Senator Eliot Shapleigh - El Paso, Texas

Before the opening gavel has been pounded, Gov. Rick Perry and his potential opponents for the governor's race in 2006 already are influencing a Republican majority entering this 79th Texas Legislature.

In the 2003 session, legislators exercised what seemed to be a conservative mandate, voting to redistrict Texas in favor of the GOP and seek limits on lawsuit awards. This time around, though, Republicans appear to face a party referendum on the balance between social services and fiscal responsibility.

With the state possibly falling $1 billion to $2 billion short of a balanced budget, Perry has stepped back from his vow of no new taxes. At the same time, his chief potential opponents are calling for more spending: Comptroller Carole Keeton Strayhorn for an across-the-board teacher raise, and U.S. Sen. Kay Bailey Hutchison for a child health insurance program that works.

What is a fiscally conservative Republican legislator who has yet to cast a vote to make of these statements? Is the Republican leadership in Texas bending to economic reality or positioning itself for what will almost certainly be a fractious primary?

"In fact, Republicans in Texas are not articulating a set of principles based on no new spending. There is no consensus," said Byron Schlomach, chief economist for the conservative Texas Public Policy Foundation.

"Rick Perry is the most conservative governor since the first term of Bill Clements, but he has been beaten up pretty hard on the spending issues, and it is being reflected in the popularity polls," Schlomach said.

Lack of consensus

This lack of consensus should come as no surprise when a minority party ascends to power,said Larry Sabato, director of the University of Virginia Center for Politics.

Texas Republicans who were once unified in their opposition to Democratic programs are now being asked to vote for or against legislation of their own creation. Invariably, those choices will open fissures within the Republican Party, which Sabato says are necessary to the health of the party.

In 1990, Republicans controlled not a single state legislature in the country. Today, Republicans control half of them, Sabato says. In several instances, inter-party squabbling that began soon after a majority was won has been costly, he says.

"Here in Virginia it took exactly one session for the party to split asunder," Sabato said. "The Republicans, after a century of Democratic control, finally take over in 1999, and they couldn't even pass a budget. In the 2001 election, voters chose Mark Warner, a Democrat, for their governor."

Such a political reversal is highly unlikely in Texas, says Jerry Polinard, chairman of the political science department at the University of Texas-Pan American.

Democrats have not won a statewide election in the state in a decade, a trend that is unlikely to change soon, Polinard says.

"Everyone is talking about the Republican primary for governor; no one is talking about the Democrats," Polinard said.

And in spite of the moderated stances of the governor and his would-be opponents, any Republican primary is bound to be defined by a conservative Republican Party platform, Polinard says. The party, not only in Texas, appears to be riding a wave of conservatism.

A former Republican governor of Texas has been elected to a second term as president and promises to carry out a conservative agenda.

His successor, Perry, comes to this session with a conservative record.

A Republican majority, the first since Reconstruction in Texas, made up a $10 billion budget shortfall in the last legislative session by cutting services instead of raising taxes.

In the preamble to their party platform, Texas Republicans say, "We believe that government spending is out of control and needs to be reduced. We support fundamental, immediate tax reform that is simple, fair, and fully disclosed. We commend President George W. Bush's principled stand to reduce taxes and stimulate the economy."

Conservative stance

Perry and his primary opponents will have to decide how far outside this conservative plank they are willing to stray.

Republican legislators will be tested, too, by their votes on issues like health insurance and education that might require new spending, Allan Saxe, political science professor at the University of North Texas, said.

In a state where a moderate Republican is called a Democrat, Saxe says that the Republicans "could potentially be in political quicksand if the party sticks to its platform."

It is the Republican majority that has faced the brunt of criticism for cuts in social services and the failure to fix school spending in the last session.

Perry made it clear that he does not intend to be carried under by the sucking sand with his announcement that he is willing to consider new ways of generating revenue for the state.

Given the potential budget shortfall in this session, there almost certainly will be debate about the fundamental taxing structure in the state.

In 1991, powerful Lt. Gov. Bob Bullock confessed publicly that "deep down in his heart," he knew the appropriate way to raise revenue in Texas was through an income tax.

This soulful plea has been met with an eardrum-numbing silence ever since. Bullock himself led the move to amend the Texas Constitution to prohibit an income tax. Even state leaders who might think an income tax a rational way to deal with the budget consider it politically foolhardy.

Coming into this session, legislators are likely to look at raising the cigarette tax, maybe nudging up sales taxes or reworking of the franchise taxes paid by businesses.

Business tax

A proposal to create a new business tax to pay for schools came from an unlikely source in Dallas last year. Attorney Mike Boone, an advocate for increased school funding, persuaded the Dallas Chamber of Commerce to endorse a flat business tax. Prominent Dallas businessmen, most of them Republicans, signed on.

At a conference in December in Austin, Lt. Gov. David Dewhurst said a flat and fair business tax might be used to pay for education as well as children's health care.

Dewhurst was careful to point out, however, that getting some kind of business tax through the Legislature might not be possible in 2005.

Neither Boone nor Dewhurst has been specific about how a flat business tax might work.

Support from the Dallas Chamber of Commerce aside, Virginia's Sabato said, "In the state legislatures, it's the opposition of chambers of commerce and small businesses that kill flat taxes for business. I couldn't see a flat business tax in Texas."

More so now that the party has consolidated its majority, Republicans in 2005 must face what Democrats faced for 100 years, says former Lt. Gov. Bill Ratliff, a Republican who, as chairman of the Senate Finance Committee, helped write several state budgets.

"It's a classic dilemma," Ratliff said. "Don't ever raise my taxes, ever, even though I want the same level of services or maybe better. It's impossible to reconcile. The problem is, everybody wants to go to heaven, but nobody wants to die."

This difficult reconciliation probably will be brought into sharpest relief on the issue of school financing.

John Dietz, district judge in Travis County, has overruled impossibility, demanding that the Legislature enact a new school funding law by October.

The law would replace the so-called Robin Hood plan that caps local property taxes and, by formula, reapportions tax money from districts with more to districts with less.

Dietz in September said that the Legislature was so inadequate in its funding for public schools that it was in violation of the Texas Constitution. And unless the Legislature enacts an adequate school finance law or the State Supreme Court overturns him, Dietz's ruling calls for schools to close in October, when money would run out.

In addition to Dietz's pressure, the Legislature must face Republicans in the suburbs of Texas' largest cities who think that the share-the-wealth system of school funding has harmed their children's educations.

These fiscal conservatives, who normally support reduced spending in other areas of government, want more money spent on their children's schools.

"It's called being between a rock and a hard place," Ratliff said. "But at least it's my impression that those suburban voters have acknowledged that something has to be done. There's only one thing worse than passing an increase in school taxes, and that's closing schools."

Critics of the Republican majority have said the Legislature is in a similar place on the Children's Health Insurance Program.

By refusing to increase spending in 2003, Texas lost at least $500 million in matching federal funds.

Those critics, who note that more than150,000 children have been dropped from the program, have accused the Republican majority of foisting the responsibility for those children on local taxpayers.

Legislative test

Perry and his potential opponents have not been content to simply let these important budget issues play out in the Legislature.

But whether their statements of moderation are indications of a shift in party philosophy or expedient political rhetoric will be tested on the floors of the House and the Senate.

Conservatives, however, will not view new spending or programs as a shift that can be accommodated, but rather a sellout to principles that brought the party into power in the first place, Schlomach said.

"What I think legislators need to keep in mind in terms of this budget pressure and those who say they absolutely must have more money," Schlomach said, "is that they came here not to represent the interests of people whose vested interests is in getting more money, but to represent the taxpayers who pay the bills."