get the money.”

U.S. Education Department officials said that they would follow the law but that they would work closely with Texas to ensure that the state receives the funds.

The law, which aims to ease budget crises in several states and prevent the layoffs of government employees, includes more than $830 million to help save about 14,500 jobs in Texas schools, according to Education Department estimates.

Dozens of Texas school superintendents, including Michael Hinojosa of Dallas ISD, and several groups representing school boards, school administrators and teachers have voiced their support for the legislation.

Rep. Chet Edwards, D-Waco, pointed to those organizations in explaining his support of the bill, and he blasted those decrying the Texas provision.

“The fundamental principle at stake is whether federal education funds should be used for Texas schoolchildren or state slush funds,” he said.

Democratic gubernatorial nominee Bill White dropped into Schertz Thursday for what was billed as a leisurely ice cream social.

Meanwhile, the governor’s race is beginning to show all the civility of an extreme cage fight.

White and Gov. Rick Perry have traded sharp, character-impugning blows over the last week, with White accusing the governor of “cash for favors” cronyism and Perry calling on White to withdraw from the race.

Perry’s attack focuses on White’s intervention, as mayor of Houston, in a billing dispute between the private company BTEC and Coastal Water Authority, an intergovernmental agency that provides water to the Houston area.

White has said he called on BTEC in 2005 to provide emergency generators as part of the Hurricane Rita relief effort. This week, records surfaced showing that he also interceded in a dispute over Coastal Water Authority’s debt to the company. In 2006, White invested $1 million in BTEC and has reported more than $500,000 in profit.

White has blasted Perry for a land deal in which the governor purchased Horseshoe Bay resort property in 2001 from his friend, state Sen. Troy Fraser, R-Horseshoe Bay, and sold it six years later at a profit of $850,000.

Fraser purchased the property from San Antonio businessman Doug Jaffe and Perry ultimately sold it to Jaffe’s business partner Alan Moffatt.

In an interview before his Schertz appearance, White said he saw no similarities between his and Perry’s transactions.

“I made no money at all for calling in a private company at the request of people who were in desperate straits,” White said. “I had no financial interest in the company and it benefited the public to have backup power generators.

“There was no public interest in Mr. Perry buying a piece of property from a mutual friend of Mr. Jaffe and selling it to a business partner of Mr. Jaffe. That was totally for his personal enrichment, and in the meantime, Mr. Jaffe’s company had a subsidy application that was pending in the government.”

Addressing a crowd of more than 100 supporters, White explained away his hoarse voice by noting that he has visited 44 counties over the last 36 days.

“I’ve come here for a job interview,” White said with a smile. He said the state government should be operated like a “well-run customer-service business,” but argued that Perry has run a “patronage machine” in which political allies are rewarded and foes are punished.

White mocked Perry for his forthcoming book “Fed Up,” which is expected to celebrate the virtues of states rights. White said Perry shortchanged the state’s public-education system by refusing to compete for federal Race to the Top funds.

“I’m fed up with a government that won’t bring our federal dollars home,” White said. “(Perry) plays the conservatives, he plays the Tea Party, he plays all of us.”

Perry says Bill White “profiteered in the aftermath of Hurricane Rita.”

A headline on one of GOP Gov. Rick Perry’s campaign websites underscores Perry’s criticism of Democratic nominee Bill White’s business dealings. White, the headline on liberalbill.org says, “profiteered in the aftermath of Hurricane Rita.”

That’s a powerful charge — worthy fodder for the Truth-O-Meter.

First, let’s check “profiteer,” which means someone “who makes excessive profits, especially by taking advantage of a shortage of supply to charge exorbitant prices,” according to Webster’s New World College Dictionary. The verb simply means to be a profiteer. Robert Prentice, a professor at the University of Texas McCombs School of Business, told us the word applies to someone who overcharges in instances of short supply or who simply seeks excess profits.

In a nutshell, Perry’s campaign says White profiteered after the hurricane hit the Gulf Coast near the Texas-Louisiana line in September 2005 because, it says, he had financial connections — before and while he was mayor — with a company that got an emergency contract to provide six electrical generators to a Houston-area water authority for three months.

In a June 10, 2010, press conference, White, who was mayor of Houston from 2004 through 2009, countered that he had no financial interest in the company — BTEC Turbines — at the time of the storm and hadn’t acted improperly when he encouraged the company to pitch in for the Coastal Water Authority, which supplies water to Houston, Baytown and Deer Park and dozens of industrial customers. (Its board of directors has seven members — four appointed by the mayor of Houston and three by the governor.)

The total amount paid by the authority to BTEC: about $1.9 million. The Federal Emergency Management Agency reimbursed the authority for nearly all the money spent on the generator contract, which was needed after the storm knocked out power to a pump station that sends water from the Trinity River to a reservoir near Baytown.

White spoke on the issue a day after personal income tax returns he released showed that he later made hundreds of thousands of dollars from investing in the Houston company.

Don Moore, a professor at the Haas School of Business at the University of California-Berkeley, said that for White’s post-hurricane investment in BTEC to be interpreted as profiteering, White would have had to know two things in fall 2005: that he would join the investment in BTEC “in the near future” and that the firm’s contract with the authority would “increase the sweetness” of that deal. Katy Bacon, spokeswoman for White’s campaign, said he did not have advance knowledge of the investment opportunity.

We scoured documents cited by Perry’s campaign, minutes from Coastal Water Authority board meetings and a packet of documents provided by Vinson & Elkins, the authority’s outside lawyers, for indications that either BTEC or White acted as profiteers from the emergency contract.

What we found: Two members of the authority’s board of directors, Darryl King and Rick Cloutier, questioned the contract costs at the board’s October 2005 meeting. According to board minutes, Cloutier said the generators could be purchased for the same cost as renting them. The authority has since made a plan to buy back-up generators.

On Aug. 4, 2010, the Associated Press reported that Mayor White later encouraged the authority to settle up with BTEC after the authority disputed some charges that it thought were too high. A final payment was arranged about eight months before White invested in BTEC. The authority ended up paying BTEC about $264,000 of more than $424,000 in disputed charges, according to the AP story.

Cloutier, now a senior vice president with engineering and construction firm CDM in Houston, told us that after Rita hit, the board was pleased that the authority could get the equipment because “it was awful hard to come across generators at that time.” He said the dispute between the authority and BTEC dealt with another aspect of the contract, the purchase and storage of diesel fuel that the authority didn’t use because power was restored a few days after the storm.

“It didn’t make sense to pay hundreds of thousands of dollars for fuel and maintenance folks that we didn’t need,” Cloutier said.

So, why didn’t the authority end its BTEC deal as soon as power was restored? Cloutier said the board didn’t think that was an option. “We were being held to the terms of the contract,” he said.

Clark Lord of Vinson & Elkins, an outside lawyer for the authority, declined to discuss generator costs. But John Agnes, a salesman for Mustang CAT, which sells generators in the Houston area, told us the $252,000 monthly generator rental charge in the authority’s BTEC contract is roughly equivalent to what his company would charge for providing such generators in a period of high demand.

The rest of the authority’s costs, about $1.2 million, were associated with installation, supporting equipment, personnel and fuel. (In October 2005, the authority’s board backed a resolution approving the agreement with BTEC and said the costs were not to exceed $2 million.)

Next, we explored White’s connections to BTEC both before and after the hurricane came ashore in September 2005.

Perry’s campaign notes correctly that before becoming mayor, White served on BTEC’s board by virtue of his job as president and CEO of the Wedge Group, a private Houston investment company with interests in oil service companies, commercial real estate and hotels. The Wedge Group bought a 70 percent stake in BTEC in December 2001, according to a December 2001 Houston Business Journal report.

After his election in 2003, White resigned from Wedge and the BTEC board. Wedge later severed its ties to BTEC; Richard Blohm, general counsel for the Wedge Group, told us that “it has been a few years since we had any ownership interest at all.”

How did White regain an interest in BTEC? In December 2006, White invested in BTEC through the Sterling Group, one of two private equity firms that bought a majority stake in the Houston company that year. Bacon told us that the Sterling Group contacted White to get his opinion about the company and White said he thought so highly of it that he would put his own money into it. The firm later took White up on that and invited him to invest, Bacon said.

The AP reported Aug. 4 that White owns about 1 percent of BTEC.

Through July 20, 2010, Bacon said, White had put $552,000 in cash and $324,480 in loans into the BTEC investment and received $1.25 million in cash back — a gain of about $375,000.

Perry’s “profiteer” case against White features two other financial connections — a deferred-compensation account that was set up before White left Wedge in 2003 and payments White received from Wedge in 2005.

Let’s look at the deferred-compensation account first. According to White’s personal tax returns from the years he was mayor, White received payments from the account each year from 2005 (about $82,000) through 2009 (about $84,000).

Bacon told us the deferred-compensation account, held by a brokerage firm, was funded with income White earned while still at Wedge that was then invested in publicly traded stocks and mutual funds, not in BTEC or Wedge. She said the payments White received were not influenced by Wedge’s performance after 2003.

What about the more than $3 million White reported receiving from Wedge in 2005? In a financial summary White released to reporters this year, that money is described as “contractual payments” based on gains from investments that White had managed for the company prior to 2004. Bacon told us none of the investments was related to BTEC.

We checked back in with the Perry campaign about the profiteering charge. Spokesman Mark Miner said the history of White’s financial involvement with Wedge, BTEC and the 2005 authority contract proves White profiteered from Hurricane Rita.

We disagree. Questions have certainly been raised about whether the authority paid too much for its deal with BTEC, but even if it did, that would serve as evidence that BTEC reaped excessive profits from the hurricane contract, not White.

Whether White improperly intervened on behalf of BTEC to settle the contract matter is another issue, which isn’t the statement we’re reviewing.

Upshot: White had a prior relationship with BTEC when he played a role in the company’s getting post-hurricane work and he later made what turned out to be a profitable investment in the company.

Those decisions might open White to conflict-of-interest criticisms. However, Perry’s characterization of White as a profiteer doesn’t bear out. We rate Perry’s claim False.

Katherine wrote about it below, but I want to hammer this point home very clearly:

Rick Perry and David Dewhurst are lying.

Rick Perry and David Dewhurst are claiming that Congressman Lloyd Doggett’s amendment is somehow unconstitutional. They are completely and totally lying.

All Doggett’s amendment does is ensure the “state maintenance” of education funds. As Harvey Kronberg wrote in Quorum Report:

There’s the curious matter of the substance of the Republicans’ objection. The language that Doggett added in his amendment to the edujobs bill is intended to guarantee a level of “state maintenance” in the next biennium. Republicans insist Perry can’t bind future legislatures; yet that appears to be exactly what the Governor did when he signed Page 4 of the State Fiscal Stabilization Fund application to receive the original stimulus package in 2009. That page guaranteed “maintenance of effort” in future years.

Meanwhile, Doggett’s amendment would save 15,400 jobs in Texas. Of the $830 million that would go to Texas’ public schools, the vast majority — much more than 65% — would go to classroom instruction. There is nothing tyrannical, evil, or wrong about Doggett’s amendment. On this one, Democrats are clearly right, we are clearly acting responsibly for Texans, and all of us — every single one of us, including the newspaper reporters, TV station anchors, and my fellow bloggers reading this right now — have an obligation to tell the truth.

Rick Perry and David Dewhurst are lying when they say this bill is unconstitutional, and their frivolous lawsuit could kill 15,400 Texas jobs.

But the state’s incarceration rate would be “going straight up again – and it would be fast” if cuts were made, she said.

