Off the Kuff Rotating Header Image

property taxes

More on the constitutional amendments

From the inbox, from State Rep. Gene Wu:

Rep. Gene Wu

Please share with your neighbors, family, tenants, parishioners, and community partners.

Governor Greg Abbott issued a proclamation setting Saturday, May 7, 2022 as the special election day for two proposed constitutional amendments in Texas.

The League of Women Voters of Texas has prepared a Voters Guide for the 2022 Special Constitutional Amendments Election using the analyses language from the Texas Legislative Council.

The League’s nonpartisan Voters Guide is available in English or  Spanish. And if you’d rather listen to their YouTube video on the proposed constitutional amendments you may find them at Proposition One and Proposition Two.

It is an honor to serve and represent you.

The LWV explainers are simple and straightforward, with the proposition text and arguments for and against for each. The TLC docs are more thorough but also more dense and with all of the legislative background that you may or may not care about. Together they do a fine job of telling you all you need to know about the amendments on the ballot. Go forth and vote.

Early voting for the May 7 elections begins tomorrow

We all have at least one election to vote in, so get ready to get out there.

On May 7, Texas voters will have the opportunity to weigh in on two proposed amendments to the Texas Constitution, as well as a number of other contests, from local propositions to city council seats.

Early voting for the May 7 elections runs from Monday, April 25, through Tuesday, May 3. As always, polls will be open on Election Day, Saturday, May 7, from 7 a.m. until 7 p.m.

[…]

To vote by mail in Texas, you must be 65 years old or older, sick or disabled, out of the county on Election Day and during the early voting period or confined in jail but otherwise eligible.

The last day to apply for a mail-in ballot for the May 7 election is Tuesday, April 26 (received, not postmarked).

This will be a good chance to see if any counties have learned from the March mail ballot debacle and taken steps to reduce the number of rejected ballots. That responsibility very much falls on the political parties as well, and the May 24 primary runoffs will be the bigger test for them. I will be keeping a close eye on this.

(By the way, tomorrow is also the deadline to register to vote for the primary runoffs, if somehow you are not currently registered to vote.)

A list of early voting locations for Harris County for the May 7 election is here and the interactive map is here. Note that fewer locations than usual are available, as this is going to be a low turnout affair, so check to ensure your regular spot is open. I note that the West End Multi-Service Center, on Heights Blvd just south of I-10, which I’ve been using lately as it’s a reasonable bike ride from my house, is not available this time. Check before you head out and save yourself some trouble.

What’s on your ballot for this election? Everyone gets to vote on the two constitutional amendments that were placed on the ballot during the last special session. Prop 2, which increases the homestead exemption from $25K to $40K, is worth a Yes. Prop 1, which approves a property tax cut for elderly and disabled homeowners, is your call. Wherever you are and whatever other races there may be, this one is for all of us to vote on.

In Harris County there is the special election for the remainder of the term in HD147, which is between Jolanda Jones and Danielle Bess. Those two are also in the primary runoff on May 24 – yes, I know, this is weird and confusing – and it really only matters if the same person wins both races. For higher stakes there is the special election in HCC District 2, with four candidates running to replace Rhonda Skillern-Jones. You can listen to the interviews I did with each candidate. For HD147:

Jolanda Jones
Danielle Bess

For HCC2:

Charlene Ward Johnson
Baby Jayne McCullough
Kathy Lynch Gunter
Terrance Hall

Also in Harris County, there are several school bond referenda:

In Fort Bend County, there are two races for Fort Bend ISD, in District 3 and District 7. Note that one of the candidates for District 7 is a problem.

In Montgomery County, there are a bunch of special purpose district elections. If you live in Montgomery, check very carefully to see if one of those includes you.

There are undoubtedly plenty of others, but I’ve only got so much space and time. Check your local elections office webpage for further details, and get out there and vote.

Texas Central owes some property taxes

deep sigh

A planned high-speed train between Houston and Dallas, backers say, would allow travelers to avoid costly and time-consuming freeway traffic.

Before it can deliver that relief, however, the company behind the high-speed rail project will have to stop avoiding its own costly property tax bills for dozens of properties across Texas.

At least $623,000 in property taxes owed by Texas Central Railroad are delinquent, according to a brief filed with the Texas Supreme Court in an ongoing condemnation lawsuit, filed by county attorneys from nine of the 11 counties through which the train is planned to run.

“If (Texas Central) cannot afford to pay less than $1 million in property taxes, how will it ever be able to raise the $30-plus billion it needs?” the brief states, referencing what some claim will be the total cost of the project.

Texas Central officials did not respond to a request for comment.

