The Lone Star Report does not publish an issue this week, in observance of Christmas day. Our next issue will publish Jan. 7, 2011. We wish you and your family a very Merry Christmas and a Happy holiday season. Our offices are closed Dec. 24, but will be open next week.

The Travis County District Attorney's office has declined to open an investigation into charges that Rep. Larry Taylor (R-Friendswood) engaged in "double-dipping," meaning he took reimbursements from both his state and campaign accounts for the same expense. "the Public Integrity Unit is declining to open formal investigation and will consider this matter closed," wrote Gregg Cox with the Travis County Public Integrity Unit in a letter to Taylor. "We appreciate your cooperation in providing documents that helped lay this issue to rest," Cox continued.

In an earlier interview with LSR, Taylor said his office keeps a detailed spreadsheet of reimbursements and that when expenses first paid by the campaign  are later reimbused by the state, those reimbursements go straight back into the campaign. The Travis County District Attorney has now examined the documents Taylor referenced and declined to prosecute. "I appreciate the Public Integrity Unit's prompt review and response," Taylor said. "They had my full cooperation in their effort. My campaign finance reports are a matter of public record and I followed the ethics laws and guidelines in filling out the reports."

Earlier this year, Taylor asked for financial information on a settlement between the Texas Windstorm Insurance Association (TWIA) and a group of plaintiffs whose homes were damaged by Hurricane Ike. One of the lawyers involved in the settlement -- Texas Trial Lawyers Association President Steve Mostyn -- sought a court order, which has since been dissolved, directing the state-financed insurance organization not to give representative samples of the documents Taylor requested to the Attorney General of Texas as required by law. Around that time a series of left-leaning non-profits began filing open records requests about Taylor's reimbursement practices and his work as an insurance agent. Unlike the plaintiff's attorneys, Taylor fully disclosed the requested information, did not challenge disclosure, and cooperated fully with law enforcement.

Speaker Candidate Warren Chisum (R-Pampa) announced his plans to call for a GOP caucus to discuss leadership of the Texas House.

Chisum, in a press statement released this morning, said he would deliver a letter to Republican Caucus Chairman Larry Taylor (R-Friendswood) on Dec. 29 calling for a meeting. The letter would request that the House Republican Caucus discuss the Speaker's race, which right now is a three-way contest between Chisum, Rep. Ken Paxton (R-McKinney) and Speaker Joe Straus (R-San Antonio).

Caucus by-laws require scheduling a meeting within seven days upon the request of 10 Republican House members, and it appears there are enough Republicans wanting a caucus meeting to pull this off.

Texas will gain four seats in the U.S. House of Representatives, starting with the 2012 election, according to the official Census count released today by the U.S. Bureau of the Census. A map of states gaining and losing Congressional seats can be found here. In a nutshell, Texas gains four, Florida gains two. Gaining one each are Washington, Arizona, Utah, Nevada, Georgia, and South Carolina. Losing one seat each are Louisiana, Missouri, Illinois, Iowa, Michigan, Massachusetts, New Jersey, and Pennsylvania. New York and Ohio each lose two congressional seats.

Besides the obvious effect on redistricting, this count also effects the electorial college for the 2012 general election, resulting in a shift of electorial votes from states Barack Obama carried to states John McCain won.

This Sunday, LSR Managing Editor William Lutz appeared on WFAA's Inside Texas Politics. He blasted lawyers for the Plano Independent School District for arguing in federal court that elementary school students don't have First Amendment Rights. Lutz is referring to the infamous "Candy Cane Case," where the Liberty Legal Institute is suing Plano ISD because it wouldn't let an elementary school student pass out a note at the winter party telling his fellow students that a candy cane has a Christian origin or pencils that say "Jesus is the reason for the season." Lutz argues that organizations like the ACLU have created an environment where public schools often inadvertently discriminate against Christian students.

Earlier this year, the elected State Board of Education passed new social studies standards that insist that children learn why America is unique and special among nations. The State Board of Education wants kids to know more about Thomas Jefferson and George Washington than just the fact that they owned slaves.

