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annexation

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.

Abbott versus the cities

The continuing story.

If Gov. Greg Abbott has disdain for how local Texas officials govern their cities, it didn’t show in a Wednesday sit-down with three mayors who were among 18 who jointly requested a meeting to discuss legislation that aims to limit or override several municipal powers.

“Whether we changed anybody’s mind or not, you never know,” said Galveston Mayor Jim Yarbrough. “But I will say it was a healthy conversation.”

What also remained to be seen Wednesday: whether Abbott plans to meet with mayors from the state’s five largest cities — who were also among those who requested to meet with the governor. So far, Abbott hasn’t responded to the requests from the mayors of Austin, Dallas, Fort Worth, Houston and San Antonio.

[…]

Houston Mayor Sylvester Turner said at a press conference Wednesday that when he was a member of the Texas House, Republican lawmakers repeatedly complained about government growing and overstepping its bounds.

“And now we find that the state government is really reaching down and telling local governments what they can or cannot do and pretty much trying to treat all cities as if we are all the same,” Turner said.

During invited testimony to the House Urban Affairs committee on Tuesday, several city officials and at least one lawmaker denounced what they said were overreaching and undemocratic attempts to subvert local governance.

“If people don’t like what you’re doing, then there are things called elections. I don’t see it as our job to overreach and try to govern your city,” said State Rep. Carol Alvarado, D-Houston.

San Antonio Mayor Ron Nirenberg testified that it felt like the state was waging a war on Texas cities.

“The fundamental truth about the whole debate over local control is that taking authority away from cities — preventing us from carrying out the wishes of our constituents — is subverting the will of the voter,” Nirenberg said.

At Wednesday’s meeting with Abbott, Yarbrough said he and his counterparts from Corpus Christi and San Marcos told the governor that local officials have a better finger on the pulse of city residents’ expectations and demands.

“We wanted to make sure we preserved the ability for local municipalities to be able to adjust and react to the needs of their community,” he said.

See here for some background. It’s mighty nice of Abbott to take a few minutes out of his busy schedule of threatening legislators to meet with these concerned constituents, but they shouldn’t have had to take time out of their busy schedules to try to persuade the Governor to leave over a century of accepted governance in place and butt out of their business. And not for nothing, but the cities whose Mayors Abbott has been ignoring are the reason he can make elaborate claims about how awesome the Texas economy is.

Let’s begin with population. The five counties that contain the state’s five largest cities have a combined 12,309,787 residents, which is 44 percent of the state’s total. If you want to talk about elections, the registered voters in those counties make up 42 percent of Texas’ electorate.

Those counties out-perform the rest of the state economically. Texas’ five biggest urban counties constitute 53.5 percent of total Texas employment. If you broaden it out to the metropolitan statistical areas, which include the suburbs as well, the proportion becomes 75.8 percent — and growth in those regions has outpaced growth in the state overall since the recession.

Not convinced Texas’ cities drive the state? Let’s look at gross domestic product: The state’s five biggest MSAs contribute 71 percent of the state’s economic output, a proportion that has increased by two percentage points over the past decade. Focusing just on counties again, workers in the ones that contain Texas’ largest cities earn 60 percent of the state’s wages.

If you look at the embedded chart in that story, you’ll see that the metro area that is doing the best economically is the Austin-Round Rock MSA, and it’s not close. It’s even more impressive when you take into account how busy the city of Austin has been systematically destroying Texas with its regulations and liberalness and what have you.

As I said in my previous post on this subject, quite a few of the Mayors that are pleading with Abbott to back off are themselves Republicans, and represent Republican turf. It’s good that they are trying to talk some sense into him, but I’d advise them to temper their expectations. Abbott and Dan Patrick and a squadron of Republican legislators, especially in the Senate, don’t seem to have any interest in listening. The one thing that will get their attention is losing some elections. What action do these Mayors plan to take next year when they will have a chance to deliver that message?

State of the county 2015: Please cooperate more

Harris County Judge Ed Emmett makes his eighth State if the County address.

Judge Ed Emmett

Judge Ed Emmett

In his eighth State of the County address, Emmett had choice words for both Austin – which is weighing a reduction in property taxes that form the backbone of county revenue – and for Houston – which has adopted a strategy of limited annexations of suburban areas but Emmett said will not adequately provide for its poor.

