Supreme Court deals a blow to ReBuild Houston


Houston’s divisive, multibillion-dollar effort to fund two decades of street and drainage improvements faces an uncertain future after the Texas Supreme Court ruled Friday that the ballot measure voters narrowly approved in 2010 obscured the nature and cost of the drainage fee at the heart of the ReBuild Houston program.

The case now returns to the trial court level, where experts say the justices’ strongly worded opinion appears to make a victory for the city unlikely. At issue was whether the ballot language made clear what voters were being asked to decide.

“The city’s semantic obfuscation is particularly egregious here, considering that the ballot proposition at issue concerned a revenue-raising measure,” Justice Eva Guzman wrote, having taken the extra step of penning a concurring opinion to accompany her colleagues’ ruling.

Though the final outcome is far from certain, the possible absence of the largest of ReBuild Houston’s four sources of revenue – the hundreds of millions of dollars Houstonians have paid through the drainage fee – would greatly undermine the city’s infrastructure repairs. As of this spring, $655 million had been spent or earmarked for new projects under ReBuild Houston, with almost 100 projects completed. That work includes 515 miles of rebuilt or repaved streets, 697 miles of ditches graded and 188 miles of storm sewers cleaned – all while paying down old debt, supporters say.

Conservative activists, however, cheered Friday’s ruling as fervently as they long have railed against the drainage fee, which they deride as a burdensome “rain tax.” The lawsuit in question concerns a related criticism: that the ballot language was misleading, making the charter amendment illegal.


Houston appellate lawyer Richard Hogan, who is not involved in the litigation, said a separate legal action would have to be launched to make the drainage fee disappear from residents’ water bills. However, after reading the Supreme Court opinion and related filings, Hogan said he would put his money on an eventual victory for the plaintiffs.

“It’s hard for me to imagine that they’re not going to win the case when it goes back,” Hogan said. “I can’t imagine that, after the Supreme Court said all this, that a trial judge in Texas would thumb his or her nose at the Supreme Court and tell them, ‘No, it wasn’t misleading.’ ”

I have a copy of the opinion here. I’m still mulling this over, but for now I have three thoughts.

1. I freely admit this may just be sour grapes on my part, but I have a hard time seeing this ruling as anything but ridiculous. I don’t know how any actual voter who didn’t spend the last six months of 2010 in a coma could have failed to understand that voting for the Renew Houston proposition meant imposing a fee on themselves. I’m struggling to not see politics at the root of this decision.

2. So far the only Mayoral campaign reactions I have seen to this have been press releases from Bill King and Ben Hall, both of which hit my mailbox on Friday, and both of which were happy about the ruling. (Mayor Parker also put out a press release, which was quoted in full in the Chron story.) I’ve looked at the Facebook pages of the other five candidates, and so far nothing. Chris Bell, Sylvester Turner, Steve Costello, Adrian Garcia, and Marty McVey – what are you waiting for?

3. There’s still a lot of legal wrangling to come, but it’s fair to say that ReBuild Houston is on life support and may not survive. If it goes down, then what if anything replaces it? I feel like I spent a lot of time back in 2010 asking Renew Houston opponents what they would do to provide more funds for flooding and drainage improvements, and I never got anything resembling a coherent answer. So I’ll ask again, with an eye especially at the Mayoral candidates. If not ReBuild Houston, then what? How do you provide more funds to do more street repairs and flood abatement? Remember, we live in a revenue cap world, so simply proposing a property tax increase (not that anyone would, I suppose) is insufficient. If you don’t propose some kind of supplemental revenue stream, then as far as I’m concerned you’re not serious about wanting to do street improvements and flood mitigation. If you do have a proposal, then I want specifics, and I want to see evidence that you’re going to fight for it. Say what you want about Steve Costello, and I’m sure he’s going to take his fair share of abuse and criticism now, but he put his money where his mouth was in 2010, and he got something passed. If the Supreme Court has taken that away, what will you do instead?

