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Had Goliath, as he thudded to the turf, shouted at David, “You bully !”, the muses could not have been more amused than when Waggoner Carr shouted at Price Daniel, “Disgusting and Reprehensible,” as Carr’s chosen tax bill thudded to the floor of his own House by a vote of 121 to 27. Carr has proved that he is opposed to any state tax on the dedicated reserves of the natural gas companies that is, to a severance-beneficiary tax. As one astute representative has said, Carr is himself a “dedicated reserve” of the long-line gas companies. His trying to blame Daniel for the first called session’s deadlock was at Once fantastic, foolish, and false. Carr betrayed his own House, sided with the Texas Senate and the gas lobby, and then had the bold confidence in the people’s ignorance to accuse Daniel of running out on his own supporters! Four separate instances of the Speaker’s role prove he was fighting for the Senate’s 75-percent-sales-tax bill and against his own House’s halfand-half tax bill which would have fallen to some extent on out-of-state corporations. First, his hand-picked revenue and tax committee voted down the severance-beneficiary gas tax and reported out H. B. 727, which was 85 percent sales taxes and 15 percent business taxes. The House of Representatives simply gutted his bill, and in the ensuing negativism and confusion Daniel’s forces could not be confident they could carry the day; hence, the first called session. Second, after the House majority made explicit and formal its approval of a five percent severance beneficiary tax, coupled with a reduction in the tax on Texas producers and royalty owners; and after the House adopted Daniel’s change in the f ranchise tax to make it fall more heavily on interstate companies; and after the House majority formally enacted H. B. 7, Carr proved his contempt for the wishes of his own colleagues by appointing, to the tax conference committee a majority of three representatives who had opposed the will of the House on gas and franchise taxes and who had voted against the very H. B. 7 which they were supposed to qoat Shin Sian Published by Texas Observer Co., Ltd. Entered as second-class matter, April 26, 1937, at the Post Office at Austin, Texas. under the Act of March 3, 1879. JUNE 20, 1959 Ronnie Dagger Editor and General Manager Larry Goodwyn, Associate Editor Sarah Payne, Office Manager Published once a week from Austin, Texas. Delivered postage prepaid $4 per annum. Advertising rates available on re quest. -Extra copies 10c each. Quantity prices available on orders . Let those flatter who fear, it is not an American art.JEFFERSON g etrayal uphold against the Senate conferees! Carr put up a phoney front : he told the five conferees to “fight for the House bill.” How could they fight in good faith for a bill a majority of them had voted against ? As the shrewd senators pointed out again and again to them in the secret conferences, they were refusing to vote on the key issues, because such votes would go 3-2 against their own bill. Finally, it came to a head. The two conferees who represented the House majority proposed a middle-ground package between the House and Senate bills, 60 percent sales taxes, 40 percent business taxes, including one percent on sverance beneficiaries_ of natural gas contracts. Carr’s boys voted No! and the House’s own compromise was defeated by Carr’s conferees 3-2 in full view of the gleeful senators. Then Reps. Kennard and Jamison for the House majority demanded a vote among the House conferees on one percent on severancebeneficiaries \( remember the House. majority favored five House conferees again, with the senators watching, voted 3-2 against the severance-beneficiary tax, even for one percent! The three nay-sayers had conferred with Carr in advance of this vote. He knew when he appointed them that all threeRamsey, Oliver, and Cookwere publicly opposed to the severance-beneficiary principle. Therefore: Third, Carr is responsible for the betrayal of the House majority by the House conferees whom he appointed. Fourth, Carr instructed his conferees to bring back whatever the Senate would give them. Carr mealy-mouths around privately that he was not committed to accepting the committee report. The truth is he went to Gov. Daniel and asked him to endorse the his men on the Conference committee voted for its final passage \(as only 20 other representatives had the guts to ated, he accused Daniel of running out on higi supporters ! This was like Rommel accusing Patton of selling out his troops because he didn’t turn tail and run when they were winning. Carr is