Texas Lawmakers Fail to Cope With Crisis

On the last day of their special session Thursday, the members of the Texas Legislature knocked off early, because there was no point in going on.

They weren’t going to get anywhere at the last minute. They weren’t going to keep the state solvent this time around.

The lawmakers had been called up by Gov. Mark White to spend 30 days wrestling with the state’s worst financial crisis in 25 years. White brought them into special session because the Legislature meets only once every two years.

Month of Haggling

But, when the legislators wrapped up their month of haggling in the early afternoon Thursday, they had almost nothing to show for it.

True, both houses had voted in favor of horse racing in Texas, a move that captured the headlines in this Bible Belt state. The Legislature had passed a bill to protect consumers who buy money orders and a bill to strengthen discipline in the classroom and eliminate paper work for teachers. It approved changes in the banking system.

But what the Legislature did not do was agree on how to deal with the state’s projected $3.5-billion deficit--a deficit brought on by declining revenues from oil, long the state’s financial mainstay. So White, a Democrat who is in one of the toughest election fights of his career--against Republican ex-Gov. Bill Clements--called another special session of the Legislature, to begin Monday.

May Write Bad Checks

So serious is the Texas financial crisis that the state treasurer, Ann Richards, predicted in an interview Wednesday that the state will have to start writing bad checks by December if new revenues are not found.

White, in announcing the new session, tried to sound an optimistic note.

“Time has run out on this session, but we’re not folding the tents,” he said. “We’re not going home.”

But Democratic Lt. Gov. William P. Hobby took a more critical view of the Legislature’s inaction, and especially that of the House. He said this week that Texas was becoming a “laughingstock” and was “about to go over a cliff.”

“I think what is taking place in this session has not helped the reputation of this state,” he said. “I would like to think the state has a reputation for solvency and responsibility in the conduct of its affairs.”

No State Income Tax

The major problem facing the Legislature is taxes. Texas has no personal income tax and no corporate income tax. Over the years, it has depended on a basic 4.125% sales tax, along with oil and gas revenues, to finance its highways, education, prisons and human services. But, with the oil bust came declining revenues, and now there is not nearly enough money to pay the bills.

When the special session opened, on Aug. 7, White called for a 1 1/8-cent temporary sales tax increase, along with spending cuts, to keep the budget balanced. Hobby called for a slightly larger tax increase. But House Speaker Gib Lewis, a Democrat, said he would oppose any tax increase, and the Republican minority in the House strongly supported that stance. That is the way the session began--and essentially the way it ended. There was speculation here Thursday that White might veto the horse-racing measure to show his displeasure at the stalemate.

State Rep. Stan Schleuter, the chairman of the House Ways and Means Committee, explained why the state’s representatives were reluctant to pass a tax increase. He said that most Texans still did not actually realize how bad state finances were, but what they did know was that they didn’t want their taxes to go up.

“I think it’s slowly sinking in to the voters and taxpayers about how bad it is,” he said. “But, when there are 84 or 85 members whose constituents are telling them they don’t want a tax bill, it’s kind of hard to shove it down their throat.”

Especially in an election year.

‘Will Move Quickly’

But Schleuter took issue with Hobby. “We are going to solve our problems,” he said. “We are not going to be a laughingstock. Texas is too strong economy-wise to let anything get it down. We’re going to be right on top again. We may be slow but, when we start moving, we will move quickly.”

In the nearly deserted Capitol building late Thursday afternoon, White sat in the governor’s office switching a television set from newscast to newscast.

He said he did not believe that the next special session would drag on like the first one, which cost an estimated $285,000. He said he thought there would first be spending cuts and then new taxation to make up the difference.

Problem of Paying Bills

“Nobody likes to raise taxes in an election year,” he said. “We are faced with the problem of paying bills.

“I have the greatest confidence they will take care of it, and I expect them to do the job,” he said.

He said he believed House Speaker Lewis would come around. And he said that, yes, the Legislature would deserve serious criticism if it did not quickly come up with solutions to the mounting fiscal crisis, that Texas lawmakers had to act responsibly in both the good times and the bad.

“Nobody made those people run for office,” he said.