State Rep. Terri Hodge, D-Dallas, pleaded guilty early this morning to lying on her tax returns in connection with the FBI's Dallas City Hall public corruption investigation, an act that ends her 14-year political career.

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State Rep. Terri Hodge (right), accompanied by lawyer Jeff Kearney, arrives Wednesday morning at the Earle Cabell Federal Building and Courthouse in Dallas.

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Hodge, 69, now a convicted felon, is dropping her re-election plans, and will resign her position as District 100 representative in the Texas House when she is sentenced. At Wednesday's hearing, U.S. District Judge Barbara Lynn said she wanted sentencing to occur as soon as possible.

"Ms. Hodge will have pleaded guilty today to a felony and will still be representing her district," Lynn said. "I'm not real keen on that notion."

Hodge's House District 100 mostly includes Dallas neighborhoods south of Interstate 30.

Her plea bargain leaves lawyer Eric Johnson as the only candidate in the March 2 Democratic primary for that House seat. (There is no candidate on the Republican side.)

"As a longtime resident of House District 100, I want to thank Terri Hodge for her service to our district," Johnson said in a statemet issued this afternioion. "My wife, Nakita, and I will continue to keep Ms. Hodge and her family in our prayers."

He added: "Now is the time for us to put aside past differences and restore the public’s trust in our ability to govern according to democratic principles. It is my sincere hope that in response to today’s events, we will come together as a party, as a district, and as a city to achieve the improvements House District 100 so desperately needs."

But Johnson, a first-time candidate, won't be able to rest easy.

Hodge's name will still appear on the primary ballot. Given her wide name recognition in the district, and the possibility that loyalists would continue to campaign on her behalf, Hodge could emerge as the winner on March 2.

If that were to happen, her guilty plea -- assuming it's ultimately accepted by the court -- would disqualify her from the November general election ballot. In that case, the Democratic precinct chairs in District 100 would pick their party's candidate. There are several contested precinct chair races in the district, which adds to an interesting political dynamic.

Jeff Kearney, one of Hodge's defense attorneys, said this morning that his client will need about 90 days to close down her legislative offices. "There are thousands of files" in her offices, he said, dealing with district and constituent business amassed during seven terms in office. "She can't throw those in a dumpster."

Lynn did not immediately set a date for Hodge's sentencing. The charge she pleaded guilty to carries a maximum of three years in prison.

As part of her plea agreement, prosecutors agree to drop all other tax and bribery charges against her when she is sentenced.

Her plea deal requires that Hodge cooperate with federal prosecutors, saying she "shall give truthful and complete information and/or testimony concerning her participation in the offense of conviction.” It’s not known what, if any, information the longtime state representative could provide.

Hodge pleaded guilty one count of fraud related to not reporting about $27,000 in income on her 2002 taxes.

That money came from Brian and Cheryl Potashnik, who paid her rent, utilities and bought carpet for a house she owned on Abrams Road in Dallas. In exchange, prosecutors alleged, Hodge wrote letters endorsing the Potashnik's efforts to get lucrative tax credits for their low-income housing development projects.

The plea documents also state that from 2001 through 2005, Hodge had income totaling $41,465 that was derived, in part, from campaign contributions that she used for her personal benefit. She did not report this additional income on her federal returns for those years, according to the documents.

Hodge choked up several times during her re-arraignment hearing, which began about 7:40 a.m. At one point, Kearney handed her a handkerchief.

After the approximately half hour hearing, Hodge emerged from the courtroom but did not make any public statements.

Her campaign manager, Cliff Walker, who accompanied her in court, handed out a statement.

"I freely admit that I violated the federal income tax laws in this regard, and I am prepared and willing to accept the consequences of my actions," the statement read. "As a result of my guilty plea to a criminal tax violation, I will not be able to continue to serve in the Texas House of Representatives. Therefore, I cannot in good conscience continue to seek re-election and I believe that the only appropriate action for me to take is to immediately terminate all of my campaign activities."

She said she will close her district office in an orderly manner and will resign at the time she is sentenced.

"I want to take this opportunity to express my remorse to my colleagues in the legislature, my friends, and my family for my actions," she said in the statement. "Most of all, I want to apologize to all the citizens of District 100 for letting them down.

"My prayer is that my successor will stand up and fight for the people of our district in the future," she said.

With Hodge suspending her campaign, it appears to pave the way for challenger Eric Johnson to win the March 2 Democratic primary. Hodge's name, however, will remain on the ballot.