I’m hard pressed to think of a non-embarrassing reason for this. If it was just an administrative screwup, it’s bad but survivable. If it’s something else…hell, I don’t want to know. Just pay your damn taxes already.

What’s on the ballot for the May statewide special election

Yes, you will have a reason to vote this May. It’s a statewide special constitutional amendment election, thanks to the most recent special session. Here’s what’s on tap.

Voters will head to the polls starting April 25 to decide whether to cut property taxes for homeowners by an average $176 a year and provide additional tax savings for elderly and disabled Texans.

There are two proposed constitutional amendments on the ballot. Election Day is May 7.

Proposition 1 would approve the tax cuts for elderly and disabled homeowners beginning in 2023, while a second measure seeks to raise the state’s homestead exemption from $25,000 to $40,000, lowering school property taxes.

State Sen. Paul Bettencourt, a Houston Republican who championed both amendments, has said the first proposal would offer relief for about 1.8 million seniors and 180,000 homeowners with disabilities, amounting to roughly $220 million in savings in 2024.

The increased homestead exemption for schools, meanwhile, would save homeowners about $176 annually starting this year, he said. Actual savings would vary depending upon local tax rates.

[…]

Current law freezes school property taxes for most homeowners when they turn 65, and those with disabilities receive the same benefit when purchasing a new property. The proposed change would lower their bills.

“Over-65 homeowners will see their freeze values actually decline, and lifetime savings from both bills in the many thousands,” Bettencourt said.

The second proposal was a compromise after state lawmakers tossed earlier plans to use federal COVID-19 funds to offer a one-time check to Texans who claimed homestead exemptions on their property.

A larger homestead exemption, which is Prop 2, is something I’ve advocated before in the past as a better and more equitable way to reduce property taxes. I’ll vote for that one. Prop 1 hinges on the state boosting its contribution to public education funding, which had been declining as a share of the overall pot of education monies. On the one hand, I’m always wary of this sort of thing because the tendency is just to move money from one budget item to another rather than try to grow revenue to meet growing need. On the other hand, if it’s public education that winds up with a bigger piece of the pie as a result, well, there are worse outcomes. I’ll wait and see on this one, which if you’re keeping score isn’t an outright No.

If all this sounds relatively simple, take comfort in knowing that the actual ballot language is epically ugly, requiring a PhD in Lege-speak to understand it.

For Prop 1, in the voting booth for the May 7 election you’ll be looking at 77 words of incoherency. Ready? I apologize ahead of time. Here it is:

“The constitutional amendment authorizing the legislature to provide for the reduction of the amount of a limitation on the total amount of ad valorem taxes that may be imposed for general elementary and secondary public school purposes on the residence homestead of a person who is elderly or disabled to reflect any statutory reduction from the preceding tax year in the maximum compressed rate of the maintenance and operations taxes imposed for those purposes on the homestead.”

Who wrote this monstrosity? Answer: The Texas Legislative Council, which helps lawmakers write their bills.

I called the TLC and talked briefly to general counsel Jon Heining. I asked him why all the gobbledygook?

“Oh, no,” he replied. “We would never explain why we did something. Absolutely not. All of the services we provide for the Texas Legislature are confidential. We don’t comment on the work we do.”

He said his group is publishing a guide to the text in the next few days.

That author asked Sen. Bettencourt about it as well, and got more or less the same response as above. Like I said, I’ll vote for Prop 2 and will wait for more feedback on Prop 1. You should look for more guidance on it as well.

Let’s pay some attention to the Gulf Coast Protection District

They may raise some tax revenue to help pay for the Ike Dike, so best to know what’s happening with it. Especially since they didn’t exactly go out of their way to make it easy to do that.

Danielle Goshen spent months trying to figure out when and where the new group that will work on funding the so-called Ike Dike was meeting. The environmental advocate was eager to know how the Gulf Coast Protection District would cover the local cost if Congress approves the sweeping coastal barrier project.

Goshen is a policy specialist and counsel for the National Wildlife Federation. She’s concerned about pursuing a $29 billion dollar plan, with the prospect that the project could cost even more. The proposal calls for building a massive series of gates across the mouth of Galveston Bay to stop hurricane storm surges from pushing up the industry-lined ship channel.

The legislature created the protection district to find local funding for 35 percent of the portion of the project built here — perhaps by levying taxes. Supporters say the concept is necessary as climate change will likely strengthen the winds and rains of future storms. Advocates such as Goshen caution it will take at least 12 years to design and build. Non-federal funding needed for the barrier system is about $10 billion.