The diversion programs’ uncertain future demonstrates a potentially recurring problem: Cuts that lawmakers make now to prevention efforts – whether aimed at disease, child abuse, high school dropouts or ex-cons’ relapses into drug abuse – could cause long-term woes that cost more to address. The cuts also could cancel lively experiments praised by criminal justice experts around the country.

Texas’ offender population has decreased slightly since 2007, when the Legislature began investing more money in treatment, diversion and lower caseloads for local probation officers. State analysts project it to stay essentially flat at nearly 155,000 adults through 2015.

“It is reasonable to conclude those actions are largely responsible for the decline,” said Michelle Lyons, spokeswoman for the state criminal justice department.

Lawmakers and Gov. Rick Perry have ordered all state agencies to identify 10 percent in spending cuts over the next two years, preparations for tackling the budget gap next year. While the department has a few more weeks to fine-tune its cuts list and isn’t tipping its hand, backers of the treatment and diversion initiatives fear the worst.

They emphasize that community monitoring and treatment account for only a dime of every corrections dollar the state spends, with 80 cents still devoted to running prisons. And yet even deluxe treatment efforts cost less than one-third of what it takes to house a prison inmate, which is nearly $50 a day.

Facing the music

“Mr. Cottingham, I’m not God,” visiting Judge Robert Francis bellowed to a packed courtroom in Dallas late last month. “If we’re going to move forward, I’ve got to know you’re being honest with me.”

Lafamette Cottingham, summoned to the front of the courtroom from one of eight “sanction chairs,” bowed his head and began to sob. The young man, who’d failed a spot drug test, then confessed he used his second paycheck from a new job to get high.

Francis, who prowls the room like Maury Povich without a microphone, waved him back to his seat. An hour or so later, the judge ordered the man to spend six days in the county jail, though he allowed Cottingham to serve it on weekends so he could keep his job.

The retired GOP district judge is the unrivaled star of Dallas County’s “4C Court.” Life’s grittiest matters are openly aired in the Community Corrections Continuum of Care Court three days a week.

“No reality show can hold a candle to ours,” he said.

Francis and a staff of 22 drug counselors, case managers, snooping probation officers, clerks, lawyers and bailiffs operate a 1 ½-year-old state-financed specialty court. It tries to keep strongly addicted felons coming out of prison or state jails under intensive individual and group therapy – and 24/7 scrutiny.

No Texas judge has ever had a full docket of “re-entry” probationers who are trying to shake addictions. But a $2.6 million state grant gives Francis unprecedented resources to help keep them on the straight and narrow.

The court gives offenders temporary housing if needed. It also insists they avoid bad family situations, helps them find jobs, and subjects them to surprise visits and drug tests.

Every morning, even on weekends, participants have to call in to see if they are part of a group ordered to go to the George Allen Courthouse that day to undergo urinalysis.

Liza Estrada, 35, a recovering methamphetamine addict, said she got tripped up by two or three beers she drank the evening after her group had been drug-tested. Estrada said she was stunned the next morning, when the group was summoned for a second consecutive day of urinalysis. She tested positive and within days, she was sitting in agony on a sanction chair.

“It’s humiliating – I was bawling,” recounted Estrada, who graduated from the program and now helps her brother run a construction business.

Francis does not apologize.

“I’m sneaky, that’s my job,” he said. “I know they’re sneaky, too.”

Individual focus

Though very different in politics and style, Reps. Jerry Madden, R-Plano, and Jim McReynolds, D-Lufkin, may be the biggest fans of diversion efforts such as the 4C Court.

Madden, a West Point graduate who served in Vietnam, is an engineer and small-business owner. He headed the House Corrections Committee in 2007, when the state pivoted in a new direction, away from building more prisons.

It has 112. And three years ago, it trailed only three Deep South states – Louisiana, Mississippi and Georgia – in its incarceration rate, locking up one of every 71 adults.

Madden said that being tough on crime doesn’t require a one-cell-fits-all approach, which wastes money.

“The reason we’re successful is that we’re treating everybody as an individual and working on their individual problems instead of a mass-produced type effort,” he said.

McReynolds, a petroleum land man with a history doctorate and the impassioned piety of a Church of Christ deacon, gushes over the treatment pilots.

“They redeem lives and they save taxpayers’ money and promote public safety,” he said.

Both said the Legislature avoided creating about 17,000 more prison beds – construction alone would have exceeded a half-billion dollars – by boosting treatment and community supervision efforts. Lawmakers approved $162 million more for such programs four years ago; and last year, they added another $46 million.

Among other things, lawmakers decided to fix the Substance Abuse Felony Punishment program, a drug treatment effort for felons better known as “Safe-P.” It needed “after care,” or closer supervision and prolonged treatment after release, McReynolds said.

In Dallas, Francis’ court provides plenty.

Offenders must attend 12-step recovery groups near their homes three times a week, and collect signatures to verify they were there. They also must come to the courthouse to see a probation officer and a drug counselor and to attend group therapy. Francis said it’s all governed by a nationally recognized set of treatment principles that attack both addiction and criminal thinking.

In just more than 18 months of operation, 4C Court has revoked probation for only 7 percent of about 360 participants. Statewide, 27 percent of released inmates return to prison within three years, said May-Williams of the local probation department. She said the 7 percent probably won’t increase much because “the biggest risk is in the first year.”

Tony Hinshaw is among the sober 93 percent.

The Dallas man lost everything to meth and cocaine in a five-year downward spiral that netted him seven felony convictions for property crimes and drug sales. Hinshaw, 42, said he needed the in-prison component of Safe-P, which lasts six months.

Therapy changed his thinking, Hinshaw said, and when he got out, fear of Francis did the rest.

Several graduates recall being gratified by the amount of personal attention that Francis and his staff gave them, an experience they weren’t used to in the criminal justice system. But when Francis decides to lower the boom on an offender who repeatedly misses appointments and tests positive, he summons all participants to a formal courtroom hearing to watch. The sentences are heavy – 10, 25, even 40 years.

“That’s a real eye-opener,” said Hinshaw, now attending Eastfield Community College with hopes of becoming a drug counselor. “It’s a wake-up call.”

Future uncertain

In May, the criminal justice department largely escaped a preliminary round of state budget cuts. But it, like other state agencies, must identify a possible trim of 10 percent. For the criminal justice department, that’s more than a half-billion dollars.

Spokeswoman Lyons, asked if diversion efforts will be among department programs potentially affected, didn’t respond directly.

“At this magnitude, all core agency functions would be impacted,” Lyons said. She declined to be more specific but said the department would make the fallout of any proposed cuts clear to state leaders. Madden and McReynolds said they’re confident the diversion efforts will be spared, if not by department leaders now then by state leaders in spring, when final decisions are made.

In Texas’ 2003 budget crisis, though, lawmakers whacked about $280 million – or about 6 percent – from the department’s two-year budget. They eliminated more than 1,200 positions and cut deeply into most rehabilitation programs.

“They cut everything that changed people’s lives,” recalled Ana Yanez-Correa of the Texas Criminal Justice Coalition, which advocates for less reliance on incarceration. “We can’t afford to go back.”

AT A GLANCE: SUBSTANCE ABUSE TREATMENT FOR FELONS

An innovative program to treat the substance abuse of felons leaving state custody works with prisoners who have been arrested an average of nine times – mostly for drug and property crimes, DWI and prostitution. Participants generally have failed at least one previous treatment effort. The state-funded program lasts 11 months to a year. Participants must:

•Submit to random drug tests, calling in each morning to see if they must come to the courthouse.

•Attend an Alcoholics Anonymous or Narcotics Anonymous group three times a week.

•Attend group therapy at the courthouse – two days a week for most but three for those with the most severe addictions.

•Attend court sessions weekly for the first six to eight weeks; and after that, every other week.

•Visit a case manager at the courthouse – weekly for six to eight weeks; and then biweekly, in the week they don’t have to go to court sessions.

•Attend individual drug counseling sessions at the courthouse, after making gains in group therapy.

•Submit to unannounced visits from the court’s two field officers – generally, between 6 a.m. and 10 p.m., any day of the week. A judge can approve predawn checks, too.

•Either hold a job deemed to have “career potential,” with telemarketing jobs ruled out, or attend school or training for a court-approved occupation.

SOURCE: Dallas Morning News research

ROBERT T. GARRETT | The Dallas Morning News

AUSTIN – A nationally acclaimed program that has helped even the hardest-core addicts to sober up and stop committing crimes is vulnerable to state budget cuts.

A staggering 70 percent of the 72,000 offenders freed from Texas Department of Criminal Justice lockups last year were chemically dependent. And without treatment, they’re potentially a menace – to property and, in some instances, lives.

Many criminologists and others in the field say that groundbreaking work on drug and alcohol counseling and community supervision has proved so effective that it has prevented another Texas prison-building boom. But they fear that could change if lawmakers cut diversion programs as they tackle a projected $18 billion budget shortfall.

Republican State Senator Robert Deuell has asked Republican State Attorney General Greg Abbott if there is any way he can increase the number of unwanted pregnancies in the state of Texas and, to that end, potentially slash Texas’ Women’s Health Program by as much as 90% in the process.

Did I mention that the Women’s Health Program prevented 10,000 unwanted pregnancies in 2008? Or that the program saves the state $40 million a year?

Does that matter to a fiscally conservative Republican like State Senator Robert Deuell? Of course not. From the Texas Tribune:

State Sen. Bob Deuell wants Planned Parenthood’s clinics out of the state’s Women’s Health Program, which provides family planning services — but not abortions — to impoverished Medicaid patients. And he says a 2005 law should exclude them already.

But for years, the state’s Health and Human Services Commission has allowed those clinics to continue participating, disregarding the legislative mandate for fear that barring them might be unconstitutional. Deuell has asked Texas Attorney General Greg Abbott to clear up the matter, hoping it will free up the agency to push Planned Parenthood out.

Do the Planned Parenthood facilities that offer services through the state’s Women’s Health Program offer abortion services? Of course they don’t. That’d be against the law. Do Planned Parenthood facilities offer considerable more privacy for women seeking health care — especially, in the case of this program, underprivileged women ages 18-44? Of course they do.

State health officials have a lot riding on the outcome. If they adopt and follow the rule lawmakers intended — and it doesn’t align with federal Medicaid policy — they could risk losing big bucks: $18 million of the $20 million the state spent on the Women’s Health Program in 2009came from the federal government, according a brief HHSC sent to the attorney general.

Planned Parenthood advocates say the clinics provide stellar reproductive health care and that they’re often the only family planning outfits available in Texas communities. And by all accounts, the program — launched in 2007 as a five-year pilot for impoverished women aged 18 and 44 — is effective. With just a fraction of eligible women currently enrolled, the program prevented 10,000 unplanned pregnancies in 2008 (through contraception and other family planning methods, not abortion), and it saved the state roughly $40 million a year, according to a recent HHSC study.

Does any of this matter to Republican State Senator Robert Deuell? Of course not. Know why? Because the ideological straight-jacket that envelopes Senator Deuell, Rick Perry, and the rest of the Republican leadership forces them to reject even the most common-sense measures….even the most obvious of successful health programs…even successful health programs that save the state money.

What State Senator Robert Deuell lacks in common sense he makes up for in senseless cowardice. If you’re in North Texas, or the Houston area, feel free to show Senator Deuell how much you care about him.

San Antonio Mayor Julian Castro, 35, is a true rising star. The youngest mayor of a Top 50 American city, the subject of a fawning New York Times Magazine profile – “The Post-Hispanic Hispanic Politician” — and the recent recipient of a light dusting on The Colbert Report, Castro is one of the nation’s most promising young Democrats — even more so since he’s cutting his teeth in the Republican-dominated Lone Star State.