But that doesn't sit well with the Obama administration. The U.S. Department of Education is mad at Texas because Gov. Rick Perry refuses to hand over the authority to decide what Texans learn in schools to unelected bureaucrats in Washington DC. Specifically, the Texas Education Agency declined to participate in the federal government's "Race to the Top" program that required adopting federal government curriculum standards. ...

The land developer in the Dallas City Hall corruption trial -- Brian Potashnik -- received a sentence of 14 months in prison Friday. Cheryl Potashnik, who offered Rep. Terri Hodge (D-Dallas) free rent, got probation. The full story is available on WFAA.com. We post a clip below:

For our North Texas readers, LSR Managing Editor William Lutz will appear on WFAA's Inside Texas Politics this Sunday at 9. Lutz will be blasting school officials for making it difficult for Christian students to exercise their First Amendment rights. Inside Texas Politics airs every Sunday on WFAA, Channel 8 in North Texas.

Is expanded gambling really dead or are gambling lobbyists just being really, really quiet right now because the gambling crowd doesn't want an anti-gambling legislator to win the Speaker's race?

It's a fair question. Last night, LSR Managing Editor William Lutz received a phone call at his home. It was a robo-dial poll consisting of three questions:

Rep. Larry Taylor (R-Friendswood) issued the following statement on Galveston District Judge Susan Criss's decision to dissolve her order (sought by plaintiff's lawyer Steve Mostyn) prohibiting the Texas Windstorm Insurance Association -- a state-financed Coastal insurance company -- from giving financial documents to him:

Plaintiff's attorney Steve Mostyn, current president of the Texas Trial Lawyer's Association, testified before the Joint Committee on Oversight of Windstorm Insurance today. Mostyn is the liaison counsel for the Hurricane Ike cases in Galveston County, but he said he is not the lead counsel for the "slab" claims in Galveston. His testimony gave Mostyn the opportunity to clarify some issues that have been discussed in the press and discuss with lawmakers his concerns about how TWIA adjusted Hurricane Ike claims.

Most of the hearing surrounded the nuts and bolts of the state-financed Texas Windstorm Insurance Association and the subsidies that are paid by policy holders statewide (and indirectly state general revenue) to keep windstorm rates low along the coast. It was not a "showdown" between Mostyn and supporters of tort reform but an extremely civil discussion of insurance issues.

We'll post a more detailed treatment of this topic later in the week. But here are a few notes from the hearing:

During our conversation with Rep. Larry Taylor (R-Friendswood), we asked him about his role as chairman of the House Republican Caucus during the Speaker's race. We print his answer below:

In this week's issue for our subscribers, we are pleased to publish an interview with Rep. Larry Taylor (R-Friendswood) on the Texas Windstorm Insurance Association and his battle with some plaintiff's attorneys to get financial information on the association. For space reasons, we had to condense part of the interview published in the issue. We print additional comments from Taylor on the Texas Windstorm Insurance Association and some ideas to solve its problems below:

During our interview with Rep. Larry Taylor (R-Friendswood), most of which is published in this week's issue, he asked for the opportunity to clarify that he is actively following state ethics laws and and state reimbursements for activities initially paid for by his campaign go right back into his campaign. We print his comments below:

At this weekend's State Republican Executive Committee meeting, Chairman Steve Munisteri told committee members that the party is now officially debt-free for the first time in a long time. That means that Munisteri -- with the help of office-holders and Repbulican donors statewide -- has retired the $708,494 of debt he inherited. He also noted that the party spent more than $900,000 on behalf of candidates this cycle.

The Texas Public Policy Foundation released a poll yesterday taken by Baselice and Associates showing the public wants more efficiency and less spending in higher education. “Texas voters want more value and higher quality teaching for the tax dollars they pay to support higher education,” said Justin Keener, TPPF vice president of policy and communications. “The results give lawmakers and university officials clear marching orders for how Texans want them to address budget shortfalls and rising tuition costs: put our students first and cut higher education overhead.”

Specifically, 87 percent responded that universities' top priority should be educating students, with only 6 percent stating that conducting research should be the top priority. The poll shows strong support for making professors teach more.