Environmental advocates have expressed wide-ranging concerns about the proposal, which the U.S. Army Corps of Engineers finalized last fall. They’ve pressed for more information about how the foundations of the gates will restrict water flow between Galveston Bay and the Gulf of Mexico, potentially impacting water quality and marine life. The barrier also won’t stop the worst of storms and it will still leave the region especially vulnerable during the years it takes to build.

Harris County is the most populous of the five counties the district represents, and residents could be responsible for some 85 percent of the local tax share for the proposal, making for about a 20 percent tax increase, Harris County Administrator David Berry said in December. Galveston, Chambers, Jefferson and Orange counties are also in the district’s jurisdiction.

The costly burden makes it all the more pressing for stakeholders and residents to be tuned into the decision making, Goshen said.

“The real concern is that they’re not doing enough to make these meetings accessible to the public and to really get the word out that they’re having these meetings in the first place,” Goshen said, adding, “We really think that it’s imperative that this district has public engagement at the top of mind.”

Goshen kept searching online for months for information about the meetings, she said, and found nothing. It wasn’t until near the end of 2021 that someone forwarded her an agenda.

It turned out Gov. Greg Abbott had appointed six board members in June. Each county’s commissioners court picked one additional board member. The group had been getting together since August. The meetings were open to all, and met legal requirements, whether or not they’d been thoroughly advertised, according to those in charge.

[…]

The newly formed district now has a website and email distribution list but as the pandemic stretches on, the group still offers no way for the public to watch meetings online. It also has pages on FacebookLinkedIn and Twitter. Goshen, as well as a Houston Chronicle environment reporter and an environmental advocate, Bayou City Waterkeeper’s legal director Kristen Schlemmer, were its only three Twitter followers before the Chronicle covered the group Wednesday.

See here and here for the background. I confess I had totally forgotten about this – it’s not like we’ve been in a low-news environment lately, but still – but I am now a Twitter follower of the GCPD, whose count was up to 119 including me as of Monday evening. I hope that whatever business the conduct going forward, it’s better publicized and better covered. This is a big deal, and we deserve to know what they’re up to.

We will have a statewide special election in May

Surprise!

Texas voters will decide whether to lower some property taxes that fund schools in a May 7 special election.

Two propositions will be on the statewide ballot. Gov. Greg Abbott officially set the upcoming election date Wednesday.

The first proposition would draw down property taxes for elderly and disabled Texans by reducing the amount they pay to public schools, which typically makes up most of a homeowner’s tax bill. The state would then cover that reduced revenue for school districts. The measure would cost the state more than $744 million from 2024 to 2026.

The second measure would raise Texas’ homestead exemption from $25,000 to $40,000 for school district property taxes, which would save the average homeowner about $176 on their annual property tax bill. If approved, this measure would cost the state $600 million annually. The state will use a $4.4 billion surplus to pay for the measure’s first-year cost, but as of October, it was unclear where future funding would come from.

Both measures passed during special legislative sessions last year with bipartisan support from lawmakers.

I have a vague memory of this from last summer, and I thought I wrote something about it at the time, but if I did I can’t find it. Go read the linked Trib story for the details. This will be on the May ballot because it happened too late to be on last year’s November ballot, when this sort of thing normally happens. Having it at that time almost certainly means there will be even lower turnout than the typical November-of-odd-year Constitutional amendment vote, but at least it means that the HCC special election will have some company. So mark your calendar, between this and the inevitable primary runoffs you now have two reasons to vote in May.

Does Houston get its fair share from Harris County?

It’s complicated.

Do property taxpayers inside the City of Houston subsidize Harris County services? It’s a question that comes up a lot, given the fact that city residents—like their counterparts in the county—pay separate property taxes to the county, but the county provides many services only to the unincorporated areas.

The answer to that question appears to be yes: property taxes paid to the county by those inside the city do subsidize services out in the county—at least so far as general county services are concerned. (On the hospital front, city residents appear to receive more in services than they pay in taxes to the county.)

The overall picture might look different; for example, residents outside the city make many purchases inside the city, and the resulting sales tax goes to the city, not the county. But at least according to a new analysis from the Kinder Institute, with the assistance of the fiscal analysis firm TischlerBise, the county gets more in property tax revenue from city taxpayers than it provides in services.

[…]

Although much of the unincorporated area is served by municipal utility districts, the county government is responsible for providing many services, such as law enforcement and road maintenance, that are typically provided by cities. For this reason, the question of whether city taxpayers subsidize services outside the city has long been debated. At the same time, it should be noted that the county provides many services, such as justice administration and hospital care, to all residents of the county no matter where they live.