“County government must have the tools and resources necessary to improve those areas because I do not see a scenario in which the city steps up and improves the situation,” Emmett said at NRG Stadium to several hundred business leaders brought together by the Greater Houston Partnership.

A city spokeswoman said the limited annexations were two-sided agreements with utility districts, not city land-grabs.

Emmett nevertheless called for a “new model of urban governance” that would work for a booming unincorporated Harris County that is becoming increasingly urbanized. The county judge expressed concern that the unincorporated part of the county could struggle to provide health care for its indigent and build roads and railways for its economy.

Harris County, which soon will have more people living in these unincorporated areas than in Houston, has been mischaracterized by outside groups and policy makers as merely an urban core, Emmett said.

The city’s governance plan has included limited-purpose annexation of unincorporated areas. Those agreements strip suburban areas of possible revenue, and Emmett said he was prepared to spend some political capital to fight the city as it tries to bring neighboring areas into its jurisdiction.

“Suburbs and close-in areas that have been skipped over are struggling,” Emmett said. “For lack of a better term, suburban blight is staring us in the face.”

Equally menacing, Emmett said, is a state government that looks to implement “arbitrary limits” on the revenue or spending of the county, which is an arm of the state. While he supports lower taxes, Emmett derided proposed property tax caps Friday as merely “good sound bites.”

The state also should take some responsibility for health care for the indigent and the mentally ill, Emmett said, rather than relying solely on county resources.

“Should indigent health care really be a responsibility solely of the county?” Emmett asked. “Or is it time for the state to establish regional health care systems that support public and private clinics, hospitals and programs?”

Here’s the full text of Judge Emmett’s address. Just as a reminder, expanding Medicaid (which Judge Emmett supports) would go a long way towards addressing those needs. I don’t know enough about the annexation issue to have a strong opinion about it, but I wonder if going back to doing more full annexations might be a better way forward. As for the threat to the county’s revenue stream coming from Austin, the main problem there is too many Republicans in Austin that don’t really care about governing but are there to implement an ideological agenda. The Judge’s suggestion is for more November voters to get involved in the primaries. That may help, but I’d point out they could also make some different choices in November, too. Anyway, the end of the speech was about the Astrodome and the ULI plan for it. Whatever else happens, here’s hoping that gets some traction.

The games our tax system plays

I find this just fascinating.

BagOfMoney

It’s been described as bribery, taxation without representation and a shady political maneuver. Others have called it an innovative way to deal with budgetary problems and get things done.

Ever since Texas lawmakers made it more difficult for cities to absorb suburbs into their boundaries 15 years ago, Houston has been quietly cutting deals with municipal utility districts to levy a 1 percent sales tax on purchases in neighboring communities.

The agreements for “limited purpose annexations” now generate tens of millions for Houston and for the utility districts, which split the revenue. But some question the appropriateness of the deals.

Houston seems to play off suburban fears of annexation to demand taxes in exchange for promises to leave them alone, said Paul Lewis, a professor of local politics and urban development at Arizona State University.

“It’s a kind of bribery,” he added.

Some local officials wonder whether the agreements lead to wasteful spending that lacks transparency. The revenue is not subject to the voter-approved revenue cap that has forced the city to lower its property tax rate and slash budgets. Critics also note that Houston provides no services to most of these suburban areas, whose residents can’t vote in city elections.

“It’s unconstitutional,” Fort Bend County Judge Bob Hebert said. “I thought we fought a war back in the 1700s on ‘taxation without representation.’ ”

Utility district leaders defend the agreements, noting that they take half the money collected and receive a contractual promise they will not be fully annexed for 30 years.

City officials agree that the agreements are fair. Census figures show that nearly two-thirds of those who work in Houston live outside of the city limits. City officials note that suburban residents attend plays in the Theater District, watch free concerts at Memorial Hermann Park and put wear and tear on city property.

“It is the primary tool we have to deal with the growth that goes on outside the city and the burden put on infrastructure by suburban citizens without our property tax,” Houston Finance Director Kelly Dowe said.

