As Bush's brother, Jeb, sought the governorship of Florida, Bush declared his candidacy for the 1994 Texas gubernatorial election. His campaign focused on four themes: welfare reform, tort reform, crime reduction, and education improvement. Bush's campaign advisers were Karen Hughes, Joe Allbaugh, and Karl Rove.
After easily winning the Republican primary, Bush faced popular Democratic incumbent Governor Ann Richards. In the course of the campaign, Bush pledged to sign a bill allowing Texans to obtain permits to carry concealed weapons. Richards had vetoed the bill, but Bush signed it after he became governor. According to The Atlantic Monthly, the race "featured a rumor that she was a lesbian, along with a rare instance of such a tactic's making it into the public record – when a regional chairman of the Bush campaign allowed himself, perhaps inadvertently, to be quoted criticizing Richards for 'appointing avowed homosexual activists' to state jobs". The Atlantic, and others, connected the lesbian rumor to Karl Rove, but Rove denied being involved. Bush won the general election with 53.5% against Richards' 45.9%.
Bush used a budget surplus to push through Texas's largest tax-cut, $2 billion. He extended government funding for organizations providing education of the dangers of alcohol and drug use and abuse, and helping to reduce domestic violence. Critics contended that during his tenure, Texas ranked near the bottom in environmental evaluations, but supporters pointed to his efforts to raise the salaries of teachers and improved educational test scores.
In 1999, Bush also helped make Texas eventually the leading producer of wind powered electricity in the US, by signing a state law obliging electric retailers to buy a certain amount of energy from renewable sources (RPS).
In 1998, Bush won re-election with a record 69% of the vote. He became the first governor in Texas history to be elected to two consecutive four-year terms. For most of Texas history, governors served two-year terms; a constitutional amendment extended those terms to four years starting in 1975. In his second term, Bush promoted faith-based organizations and enjoyed high approval ratings. He proclaimed June 10, 2000 to be Jesus Day in Texas, a day on which he "urge[d] all Texans to answer the call to serve those in need".
Throughout Bush's first term, national attention focused on him as a potential future presidential candidate. Following his re-election, speculation soared. Within a year, he decided to seek the Republican nomination for the presidency.
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