During a recent trip to San Antonio, I spoke with Mayor Castro for half an hour about San Antonio’s remarkably resilient economy, the Arizona immigration law, the stimulus, and the state of Texas. Here is an edited transcript:

There’s a recession going on out there, but San Antonio is weathering it beautifully. Whether you look at jobs or home prices, your city is near the top of so many positive metrics. Why?

I think three sectors underpin the resilience of San Antonio. The first is the health care and the bio sciences, which have a $16 billion impact on the local economy. The second is education. There are about 100,000 students enrolled here, more than San Diego, Austin, or Dallas. Because we have such a young population, the education sector is not only business, but big business. The third is government investment. We still have several military installations. And then you have the traditional hospitality that SA has offered since the 1968 “Hemisfair.”

Texas didn’t experience quite the same real estate bubble as other states. Why not?

Several of the reasons are cultural.The banking practices in Texas since the Savings and Loan blowout of the 1980s have been a little bit more conservative, more cautious, than around the nation. Another thing is the tax scheme in Texas is heavily dependent on property taxes and discourages [real estate appreciation] more than a state that relies on sales taxes primarily — or California with Prop 13, where taxes on property are cordoned off.

The other side of that coin is that because you have a more traditional approach to investment in Texas, there is less venture capital. Folks with capital tend to invest more in oil and gas and traditional sorts of investments rather than [real estate].

In the last year, CEO Magazine and CNBC named Texas the best place for business. We hear a lot about your low-tax, low-regulation environment. What else makes Texas so popular with business?

We’ve got lots of affordable land, for one. In the last few decades we’ve secured much more water in the southwest. That’s been a fundamental issue. The other advantage is a very young population, a strong labor force. The wage level here is lower. Unions are not that strong compared to a lot of other states. A constant supply of labor feeds the hospitality industry.

In your State of the City address, you made education a focus for your time as mayor. But you’re in a state that traditionally ranks low in terms of achievement and money per elementary student. Does being pro-education in Texas have its challenges?

It’s political, you know. This state is doing very, very well. The statistics are obvious. But it’s sacrificing the future for the present, in some sense. We have the highest teen pregnancy rate of any state. We have one of the lowest student achievement rates. We have the highest number of children without health insurance. If we don’t change those facts, Texas will not be at the top of the list for economic progress and job creation in 20 years or 30 years. The issue is, we need to strike a balance between attracting investment and meeting the labor needs of that investment.

Your governor famously railed against the stimulus. What do you think?

You know, the Riverwalk is the most visited site in Texas now for tourists and it was a WPA project under Roosevelt. People talk about stimulus money and what it can do. That’s a perfect example of a good use for public investment, and it’s still paying dividends for the city.

I think it made sense to infuse the national economy with resources. It has helped cities and counties create jobs and bridge a lack of resources at the local level. I’ll give you an example. We got $10.2 million to hire new police officers, and those folks are out on the street right now making the streets safer. But I think the federal government should have worked closer with cities and localities.

What could the nation learn from San Antonio on immigration?

In San Antonio, you have a city that is 60 percent Hispanic and is one of the most successful cities in the United States today. There is this conversation about the Balkanization of America, whether people are going to assimilate and so forth. This city is a testament to how a community can get it right. I think the struggles amongst constituencies in the United States have already occurred in the San Antonio area over the centuries. People have learned to live together and work together and to respect each other.

Do you agree with the Arizona law?

Immigrants are not a net threat to the nation. They are part of the fabric of the nation, and hard workers that help propel local economies, as they have here. I’ve been proud of folks in this city who have said we need a different approach than the Arizona approach. We’ve taken a more adult and sober perspective to the issue than the sometimes strident perspective people have taken in other states.

Fighting to make sure that education funding actually goes to Texas schools and teachers, Congressman Lloyd Doggett has inserted Texas-specific language into the education and jobs bill to prevent our state government from diverting education funding to fill budget holes elsewhere. Doggett’s amendment, which passed in the Senate, is designed to prevent another bait-and-switch by Perry, in which emergency education funds go to balancing the budget, rather than helping our school kids. Texas is currently slated to get approximately $830 million of the $10 billion education and jobs bill, and Doggett is rightfully concerned that anti-education Perry won’t use the funds as intended.

According to the Department of Education, Doggett’s amendment would save 15,400 jobs in Texas. From a statement released by Rep. Doggett’s office, emphasis mine:

Governor Perry didn’t have any problem ordering every 6th grade girl to be vaccinated for a sexually transmitted disease. He didn’t have any problem denying $3.2 billion in additional federal education monies to our local schools. This amendment says we have had enough.  We have listened to the needs of parents and school leaders across Texas, we overcame the opposition of the Obama Administration, and we are writing into federal law a requirement that provides accountability for taxpayer dollars and prevents federal education dollars from being diverted again from local schools.There is no Constitutional limitation on doing right by our Texas schoolchildren. The obligation that this amendment places on Texas is to spend new education dollars on education purposes. Our schoolchildren deserve no less.  And that is why this approach has enjoyed the support of the Texas Association of School Boards and statewide groups representing teachers, principals, and school administrators from across the State.

Compliance is very easy, unless there remains a hidden Republican agenda to avoid accountability and to engage in more of the shenanigans of last year, which replaced state education dollars with federal dollars, leaving our schools no better off than if we had done nothing. Instead of concocting phony legalistic arguments to deny our local schools the funds that they so desperately need, Governor Perry should join with us in support of public education.

This is a crucially necessary effort by Doggett — some $3 billion in federal stimulus money designated last year for Texas education was used to replace state money instead of increasing the investment in public education.

We must invest in education here in Texas, and invest in our economic future. We need kids that are ready to compete in the 21st Century. Texas can’t afford to squander the minds of our future leaders with lackluster education funding. Kudos to Representative Doggett for fighting so hard on this issue, and doing all he can to make sure that Texas school children get the quality education that they need and deserve.

Undercover investigators posing as students interested in enrolling at 15 for-profit colleges found that recruiters at four of the colleges encouraged prospective students to lie on their financial aid applications — and all 15 misled potential students about their programs’ cost, quality and duration, or the average salary of graduates, according to a federal report.

The report and its accompanying video are to be released publicly Wednesday by the Government Accountability Office, the auditing arm of Congress, at an oversight hearing on for-profit colleges by the Senate Committee on Health, Education Labor and Pensions.

The report does not identify the colleges involved, but it includes both privately held and publicly traded institutions in Arizona, California, Florida, Illinois, Pennsylvania, Texas and Washington, D.C. According to the report, the colleges in question were chosen because they got nearly 90 percent of their revenues from federal aid, or they were in states that are among the top 10 recipients of Title IV money.

The fast-growing for-profit education industry, which received more than $4 billion in federal grants and $20 billion in Department of Education loans last year, has become a source of concern, with many lawmakers suggesting that too much taxpayer money is being used to generate profits for the colleges, instead of providing students with a useful high-quality education.

The report gave specific instances in which some colleges encouraged fraud. At one college in Texas, a recruiter encouraged the undercover investigator not to report $250,000 in savings, saying it was “not the government’s business.” At a Pennsylvania college, the financial representative told an undercover applicant who had reported a $250,000 inheritance that he should have answered “zero” when asked about money he had in savings — and then told him she would “correct” his form by reducing the reported assets to zero, a change she later confirmed by e-mail and voicemail.

At a college in California, an undercover investigator was encouraged to list three nonexistent dependents on the financial aid application.

In addition to the colleges that encouraged fraud, all the colleges made some deceptive statements. At one certificate program in Washington, for example, the admissions representative told the undercover applicant that barbers could earn $150,000 to $250,000 a year, when the vast majority earn less than $50,000 a year. And at an associate degree program in Florida, the report said, a prospective student was falsely told that the college was accredited by the same organization that accredits Harvard and theUniversity of Florida.

According to the report, courses in massage therapy and computer-aided drafting that cost $14,000 at a California for-profit college were presented as good values, when the same courses cost $520 at a local community college.

Six colleges in four states told the undercover applicants that they could not speak with financial aid representatives or find out what grants and loans they were eligible for until they completed enrollment forms agreeing to become a student and paid a small application fee.

And one Florida college owned by a publicly traded company told an undercover applicant that she needed to take a 50-question test, and answer 18 questions correctly, to be admitted — and then had a representative sit with her and coach her through the test. A representative at that college encouraged the applicant to sign an enrollment contract, while assuring her it was not legally binding.

But in some instances, the report said, the applicants were given accurate and helpful information, about likely salaries and not taking out more loans than they needed.

Eric Berger | The Houston Chronicle

The dead zone off the Texas coast is larger this year than scientists have ever measured, stretching offshore from the Mississippi River to Galveston Island.

An area of low-oxygen water that threatens marine life, the dead zone is at its largest during the summer months.

Scientists have surveyed the Gulf dead zone for a quarter-century, and this year’s 7,722-square-mile area of hypoxic water is among the five largest.

“It’s been getting larger and larger over the last five to seven years,” said Nancy Rabelais, a Louisiana scientist who leads efforts to annually map the dead zone. “As it’s been getting larger, it’s expanded farther into Texas waters.

“This is the largest such area off the upper Texas coast that we have found since we began this work in 1985.”

Discharge from the Mississippi River, which carries nitrogen and phosphorous nutrients from Midwestern states, largely creates the dead zone.

These nutrients, partly from commercial fertilizers, spur the growth of algaeblooms which, after dying, sink to the bottom. There the bacteria which feast upon the algae also bloom, depleting oxygen in the water.

Fish and shellfish often can swim away from these areas but immobile organisms, such as clams, simply die without access to oxygen.

Scientists are beginning to try and quantify the economic effect of dead zones, primarily due to potential disruption of fisheries.

“There are a whole host of biological consequences for fish in hypoxic areas, and when you add up all those different things you might expect there will be less fish to catch,” said Martin Smith, an environmental economist at Duke University.

In recent years Smith has studied the effects of hypoxia on North Carolina fisheries at the mouth of the Neuse River, and he said low-oxygen water may have reduced catches by 10 to 15 percent.

Long-term worries

Smith is part of a team that recently received a four-year, $700,000 grant to perform the first extensive study of the economic consequences of the Gulf dead zone.

In the short term it may benefit some fisheries, he said, because some species such as shrimp may be more tightly clustered at the edge of hypoxic areas, making them easier to catch.

Nevertheless there are long-term concerns about areas of low-oxygen water because they may reduce the reproduction of fish, or slow their growth rates.

“One would expect that if there’s less dissolved oxygen, as the severity of the problem worsens, the consequences are going to get worse, too,” he said. “But we’re not going to answer that question scientifically until we do the study.”

Common in summer

Texas has seen dead zones before. Excessive rainfall in 2007 caused the Brazos River to discharge more than twice as much water into the Gulf of Mexico than previously measured since at least 1967.

This large amount of fresh water carrying nitrates led to the creation of a temporary 1,750-square-mile area of oxygen-depleted water, stretching from Freeport to Matagorda Bay.

And the Gulf’s summer dead zone — such areas occur most commonly in the summer when winds are lightest – has stretched along the upper Texas coast before.

Now it appears that, absent tropical weather in the summer to break up dead zones by mixing the water, dead zones will become permanent summertime fixtures.

“There’s still room for it to grow,” Rabelais said. “It just has to do with the pressure of more people and nutrients. It means lower water quality, and larger algae blooms. It’s certainly not a good thing.”

eric.berger@chron.com

Kate Alexander | The Austin American-Statesman

A federal measure aimed at saving teacher jobs has Gov. Rick Perry and U.S. Rep. Lloyd Doggett accusing each other of short-changing the state’s schoolchildren.

