• ;AI . Houston Chronicle MAR. 2 3 198e Page G-1 Gubernatorial candidates can't escape money woes By CLAY ROBISON Houston Chronicle Austin Bureau AUSTIN — If the timing bothered Bill Clements, it certainly wasn't no- ticeable. ._,..... The former governor met with re- porters in the state archives building next door to the state Capitol and declared — no ifs. ands or buts — that there wouldn't be higher state taxes or fees "of any kind" if Texas voters re- turn him to the gov- ernor's office. —I -have -11F-Enow- 1I Texas how and commitment to tell Tex that will veto any and all tax or fee in- creases," Clements said. _ That was D :wimp. ills—dr—Thar4 Thi Race For Governor 60 b Clements paid his $3.000 fi g ee or the Republican gubernatorial nomina- tion. It also was the day that the spot mar- ket price of West Texas Intermediate crude, a benchmark for the oil industry that so heavily affects the state trea- sury. closed at $17.36 a barrel, down more than $12 in little more than two months. It was the day before Corn trnikr Bob Bulloc announced that his office wou study the impact of falling oil prices on the state budget. a study that resulted in Bullock's projection that state government would be $1.3 billion short of balancing its current budget by mid-1987 and as much as $6 billion short of meeting the needs of its citi- zens in 1988-89. The price of oil is still well below $20 a barrel. The Texas Department of Mental Health and Mental Retardation and the Texas Department of Correc- tions. two of the big-ticket state agen- cies, are still under federal court orders requiring millions of dollars in improvements_ Texas still lags behind many other states in what it spends for ethication and various other social ser- vices. And Clements is still insisting state government can meet its responsibili- ties to its citizens for the foreseeable future without higher taxes or fees. Chiming in with similar refrains that sound only slightly ss adamant are Clements two opponents in the May 3 GOP primary, former Democratic con- gressman Kent Hance and U.S. Rep. Tom Loeffler. Democratic Gov. Mark White. who campaigned against higher taxes in 1982 and then signed the largest tax bill in the state's history in 1984 to pay for educational and highway improve- ments after the oil inkiustry took an earlier nose dive, says he wants to try to avoid new taxes in a second term. But he has said it would be "irresponsi- ble" for him to make Clements' kind of promise in the face of weak oil prices. Money is an issue that pervades all others in the 1986 gubernatorial race. thanks to declining oil revenue and cuts in federal aid posed by President Rea- gan and the Gramm-Rudman deficit reduction law. But all the campaign rhetoric about tightening belts, trim- ming fat and reordering priorities re- mains rather fuzzy. Two of White's opponents in the Democratic primary have ofiered rev- enue-raising proposals. but it would take a miracle for either one of them to win the party's nomination. Dallas attorney A. Don Crowder ad- vocates creation of a state lottery or. if necessary, a state tax on corporate in- come, while contractor Bobby Locke of San Antonio, a sometime marathon runner, would have the Legislature put special taxes on hamburgers and other fatty and sweet foods associated with health risks and on companies that sponsor violent programs on television. Locke explained that he would seek taxes on "areas I would want to do away with." Clements, who was unseated by White in 1982, insists that the current $37.2 billion, two-year budget is more than sufficient to take care of state government's needs and obligations. He has challenged White to summon the Legislature into special session now to reduce the budget to take care of the revenue shortfall that the comptroller has predicted for 1987. Clements. who founded a worldwide oil well drilling firm, predicts that con- tract oil prices are going to stabilize at CAMPAIGN More stores on re issues in me gubernatorial cambaton are on Page 32. • Several parts of the 1984 education reform package passed by the Legislature are under attack. • The politics of utility rates and rate increases will be played Kern in 1986. • Texas needs more prisons. but where to get the funds to construct them in a de- pressed state economy is be- ing debated among candidates. t2 1 to = a barrel by the fall. several dollars a barrel higher than current prices. The former governor also says that state revenues, despite all the gloom and doom over oil prices, have actually increased 41 percent during the past three years. The comptroller's office reports the actual increase is probably closer to 30 or 35 percent, but Bullock's projections of future revenue shortfalls also take into account such factors as inflation, population growth and spend- ing increases for some programs that already are built into law. Clements has warned that "tough de- cisions based on hard choices will be a part of the corrective process" for the state budget.. "The current budget has certain de- partments that will need increases. such as the Department of Corrections. the Department of Public Safety and the Department of Mental Health and Mental Retardation," Cements said in a recent speech to the Austin Rotary Club. "Other parts of the budget will re- main basically about where they are. Then there are the more than 200 other boards, agencies and commissions that will need to be closely examined for waste, inefficiency and duplication." But if Clements knows exactly where the state can save a lot of money by cutting, he isn't saying. Hance said he would avoid higher taxes and help set the example for more government efficiency by reduc- ing spending in the governor's office and promised to exercise the gover- nor's line-item veto authority over the next state budget approved by the Leg- islature. Hance also suggested that the state should try to reopen some ot u--...? constitutional issues for inmate care in the long-running prison reform lawsuit that state officials already have a.:reed to address with expensive improve- ments in the Texas Department oi Cor- rections. Some legal experts say the state scant legally act now to change those agreements. several of which were en- tered into several years ago when White was attorney general and Clem- ents was governor. But Hance insisted. "Bill Cements and Mark White have let (U.S. District Judge) William Wayne Justice run the prison system." Loeffler said he would consider any new revenue measure "only after a thorough review of existing programs - "There shouldn't be any program that should not be reviewed with a fine eye." he said. Loeffler also has consistently criti- cized White for purchasing a new jet for the governor's office, a purchase that White has insisted will prove eco- nomical for the state in the long run. White, Clements, Hance and Loeffler all are adamantly opposed to a state income tax. And each has indicated he could support the legalization of pari- mutuel betting on horse racing as a revenue source, provided it was ap- proved in a statewide referendum. es- tablished by local option and contained adequate safeguards against criminal intrusion. As many as 12 racing tracks could generate as much as $40 million in state tax revenue the first two years and provide a higher yield later as the tracks become more established, the comptroller's office estimates. A lot- tery would bring more money to the state treasury, an estimated $400 to $600 million the first biennium, but that proposal. although advocated by Crow- der. is opposed by most gubernatorial candidates. The governor lacks budget execuuon authority, but White has asked state agencies to voluntarily reduce their spending by an average 13 percent to help meet the revenue shortfall and avoid a special legislative session in an election year. The next regulF session will convene in January. White insisted that his belt- tightening plan, which includes a frf.,e7e on hiring and most pay raises. wouldn t require any state employee layoifs. But a study by the comptroller's office de- termined that staff layoffs "would al- most certainly be necessary" to reach a spending reduction of $1.3 billion IThe governor said he was sectre Int- example of a 13 percent spendinz flit Ir. his own office. but by the first w-ck ir March 108 agencies had arin.,,t;ed plans to trim only about $600 mil:ion from their budgets. "I think its very .important th,it 1.1.e demonstrate cutbacks can be r.:ade ' White said. "We re not cutting into e•rr- ployment. This does not requir,' :ir.,.' la voffs. " . mre t en. however. the Adul• Pr. bation Commission agreed to trip, !,,,- than 3 percent from its budgot percent budget reduction, the at.:),.:.. reported, would have cost at least 4110 employees their Jobs and sent probationers to an already over- crowded prison system. (Continued next pnf.Y.,•.1