Several say chief of staff asked for $1.2 million

09:59 PM CDT on Friday, April 15, 2005

By ROBERT T. GARRETT / The Dallas Morning News

AUSTIN – Gov. Rick Perry's top aide summoned about a dozen business lobbyists to a private club this week and asked for $1.2 million to pay for a statewide advertising campaign in support of flagging efforts to restructure Texas' tax and school finance systems.

Many of the lobbyists represent industries – including real estate, liquor, beer, oil, gas and petrochemicals – that would fare well under a tax-swap bill the House passed last month. The Senate is considering similar legislation, but the two chambers are far apart on the details.

Deirdre Delisi, the governor's chief of staff, asked the lobbyists to report back next week on whether their clients would contribute money, according to two attendees who spoke only on condition of anonymity because they fear harming relations with Mr. Perry's office.

Although the lobbyists agreed to ask their business clients about the proposal, their initial response was tepid, one attendee said.

"The question in everybody's mind was, 'Now, what are we supporting here?' " the lobbyist said. "Depending on what they come up with, everybody has a different opinion."

Ms. Delisi acknowledged Friday that she had "preliminary discussions" with "several representatives of employers and job creators" about an ad campaign.

She said such ads would ask citizens to urge lawmakers to act quickly on the session's two most important bills, one of which would change how the state funds public schools and create the largest teacher merit pay program in the nation. The other bill would cut school property taxes by a third and raise other taxes, including sales and cigarette taxes.

"We plan to take our message directly to the people of Texas," Ms. Delisi said.

Mr. Perry's effort comes as progress has slowed on both measures, but especially the tax bill, which has been parked in the Senate Finance Committee for more than three weeks and is being whipsawed by conflicting business interests. Both bills are important to the governor, who has named a property tax cut and school-finance overhaul as legislative priorities as he tries to fend off potential challengers in next year's Republican primary.

Ms. Delisi declined to reveal Mr. Perry's thinking about what entity should collect the corporate contributions and manage the envisioned ad campaign. She would not say how the ads and accompanying household mailers would identify who paid for them, as required by law.

"I'm not going to talk about specific tactics," she said.

Tom "Smitty" Smith of Public Citizen of Texas, an ethics watchdog group, said raising corporate money for issue ads is "entirely legal, but we question whether it's the right thing to do. They appear to be planning a massive advertising campaign to convince Texans to support property tax relief that only benefits a few."

Those informed of the campaign said it was designed to shore up support for the tax swap package in the House because radio spots would run in areas represented by Republicans who voted "no" or who voted "yes" but are considered susceptible to switching if the bill returns from the Senate in a different form.

The House passed the tax bill, 73-68, on March 15. Since then, GOP support has softened, especially after Comptroller Carole Keeton Strayhorn said the House overestimated how much revenue the bill would raise. House leaders angrily dismissed her criticism.

Ms. Delisi would not say whether the effort would target wavering House Republicans.

"Any educational advocacy effort done will be a statewide effort that will target Texans from all regions of the state," she said.

When she met with the business lobbyists Tuesday at the Austin Club, a downtown club popular with lawmakers and lobbyists, Ms. Delisi proposed a radio ad campaign in nine markets and mentioned sending out household mailers. One participant said she distributed a list of radio stations in Dallas, Austin, Bryan-College Station, San Angelo, Beaumont, Tyler, Abilene, San Antonio and Amarillo.

Four Dallas-area House members – Jodie Laubenberg of Parker, Brian McCall of Plano, Ken Paxton of McKinney and Elvira Reyna of Mesquite – were among 11 Republicans who either voted no on the bill or said that they would have opposed it.

In the Senate, where two-thirds of senators are needed to bring up a bill, Democrats object to provisions that would add a penny to the sales tax and increase taxes on snacks, soft drinks, bottled water and car repairs and washes.

While Democrats want less reliance on consumption taxes, Senate leaders say they also have to appease Republicans wary of squeezing a lot more revenue from business. The House bill would tax more businesses by overhauling the state's franchise tax, which few businesses currently pay.

Ms. Delisi cast the governor's ad effort as an uphill effort against big-spending adversaries.

Radio ads that criticize the tax-swap bill, paid for by cigarette-maker Philip Morris USA, began airing on some Texas stations this week.

"It's been clear that big tobacco is willing to spend a large amount of money to defeat this, and it's no secret that the school districts have spent a lot of taxpayer dollars to pay lobbyists to defeat our efforts to cut property taxes," Ms. Delisi said.

Many school groups oppose the House's school-finance. However, they criticize the bill because they say it doesn't give schools enough new money or they oppose merit pay, not because they oppose property tax reductions.

Ms. Delisi would not say whether House Speaker Tom Craddick and Lt. Gov. David Dewhurst, who presides over the Senate, were told of the meeting before it occurred.

A spokeswoman for Mr. Craddick said the speaker didn't know about it until it was over and "still doesn't know what the outcome of the meeting was or who was there."

Aides to Mr. Dewhurst said the lieutenant governor's staff was notified beforehand by the governor's office.

Ms. Delisi said she didn't know if business groups would provide the money requested.

"I haven't had any follow up discussions with anybody," she said.

Staff writer Christy Hoppe contributed to this report.

E-mail rtgarrett@dallasnews.com