After almost two months of haggling over...

After almost two months of haggling over how to keep Texas from going bankrupt, the state Legislature voted in a sweeping series of tax increases and budget cuts Tuesday to offset the crisis brought on by the plunging price of oil.

The new sales and gasoline taxes passed Tuesday will raise an estimated $872 million, while expenditures will be cut by $511 million. The taxes and cuts were necessitated by what is now estimated to be a $2.8-billion deficit in the state budget.

Interfund borrowing will be used to balance the books until the Legislature convenes in January to search for more long-term solutions to the state’s money crisis.

White Big Winner

For the moment, though, the big winner is Democratic Gov. Mark White. While Texans will have to dig deeper into their pockets to pay the bills, the measures have given a desperately needed boost to White’s reelection campaign.

At one time he looked like a sure loser to former Republican Gov. Bill Clements. But after endorsing a tax increase only three months before the November election and calling the Legislature back for two special sessions, White, according to a poll released Sunday, is now in a dead heat with Clements.

“He did what had to be done,” said Lt. Gov. William P. Hobby Jr. “I think he himself perceived it as an unpopular step. I never did.”

‘Ensured His Political Future’

Or, as one senior staffer in the governor’s office put it Tuesday: “It ensured his political future.”

While White pushed ahead with his cuts, Clements remained silent about how he would deal with Texas’ fiscal crisis, except to say that he had a secret plan for saving the state. Democrats, in response, offered a reward for anyone who could come up with the Clements plan.

“I’ve still got a $1,000 reward for Bill Clements’ secret plan,” state Sen. Chet Edwards said Tuesday.

“I think they (the legislators) did a good job,” White said even before the session ended Tuesday night after a day of filibustering by Republican state Sen. J. R. (Buster) Brown. “It was a tough job. No other legislature in the country has been called upon to do it.”

Hobby, however, was not so kind, charging that two months of debate resulted in little more than a quick fix for the problems of the state.

“It’s not a satisfactory solution at all,” he said. “Instead of addressing the thing in a comprehensive manner, it was done in a rather haphazard fashion that has damaged the state. After 60 days of grief, we get to have the fun of addressing the question again when the Legislature convenes in January.”

Wide Differences

The Senate and the House were poles apart when they finished their first session Sept. 4. The Senate, led by Hobby, wanted tax increases even larger than the one called for by White. The House, with Speaker Gib Lewis taking the lead, was adamantly opposed to any form of tax increase. The two sides compromised on what was essentially White’s initial proposal.

Sales tax will be increased from 4.125 cents per dollar to 5.25 cents. The gasoline tax will be raised from 10 cents to 15 cents a gallon.

The Legislature also approved pari-mutuel betting on horse racing in Texas, a measure that White allowed to become law without his signature because of what he described as religious reasons. And in a move that could help the flagging Texas banking industry, the lawmakers voted to allow branch banking.