deeply beholden to the gas lobby. Either he makes a break with them, or the House must repudiate his prerogatives over their tax legislation. Got. Daniel continues his .fight to tax out-of-state users of Texas gas and out-of-Texas corporations profiting from operations in Texas ; to reclaim the state’s money from the banks which won’t give it up. We do not like his sales taxes. We know he will sign less than he demands. But the House will not pass a tax bill without a severance-beneficiary tax, a franchise tax adjusted to bear more heavily on the out-of-state corporations, and a ratio of sales-to-business taxes within a few percentage points of 50-50. As our favorite Austin newspaperman, Sam Wood, said in his column Friday morning, “the choice now may very well .be up to the Senate to compromise or pick up the goat skin.” THE TEXAS OBSERVER 10 EDITORIAL and BUSINESS OFFICE: 504 West 24th St., Austin, Texas. Phone GReenwood 7-0746. HOUSTON OFFICE: 1010 Dennis, Mrs. R. D. Randolph. We will serve no group or party bud will hew hard to the truth as we find it and the right as we see it. We are dedicated to the whole truth, to human values above all interests, to the rights of man as the foundation of democracy; we will take orders from none but our own conscience, and never will we overlook or misrepresent the truth to serve the interests of the powerful or cater to the Ignoble in the human spirit NOW AUSTIN The impersonal, efficient *economic forces of our state and the fallible human personalities occupying her executive and legislative offices all became entwined in the viney jungle of eleventh hour tax maneuvering that climaxed the first special session. In the angry, aftermath the onlooking populace had these conclusions to ponder : Far removed from the headlines, the Austin lobby is quietly winning its battle to cut the appropriations billthe conservative appropriations billback to a level that means stagnation for the state’s system of higher education, custody and not treatment in the state’s mental hospitals, frightful overcrowding in_correctional institutions, and anemic indirection for the water program which, properly supported, could ward off the crisis certain to strangle this province in the next decade or so. The appropriations , conference committee is tentatively agreed on a $315 million general revenue budget, $20 million below Gov. Daniel’s supercautious program. In its greed, and in its underestimation of the Governor and the popular majority in the House of Representatives, the lobby has overreached itself on the question of selective sales taxation to support the ruinously shortsighted budget. There almost certainly will be a tax on dedicated gas reserves, making 1959 the year Texas finally stirs itself to exact from the absentee owners of its vast natural resources a contribution to Texas public services. Last lingering hopes of the lobby die-hards for a general sales tax perished under the avalanche of House votes scuttling the Senate tax bill. The Governor’s prestige is at a new high, giving him a power over the lobby he has thus far chosen not to exercise fully. There is serious doubt about the political a c u men of House Speaker Waggoner Carr. The Senate, half of which is up for reelection, is becoming increasingly involved in the political realities with which the House has been living since January. AN HOUR before the startling 121-27 House vote to reject the sales tax-loaded conference committee report, Rep. Frates Seeligson, who is as broadly intelligent as he is stiffly conservative, handed this reporter a copy of his new tax proposals for the second special session. Seeligson’s general sales tax hills, which hovered on the fringes of the batty for five months, are now gone ; in their place is a tax package broadly slanted at consumers with interesting theoretical concessions to the theory of ability to pay. More important, Seeligson includes, a small severance tax on natural gas. His bill will not pass the Housethat chamber has long since passed the point to which the perceptive San Antonio millionaire conservative has now reluctantly movedbut something like it may emerge from a reoriented Senate. An hour after Seeligson’s tax summary illustrated his reactions to legislative developments, the press received another sheet of paper, this one from Waggoner Carr, illuminating his reactions. The Speaker’s surprising personal blast at Danielaccusing him in the same breath of being dictatorial and indecisiveis an odd document; to this reporter, it is a quivering platform from which to launch trial balloons for a state-wide race. As one newsman concluded incredulously, Carr