Will we address the unincorporated problem?

The Chron proposes an agenda item for the Lege.

Unincorporated Harris County

The challenges of unincorporated Harris County are nothing new. For decades neighborhoods have sprouted up in the vast prairie west of Houston without any formal municipal governmental structure. Special districts have provided basic needs, such as neighborhood streets and water. The county government picked up the rest — notably law enforcement and roads. No mayors. No city halls. No local sales taxes.

This model is becoming unsustainable. If grouped into a single city, the total population of unincorporated Harris County would be the fifth largest in the United States. Issues like infrastructure costs and upkeep, law enforcement and the basic duties of government are piling up, and commissioners court lacks both the funds and the statutory authority to deal with it all.

Meanwhile, obscure rules written in Austin prohibit these neighborhoods from forming their own cities, which could levy sales taxes and pass ordinances. Already existing cities are hesitant to annex special districts, which often have long-term debt.

So why would the Legislature finally address this big-picture issue after ignoring it for so long?

Hurricane Harvey revealed the weaknesses of these special districts to meet residents’ needs and the ongoing fight over property taxes has the county looking for another way to pay for services.

Formal studies, notably from the Kinder Institute, are being published about the problems in these areas — and potential solutions.

The status quo in the unincorporated county can’t go on forever, and only Austin can change it.

I basically agree with the premise, but I seriously doubt anything will happen this session. This wasn’t a theme that Judge Lina Hidalgo campaigned on, and I expect she’s got her hands (and the county’s lobbyists’ hands) full right now. More to the point, it’s not clear what kind of legislation would be proposed to remedy the problems. Something like this needs to have a vetting period, with opportunities for public input, since any change would affect how current residents of unincorporated Harris County would be affected.

There’s an analogy here to the oft-lamented-by-the-Chron system of partisan judicial elections. What we have now is flawed, and it’s easy to say there must be a better way, but it’s all vaporware until something specific gets proposed and advocated. My suggestion would be to lobby Commissioners Court to put together a committee to study the options and propose something that can be turned into a bill one of our legislators can author for 2021. Something concrete has a chance to be enacted, so start with that and maybe we can actually make a change happen.

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15 Responses to Will we address the unincorporated problem?

  1. Bill Daniels says:

    I fail to see the problem. These unincorporated areas generally have MUD’s, so they have water and sewer service, they have trash service, and many of the subdivisions use some of their savings from not paying city taxes to pay for private security. Most neighborhoods also have HOA’s as well.

    It seems like they are doing just fine without being enveloped by a city. Have we forgotten what happened to Clear Lake? Has Clear Lake improved since the CoH takeover? What about Kingwood?

    There’s obviously a reason The Woodlands pays protection money to the CoH in order to NOT be annexed. They are willing to pay blackmail rather than being annexed.

  2. Ross says:

    If they want to be in an incorporated city, they can ask Houston to annex the area. There’s no need to have a bunch of small incorporated entities around Houston.

  3. EducatedHippie says:

    It’s all about taxes. How do cities get that sweeet swweeeeeeeet tax revenue? The Burbs are doing just fine, thanks.

  4. Steve Houston says:

    Locally, many of the neighborhoods in unincorporated Harris County are already paying additional sales taxes thanks to the hundreds of MUD’s that agreed to limited purpose annexations with the city of Houston. The terms vary but most of them split the extra funds in half while the city provides virtually no services.

  5. voter_worker says:

    Thanks for mentioning the LPAs, Steve. An additional feature is that voters registered within LPAs are qualified to vote in City of Houston elections. The deals also typically contain an agreement by Houston not to annex the MUD for a period of 30 years from the inception date as long as the agreement is in force. The complexity of this situation places it in a realm entirely of its own.

  6. Manny Barrera says:

    Steve can you provide a link where I can verify the information, Many … already paying … hundreds. If you cannot provide a link, where did the data come from?

  7. voter_worker says:

    Slight correction to my post: LPA voters don’t qualify to vote in City of Houston bond elections. Here are two resources on the subject:

    http://houstonpublicpolicy.org/limited-purpose-annexationa-city-of-houston/ (data from 2013)


  8. voter_worker says:

    Slight correction to my post: LPA voters aren’t qualified to vote in Houston bond election. Here are two resources on the subject.


    http://houstonpublicpolicy.org/limited-purpose-annexationa-city-of-houston/ (data from 2013)

  9. Steve Houston says:

    Voter, it’s my understanding that Houston doesn’t use the process to annex the entire MUD, just the commercial portions of the MUD in most cases, eliminating any voting issues. Friends out west and up north tell me they are still charged the full tax rate on items they have shipped to their homes but do not get to vote in city elections-but I don’t know if that is widespread or not.

    Manny, sure thing. They started when Mayor Brown was in office and used to be a large part of individual weekly council sessions. Some are with MUDs and others with similar special purpose zones. The city website used to offer a list of each LPA but I cannot quickly find it since the website’s been upgraded.