The $26 billion legislation, which cleared the U.S. Senate on Thursday, allocates $831 million to Texas to pay for 14,500 teacher jobs, according to estimates from the U.S. Department of Education.

But it also includes an amendment authored by Doggett, D-Austin, that calls for the Texas governor to assure that the state will maintain a level of education funding for the next three years that is on a par with current spending. No other state is affected by the amendment.

“We gave (Perry) an opportunity to do right by Texas schoolchildren instead of repeating the wrongs from last year,” said Doggett, who has long complained about the state using much of the $3.2 billion in federal economic stimulus money to reduce state education obligations, not increase overall education spending as intended.

Providing such an assurance, Perry maintains, would require him to violate the state constitution by binding the Legislature to future education funding.

“It is appalling to think other elected officials in Congress, especially Texas’ Democratic congressional delegation, would forsake the interests of Texas schoolchildren for partisan politics,” Perry said.

Perry’s constitutional concern could be used as the basis of a legal challenge of the federal law, but it does not have to preclude him from seeking the money now, said Jacqueline Lain , associate executive director of the Texas Association of School Boards.

“This has become a hot potato in a political fight, which is unfortunate because schools need money to save teachers’ jobs,” Lain said.

More than half of Texas’ 1,100 school districts will be dipping into reserve funds for day-to-day expenses this year, Lain said, and the federal money would help them avoid future layoffs.

The governor must make a good-faith prediction as to whether the state will maintain education funding at current levels, said former state District Judge Scott McCown, who presided over the long-running state school finance case and is now executive director of the Center for Public Policy Priorities, which advocates for low-income Texans.

There is also nothing in the legislation that allows the federal government to get the money back if the state misses the mark, McCown added. “We shouldn’t exaggerate what the legal requirement is.” he said.

Public school funding is one of the few areas of state government that has been exempt so far from mandatory cuts as Texas prepares for a projected shortfall of as much as $18 billion in the 2012-13 budget. As a result, education funding will probably increase as percentage of the total budget even if the Legislature does not raise per student funding when it writes the budget next year.

The assurance language is similar to stipulations in the 2009 federal stimulus legislation to which Perry assented.

Unlike last year, the Legislature is not in session to weigh in, said Debbie Graves Ratcliffe, a spokeswoman for the Texas Education Agency.

Perry painted Doggett’s gambit as another example of the federal government trampling on Texas’ rights, as he has accused the Obama administration of doing with health insurance reform, air quality and other issues. “Washington is deft at placing targets on the backs of Texans,” he said.

But Doggett said the Obama administration had nothing to do with his amendment and even opposed it in the past.

Nearly $1 billion in additional money for Medicaid is also part of the legislation, which is scheduled for a final vote in the U.S. House on Tuesday. Demand for the low-income health care program has soared as the economy has languished.

kalexander@statesman.com;

445-3618

AUSTIN — President Barack Obama’s trip to Texas on Monday to raise money for Democratic candidates comes during a growth spurt in fundraising activity for Texas Democrats, fueled in part by the emergence of a new generation of deep-pocketed donors.

The state Democratic Party, virtually destitute early last decade, has rebounded with a robust upswing in fundraising the past five years. And in the governor’s race, Democratic nominee Bill White is giving Republican incumbent Rick Perry a strong run for money as well as for votes.

With four months before the Nov. 2 election, White had more than $9 million as of June 30, compared with Perry’s $5.8 million, according to campaign finance reports filed with the Texas Ethics Commission. White has also raised slightly more than Perry — $7.4 million compared with just over $7 million — since the March primaries. White trails Perry in overall fundraising for this election cycle, with $16 million compared with $20 million.

The improved fortunes, Democrats say, stem partly from an aggressive comeback plan that they put in motion five years ago after Republicans completed their hold on state government by taking over the House of Representatives in 2003. Over the past few years, a group of relatively young big-money donors has stepped forward to help finance the comeback, including husband-and-wife lawyers Steve Mostyn and Amber Anderson Mostyn of Houston and Dallas civic leader Naomi Aberly, former chairwoman of Planned Parenthood of North Texas.

Revival of confidence

Democratic leaders in Fort Worth say the Republican-dominated city has yet to match the fundraising star power of other big cities. “The more flamboyant fundraising events are usually done in Dallas, Houston or Austin,” Tarrant County Democratic Chairman Steve Maxwell said. “We just don’t see many of those in Fort Worth.”

At the same time, however, Maxwell says the local party is having one of its best years ever for smaller donations, usually $50 to $500.

“There was a time when it was virtually impossible to raise money for the local county party,” Maxwell said. “Now I’m raising money all the time and raising far more money to fund our party efforts than we’ve ever done in the past.”

Democratic donors Stephen Tatum and David Chappell are colleagues in Fort Worth’s Cantey Hanger law firm and serve on White’s finance committee. Tatum, who was White’s classmate at the University of Texas law school, has donated more than $40,000 to Democratic candidates this year, including $29,000 to White. Chappell’s donations include $2,400 to White and $500 to state Rep. Paula Pierson, D-Arlington.

Chappell, a former councilman, believes that one reason for the growth in Democratic fundraising is that conservative and moderate business people are being drawn back into the party from the Republican ranks to support White, a former Houston mayor who has touted his bipartisan credentials and business background.

Ben Barnes, a prominent lobbyist and former Democratic lieutenant governor, echoes that assessment.

“Bill White has been able to raise more money from the business community than Democrats have raised in 20 years,” he said. “It’s kind of a revival of the trust and confidence that the business community used to have in the Democratic Party,” whose conservative wing dominated Texas politics for decades before Republicans began gaining power in the late 1970s.

Some analysts say the brightening outlook for Democratic fundraising in Texas could be one reason for Obama’s fundraisers in Austin and Dallas. In Austin, he will also deliver an address at UT, possibly on higher education.

‘Changes the equation’

More than 200 supporters will pay $5,000 to $15,000 apiece to attend a presidential luncheon at Austin’s Four Seasons Hotel. Obama will then fly to Dallas for a late afternoon fundraiser at the home of Dallas attorney Russell Budd, who contributed to Obama’s campaign in 2008 and has donated more than $130,000 to candidates in Texas over the past three years, according to campaign reports.

The $15,000-a-plate event at the Budd residence is sponsored by the Senate Democratic Campaign Committee to raise money for senatorial candidates in other states. But at least $250,000 raised from the Austin event — sponsored by the Democratic National Committee — will be used by Texas Democrats. Before, money raised in Texas was channeled out of state, angering state Democrats.

DNC officials say they expect to raise as much as $1 million in Austin. The president’s one-day visit will be his third trip to Texas since he became president, but his relative unpopularity in Texas has prompted some Democratic candidates to keep their distance. White is to campaign elsewhere and has no plans to appear with Obama.

Although Democrats haven’t won a statewide office since 1994, gains in the past two election cycles have given them more credibility and leverage in raising money for 2010 candidates, party strategists and independent analysts say. Democrats also say dissatisfaction with the political status quo after years of Republican domination is making it easier to pick up donations as well as political converts.

Many Democratic fundraisers say Republicans, with the strength of incumbency, still have the upper hand in fundraising and could retain that advantage for some time. But Democrats’ widening efforts to rake in cash haven’t gone unnoticed by the other party.

“We still win on the issues, but the money definitely changes the equation because of the attacks on our guys,” said Bryan Preston, spokesman for the state Republican Party.

A matter of trust

The Democratic comeback effort began in 2005 when wealthy Dallas trial lawyer Fred Baron, Budd’s law partner, formed the Texas Democratic Trust with the express goal of putting Democrats on track to reclaiming statewide offices and majorities in the Legislature.

Although Baron died in 2008, the trust has steadily pursued its goals under director Matt Angle, a longtime Democratic strategist and one-time aide to former Democratic Rep. Martin Frost of Dallas. By design, the trust will expire after the 2010 elections, but Angle says the organization has largely accomplished its mission by helping Democrats gain near parity in the House, training and recruiting qualified candidates, and raising hundreds of thousands of dollars over the past five years.

File under “not a shock” and “pandering to the far-right fringe” — ten Republican Congressfolk from Texas have decided to join far-right loon Michele Bachmann’s Tea Party caucus in the House of Representatives. From the DNC:

Ten Texas Republican representatives recently followed the lead of extreme right-winger Michele Bachmann (R-MN) and joined the newly formed Congressional “Tea Party Caucus.” Tea Party Republicans John Culberson (TX-7), Louie Gohmert (TX-1), Ralph Hall (TX-4), Joe Barton (TX-6), Michael Burgess (TX-26), John Carter (TX-31), Kenny Marchant (TX-24), Randy Neugebauer (TX-19), Pete Sessions (TX-32), Lamar Smith (TX-21) and their allies have advocated extreme policies that would take our country backward like abolishing the Department of Education, the Department of Energy and the Environmental Protection Agency and repealing consumer protections in health insurance reform and Wall Street reform to name a few. It’s clear that instead of standing up for their constituents in Washington, these Texas Tea Party Republicans decided to use their power in Washington to advance an extreme agenda that only benefits special interests like Wall Street bankers and health insurance executives.

What do these so-called Representatives stand for? Nothing that benefits working Americans, that’s for sure. While Republican leaders have struggled for two years to develop their agenda for the upcoming elections, The Republican Tea Party Contract on America was developed by the DNC by simply making a list of the items that Republican leaders, their candidates and their Tea Party allies have said they intend to do if they regain control of Congress.

As the DNC puts it, the Republicans have taken out a Tea Party Contract on America, and it looks like this:

The DNC’s Republican Tea Party Contract On America:
1. Repeal the Affordable Care Act (Health Insurance Reform)
2. Privatize Social Security or phase it out altogether
3. End Medicare as it presently exists
4. Extend the Bush tax breaks for the wealthy and big oil
5. Repeal Wall Street Reform
6. Protect those responsible for the oil spill and future environmental catastrophes
7. Abolish the Department of Education
8. Abolish the Department of Energy
9. Abolish the Environmental Protection Agency
10. Repeal the 17th Amendment

Why make government work for all Americans when it can cater to the special interests of the few?  Visit www.republicanteapartycontract.com/America.com for more information on the “Tea Party Contract On America.”

An undercover congressional investigation into recruiting tactics at for-profit colleges and universities found fraudulent and deceptive marketing practices at 15 institutions in six states, including Texas, and in the District of Columbia.

Carried out by the Government Accountability Office, or GAO, the investigation didn’t name individual schools but highlighted a Texas school for encouraging undercover applicants to lie about their assets and dependents to qualify for federal financial aid.

Other examples include an employee at a Florida school who falsely claimed it was accredited by the same agency as Harvard and the University of Florida, and a small beauty college whose staff told an applicant that barbers can earn $150,000 to $250,000 a year.

The undercover applicants also comparison shopped and found that many of the programs being touted by for-profits as a good deal were offered by a nearby public college at a fraction of the price.

The for-profit universe ranges from large companies whose shares are traded on Wall Street to mom-and-pop career schools. They offer everything from certificates in medical billing and cosmetology to a bachelor’s degrees in business administration. The University of Phoenix, for example, has the largest student body in North America.

The investigation focused on for-profits that glean more than 89 percent of their revenue from federal financial aid. When students default on federal loans, the taxpayers are on the hook for the money.

U.S. Rep. Charles Gonzalez said the findings showed there are a lot of “bad actors” in the for-profit education industry and that lawmakers must do more to protect taxpayers’ investment and vulnerable students.

“People get taken advantage of and that is a concern,” Gonzalez said.