Today, Gov. Rick Perry, Lt. Gov. David Dewhurst, and Speaker Joe Straus sent state agencies a letter asking them to identify an additional 2.5 percent in budget reductions for Fiscal Year 2011. The letter, which can be read here, contains some rather concerning statistics about where state finances are. Specifically, the letter states "overall state revenue receipts for fiscal year 2010 came $2 billion below estimate." The letter then notes that sales tax numbers are rebounding but "we still anticipate insufficient revenue to cover general revenue spending needs in the current biennium." The 2.5 percent reductions will be memorizalized in a 2011 supplemental appropriations bill, the letter continues.

Undoubtedly in a few minutes, presidents of state universities will start hyperventalating because cost control is not in their vocabulary. And the Capitol press corps will try and recite the tired refrain about a so-called "structural deficit," but that's not what's really happening here.

Steve Taylor of the Rio Grande Guardian is one of the most knowledgable writers about the politics in the Lower Rio Grande Valley. Yesterday, he published an extremely insightful interview with Rep. Aaron Pena (D-Edinburg), which is a must-read. Here are a couple of key excerpts:

“The Democratic Party in Texas has got decades of rebuilding to do. Their dream of demographic salvation is an illusion ... Hispanics are not being engaged with by the Texas Democratic Party. In percentages, they are moving over to the Republican ranks, as we saw in Corpus Christi,” Peña said. “As long as Republicans can get over 40 percent of the Hispanic vote, they will dominate Texas for my lifetime. And that is what is happening. That is why, after the next redistricting, not the one coming up, you will see Cameron County with a Republican leadership.”

“They have completely ignored South Texas and other parts of urban Texas. They have spent a disproportionate amount of time and money on swing voters who never come over. It has happened in every race since we started losing. They have not engaged with the base of the Democratic Party. You need to do both (swing voters and base party voters) but they have spent nearly every penny on swing voters,” Peña said. "Unfortunately, a handful of people in Dallas and Austin have led the debate. The Democratic Party, unfortunately, is standing on one financial leg and that is the trial lawyers.” ...

Former Harris County Republican Chairman Gary Polland has endorsed Joe Straus for re-election as House Speaker. Polland is a long-time conservative activist who has sought to move the GOP to the right, particularly on taxation and spending issues. Polland's endorsement can be read at his online newsletter, Texas Conservative Review.

 "And for those who say he isn't conservative enough, we say look at his plans with a super-majority in the House as opposed to a nail-biting majority he dealt with last session: a real voter ID bill, balancing the Texas budget without raising taxes, and strengthen border security," Polland wrote. "... This is not a case where we are dealing with a RINO (Republican in name only)."

Health care policy expert Troy Alexander rejoined the Texas Medical Association's staff, now working in the legislative affairs department, a TMA press release noted.

Alexander worked for TMA 1999-2003 as its director of political education. Alexander then worked as a senior health and human services policy analyst for then-Speaker Tom Craddick. Since 2009, he has worked for the Department of Health Services.

The Lone Star Report will not be publishing this Friday, Nov. 26, 2010.

A Travis County Jury has convicted former U.S. House Majority Leader Tom DeLay on money laundering and conspiracy charges. The story is in most of the state's newspapers. Click here to read the Houston Chronicle's account.

The Austin American-Statesman published an interesting article today on the attempt by some city officials to have the Texas Open Meetings Act declared unconstitutional. The officials argue it violates their First Amendment rights to be prevented from emailing a quorum of, say, a city council and having a virtual discussion about agenda items (or the future agenda of the city council). The case is being heard in the District Court by federal judge and former legislator Rob Junell.

We wish to draw our readers' attention to one section in the story:

With help from the Texas Municipal League, [attorney Dick] DeGuerin recruited current city officials to join a new lawsuit, including Pflugerville City Council Member Victor Gonzales, who was on the witness list but did not testify Tuesday.

First the big-government city lobbyists work to make sure it's next to impossible for voters to rollback excessive property tax increases. Now they're trying to get a federal judge to throw out the Texas Open Meetings Act so they can do public business in secret.