    “As the City of Houston has ceased general annexations, it
    has moved heavily toward creating LPAs with MUDs and
    other special districts. This has allowed the city to access
    sales tax revenue without providing major services to
    these districts over the short- and long-term.57 The pursuit
    of these agreements is often framed by the city as a commuter tax, aimed at collecting revenue from residents who
    live outside of Houston but who use the services provided
    by the city. In these agreements, the city typically annexes
    only existing or future commercial centers and collects
    sales tax in those areas. They then agree to split that revenue 50-50 with the MUD. The city is not required to provide any additional services within the LPA and in most
    cases, the MUD simply continues to provide services and
    infrastructure it was already providing.
    In FY 2017, the city collected $106.6 million in sales tax
    across 227 LPAs, meaning the city and the special districts
    involved received approximately $53.3 million each.58 In
    FY 2017, 187 LPAs were with MUDs, from which the city
    collected more than $88 million in revenue, resulting in
    $44 million going from MUDs to the city and the remaining $44 million split among the MUDs. MUDs often use
    this funding to pay for law enforcement contracts.
    The LPA approach, though, does not include counties.
    Under a full annexation, the city brings a territory into the
    city, provides full services and collects sales and property
    taxes to pay for them. Under an LPA, the sales tax is collected and split between the city and district. The county still provides services within the limited annexed territory—especially road and stormwater maintenance—but is not given access to any of the collected sales tax.”

  10. Manny Barrera says:

    It seems that for the most part it benefits both entities,

    The MUD can’t impose a sales tax, the City can and they split that with the MUDs.

    Thanks for the links.

    1. Revenue-Districts cannot impose taxes on retail sales, but they can share sales tax revenues with the City which has statutory authority to impose a sales tax. The additional revenue that accrues to the districts can be used in any lawful way to benefit the districts. This revenue is typically used to reduce outstanding debt and to invest in infrastructure.

    2. City regulations and ordinances can be extended to the LPA’s. For example, the districts have no authority to control fireworks, and the counties in which districts are located have limited authority to control fireworks. The counties authority is usually associated with a drought designation. As a home-rule city, Houston has broad authority to control fireworks by ordinance. This control can be extended to a district through a LPA and it accompanying SPA. Refer to the Fireworks Ban Enforcement Area map to the map at: http://www.houstontx.gov/fire/news/2010fireworkban/mastermap.pdf. Note that the fireworks bans extend beyond the boundaries of the LPA’s. Mentally place the fireworks ban areas on the spiderwebbing display of LPA’s and immediately questions arise on how the rectangular ban areas are determined. There is a provision of Texas law that allows a municipality to control fireworks 5,000 feet outside the city limits. [8] This law may be the authority under which the patchwork of fireworks bans reaches out beyond the geographical boundaries of the LPA’s.

    3. The districts can secure enhanced levels of services from the City. Such services can include animal control, police, fire and emergency medical services.

    4. The districts can use the City authority to offer “380 agreements” to potential developers of commercial property. 380 agreements refer to chapter 380 of the Texas Local Government Code. This chapter of the Texas Local Government Code authorizes Texas municipalities, both home-rule and general law municipalities to provide assistance for economic development. These programs must serve the purpose of promoting state or local economic development by stimulating business and commercial activity within the city, the extraterritorial jurisdiction of the city, or an area annexed for limited purposes.[9]

  11. voter_worker says:

    Steve, yes, the LPAs are not covering entire MUDs, only significant commercial areas within them. The reports from your friends who are not in an LPA but are being invoiced for sales tax are a red flag that tax is being erroneously charged by online corporations. Very sloppy if it’s happening and could be a cause for legal action (I am not a lawyer). There are more than a few voters in LPAs because they sometimes include hotels and even a few apartments, and it’s not unheard of for folks to register to vote where they work and at private postal boxes inside LPAs.

  12. voter_worker says:

    Add “City of Houston” as a modifier to my comment about sales taxes being collected. Anyone can check their residential address on the HCAD website to see if it’s in a City of Houston full annexation (jurisdiction code 061) but that code will not appear in accounts within an LPA.

  13. Bill Daniels says:


    The MUD can’t charge sales tax, but it CAN collect MUD tax, which a relative of mine has to pay. It’s not an insignificant amount. So if the MUD can levy taxes, how would it benefit from a “partnership” with the city? The city gets a cut of the sales tax for being a tax collector, but how do the actual people of the MUD benefit? Seems like they just get screwed out of more money.

  14. Steve Houston says:

    Bill, he said that the two entities benefited (presumably Houston and each MUD), not the people actually paying the additional sales taxes/”commuter tax” (what they used to call it around the horseshoe of city hall). The city gets a half cent and the MUD gets a half cent, the county gets nothing and the resident gets nothing. The reality is, in most cases at least, that the city provides no real services or benefits, no property taxes being imposed but could benefit if his MUD used the extra money to pay off debt, move forward on needed upgrades, or spent it on something the residents wanted.

    Voter, I’ll check on that because they were certain they were being taxed the full sales tax rate by everyone, such as Comcast, ATT, Amazon, etc.

  15. Manny Barrera says:

    Steve, While it may not be the case in some of those places, the people that live in the MUDs benefit by lower MUD taxes if the MUD uses the money for paying debt or improvements that would have been taxed.

    If the MUDs were not benefitting it would be an issue with the state, as much as Republicans hate Houston.

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