The investigation cited good practices too.

In some cases, schools employees warned applicants not to take out more loans than necessary and gave them realistic information about their earning potential.

Jerry Valdez, executive director of a Texas lobbying group representing for-profits, said that if the GAO report is an accurate representation of the industry, he would encourage for-profit schools to change their practices.

“However, we cannot deny the positive impact that private-sector colleges have on the growing Texas economy. The value our graduates bring to the workplace should far exceed the alleged actions of a few schools,” said Valdez of Career College and Schools of Texas.

Congress recently began cracking down on the for-profit education industry, which has grown from 365,000 students to nearly 1.8 million in the past few years.

Propped up by federal financial aid meant for needy students, the schools rake in $24 billion a year in grants and loans while spending generously on marketing and turning healthy profit margins.

Their students, however, often have trouble paying back their loans and account for 44 percent of all defaults nationwide.

In San Antonio, a dozen locally based for-profit schools enroll about 11,500 students, and thousands more attend branch campuses of national brands such as DeVry University.

Accompanied by video clips and voice messages from recruiters, the GAO report found four of the schools — including one in Texas — encouraged applicants to commit fraud and at all 15 of the institutions, recruiters made deceptive or questionable statements to investigators.

In Texas, an undercover agent who applied for admission to a bachelor’s degree program in construction management told a representative that he had $250,000 to pay tuition.

The representative urged him not to report it on his federal aid application, saying it was not the government’s business how much money he had.

Other admissions representatives evaded questions about graduation rates and overstated applicants’ prospects for jobs and pay.

One college employee told an applicant he could work for the FBI after earning an associate’s degree in criminal justice, a job that requires at least a bachelor’s degree. Another applicant was told she could earn up to $68,000 as a medical assistant, when 90 percent make less than $40,000 a year.

Admissions representatives also used hard-sell techniques, scolding applicants for not signing enrollment forms before speaking with financial aid.

The applicants also signed up on Web sites that purport to match them with the right college, triggering a flood of phone calls from for-profits. One applicant received 182 in one month.

When investigators compared tuition, they found that for-profit programs charged significantly more than similar programs at nearby public colleges.

In Texas, for example, an associate’s degree in respiratory therapy would have cost $38,995 at a for-profit college and $2,952 at the closest public college.

GULF OF MEXICO — The Gulf of Mexico “dead zone” this summer is the fifth largest it’s been since monitoring of it began in 1985, and Texas waters has the largest portion of it ever experienced.

“The near shore currents kind of drive it, and this year we’ve encountered it earlier than normal and it seems to be lingering,” said Jerry Mambretti with the Coastal Fisheries Division of the Texas Parks and Wildlife Department.

A dead zone is an area so devoid of oxygen that little in the way of sea life lives there. The low oxygen levels of the dead zone stem from high levels of nutrients in the water, particularly nitrogen and phosphorous.

These chemicals enter the Gulf through the Mississippi and Atchafalaya river deltas after washing off of agricultural lands upstream as far away as the upper Midwest. Near shore currents sweep these nutrients westward along the coast as far as Galveston.

Three years after Gov. Rick Perry’s biggest real estate score, questions persist about whether the governor benefited from favoritism, backroom dealing and influence-buying.

The Dallas Morning News found evidence that Perry’s investment was enhanced by a series of professional courtesies and personal favors from friends, campaign donors and the head of a Texas family with a rich history of political power-brokering.

Together they may have enriched Perry by almost $500,000, according to an independent real estate appraisal commissioned by The News.

The governor’s staff insists these were routine, legal deals that were properly handled. They point to a bank’s appraisal, done when Perry sold his land in 2007, that said the buyer was paying Perry slightly less than market value.

Experts hired by The News dismissed that appraisal as “unsupported” and said it did not meet professional standards. County tax appraisals at the time also indicated that the governor was able to buy the land below market value and sell far above it.

Perry, in a brief interview last week, said every land transaction he has made while in office “has been open and honest, and at arm’s length,” and disclosed in public records.

“So I would just have folks take a look at the record, and I think the record pretty much speaks for itself,” Perry said. “Being open and being honest and being at arm’s length is what people expect every day.”

At the center of the dispute is a gently sloping, half-acre grassy lot on the shore of Lake Lyndon B. Johnson in the Texas Hill Country resort of Horseshoe Bay. The resort is owned by Doug Jaffe, whose family has long, deep and sometimes controversial ties to Texas politics.

Jaffe’s company had sold the parcel to state Sen. Troy Fraser, R-Horseshoe Bay, a friend and political ally of Perry’s. Fraser sold the lot to Perry for just above $300,000.

An appraiser hired by The News determined that the land actually was worth $450,000 when Perry bought it.

Perry sold the property in 2007 to Alan Moffatt, a British national who is a business partner and close associate of Jaffe’s.

Moffatt, as the owner of an aviation firm, was questioned, but never prosecuted, for his company’s international arms shipments to Africa in the 1990s.

He paid Perry $1.15 million for the parcel. The News’ appraiser, who has decades of experience in Horseshoe Bay real estate, found that price to be $350,000 above market value.

Moffatt denied that anything improper occurred in the transaction. “It just happened that the governor of Texas owned that lot,” he said. “It was a good deal for me.”

If Perry was deemed to have received any gifts, he would, as a state officeholder, have been required to disclose them. He did not do so.

Perry has portrayed himself as one of the most financially transparent governors in Texas history, and has attacked Democratic nominee Bill White for not releasing all tax returns.

Republican Perry, running for re-election to a record third four-year term, has been criticized by political opponents, including GOP Sen. Kay Bailey Hutchison, for enriching himself via land deals while in office.

The head of a nonpartisan, nonprofit organization that promotes transparency in government said Perry’s Horseshoe Bay transactions look questionable.

“The man on the street on this would think that this is a series of deals that smell of special favors being created for elected officials to curry their favor,” said Ellen Miller, executive director of the Sunlight Foundation in Washington, D.C.

The Perry deal was hardly the first time the Jaffe family has operated among shadowy businessmen and influential officeholders.

For the Jaffes, it has been a way of life.

‘Wheeling and dealing’

Doug Jaffe and his late father, Morris, have built widely chronicled reputations as big-money backers of Democratic politicians going back to Lyndon Johnson’s days as a U.S. senator. Johnson and Gov. John Connally were occasional dinner guests at the Jaffe mansion in a San Antonio suburb.

Morris Jaffe, who died in 2001, rose from poverty on San Antonio’s west side to create an empire that included oil and gas exploration, real estate, a department store chain and an insurance firm. Among his business partners was Houston oilman Oscar Wyatt, who went to prison in 2007 for paying kickbacks to Iraqi President Saddam Hussein.

The Jaffes were implicated in a federal investigation of billionaire rancher Clinton Manges, a protégé of legendary South Texas political boss George Parr. Manges was convicted of using the mail to file false claims with a state land official to retain an oil lease for the Jaffes.

“Anything they do is wheeling and dealing,” said Bob Wallace, a former business associate of the Jaffes whose venture with them fell apart. “Anything they do is complicated.”

Doug Jaffe found success in the vending machine business and made a fortune selling “hush kits” that allowed older commercial jets to meet government noise restrictions. His worldwide client list included the government of Nicolae Ceausescu, communist dictator of Romania, and Samuel Doe, a notoriously repressive president of Liberia.

In 1989, numerous press accounts reported that a congressional ethics committee investigating House Speaker Jim Wright subpoenaed both Jaffes to testify about an East Texas oil exploration venture that, despite producing nothing, earned Wright about $150,000.

The Jaffes disputed allegations that they helped enrich Wright so that he would support a bid by one of their companies to win a $3 billion military aircraft contract.

The federal Office of Independent Counsel also investigated the Jaffes as part of a probe of former San Antonio Mayor Henry Cisneros, then the U.S. housing secretary, according to the counsel’s report. The Jaffes acknowledged they had made thousands of dollars in loans to Linda Medlar Jones, a former Cisneros girlfriend.

While best known for backing Democrats, the Jaffe family also has contributed to Republicans when the GOP was in power. After giving $25,000 to Perry’s Democratic rival in 1998, Doug Jaffe gave $5,000 to Perry’s campaign fund for governor in 2004, campaign records show.

Doug Jaffe said he appreciated Perry’s stewardship of the Texas economy. “I feel blessed that we’ve had him there,” he said recently.

Bexar County Judge Nelson Wolff, a longtime Democratic ally of the Jaffe family, chuckled when asked if he thought Doug Jaffe was a Perry supporter.

“Money,” he said, “generally follows the candidate they think is going to win.”

Texas’ Pebble Beach

Horseshoe Bay was started in the 1970s by two cousins, Norman and Wayne Hurd. The former goat ranch 50 miles northwest of Austin has become a glitzy getaway complete with luxury homes, the largest private airport in the state, a yacht club and three championship golf courses.

Its list of celebrity residents has featured former astronaut Jim Lovell, oil well firefighter Red Adair and Dallas Cowboys legend Roger Staubach. It also boasts a cadre of retired chief executives of major corporations.

Doug Jaffe bought out the Hurds in 1996. He then proceeded to pour millions of dollars into expanding the resort, which some consider the Texas equivalent of California’s Pebble Beach. Horseshoe Bay is a popular place for second homes built by the wealthy of West Texas. One of those who chose to settle there permanently is Fraser, the state senator.

In 2000, Fraser decided to bring perhaps his closest friend into the exclusive group of Horseshoe Bay property owners – Rick Perry. Fraser and Perry had known each other since they met as teenagers at a Future Farmers of America convention.

Fraser once told a reporter of Perry: “Once he committed to you as his friend, he was your best friend. That’s been our relationship for 37 years.”

He ran for the Legislature in 1986 at Perry’s urging, Fraser said. After Fraser moved from the House to the Senate, colleagues surmised that his growing power stemmed from his close ties to Perry.

Now, Fraser said, they were making plans to live near each other in retirement.

Fraser, a wealthy investor, said he had been eyeing a 10-acre estate with panoramic views of Lake LBJ for development as a luxury subdivision.

For more than two decades, there was only one house on the property – an unorthodox mansion at the tip, owned by Norman Hurd.

Hurd installed sensors along the road leading to his house and an elaborate series of speakers in the woods so that visitors would hear rain forest sounds. Some of the inside walls of the house were lined with fake fur.

“It was a 1960s hippie pad,” said Clarence McDaniel, chief appraiser in Llano County. “There is no telling how many millions or billions of dollars of business went on in that house.”

By 2000, Hurd had sold his estate to Jaffe’s company, which divided the land into 11 waterfront lots. Fraser was one of the first buyers in the development dubbed “The Peninsula.”

Fraser said he had known Jaffe for years, and that the family supported him but did not donate to his campaign. “I consider them nice, good people, and because I’m the senator there, they are appreciative that I represent the area,” Fraser said.

In September 2000, the senator said, he offered Jaffe $700,000 for a lot adjacent to the former Hurd mansion. After Jaffe accepted, Fraser said he contacted him again a day or two later and offered $300,000 for a smaller lot with scant waterfront footage near the entrance to The Peninsula.

“It was the least distinctive of the lots on the property,” Fraser said.

He said he told Jaffe the second lot was for Perry. Jaffe denied that in a recent interview.

Fraser said he made the offers without an appraisal because he knew property values in Horseshoe Bay. “It was a willing buyer, willing seller,” Fraser said, and the offers were made at pre-development rates.

Fraser said he wrote one check for $1 million. He said he paid for Perry’s lot with the understanding that his friend would pay him back with interest.