The Harris County government collects and spends about $2 billion per year in property tax revenue. The Harris County Hospital District collects and spends about $700 million per year in property tax revenue. A little more than half of the county’s property tax comes from inside the city.

But the amount of money that the county spends on services to city residents varies. For example, we estimate that almost 60% of all county flood control expenditures benefit the city. At the same time, however, almost 90% of county road and bridges expenditures occur outside the city limits.

I have definitely complained in this space about all of the roadbuilding in empty parts of the county as the primary development planning strategy. It’s worked in that the county’s population has boomed, but it has also led to the paving over of a lot of prairie land that had been a key component of flood control, and it has had the feel of leaving the inner core behind to fend for itself. I have felt that a little less in recent years, as the county has kicked in on various city road and bike projects, as well as contributing to Metro for bus shelters and other repairs. I give Commissioner Rodney Ellis a lot of the credit for that. I’d still like to see more done, but at least the disparity is not as glaring.

As this article points out, there are county services that provide a lot of benefit to Houston, and services that are widely used by everyone, so the picture is more nuanced than I might have given it credit in the past. The city also benefits from sales taxes from people who work in the city or travel into the city for business and entertainment. The cited study did not go into that aspect of the finances, though they say more study will be forthcoming. I’m just glad to see this issue get some attention.

The high pastoral life

Sweeeeeeeeeeeeet.

This fall, county officials mailed out property tax bills to the owners of a 10-bedroom, 10.5-bath Houston-area mansion, an 8,000-square-foot residence in a historic San Antonio neighborhood, an elegant Highland Park estate in Dallas and a house on more than an acre overlooking Corpus Christi Bay. The homes are worth millions of dollars. In each case, their 2021 tax bill was identical:

Zero.

Most people know that religious organizations pay no property taxes on their houses of worship. Lesser known is that many also get a valuable break on residences for their clergy as well.

The word “parsonage,” as these residences are called, conjures images of humble, spartan rooms attached to drafty churches. A few still are.

Yet in many places across Texas, parsonages are extravagant estates nestled in the state’s most exclusive enclaves. Like their wealthy neighbors, the clergy occupants enjoy spacious and well-appointed homes, immaculate grounds, tennis courts, swimming pools, decorative fountains and serene grottos.

Unlike their neighbors, the parsonage owners pay nothing in taxes, leaving other Texans to backfill the uncollected revenue to cover the cost of schools, police and firefighters.

State law allows religious organizations to claim tax-free clergy residences of up to 1 acre. Yet each of the state’s counties has its own appraiser responsible for overseeing local properties. So no one entity has examined how many parsonages there are in Texas, their value and their legality.

A first-of-its-kind Houston Chronicle investigation analyzing thousands of pages of property records found:

• The state’s most populous counties identified 2,683 parsonages worth about $1 billion, costing other residents who must fund school districts and local governments $16 million every year. The true cost is almost certainly higher because several large counties did not or could not respond, and even those that did conceded they did not regularly update values for the tax-exempt properties.

• There is no dollar limit to a parsonage’s tax exemption. At least 28 of the clergy residences were worth more than $1 million.

• Compared to some other states, Texas’ parsonage law is vague and permissive, allowing appraisers little leverage to question the legitimacy of a religion or clergy member. A lack of enforcement authority means the process effectively operates on the honor system.

• Across Texas’ largest counties, the Chronicle identified more than 30 parsonages for which appraisers had granted the 100 percent tax break even though they exceed the law’s 1-acre limit. Presented with the Chronicle’s findings, 13 appraisal districts said they were initiating reviews of parsonages in their jurisdictions.

“If you’re trying to paint a picture of there’s a lot of abuse in the clergy exemption, it does a pretty good job with that,” Brent South, chief appraiser in Hunt County and former president of the Texas Association of Appraisal Districts, said of the newspaper’s investigation. “The numbers don’t lie.”

It’s like my momma always told me. You wanna really make some bank in this world, put some mousse in your hair, develop an drawl, and become a megachurch preacher. (*) Doesn’t get any better than this. The Chron has been running a series of stories about how completely stacked the property tax system is in this state – you can read it here if you want to get your heart rate up. There’s stuff we’ve discussed here before, and there’s stuff like this which I had no idea about. Check it out.

(*) My fingers originally typed that as “magachurch preacher”. Clearly, my subconscious needs a break.

We are making progress on the flood bond projects

Let’s not lose sight of that.

Three years into Harris County’s historic $2.5 billion flood bond program, progress can feel maddeningly slow. After decades of underinvestment in flood protection, however, any completed project is a welcome improvement for nearby residents.