Texans for Lawsuit Reform President Richard J. Trabulsi, Jr. issued the following statement on the Attorney General's ruling that many documents in the TWIA settlement, including bills for legal fees, constitutes public information:

“Restoring and maintaining public trust in our civil justice system has always been a primary goal of TLR.  In September, TLR requested that all important information regarding the TWIA-Ike settlements be released.  The public absolutely has a right to know the details surrounding the TWIA-Ike settlements because of the unique nature of TWIA, the involvement of elected officials in its oversight, the potential impact on premiums paid by Texans for insurance, and the possibility that our State’s general revenue fund might be impacted.”

At today's news conference, LSR asked Lt. Gov. David Dewhurst what he thinks of proposals from school lobbyists and superintendents to spend billions more on public education. "Everyone in America realizes that the message of this last election, whether you're living in Washington DC or you're living in Texas or you're living in the state of Washington or Maine or Florida or California -- all across this great land -- is that we've got to live within our means," Dewhurst said. "TThat's what people want they don't want to go into debt. They don't want to mortgage their kids' future ... What I would say to superintendents is public education is a huge priority, and we're going to do everything we can in the Legislature ... to put more new money into public education. But these are challenging times ... We've got to live within our means, and everybody from the Legislature has got to look at ways we can do the same job or better for less money... And we've got to figure out -- whether we're a public education superintendent or lieutenant governor -- how to do the job smarter with less resources."

Republican Party of Texas Chairman Steve Munisteri and Lt. Gov. David Dewhurst unveiled a rainy day fund for the Republican Party of Texas today. The party has established a $100,000 Certificate of Deposit to save for a rainy day. Dewhurst contributed $65,000 directly to RPT and helped to raise an additional $100,000 -- which the party decided to use to open its Rainy Day Fund.

"I have been so impressed with what our new chairman Steve Munisteri has done since June," Dewhurst said. "... The turnaround we've seen is nothing short of incredible ... I'm very anxious to do anything I can to help the party."

Munisteri's statement can be read here. 

Speaker Joe Straus issued the following statement on the agreement between the State Board of Education and Land Commissioner Jerry Patterson to provide extra cash from the Permanent School Fund to balance the state budget:

"As a result of the good stewardship of our investment portfolio by Commissioner Jerry Patterson and the General Land Office (GLO), we will have $300 million in resources previously unavailable for our schools for the budget next session.  I applaud the SBOE and Commissioner Patterson for developing a solution that helps Texas fund our education priorities."

Lt. Gov. David Dewhurst issued the following statement today about the elected State Board of Education and Land Commissioner Jerry Patterson reaching an agreement to provide an extra $300 million to balance the state budget:

"I want to thank Commissioner Jerry Patterson and the State Board of Education for working with us to develop a solution that will help the Legislature fund our education priorities next session. Every dime of this additional $300 million distribution, equivalent to 3,000 teacher salaries over two years, will go directly to our public schools, students and teachers."

The State Board of Education voted to increase the payout rate for the Permanent School Fund today. The rate helps fund the state's public school obligations, which in turn helps balance the state budget.

The board agreed to spend 4.2 percent of the value of the fund over the past 16 quarters. That works out to $1.58 billion plus an additional $300 million from the General Land Office (GLO). This is an increase from a previously adopted 3.5 percent rate. The board made its higher rate contingent on action of the School Land Board to send an additional $500 million from its land accounts to the State Board of Education's accounts. Land Commissioner Jerry Patterson, chairman of the School Land Board, agreed in writing to support such a transfer.

The Legislative Budget Board (LBB) adopted an 8.92 percent estimated growth rate for 2012-13, a press release from the House Speaker's office said today. From this number, a constitutional spending limit (based on the spending limit of the previous biennium and the economic forecast from the Texas Comptroller of Public Accounts) can be arrived at, the press release explained. It is one of a handful of spending limits used by the Legislature in the budget-setting process.

Today, the Young Conservatives of Texas and Rep. Tan Parker (R-Flower Mound) endorsed Rep. Ken Paxton (R-McKinney) for Speaker, and Rep.-elect James White (R-Lufkin) issued a statement. We print more details below:

Today, the Joe Straus campaign released a letter from the Speaker's GOP committee chairmen calling Joe Straus a "staunch fiscal conservative in the model of President Reagan." The letter promises that Voter ID will be brought back for a vote and that sanctuary cities will end. We reprint the entire letter below. (Again, like other Speaker race posts, we are posting the letter because of its news value not support or opposition to its contents.)