The governor’s office provided The News with a real estate closing statement that showed Perry paid Fraser $310,762 for the Horseshoe Bay lot on Feb. 28, 2001. Perry used cash from the proceeds of his Austin home sale, said spokeswoman Allison Castle.

Donna Lollar Green, owner of Highland Lakes Appraisers in Marble Falls, Texas, concluded in a report done in July for The News that Perry paid well below market price. Using four comparable lot sales, she placed the actual value at $450,000 at the time of sale.

Both Fraser and Perry’s spokeswoman said an ethics lawyer was consulted at the time of sale, and the attorney deemed the transaction proper. Fraser said the governor selected the lawyer. Later, the governor’s office said Fraser spoke with the attorney.

Finally, Castle said that there may not have been an ethics attorney involved. “There was no requirement to talk to an ethics lawyer or to get an opinion,” she wrote in an e-mail.

Tax protest

One of Perry’s first acts as a new property owner was to appeal his appraisal. The lot had been valued for tax purposes at $414,700.

Although the land is in Burnet County, the assessment was done by the neighboring Llano Central Appraisal District. The Peninsula was located within a municipal utility district for which the Llano CAD did appraisals.

McDaniel, the chief appraiser for Llano, said he calculated the appraisal by comparing the governor’s lot to some in another high-end development at Horseshoe Bay. He still has questions about the Fraser-Perry deal being an arm’s length transaction.

“Obviously, everybody would have concerns in regards to it coming from one political person to another political person that are of the same party affiliation,” McDaniel said. “It is a brand-new subdivision. Did the senator get a bargain on them when he bought into it? Maybe, because he bought two.”

McDaniel declined to elaborate, citing liability reasons.

Appraisal districts are required to value property at market rates, which the state tax code defines as the sales price if “both the seller and purchaser seek to maximize their gains and neither is in a position to take advantage of the exigencies of the other.”

Perry asked attorney Colleen McHugh to handle his tax appeal. A corporate labor lawyer from Corpus Christi, McHugh had just been appointed by Perry as chairman of the Texas Public Safety Commission.

She challenged Perry’s appraisal in a letter to the Burnet Central Appraisal District that listed the purchase price. Two weeks later, McHugh and Stan Hemphill, chief appraiser for the Burnet CAD, reached an agreement to lower the appraisal to $310,762. The appraisal district said it had no closing statement to confirm the price.

The appeal saved Perry about $14,000 over the six years that the appraisal district kept the value at purchase-price level.

Castle, the governor’s spokeswoman, said McHugh was not compensated for the appeal because Perry had paid her $2,850 for earlier work on the property purchase.

Craig McDonald, executive director of Texans for Public Justice, a liberal Austin watchdog group, said McHugh’s legal services had the appearance of a gift.

“It seems to be something that she did that certainly saved him a bundle of money. You would think most attorneys would bill their client for that,” McDonald said. “If she didn’t, he should have reported that as a gift.”

McHugh – a former State Bar of Texas president appointed by Perry in 2005 to the University of Texas System Board of Regents – said it would be improper for her to comment.

The Texas Observer first reported McHugh’s appraisal protest in May 2009.

Hemphill told The News he felt no undue pressure when dealing with the governor’s attorney. “I didn’t have any information that this was out of line,” he said.

But he took a harder line with an appeal by another Peninsula property owner.

Austin businessman Jess King bought a lot similar in size to Perry’s, but with more lakefront footage, about nine months after Perry’s purchase. Its taxable value tripled to $622,037 after the sale. King hired a property tax consultant who concluded the appraisal was inconsistent. Hemphill rejected the appeal, as did the county’s appraisal review board. King then filed a lawsuit, which took three years to resolve.

The value of King’s parcel was lowered to $550,000 – still more than double the appraisal in 2001, and far above Perry’s. The difference, Hemphill said, was that Perry provided a sales price.

King said he was unaware of the difference in values placed on his land and Perry’s until being told by The News. “It does seem a little out of whack,” he said.

While Hemphill said he considered sales prices to be definitive proof of value, his view was not shared by Dallas County’s chief appraiser. Ken Nolan said he would be guided more by sales of comparable properties, as McDaniel said he was.

“I’m not just going to take it at face value,” Nolan said of a parcel’s sales price. “Price and value are not synonymous in all cases.”

Listed for $1.2 million

By 2005, Perry had grown tired of the tax burden and maintenance cost of his Horseshoe Bay lot. He approached Ron Mitchell, the vice chairman of the resort, to help him unload the property.

Mitchell had been assigned by Jaffe to develop The Peninsula, and he became friends with Perry after the governor bought the lot. When Perry ran for a full term as governor in 2002, Mitchell made an in-kind contribution of $9,725 to help put on a fundraiser for him at Horseshoe Bay.

Steered by Mitchell, Perry signed an agreement with Horseshoe Bay Resort Realty listing his lot with a sales price of about $1.2 million, said Michael Gordon, director of real estate operations. The agreement included a standard provision that Perry would pay a commission if the property was sold, Gordon said.

Perry’s office did not respond to a request by The News for a copy of the listing agreement.

When the listing produced no takers, Perry pulled the property off the market after about four or five months, Gordon said. The property sat dormant for more than a year, he said.

Then along came Moffatt, a part-time Texas resident with a globe-trotting lifestyle and a colorful past.

In the 1990s, Moffatt owned Peak Aviation, a now-defunct company that the British government investigated in connection with arms shipments to Africa for use in the Rwandan genocide. The tribal conflict may have claimed about 800,000 lives.

Moffatt said in an interview that he met twice with British customs investigators but was never charged with a crime. He said the arms shipments that his company made to Africa were legitimate government-to-government deliveries.

He also acknowledged that Doug Jaffe is a friend and business associate. “I do an airplane business with him, and I have known him for almost 30 years now,” Moffatt said.

State incorporation records show Moffatt was listed as a partner with Jaffe in the Horseshoe Bay Resort Air and Business Park. He also bought three Horseshoe Bay condominium units, another parcel on The Peninsula where he built and sold a house, and eight vacant lots in the resort.

Moffatt was known to Jaffe employees at Horseshoe Bay as the boss’s partner.

Changes and conflicts

Retellings of how Moffatt came to purchase Perry’s property in Horseshoe Bay involved changing and sometimes conflicting accounts.

Gordon, the resort’s real estate director, said that Moffatt approached him and that an executive in his office who knew the governor made contact, after which a deal was struck. He would not identify the executive and called his own involvement minimal.

“As a favor, I wrote the contract for him [Moffatt], handed it to him, he took it to the title company and then off they went,” Gordon said.

Castle said the sales price was negotiated by the title company, whose owner also worked as an attorney for the Jaffe family.

Mitchell, the resort vice chairman, said he called Perry on Moffatt’s behalf about buying the lot. “I either provided the contact information for the governor to Alan or of Alan to the governor’s office,” Mitchell said. “I got them connected.”

In a subsequent interview, Mitchell described a more active role. He said he conveyed Perry’s proposed price of $1.2 million to Moffatt and relayed Moffatt’s counteroffer of $1.15 million to Perry, who accepted.

Moffatt purchased the land in the name of Wallace Holdings LLC, which identifies him as its sole manager. He and Perry never met, the governor’s staff said.

When Perry sold it, the land was appraised for tax purposes at $600,000.

Appraiser Green concluded in her report to The News that Perry’s lot was worth $800,000 when sold. Her findings were based on recorded sales of five other properties in Horseshoe Bay in the year before Perry’s sale.

Her appraisal also took into account that Perry’s lot had only 35 feet of lake footage, by far the smallest of any lot on The Peninsula.

By buying below market value, and selling above, according to Green’s appraisals, Perry was able to add $489,238 to his profit.

Doug Jaffe, who said he discussed a possible purchase with Moffatt, said his friend had landed a bargain. “I think the governor sold too cheap,” he said.

Moffatt financed the purchase with a loan from The Bank of Texas in San Antonio.

An appraisal done for the bank in March 2007 said the land was worth $100,000 more than the $1.15 million that Moffatt paid.

The News hired a Dallas firm to review Green’s work and that of Robert J. Thompson of San Antonio, who did the appraisal for The Bank of Texas.

Thompson based his appraisal on two property sales near Perry’s lot whose values were not reported to the Multiple Listing Service, and a third parcel that was listed but had not been sold.

The report to The News by Stephen Crosson, chairman of Crosson Dannis Inc., faulted Thompson’s work. “The value expressed in that thing is just essentially unsupported,” Crosson said of the bank’s appraisal.

He added in a written report: “In my judgment, the Report does not comply with the Uniform Standards of Professional Appraisal Practice.”

Thompson said Saturday he could not discuss his work for privacy reasons.

Crosson questioned whether Green’s market value was too high because she had not properly adjusted some data. In response to Crosson’s report, Green lowered her appraisal by $50,000 to reflect a market value for Perry’s property of $800,000 at the time of its sale. After Green’s changes, Crosson said her appraisal for The News met professional standards.

Texas law generally prohibits elected state officials from accepting gifts, which are described as anything of monetary value. Exceptions include gifts under $250 or gifts from family members or close friends.

The Sunlight Foundation’s Miller, a 30-year veteran of studying the influence of money in national politics, contended the variances from market values amounted to gifts that Perry should have disclosed on his personal financial reports.

“It sounds to me like something they should have avoided, should not have done and depending on the state law, should have been reported,” she said.

Perry did not pay a real estate commission on his sale to Moffatt. Mitchell said the waiver of the fee was a favor to Moffatt. The fee, typically 6 percent of the sales price, could have amounted to as much as $69,000.

Real estate commissions usually are paid from the seller’s proceeds; buyers are normally not charged.

“Alan may have done something that made him [Jaffe] a lot more money than that in the aviation business,” Mitchell said.

Asked if the company would have charged a commission if the sale involved anyone else, Mitchell laughed and said, “We’re here to make money.”

Castle, Perry’s spokeswoman, said there was no need for the governor to declare the waived commission as a gift.

“Commission for what? There was no Realtor,” Castle said. When asked about Mitchell’s involvement, Castle replied: “He’s not a Realtor. He’s a developer.”

Miller of the Sunlight Foundation ridiculed the notion that Mitchell had not performed a service.

“He finds a ready buyer at twice the price of what the governor paid for it [the lot] and doesn’t charge any kind of fees?” she said. “It’s ridiculous. It doesn’t have to be a real estate commission, but there has to be a fee for arranging that.”

‘I was sick’

It is not clear if Jaffe benefited from the sale of Perry’s property. He maintained that Perry had been good for Horseshoe Bay and he did not want him to leave. “I was sick that he sold the lot,” he said.

Perry’s aides denied that he did any favors for the Jaffe interests. They also denied that Mitchell’s appointment to the Texas State University System Board of Regents in 2009 had any relation to the help he gave Perry on the land sale.

They also insisted that Perry did not know, as The News found, that Jaffe was an investor in a struggling San Antonio aircraft business that the governor approved to receive $2.5 million from the Texas Enterprise Fund.

The company, Sino Swearingen Aircraft Corp., claimed the grant would help create 850 new jobs in Texas. Perry announced the grant in 2006, about a year before the sale of his property in Horseshoe Bay.

Jaffe said he played no role in seeking the funding.

Sino Swearingen announced layoffs soon after the grant announcement. It later rescinded its request for the grant, and no money was paid.

Moffatt’s purchase of Perry’s land has yet to show a profit. He has had the lot on the market for most of the last three years and recently dropped his asking price to $1.65 million.

Perry spokeswoman Castle she didn’t understand why anyone would question the ways in which the governor bought and sold the land. Perry has reported on his federal tax returns that his profit on the sale was $823,000, the largest he has disclosed from a real estate transaction during his term as governor.