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12 Responses to Supreme Court deals a blow to ReBuild Houston

  1. Steven Houston says:

    Don’t forget to ask King how he intended on financing his regional anti storm surge project in the Gulf, the one projected to cost many billions at a time the feds and state are making it abundantly clear they are cutting how much they contribute to projects. Of course King claims the city is in dire straits from debt (projected and otherwise), laying blame on city pensions rather than the much larger amounts approved by voters, suggesting Rebuild Houston is terrible because it is pay as you go though voters should approve more bond debt for every project under the sun even if no revenue stream to pay for them is determined. His frequent “find someone else to pay for it” and “push the costs to a different agency” sounds good but is unrealistic, he wants the county to pay for city crime lab costs, the state and feds to pay for flooding and storm surge protection, and who knows how many other projects.

    From the Chron (Flood problems emerge as mayoral race issue):
    Mayoral candidates were quick to find shortcomings in ReBuild and in Project Brays.

    Former Kemah mayor Bill King, the most outspoken critic of ReBuild, said he supports scrapping the initiative in favor of issuing an infrastructure bond, which would both require voter approval.

    Others were more measured.

    Former Congressman Chris Bell also said he would re-evaluate ReBuild to determine whether it should be restructured, and state Rep. Sylvester Turner said the mayor and City Council should allocate a set percentage of the city’s street and drainage fund for drainage and flooding projects.

    Former Harris County Sheriff Adrian Garcia, on the other hand, said he would prioritize neighborhoods with chronic flooding above all others.

    City Councilman Stephen Costello, one of the leading forces behind the passage of ReBuild, defended the program, saying the city has completed more than 375 street, drainage and traffic improvement projects in the past four years under ReBuild, all while lowering its debt burden.

    “That’s a pretty incredible success,” he said.

    The Brays Bayou improvement project, meanwhile, was originally scheduled to be completed last year, but its projected end-date has been pushed to 2021 amid federal funding delays and land acquisition challenges, among other problems, Talbott said.

    The project involves widening and deepening the bayou’s channel, modifying its bridges and creating four detention basins to hold excess stormwater.

    It is expected to cost $480 million, split between the flood control district and the U.S. Army Corps of Engineers, with the county footing the bill and later receiving federal reimbursement.

    Many of the candidates were quick to criticize the project delays, with Costello, Bell and King all saying they would be more aggressive in pursuing federal funding for the channel’s redevelopment.

    “I didn’t realize how far we were behind on that project,” King said. “We needed to get that done yesterday.”

    Bell agreed.

    “Allowing that to fall behind schedule has proven to be a big mistake,” said Bell, whose Meyerland home flooded in the recent storm. “I don’t know if it would have prevented what occurred to me and others last week, but we’ll never know now, will we?”

    Klotz said residents’ efforts to hold leaders accountable for drainage is complicated by the many agencies involved – the county and federal government for the bayous, the city for streets, pipes and ditches, and the state for highways.

    “What I think sometimes is confusing for people is they think it is all one thing,” Klotz said. “Then you see all this talk online about ‘what are we paying for’ and it is an issue in the mayor’s race, and it should be. But the city’s drainage fee has nothing to do with flooded freeways.”

    Some candidates stressed the need for greater collaboration among these agencies, including Turner, who mentioned the Texas Department of Transportation and the flood control district.

    “How can we work collectively?” Turner asked. “And how can we leverage our resources together in order to produce the greatest result that can ameliorate the possibility of flooding?”

    Other suggestions

    Businessman Marty McVey and 2013 mayoral runner-up Ben Hall agreed that collaboration with regional entities is key to flood prevention.

    The state Supreme court, in yet another completely political decision, has found that regardless of the available information released, the ballot wording itself was deficient, a curious ruling for many reasons, so it is likely the trial court will be pressured to end the program. I opposed it based on the realities of how it allowed the city to shuffle money to various other things but accepted that the fee has done some good. If struck down completely, I’m sure that whooping $5, $10, or even $15 some are paying is going to make their lives so much more complete (sarcasm intended) but like so many other issues, all lawsuits like this are going to do is make the city a microcosm of the fed manner of obstructionism, those on the right that rarely win on a getting what they want using the courts (just as their opponents used to do).