You can read the story and decide its morality and/or constitutionality for yourself. Personally, as a resident of Houston, I have no problems with it. What occurs to me in reading this is that it’s a natural outcome of our overall system of taxation in Texas, which is heavily dependent on sales and property taxes, and also on legal ways to minimize one’s sales and property taxes. There’s one way we could avoid all the problems associated with a tax system designed around political boundaries, and that’s to switch to one that is primarily dependent on income taxes instead. Of course, there are plenty of ways to game an income tax system, too, so it would most likely substitute one set of shenanigans for another. But at least it would be something different for us to argue about.

Valero’s special deal

I’m sorry, I just can’t get behind this.

Companies routinely relocate to the city or state that lures them with the best tax break, but Valero wants Houston City Council to give its eastside refinery the same treatment without having to pack its bags.

Valero wants most of its Manchester facility, the only refinery inside Houston city limits, be considered outside the city boundaries for tax purposes. The rare move would let the energy giant pay lower fees than if it remained in the city and paid property taxes, and would, officials say, ensure a planned $800 million expansion – and the jobs that would accompany it – happens here and not at a Valero facility in Louisiana.

Some community leaders in the struggling Manchester neighborhood that borders the refinery question the proposal, saying the plan amounts to corporate welfare for a firm they blame for polluting the air and devaluing their homes.

The proposal, which City Council will consider this week, would see 161 acres of the refinery’s 190-acre site transition to a so-called industrial district. The remaining 29 acres at the plant sit more than 2,500 feet from the Houston Ship Channel, and, per a provision in state law, must remain inside city limits.

A Houston Chronicle analysis shows Valero would pay a projected $37.7 million in fees under the 15-year industrial district deal. If the refinery remained in Houston and paid property taxes, it could pay an estimated $10 million to $18 million more than that depending on the city’s future tax rate. Andy Icken, the city’s chief development officer, said a voter-imposed cap on the revenue Houston can collect from property taxes means the Valero tax break would not cost the city money. Icken said Houston has already hit the cap and will collect all the property tax revenue it is allowed to collect whether those dollars are paid by Valero or by other taxpayers.

Houston attorney Beto Cardenas, who negotiated the deal for Valero, said the Manchester refinery is at a disadvantage by being inside city limits when all adjacent facilities are in industrial districts. Valero, he said, simply seeks “parity” with its competitors.

Houston has used industrial districts since the 1960s, and today has 104 such agreements in place, generating $16 million in fees annually. Most were initiated in past decades when the city aggressively sought to annex surrounding areas. The agreements, which typically are renegotiated every 15 years, are a sort of economic standoff: The city gets revenue without having to provide services, and companies pay less in fees than they would pay if the city annexed them and levied its full property tax rate.

The Valero proposal would be the second public tax break granted to its refinery this year, and for the same expansion plan. Valero also has come under fire in recent years for seeking controversial state tax breaks and stressing local school districts’ budgets by suing to lower its tax bills.

The previous subsidy, which was approved by City Council and then by Gov. Rick Perry’s office, per the rules of the governor’s Texas Enterprise Zone program, saw Valero commit to the expansion plan in exchange for an up to $1.6 million rebate of state sales and use taxes.

“It’s a perfect corporate double-dip,” said Tom “Smitty” Smith of Public Citizen Texas. “There’s an ongoing assumption now that tax abatements and so forth are going to be given to any existing company that says, ‘We’re threatened,’ even though they may be some of the most profitable companies in the country.”

[…]

Unlike other industrial district agreements, which typically give a company’s existing buildings and equipment an immediate tax break, the Valero deal would ensure the city collects no less than the $2.2 million property tax bill the refinery will owe in January. Also unlike other such agreements, Valero would be annexed back into the city in 2017 if it has not begun the expansion, and in 2020 if it hasn’t completed the project. The facility also would be annexed back into the city at the end of the agreement in 2027 unless the agreement is renegotiated.

Valero also has agreed to continue paying its drainage fee under the ReBuild Houston program, which Icken said is about $200,000 a year.

I get the rationale for this, and the two paragraphs quoted at the end make it all a bit less disagreeable. But it’s stuff like this that makes too many people feel like the system is stacked against them, with one set of powerful interests currying favor from another, to their detriment. Who else can get this kind of deferential treatment, and for what? A handful of jobs whose security are tied to the price of a commodity? In the spirit of the season, let me offer up a two-word summary of this and my feelings towards it: Bah, humbug. Hair Balls has more.