“He purchased it,” Castle said. “It was a fair price. He was later interested in selling it. He had an interested buyer. He sold it. … It was pretty straightforward.”

Back in Horseshoe Bay, curiosity lingers.

“He sold it for a pretty good profit,” said local real estate broker Vic Shackelford. “Those deals are made on the high level like that. People like you and I can’t do that.”

jdrew@dallasnews.com; smcgonigle@dallasnews.com; rmcneill@dallasnews.com

June 12, 2000: Norman Hurd sells his 10-acre family estate on Lake LBJ, renamed The Peninsula, to Horseshoe Bay Resort Inc., owned by Doug Jaffe.

Sept. 19, 2000: Sen. Troy Fraser, R-Horseshoe Bay, buys two newly subdivided Peninsula lots from Horseshoe Bay Resort for $1 million.

Feb. 28, 2001: Gov. Rick Perry purchases a half-acre Peninsula lot from Fraser, a longtime friend, for $300,000 plus $10,762 in interest.

Nov. 30, 2001: Perry, through attorney Colleen McHugh, chairwoman of the Texas Public Safety Commission, appeals the tax appraisal on his Peninsula lot.

Dec. 14, 2001: Stan Hemphill, chief appraiser for the Burnet CAD, agrees to lower the assessment on Perry’s Peninsula lot from $414,700 to $310,762.

April-May 2005: After talking with Ron Mitchell, the resort vice chairman, Perry lists his Peninsula lot for sale with Horseshoe Bay Resort Realty for about $1.2 million. He pulls the listing after about five months without receiving any offers.

Jan. 1, 2007: The Burnet CAD raises the appraisal on Perry’s Peninsula lot to $600,000.

March 30, 2007: Responding to an offer conveyed through Mitchell, Perry sells his lot to Alan Moffatt for $1.15 million. Horseshoe Bay Resort Realty does not charge a commission.

Nov. 28, 2007: Moffatt lists The Peninsula lot with Horseshoe Bay Resort Realty for $2.35 million.

Feb. 9, 2009: Perry appoints Mitchell to the Texas State University System Board of Regents.

May 29, 2009: Moffatt lowers his asking price on the Peninsula lot to $1.95 million.

July 2010: Moffatt reduces the listed price to $1.65 million.2000200120022010

As part of its examination of Gov. Rick Perry’s land dealings in Horseshoe Bay, The Dallas Morning News hired Donna Lollar Green to conduct an independent appraisal of Perry’s lake property at the time he bought and sold it.

Green, who has more than 20 years of experience as a licensed real estate broker and an appraiser, is the owner of Highland Lakes Appraisers in Marble Falls, Texas, and a past president of the Highland Lakes Association of Realtors.

The News selected Green because of her familiarity with real estate values in the Horseshoe Bay area. She had no prior role in Perry’s land transactions and is not a political contributor to the governor or any of his political rivals.

To assist her research, The News provided Green with copies of the real estate closing statements on Perry’s purchase and sale of his lot. The News gave Green no instructions on the manner in which she should conduct her appraisal.

Green based her conclusions on an examination of comparable property sales in the vicinity of Perry’s lot in the year preceding his 2001 purchase and 2007 sale. The values on each property were adjusted for individual property characteristics.

Based on four comparable sales, she found that Perry’s lot had a market value of $450,000 when he purchased it for $310,762. Based on five comparables, she concluded in her final review that Perry’s lot had a market value of $800,000 when he sold it for $1.15 million.

The News also hired Stephen Crosson, chairman of Crosson Dannis Inc., a Dallas appraisal firm, to review Green’s work. He questioned whether Green’s market value of the governor’s property at the time he sold it was too high because she had not properly adjusted some data.

After she was told of Crosson’s analysis, Green agreed with some of the concerns and revised her appraisal from $850,000 to $800,000.

In addition, Crosson reviewed an appraisal done for the bank that financed Perry’s sale of his land to British businessman Alan Moffatt. That appraisal, done for The Bank of Texas in San Antonio by appraiser Robert J. Thompson, said the property was worth $1.25 million.

Crosson said Thompson’s appraisal, which was based on two comparable property sales near Perry’s lot, was incomplete and inadequately supported. “In my judgment,” Crosson wrote in his report for The News, “the Report does not comply with the Uniform Standards of Professional Appraisal Practice.”

Thompson said Saturday he could not discuss his work for privacy reasons.

AUSTIN – Texas Education Commissioner Robert Scott defended a policy Thursday that has allowed schools to boost their state ratings by counting some failed students as passing, saying politics has driven many of the complaints.

Scott, speaking to the State Board of Education, said the Texas Projection Measure has been misunderstood and misrepresented by critics who contend it gives a false impression of school performance.

The complex formula allows schools and districts to count as passing some students who actually fail the Texas Assessment of Knowledge and Skills if the projection measure shows they are likely to pass in a future year.

“There is a little bit of election-year politics going on here,” Scott said.

“It is very easy to demagogue. It is very easy for someone to say they gave students credit for failing.”

Democratic candidate for governor Bill White has been among those attacking the policy, accusing Scott and his boss, GOP Gov. Rick Perry, of cheating to make some schools look better than they really are.

“They decided to cheat, and then once caught cheating they failed to acknowledge responsibility. They counted failing scores as passing,” White has said.

Scott rejected that, saying the formula – which gives schools credit for projected growth in student achievement – is “statistically accurate, valid and reasonable.”

Scott has said he may revise the policy and will be open to any legislative changes.

He also cited scores of e-mails from superintendents, principals and teachers who wrote that the projection measure was beneficial for their students and schools – and should be retained.

The Dallas Morning News obtained copies of all e-mails received by the Texas Education Agency through the beginning of this week.

“Please keep TPM and do not suspend the use of the TPM for school accountability ratings,” said Lewisville High School principal Brad Burns, reflecting the viewpoints of numerous principals.

Weatherford High School principal David Belding urged Scott to please “not dismantle a system that gives schools with more difficult student groups to educate the chance to be recognized for moving those students forward. That is what TPM does.”

But there were a few critics mixed in with all the supporters of the policy.

David Seizer of Frisco called the upward adjustment of passing numbers a “crime” and “an open admission that you have been negligent with one of your major responsibilities.”

The TEA reported last year that 78 school districts and 355 campuses would have been rated academically unacceptable if the test results of their students had not been adjusted by the formula.

Instead, they received acceptable ratings.

Kyle Vrla walked away from college life in May with a civil-engineering degree from Texas A&M. He also has a load of textbooks he hopes to sell to recoup some of the estimated $4,000 he spent on them during four years at College Station.

Vrla, who is working in Dallas, got his college textbooks every which way — new, used, online and borrowed. Sometimes, he didn’t get his money’s worth — he used one only three times and lost $150 on another because he couldn’t resell it.

“When I went to resell the fifth edition of my Mechanics of Materials, the course had switched to the sixth edition the semester after me,” Vrla said.

Advocates say a new set of federal provisions, aimed at driving down the cost of college textbooks, should help students this fall. On July 1, these rules took effect:

Publishers must give professors detailed information about textbook prices, revision histories and a list of alternate formats.

Publishers have to sell materials typically bundled with textbooks — such as CDs, DVDs and workbooks — separately so students don’t have to buy them.

Colleges have to include in-course schedules with required textbooks for each class, including the book’s price and International Standard Book Number, an identifying tool.

The protections, included in the Higher Education Opportunity Act of 2008, are an attempt to lessen student debt, said U.S. Sen. Richard Durbin, D-Ill., on Wednesday.

“The cost of education is of concern not only to students and families but to the nation,” Durbin said, explaining why the government got involved in textbook prices. “Students are emerging with more and more debt.”

Durbin has estimated that textbooks cost college students $800 to $1,200 a year and that prices have been rising at four times the rate of inflation.

Students welcome the new protections.

“Textbooks are ridiculously expensive,” said Frank Netscher, 22, a senior physics major at the University of Texas at Austin.

Students often feel trapped by the expense, and sometimes they choose not to pay for a book to save money.

“I skimped on a physics course, and I skimped on a course called linear systems,” Netscher said. “The reason I didn’t buy the books was because I knew I could pass the courses.”

Area colleges, including the University of Texas at Arlington, the University of North Texas and Texas Christian University, are already providing students access to textbook information in course schedules. For example, a link navigates UNT students from the course catalog and registration site to detailed text information, said Tom Rufer, UNT’s assistant vice president for auxiliary services.

There, students will find required and recommended textbooks with title, author, edition, copyright year, publisher and ISBN reference, Rufer said. Students can also learn whether a textbook has not been chosen, as well as the new, used and rental prices at the UNT Bookstore, if available.

UTA Bookstore manager Bill Coulter said students going online to the university’s class schedule can click on a book icon that includes information similar to what UNT is providing. The bookstore is also continuing a book rental program.

“It was hugely popular,” Coulter said, adding that books selling new for $100 were being rented for a semester for about $47.

Rufer said the UNT bookstore will have more than 975 titles available for rent this fall. UNT is also focused on buying back more used textbooks to have them in supply for students.

“We are giving more options to students,” Rufer said. “Students really can have an impact on lowering their costs.”

Drew Bradley, 19, who will be a sophomore at UNT this fall, quickly learned to be savvy about textbook shopping. He spent about $500 on new books in his first semester. But in his second, he cut the cost to about $150 to $200 by using ISBNs to shop online. He said some books online are only $2.

“Everything counts,” he said. “If you can get them used, go online, shop around.”

Diane Smith, 817-390-7675

DALLAS — Rising temperatures and the economic downturn have led to renewed calls for the state to release more funds originally intended to help low-income people pay their electric bills.

A small group of residents gathered Thursday at the Dallas County Health and Human Services building to protest the use of the System Benefit Fund for purposes other than helping families.

The fund was created as part of the 1999 electric deregulation law to help low-income customers lower bills, weatherize homes and learn about the competitive electric market.

However, the Legislature has allocated only 25 to 30 percent of the fund to help low-income families through LITE Up Texas, the summertime discount program, officials say. The rest has been used to balance the budget.

Allison Brim, a member of the North Texas branch of the Texas Organizing Project, a community group that arranged Thursday’s event in Dallas, said the money would help low-income families make their homes energy efficient.

“People are struggling to pay their electric bills,” Brim said. “We’re calling on state lawmakers to start putting this money toward its much-needed purpose.”

Thursday’s gathering was small, but officials with other organizations that help people on low or fixed incomes agreed that clients need more help paying electric bills in the summer.

Tim Morstad, associate state director for AARP Texas, called the redirection of money “a shell game” that legislators should correct.

“There are many households that struggle to keep the lights on and stay safe and cool,” he said. “The programs that are funded by the System Benefit Fund can literally be lifesavers for Texans.”

Texas ratepayers each contribute 98 cents every month to the state-managed fund via deduction from their electric bills. At the end of June, the fund had reached $610 million, according to the Public Utility Commission.

State Sen. Wendy Davis, D-Fort Worth, agreed that state leadership is not using the fund as intended.

“Those leaders have taken the system benefit funds that each of us are paying to help low-income persons weather the cost of electricity in high-cost summer months and they’ve been socking those monies away into a deposit account,” she said in e-mailed statement.

The need for assistance is strong in Tarrant County, particularly as more people struggle to find work, officials said.

Sara Ramirez, vice president of development for Catholic Charities Diocese of Fort Worth, said paying electric bills is a chronic source of stress for clients.

“They get their electric bills and they can’t afford to pay them, so they use money they spend on food,” Ramirez said. “It’s like robbing Peter to pay Paul.”