  2. Manuel Barrera says:

    To hold persons on the right is irresponsible as the City has not been controlled by the right since before Kathy Whitmire. Whitmire could be considered a fiscal conservative the last one to hold the Office of the Mayor.

    Kathy Whitmire was certainly disliked by the police and fire unions. One of the things that she did was increase the sewage rate which was to be used for upgrades to the water lines. The money that was there was robbed for other purposes by all those good Democratic (or people on the left if you prefer) Mayors. That rate increase was first necessary because of the sewage leakage to the bayous, mandated by the federal government.

    Rebuild Houston will not contribute anything (or much) that would prevent most flooding. Every time they lay asphalt over the concrete or other asphalt they add to the flooding, displacement.

    Steven $10 a month over a 30 year period equals $3,600. Ten dollars being typical for a house but not for a business their rain tax is about $75 a month, $27,000 over a 30 year period. The worse part is that it a regressive tax hurting the less well off more than the rich. Compare some of the rates with homes in River Oaks with some in the East End. I thought that Democrats were normally against regressive taxes, I am. In fact that is the biggest complaint that I have against the Rain Tax. The City could raise money by lowering the amount of exemptions on property taxes, property taxes are for the most part not regressive.

    The problem is that the City is not using the rain tax money for its intended purpose, it is not in a “lock box” as Annise Parker promised. Money has been used for hike and bike trails certainly not its intended purpose. Still tying to understand why the media had to get involved in regards to pot holes before Rebuild Houston said oh we have a problem.

    One way that all mayors since at least Lanier, can’t speak to before that have done to reward the engineering firms is to contract for projects that never get built. There are tens of millions of dollars of such projects sitting on shelves.

  3. Jules says:

    The ballot language was totally misleading. Regardless of whether or not all the voters understood they would have to pay a fee, it should have been mentioned in the ballot language.

    Also, the money is being used to pay salaries of approximately 500 PWE employees and pay down past debt. There is no “lock box”.

    I’m glad the Texas Supreme Court struck this down and I hope it goes away.

    The software to determine the fee is wrong. It counts shadows as impermeable.

    I agree that it’s regressive and hurts the poor in ways the people who aren’t poor cannot understand.

    How about ending TIRZ, tax abatements and 380’s for money for drainage projects?

  4. Steven Houston says:

    MB, right or left, the reality is that neither seem interested in good governance these days. Back when we were fussing at one another, you would routinely suggest I was this or that based on a single position, the fact is I am a centrist. As you say, there is an increasing amount of flooding in this area. Costello, a right winger according to the vast majority of his positions, and Parker, whose left wing credentials are secure in history, both pushed through the ReBuild measure using the same type of BS legalese most ballot measures have contained over the past 30+ years yet the decidedly right leaning state supreme court singles this one out. In that sense, the “right” most certainly controls the city with that same kind of legislating from the bench others on the right lay strictly at the feet of the left all the time.

    Regressive or not, the fee was not used just to lay asphalt and many feel that all covered by said projects should pay their fair share (not based on income or value but size of lot). If you want to nit pick specific details on every piece of legislation based on everything under the sun, nothing will ever happen. Given this is June of an election year and the standing mayor is term limited out, one of those running for the office will have to come up with something else by most accounts. King, who believes the city has an actual current debt of over $20 billion, proclaims that he will shuffle many costs off to the county, state, and feds which is news to them by the way. He further thinks we should issue bonds to deal with infrastructure repair (many billions) and pension debts already incurred (his estimate is $5 billion), without identifying revenue streams in which to pay for these bonds. While not generally as right wing as Costello or Hall, he is certainly tied to the right overall.

    Otherwise, I agree that the bike trails few will use were a waste of money as were most park upgrades and other things that future city leaders will not be able to fund to maintain. I further agree that other uses of those funds were questionable, though using them to pay for city workers engaged in related work seems fairly reasonable.