[...] As House chairs appointed in 2009, we write to you today to express our support for Speaker Straus and advancing the conservative agenda on several critical public policy fronts.

As you know, last session Democrats were successful in shutting down the business of the House for five critical days because of their opposition to a new law requiring a photo ID in order to vote. We are committed to bringing this issue back to the floor, and passing a photo ID requirement as a protection against voter fraud. ...

Rep. Warren Chisum (R-Pampa) sent out a news release calling on Speaker Joe Straus to release all his pledges. Straus refused. We reprint the Chisum release and the Straus response in full below. (Again, we reprint for news value and that decision does not imply endorsement or opposition to its contents.)

When I discuss higher education with my staff, I tell them NEVER to trust numbers put out by the taxpayer-funded lobby operation at an individual university or system. To borrow a phrase from the Wizard of Oz, there's always a man behind the curtain. I tell staff that -- with rare exception -- I have a strong preference and a lot more trust for numbers that come from either the Higher Education Coordinating Board (www.txhighereddata.org), the Comptroller, or the Legislative Budget Board. In other words, I've found the coordinating board a lot more objective about what's really going on in higher education than individual university or system administrators.

Along those lines, Gov. Rick Perry commendably tapped the Coordinating Board to look at the cost structure of Texas Higher Education and recommend efficiencies. The board issued its report earlier this week. Click here to read. There are a lot of thoughtful recommendations in this report that are worthy of serious consideration from the powers that be. I particularly think it's noteworthy that the coordinating board recommended mandating a 10 percent increase in the credit hours generated per faculty member. That will be an anathema to a lot of faculty leaders in higher education who relish ridiculously low teaching loads. Again, I highly recommend reading this report.

Rep. Ken Paxton (R-McKinney) confirmed he will run for Speaker of the House, a post currently held by Joe Straus who is seeking re-election. The seat is also being sough by Rep. Warren Chisum (R-Pampa). We post Paxton's entire statement below:

"... On Election Day, we witnessed a monumental shift in the political climate, and I believe that historic opportunities demand bold action in defense of our conservative values. Voters across Texas sent a clear message that they favor leadership dedicated to protecting our freedoms and fighting government growth. Texans have provided us with an historic mandate, and they expect us to use this mandate to honestly advance conservative principles and not simply protect the status quo. These goals can only be accomplished with a conservative Speaker." [...]

Rep. Bryan Hughes (R-Mineola) said that he is withdrawing his pledge to Speaker Joe Straus. He also accused a “member of Speaker Straus’ leadership team” of telling Hughes that “maps were already being drawn to get rid of Representative-Elect Erwin Cain (R-Sulphur Springs) and Representative Dan Flynn (R-Van), because they were not on the Speaker's list of supporters."

"I was then told that I had nothing to worry about in redistricting, so long as I stayed on the Speaker’s list," Hughes continued.
 
Straus said he “did not and would never authorize, allow, or condone linking redistricting in any way with the Speaker’s race.” He also called on Hughes to name the person who placed the phone call. We reprint both the Hughes release and the Straus statement below:

LSR Managing Editor William Lutz appeared on WFAA's Inside Texas Politics this Sunday. Lutz warned Republicans not to get cocky over recent election results, because they were getting beat two years ago. He called on the GOP to focus on the fundamentals of lower taxes and limited government. He also warned Gov. Rick Perry that politics is a team sport and that he should not veto non-controversial local bills by Republicans who stand up to sleazy power grabs like the Trans-Texas Corridor. Lutz's segment begins right after the interviews with Dallas County GOP Chairman Jonathan Neerman and Democratic strategist Matt Angle (about 10:15 remaining in the broadcast). Inside Texas Politics appears every Sunday at 9 am on WFAA, Channel 8 in North Texas.

The Texas Association of Business has reached an agreement with the public education lobby group Raise Your Hand on how to fund pre-Kindergarten at the state level. Given that these two groups were on opposite sides of the issue during the 2009, this is a rather noteworthy development.

We will print the contours of the agreement below, but first it's important to put it in perspective. First, it is not the bill that got vetoed in 2009. In fact, it appears that the Raise Your Hand/TAB deal directly addresses the concerns Gov. Rick Perry mentioned in his veto proclamation. Second, it is not full-day pre-K. Third, it does not involve any new money, rather a reallocation of existing resources.