Catholic Charities receives $600,000 a year through a TXU Energy emergency aid program to distribute to families struggling with electric bills, she said. But the need has grown in the economic downturn.

Staff writer Aman Batheja contributed to this report.

Alex Branch, 817-390-7689

About 81 percent of Texas small businesses, or 248,700 of 4 million U.S. companies, are eligible for a federal tax credit this year to help them buy health insurance for their workers under the new health care law, according to a report released Thursday.

The provision targets companies with 25 or fewer workers who earn an average of less than $50,000 a year, said the report by Families USA, a national consumers group, and the Small Business Majority, an advocacy and research organization.

Tax credit amounts will vary based on the company’s size, but ones with 10 or fewer workers who earn an average of less than $25,000 a year are eligible for the maximum benefit — 35 percent off the cost of a small group plan. In Texas, 79,100 small businesses would qualify for the maximum this year, said the report, “A Helping Hand for Small Businesses: Health Insurance Tax Credits.”

The maximum credit for nonprofit employers is 25 percent.

“I think the tax credit is a great, great, great thing,” said Judy Fazzio, co-owner of 2 Chicks Grooming, a Cedar Park pet grooming business. “I don’t know how it could not be an enticement and a benefit for other small businesses.”

The tax credit is aimed at companies that have the hardest time affording health insurance, said Kathleen Stoll, deputy executive director of Families USA.

“It’s really (for) the small guy who is in the most need of help,” she said during a conference call with journalists Thursday.

The report said that, in 2008, businesses with fewer than 10 workers paid $350 more on average for each employee they covered than firms with 50 or more workers. And the smaller companies generally got less coverage for their money.

Nationally, 72 percent of businesses with 10 to 25 workers offer health coverage, the report said, versus 95 percent of businesses with 50 or more workers. Less than 46 percent of companies with 10 or fewer workers offered it, the report said. More than half of America’s uninsured people are small-business owners, their employees and family members, Stoll said.

The data show “there’s a crisis in small businesses offering insurance,” said John Arensmeyer, founder and CEO of the Small Business Majority. The program is “not a panacea,” Arensmeyer said, but “there is no downside.”

The organizations commissioned the Lewin Group to analyze data from the U.S. Census Bureau and U.S. Agency for Health Care Research to produce the report’s estimates.

Travis, Hays and Williamson counties have 32,208 small businesses with one to 20 employees, said Jim Rodriguez, president and CEO of TexHealth Central Texas, a nonprofit that is offering low-cost insurance to small businesses with contributions from Williamson and Hays county commissioners and Central Health, formerly the Travis County Healthcare District.

Rodriguez said the tax credit will make health coverage more affordable to companies.

Fazzio’s company is enrolled in TexHealth, and she and a co-worker are covered by it. Two other workers are covered by a spouse’s health plan, and a fifth worker has chosen to go uninsured, Fazzio said. She pays $249 a month for her coverage and matches $74.52 for half of the employee’s monthly share. If she can get the maximum 35 percent credit, Fazzio would pay $26.08 less per month for her employee. She is going to check with her accountant.

Not everyone will be able to afford it. David Levy, who owns Jake’s Natural Fine Foods along with his wife, said he doesn’t have the cash flow to offer health coverage at this time.

“I think, right now with the economy being what it is, it’s all we can do as really small businesses to merely survive the downturn.” Levy wrote in an e-mail. “Health care coverage would have to be considered a luxury at present.”

The report cites other provisions in the law that will help businesses buy insurance, including a website starting this month listing options for small-group coverage, with links starting in October for easy comparison shopping; health care exchanges in 2014 that will enable employers to buy insurance for workers in a simplified way; and an end to allowing insurers to charge employers higher rates if workers have pre-existing health conditions.

maroser@statesman.com; 445-3619

Greg Harman
gharman@sacurrent.com

Population growth, rising temperatures, and changing rainfall patterns are poised to wreak havoc on the country’s water supply, leaving one in three counties facing high risks of water shortages by 2050, according to a report released this week by the Natural Resource Defense Council.

And the study, which bases its findings on population trends and leading international climate models, places Texas at center stage of those expected shortfalls. Already in many areas of the state more water is being withdrawn from surface and groundwater supplies than is returned. Factoring a near doubling of the state’s population, loss of an inch of rainfall per year from changing weather patterns, and adding a nearly three-degree rise in average temperatures by mid-century expected to cook off another five to seven inches of rainfall through increased evaporation rates would place most of the state at “extreme” risk of loss of water sustainability, the researchers found.

“Water shortages can strangle economic development and agricultural production and affected communities,” said Dan Lashof, director of the NRDC’s Climate Center, said in a prepared release. “As a result, cities and states will bear real and significant costs if Congress fails to take the steps necessary to slow down and reverse the warming trend.”

That the Texas of the future will be a much drier place is not exactly new information. The Texas Water Development Board wrote in its 2007 State Water Plan states that as we add another 20 million residents by 2060 water demand is expected to grows by 17 percent, mostly in the cities. And Texas will have about 22 percent less of the wet stuff to pass around. As daunting as that sounds, the TWDB’s chapter on climate doesn’t even mention the anticipated impact of global climate change now underway.

While a natural drying is already occurring across the Western U.S., the impact of human-induced climate change — expected to upset rainfall events and increase temps by seven degrees this century if unaddressed — is a complete game-changer.

When I was writing on climate predictions and Texas (“Last Chance for a Slow Dance?”) more than a year ago, Richard Seager, a Doherty Senior Research Scientist at the Lamont-Doherty Earth Observatory of Columbia University in Palisades NY, suggested that folks in the Southwestern U.S. and western half of Texas should be settling in for a nice long spell of “permanent drought.” [You can listen in on our 20-some-minute discussion about megadrought.]

NRDC contracted out their most recent study to Tetra Tech, a research outfit frequently employed by the Feds. In creating their rankings of all U.S. counties, Tetra Tech evaluated projected water demands, precipitation levels, susceptibility to drought, and projected summer water deficits. Changing precipitation patterns were also a key factor.

The group draws on a variety of climate models to project future conditions, including data from the U.S. National Oceanic and Atmospheric Administration, NASA, the National Center for Atmospheric Research, and research centers in Japan, Germany, Australia, Canada, United Kingdom, France, and Russia.

In the coming month, water districts across the state will be hustling to finish up work on their Desired Future Conditions reports due September 1. These documents will be used by the TWDB to fashion the state’s next State Water Plan. Considering the forecasts, residents across the state may want to press for the most conservative scenarios possible. While weather is a funny thing, and Texas weather especially quixotic, I have yet to find any suggestion that the clouds on the horizon are bringing anything but sad dust and mesquite thorns.

If you’re interested in how the groundwater for Bexar, Bandera, Blanco, Comal, Hays, Kendall, Kerr, Medina, and/or Travis counties is being managed, we humbly suggest you descend on Boerne at 10 a.m. Monday when Groundwater Management Area 9 holds their next DFC meeting (PDF). Your future self will thank you.

AP | The Austin American-Statesman

Gov. Rick Perry is urging Texas employers to help high school dropouts finish school.

He proposed a business tax credit Tuesday that would reward businesses who grant employees two hours a week of paid time off to return to school or study for the General Educational Development Tests. Employers would be eligible for a $1,500 credit on their sales taxes for each student who obtains a diploma or GED certificate.

Perry, seeking re-election to an unprecedented third term, has been sharply criticized for Texas’ high dropout rate.

The proposal requires action by the Legislature, which isn’t scheduled to meet until January. Perry estimates that the proposal would cost the state $15 million per biennium.

Perry’s announcement in El Paso came a day after Democratic gubernatorial nominee Bill White touted his five-point education program, which calls for changes such as expanding pre-kindergarten programs and making college tuition more affordable.

The former Houston mayor outlined the program in a speech Monday to the annual conference of the National Council of La Raza in San Antonio. The council is a Hispanic rights advocacy group.

White’s program also calls for working with school districts, community colleges and employers to improve career and technical education; more tutoring, summer school and outreach to absentee students to cut dropout rates; and adding measuring sticks for teacher-student performance besides standardized tests.

Correction: This story said the governor’s proposal for a business tax credit would cost $15 million per year. The cost is $15 million per biennium.

ERICKA MELLON | The Houston Chronicle

Democrat for governor Bill White has been critical of Republican incumbent Rick Perry, accusing him of using appointments to boards and commissions as a “machine” to raise money for his campaign. White spoke to Houston Chronicle reporter R.G. Ratcliffe recently about some of the ethics reforms he wants, his own donations and how some of his campaign rhetoric makes him sound like a Republican. Below is a condensed version of that interview. (The Chronicle has requested a similar interview with Gov. Perry.)

Q: Sometimes on the campaign trail, you sound like a Republican. You want to “scrub the budget” like former Republican Gov. Bill Clements. You also have said, “We believe in work, not entitlements or handouts.” But Medicaid, one of the largest parts of the state budget, is an entitlement. Is that a signal that you’re going to lean more to welfare-to-work programs?

A: Absolutely. I want to make public education and higher education the highest priority. We have limited budgets and we need to prepare Texas for the future. I’ve said for years, including as mayor, including to large groups of people with press present, when there were many evacuees from Louisiana, that able-bodied people should work. Give people opportunity. That means job training. People who are able-bodied should seek employment as quickly as possible. And on the fiscal discipline … I believe budgets should be disciplined. Government should be run as a well-run business. I consider that to be fiscally conservative.

Q: What kind of campaign finance reforms do you want?

A: Some essential elements would be, there should be a limit on both the fundraising and donations of people that the governor has appointed to boards and commissions. That’s important because it ensures those individuals will exercise their independent judgment and not somehow feel indebted to those who appoint them. There should be limits on the extent to which a governor should be able to take personal gifts and direct financial benefits from those he appoints. There should be a limit on the ability to use campaign funds to defer personal living expenditures. Gov. Perry has used over $800,000 in campaign funds, many of which have come from political action committees that have legislative agendas, to defray personal living expenditures.

Q: You have been critical of Gov. Perry for taking directly or indirectly more than $2 million from Houston home builder Bob Perry. In your mayoral campaigns you have taken at least $15,000 from Bob Perry and his wife. Are you critical of the donor or the donation amounts?

A: Probably in the different mayor races I raised $13 million to $14 million, and there were campaign finance limits. So, no one donor constituted some high percentage. It’s important that elected officials have a broad base of support and not one individual have an excessive amount of the total amount raised.

Q: So, would you support campaign finance limits such as those for mayor or the Texas judiciary for all candidates?

A: It would be a good thing. I would want to check to see what the legislative leadership believes. I certainly believe that should be true to people the governor appoints to boards and commissions. It would be a limit on what could be done after they are appointed. It is true that there are a lot of citizens in the state who would contribute who also are qualified, and it is true that any governor will be more likely to appoint somebody where they know something about the individual than not, but the first step is to limit the amount people appointed to boards and commissions can give.

Q: In talking to people on the campaign trail, what have you learned most?

A: The frustration people have with the neglect of career and occupational education in the public schools. People understand it. If everybody went and got a four-year degree and a master’s degree in something, we’d have a lot of unemployed Texans. People understand that we’re not teaching and preparing people for skilled trades.

Q: Would you do something about that as governor, because that would require additional spending in a tight budget?

A: It doesn’t, frankly. This really takes a vision and an organization, allowing there to be counseling and training earlier on so nobody is confined to a high school that is entirely vocational. People can begin in high school building those skills and then integrate a community college alternative, have a trajectory to community college and integrate the employers in it because this is a great sense of frustration for employers, not having enough skilled labor.

r.g.ratcliffe@chron.com