Welcome to the not-quite-a-city of The Woodlands

On January 1, a unique experiment in city-like governance will commence in The Woodlands.

A new government body, approved by residents two years ago and called The Woodlands Township, will take control of the Montgomery County community 30 miles north of Houston.

“We’re transitioning from community associations that predominately provided services to a central government unit,” said Don Norrell, serving in the new role as president of the Township. “The key is centralized government.”

The change is historic because no other community in Texas has ever had legislation written to create such a unique government entity and to enable it to enter into an agreement with a city to avoid annexation.

The township is a special-purpose district that, in some ways, will look and act like a municipality when it really isn’t.

The township, for example, can collect property and sales taxes to provide services, but it can’t adopt ordinances. It can maintain parks and trails, but it can’t fix potholes or build new streets.

The township board will be responsible for making important decisions about the community just like a city council. It will be made up of seven board members, including a chairman who is similar to a mayor. Daily operations of the government will be overseen by a president whose duties are similar to a city manager.

It doesn’t say in this story, but according to this archived Chron story, the Town Center Improvement District board “would transition from an 11-member body, consisting of appointed and elected directors, to a seven-member communitywide elected board by 2010.” It also says that five of those seats were up for election in 2008, but I can’t find any evidence of that in the Montgomery County election returns. I guess they held the election, and will hold another one in 2010, but I’ll have to take someone’s word for it. As for the setup they’ve chosen, I don’t really have an opinion one way or the other, I’m just sort of fascinated by it. There will likely never be anything else like it.

Endorsement eatch: For HCC annexations

Missed this from Wednesday.

In this fall’s elections, voters in the Spring Branch and North Forest Independent School Districts are being asked to approve annexation of their respective districts into the Houston Community College System.

We believe the larger region has a stake in these elections and strongly encourage voters in both areas to cast their ballots in favor of annexation. The annexation effort has been community-driven in both districts and was unanimously approved in both cases by the HCC Board of Trustees.

[…]

The benefits of inclusion in the community college system are a genuine bargain. The system’s tax rate of just over nine cents per $100 of assessed value is the lowest among area community colleges. Residents over age 65 receive an exemption of up to $100,000 in addition to the 10 percent homestead exemption.

In Spring Branch, the annexation effort has been targeted for defeat by antitax crusaders wishing to draw the line against additional taxes. That is a shortsighted crusade: Education that helps the Houston area train a skilled job force is precisely the wrong place to draw lines.

Shortsightedness about taxes has never been an obstacle for some folks. I hope the fact that the Chron has taken a position on this issue, which only affects a relatively small number of voters, means that they will offer endorsements in the Alief, Cy-Fair, and other area ISD elections. The same type of antitax crusaders are at work in those elections as well – as noted in my interview with Sarah Winkler, this is the case in Alief in part because of a successful HCC annexation election in a previous cycle – and that needs to be more widely known.

By the way, I was able to easily find this endorsement editorial because the Chron has, for the first time I can recall, maintained a list of all their endorsements on the index page for the opinion section. Like the trend towards getting endorsements done before the start of Early Voting, I hope it’s something they keep doing. Kudos to whoever made it happen.

More on Lonnie Allsbrooks

Lonnie Allsbrooks, the most recent entrant in the race for City Council At Large #1, sent a missive to Swamplot about problems he’s had trying to open a second establishment with a beer and wine license. It’s not easily excerpted, so just go read it for yourself. Two things I have to say:

1. What I know about the Heights being dry is that it’s because the formerly independent city that once was the Heights was dry, and that its annexation by Houston didn’t change that. As far as I know, an election would need to take place to overturn that. I remember seeing a map once that showed the dry/not dry boundaries, but I don’t recall where I saw it. If anyone can shed a little light on that, I’d really appreciate it.

2. The race for At Large #1 is now officially more fun than it was before. Read the Swamplot post and you’ll understand.

UPDATE: An email to Whitmarsh’s list reminds me that Beer Island had a Tommy Thomas sign on it last year. That wasn’t exactly in touch with area sentiment.