Just when Texas House staffers thought it was safe to pick up the phone, it's back.

Rep. Brandon Creighton (R-Conroe) has refiled his 10th Amendment resolution as HCR 16. The resolution officially claims Texas's rights under the 10th Amendment to the United States Constitution and calls on the federal government to stop passing unconstitutional, unfunded mandates to the states. The text of HCR 16 is very similar to last session's HCR 50, which probably set an all time record for most number of constituent phone calls received on a resolution.

In addition to HCR 16, Creighton has also filed HCR 17 endorsing a constitutional amendment allowing two-thirds of the states to repeal federal laws and HCR 18 endorsing a federal balanced budget amendment. He also filed HB 32, which would prohibit mandating health insurance coverage (a la ObamaCare).

Gov. Rick Perry has announced Tue. Dec. 14 as the date of the special election in House District 44. The seat became vacant due to the death of Edmund Kuempel (R-Seguin). The filing deadline is 5 pm Nov. 15. Early voting will occur Nov. 29- Dec. 10. The district includes Guadalupe, Gonzales, and Wilson Counties. Click here to see the governor's proclamation. Candidates from all parties will appear on the same ballot. If no candidate receives a majority, a runoff will follow about one month later.

Sen. Jane Nelson (R-Lewisville) filed SB 84, a bill which would require the State of Texas, all of its local governments, and state and local contrators to check new hires using the e-Verify system.

The federal government offers employers the option of using e-Verify, where the employer feeds information that employers are already required by law to collect into a federal database to make sure the potential employee is indeed legally authorized to work in the United States. "This will effectively ensure that Texas employs a legal workforce," Nelson said of the bill.

A group of Republicans calling itself "Conservatives for Joe Straus" has issued a letter responding to calls from conservatives for a new House Speaker.

The letter defends Straus's record as a fiscal conservative talking about the restraint in the 2010-11 state budget as well as Straus's efforts to abolish the telecommunications infrastructure tax. The letter is signed by 11 current members of the State Republican Executive Committee, including Republican National Committeewoman Borah Van Dormolen. It is also signed by several Republican County chairmen. We reprint the text of the letter below.

One thing that is clear from recent events is that a large portion of frustration felt by parts of the Texas Republican base (and particularly the Tea Party Movement) is directed not only at the Democrats but also at Texas House Speaker Joe Straus. A group of conservative groups is trying to capitalize on that frustration, issuing a letter Nov. 4 calling for a new Speaker. The signatories include representatives from a lot of major conservative groups, including Texans for Fiscal Responsibility, Texas Right to Life, Americans for Prosperity, the Texas Eagle Forum, Liberty Institute, former Republican Party of Texas Chairman Cathie Adams, and former Republican Party of Texas vice-chairman David Barton. Of particular concern to grass roots conservatives is the fate of bills requiring showing photo ID prior to voting and bills that limit property taxes.

We reprint the text of the letter below: (Note: reprinting the letter should not be viewed as agreement nor disagreement of its contents. We are reprinting becuase of its news value.):

Lone Star Report managing editor William Lutz will be appearing on WFAA's Inside Texas Politics Sunday morning. Lutz will warn incoming Republicans not to get cocky and focus on the fundamental values that got them elected. WFAA's Inside Texas Politics airs every Sunday at 9 am on Channel 8 in North Texas.

We received the following statement and list of pledges from the Joe Straus campaign. We print in full below. (On the list of pledges, we offer no warranty, we are simply cutting and pasting what we have received from the Straus campaign in regard to his run for House Speaker):

"... As Speaker, I congratulate every House candidate elected tonight, and I look forward to working with each member for the good of our state.  I will continue to lead the Texas House in a fair and respectful way as Speaker, and at this early hour, I'm grateful to have 122 colleagues support me for Speaker, including 76 Republicans and 46 Democrats, and I look forward to visiting with more members in the coming days."

Confirmed List of Pledges for Republican Texas House Speaker Joe Straus
UPDATED:  November 3, 2010 12:00 a.m. [...]