Steve Holzheauser

Political Affaires Consultant

DATE: January 12, 2007

RE: Austin Update

House

The Texas Legislature was sworn in on the second Tuesday, January 9^th, of 2007, for a constitutional 140-day session. The first order of business for the House of Representatives is to elect a Speaker. This responsibility of the House membership is normally routine, with the decision on who will lead the House being made long before the opening bell.

This year was anything but normal. A few days before Christmas, an insurgency was initiated by the majority of Democrats and a small number of ABC (anybody but Craddick) Republicans. The race started with three Republicans vying for the support of the dissatisfied. Ultimately, Rep. Talton of Houston and McCall of Plano abandoned their efforts and backed Jim Pitts of Waxahachie. The drama played itself out over the ensuing run-up to January 9^th. When the dust had settled, incumbent Speaker Craddick was reelected pledging to exercise the power of the Chair in a kinder and gentler manner.

Senate

Not all of the excitement was reserved for the House. While most eyes were on the Speaker’s race, there was some excitement in the Senate.

Houston radio talk show host, Dan Patrick, turned freshman Republican Senator, launched an attack on the rules that govern the Senate. Specifically, his target was the so-called two-thirds rule. Before a bill can be brought up on the Senate floor for debate and a vote, 2/3 of the Senate membership must approve. This requirement, for a super majority to give their OK before a bill can be heard on the floor, is one of the issues talk show host and candidate Patrick rode to victory. Traditions die hard. When Senator Patrick offered his amendment that any simple majority of the membership could bring a bill to the floor, the vote was 30-1.

Committee Assignments

The heavy lifting in the legislature is normally done in committee. Activities around the Capitol will be mostly ceremonial until committees are announced. The Lt. Gov. is historically the first presiding officer to announce his choice. This usually occurs in mid to late January with the Speaker of the House making his choices known about mid-February.

Early Emerging Issues

Minimum Wage

Numerous bills have been filed to increase the minimum wage in Texas. This week, the new Democrat majority US House passed a minimum wage bill that will apply to all 50 states. All indications are the Senate will follow suit. The President has signaled his willingness to sign this legislation, so it appears there will be a reduced urgency to pass a bill at the state level.

Border Security

The Governor has made it clear he is dissatisfied with the support Texas is receiving on this issue. He has previously committed substantial state resources to the border and has promised to do whatever he can to deal with this international issue.

Property Tax Appraisals

This is another issue the public is demanding be addressed. The public feels betrayed by elected officials claiming they have not raised property tax rates while increased evaluations have dramatically increased the amount being paid by property owners. The governor has appointed a committee, which, any day, will report its recommendations on how to address this issue.

Gaming

Expanding the venue for legalized gaming has been a hard sell in Texas. The horse and dog track owners want “slot” style machines legalized for their venues and claim it is a way to save the horse race industry. Others want full-scale casinos with resort, destination style facilities. The Attorney General has issued an opinion that a constitutional change will be necessary for any expansion of gaming. This would require a 2/3 majority of both chambers to authorize an amendment. The amendment would then have to be approved by a majority of Texas voters. In the absence of a fiscal crisis, legalization of “slot” machines or casino style gaming is unlikely.

ETC

Economic development, water, electric deregulation, transportation, higher and public education, prison overcrowding and substance abuse treatment have received honorable mention and I’m sure there will be some sleeper issues that will surface before this session ends on Memorial Day, 2007.