is the first man ever to run ,for office on the issue of taxing the very people he wants to vote for him. One can only -conclude Waggoner believes that any publicity is better than none. Yet the fact remains that while Texas conservative candidates don’t make a habit of running on a platform of natural resources taxation, , they manifestly don’t plump for taxes on Texans so as to spare out-of state major oil and gas companies. Perhaps he plans to tell the people he got the Governor’s tax program through the House, but this shouldn’t take long to clear that up, not after Carr has stretched himself on the rack for five months in futile opposition to his own House’s desire-to tax natural gas. Retrospection now turns to the Governor. He was in fine fettle the day following the showdown when he opened the second called session. He gave Waggoner Carr a couple of consoling pats on the shoulder as if to say, “That’s all right, boy, I know you had to do it.” He restated and defended with gusto the efficacy of his business taxes, recalled the lobbyrattling remarks of Governor: Jim Hogg, added a few of his own, and retired to the biggest ovation he has ever gotten in the Capitol. Now WHAT? One suspects Daniel can get a token severance taxsomething like Seeligson’s one per cent gratuitywithout a messy fight. It would be no victory; the gas lobby probably would not even test it in the courts, preferring, as they did in Louisiana, to pay it without protest pending the day a future legislature tried to raise it to more than the nuisance level. Such a development does the state’s archaic tax structure no service at all, merely beclouding the issue further. The constitutionality of a gas tax on the absentee owners must be tested at once, if Texas is to make a start toward obtaining governmental sustenance from its vast intangible wealth. Otherwise, all the triurriphs over the lobby thus far are meaningless, leaving the Governor’s words and the House’s votes to echo aimlessly in the blind leys of history. As is custom, Daniel succeeded in publicly absolving himself from any blame whether or not the first session ended in failure. He told the Senate he would accept any bill not a sales or income tax, but he did not say the House would. With material help from the lobby and the Senate7 neither of which have shown the slightest indication they understand the temper of the Housethe lower chamber rejected the ineptly drawn package concocted in the Senate and approved by the three Carr men on the conference committee. If the Senate and the lobby have underestimated the representatives across the hall, one can but conclude that the Governor, while correctly evaluating the House, continues to overestimate the Senate. He needs about five votes in that green carpeted joint stock company that passes for a parliamentary chamberfive votes to end the Austin tax fight with a measure of victory for Texans and a measure of defeat for Standard of New Jersey, Tennessee Gas, and airborne appendages of Texas Eastern. Blunted and blunted again, the corporate shafts of the Senate no longer have the sharpness of January. They are reduced now to bargaining on a bluff basis. One can almost hear their trial arguments being hammered out for the second session : “Better take a one per cent severance tax as a compromise or you may end up getting a general sales tax.” A pathetically meagre argument for the once truculent Senate but all the senators have left now that Carr has been shot out of the saddle across the hall and the rhetoric of the gas taxers is being trained directly on them for the first time. With a five-vote margin, the Senate draws up its unwilling tank corps as Ben Ramsey, Ed Clark, Bailey Jones, Red Wells, and others of the gas crowd try to pump some fuel into the stuttering corporate engines. On the quettion of cigarette taxes ton $3500 a year Texans or severance taxes on multi-million dollar pipeline companiesin this realm of politicil ideas and idealsthey know they are wrong but shrug it off on the grounds they’re not interested in such matters. Carr o _A Rut Plain citizens watching the Texas legislature at work would find outrageous the rule of the House which denies the House majority the right to send legislation to the committee it believes should handle it, without delay. As long as the Speaker is permitted unreasonable control over legislation, what House member can say he represents his people as he should? The pre-1953 rule in effect since the 1800’s should be restored to let a majority re-refer any billsay, a tax billwhen a stacked committeesay, revenue and taxis obstructing the will of the House. WHAT?