    Jules: “How about ending TIRZ, tax abatements and 380’s for money for drainage projects?”
    I’d suggest using that money for something of higher priority than fancy street lights, greatly expanding Memorial (and other) parks, and enriching board members whose contracting firms are raking in millions, would make a great deal of sense. Lowering city debt with it for several years would make a lot of sense, though any direct use of the TIRZ increases would require lifting the revenue cap if you dismantle the organizations themselves. Better to use the city’s “Hollywood accounting magic” to simply direct them to legally pay for their portion of any city services, then the freed up funds could be spent as truly needed (like the Metro transfers of old).

  5. Jules says:

    The TIRZ money is outside the revenue cap? I still want to dismantle all TIRZ, tax abatements and 380’s. They beg for corruption.

  6. Steven Houston says:

    Jules, we are in agreement. Keep in mind that the local wheeler dealers will endlessly promote TIRZ’s and abatement’s as “wonderful ways to promote economic growth” largely because they stand to personally benefit. Having to own property in a TIRZ or work in the area to be on the board means they are going to benefit directly. When they started 25 or so years ago, they were used in run down areas that weren’t going anywhere because nobody was dumb enough to spend money in them (less to lose for the city) but before long, places that were already among the most developed and growing in value were included because the right people pulled the right strings.

    Now, almost 20% of the entire city covered by one. Blame pensions or rising health care costs all you like but when much of your productive tax base in the most lucrative areas is still only contributing to the general fund at the same rate they were 15 or 20 years ago, you’re going to have a problem. And the idea was NEVER that the zones would remain zones for all time by being continued, the idea was that the areas would get their boost and return to tax rolls at the higher rate. Over time, this has amounted to billions in a city that has plenty of needs but will always remain short of funding to pay for them while the TIRZ program remains.

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  8. Ross says:

    Jules, there is no way anyone was misled by the ballot language. Anyone who makes that claim is a liar.

    It sucks to be poor, but they still have to pay their way in many respects, and the drainage fee is very fair.

    If you think your impermeable area was calculated incorrectly, there is a means to get it corrected.

    To date, no one has provided an alternative means to fund drainage improvements. I have to guess they are all just haters of any government spending whatsoever.

  9. Jules says:

    Ross, are you kidding me? I think a lot of people don’t understand the propositions and try to figure them out from the ballot. Anyone that regularly comments on political blogs is way more informed than most people. The fact that the Mayor neglected to include the words “fee” or “tax” on the ballot language is disgraceful, and is now costing everyone in the City.

    And by the way, the Supreme Court of Texas agrees with me, not you.

    I voted against it, but I was informed from sources other than the ballot language.

    My impermeable area was calculated incorrectly and I did get it corrected.

    What about property taxes for drainage improvements? What if everyone, even Kroger and Walmart paid property taxes? What if the TIRZ money went to streets and drainage?

  10. Ross says:

    Jules, what part of “can’t increase property taxes due to stupid revenue cap” do you not understand? The City doesn’t have the capability to increase taxes to pay for the needed improvements.

    Kroger and WalMart pay taxes. I don’t think we should be giving abatements at all, unless there’s something in it for the city. Oh, that’s right, those are 380 agreements, where a party funds improvements that should have been paid for by the City, then recovers the cost out of increases in property taxes until the total has been repaid.

    I am not kidding. There was nothing confusing about the ballot language. My 12 year old read it and said “that means there’s going to be a charge of some sort”.

    Some of the TIRZ money does actually go to streets and drainage. And that TIRZ money is one way to get past the revenue cap.

    The nice thing about the drainage fee is that it can be recovered from otherwise tax exempt parties (although, the City punted on that one). There’s no reason a church , school, or any other entity shouldn’t pay for their drainage impact. Churches and other tax exempts should also pay for fire and police protection, but that’s another issue.

  11. Jules says:

    And what does the City get for the Downtown 380 agreements? Oh, yes, nothing.

    Your 12 year old is probably smarter than most people. I’m not kidding.

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