Through October, 16 percent of the planned projects for detention basins, channel widening and other infrastructure was complete. All 181 projects are underway in some capacity, from design to construction, and each is on schedule.

“Our project life cycle is three to five years, and in some cases that cycle has just started,” Harris County Flood Control District Executive Director Alan Black said. “But at least they’ve all been started. And on top of that, no project has been delayed due to lack of funding.”

Several completed works already are providing better flood protection for hundreds of thousands of homes, Black said.

Those include major maintenance along Cypress Creek and Spring Branch Creek, as well as the first phase of the Aldine Westfield detention basin project

In Kashmere, local officials heralded the progress of a $100 million Hunting Bayou channel improvement project that will remove more than 4,000 homes from the floodplain.

[…]

Whether the bond program is completed as originally planned remains an open question. Commissioners Court sold the bond to voters — who approved it overwhelmingly in 2018 — as, essentially, a buy-one-get-one-free deal. If voters agreed to pay $2.5 billion, the county predicted it could secure another $2.5 billion in federal matching dollars, bringing the total pot to around $5 billion.

So far, that plan has had mixed success.

You can say that again. I’m not going to rehash all of that – the article does so, you can keep on reading. The fact that we’re getting stuff done for flood mitigation is good. The fact that there’s so much more to do, well, that’s the reality.

[County Judge Lina] Hidalgo blamed some of the funding woes on the previous Commissioners Court, which she said was far too conservative in proposing a $2.5 billion bond. Flood control experts peg the total cost to protect Harris County against 100-year storms at more than $30 billion.

“Everybody will tell you, it should have been a much bigger number,” Hidalgo said. The leaders at the time thought it was a politically expedient number to select $2.5 billion.”

I think, if we had to do it all again and we knew that P Bush and the GLO were going to screw us on the federal funds, the Court at that time probably would have proposed a larger bond issue. I also think that the top number was going to be strictly limited by whether or not it would require a tax increase, even a small one. Maybe $30 billion is an overestimate of how much we need to spend to truly mitigate our flood risk. For sure, it’s more than $5 billion, and at some point we’re going to have to come to terms with the fact that we’re going to need to pay up for that.

Now is the autumn of our discontent

Nobody likes anything right now.

Texas voters have a net disapproval for how state leaders have handled the reliability of the electricity grid, abortion and property taxes, according to a new University of Texas/Texas Tribune poll.

In an October poll of 1,200 registered voters, respondents expressed major disapproval for the state’s handling of the reliability of the main power grid after statewide power outages in February left millions of Texans without power for days. Only 18% of voters approved of how state leaders handled the issue, and 60% of voters disapproved. Even lawmakers themselves have expressed frustration that the laws they wrote to prepare the power grid for extreme weather haven’t led to enough preparations ahead of this winter.

“The lurking uncertainty and doubts about the electricity grid [are] a mine waiting to go off,” said Jim Henson, co-director of the poll and head of the Texas Politics Project at the University of Texas at Austin. “If there’s another even moderate infrastructure problem in the state in the grid or service delivery writ large that can be connected with the February outages and the failure of the Legislature to respond in a way that people expect it to be effective, it’s a real political problem for incumbents.”

[…]

According to the poll, 39% of voters approved of how state leaders have handled abortion policy while 46% disapproved. Lawmakers this year passed the most restrictive abortion law in the nation, barring the procedure before many people know they are pregnant.

Only 20% of voters said they approved of the Legislature’s handling of property taxes, while 46% said they disapproved. The Legislature has tried for years to cut increasing property taxes for homeowners across the state, but voters see only minor reductions in their bills.

Voter disapproval for the state’s handling of the issue increased from June, when pollsters at the University of Texas last asked about the issue after the Legislature’s regularly scheduled five-month special session.

[…]

A plurality of 47% of voters opposed banning abortions after about six weeks, as the state’s new law does, and 45% approve. Fifty-seven percent of voters oppose the law’s provision allowing private citizens to sue people they believe helped someone obtain an abortion, including 35% of Republicans. Only 30% of voters said they approved of that portion of the law. If the plaintiff wins such a lawsuit, the law allows that person to be awarded at least $10,000, as well as costs and attorney fees.

“The idea of bounties and the problems with having private enforcement of public laws of what are seen currently as constitutional rights strikes at least more people as problematic than the actual law itself,” Blank said.

Overall, the polls showed an uptick in approval of how the state has handled abortion policy since the last time voters were polled on the subject in June. Then, 32% of voters approved and 42% disapproved. Blank said that was marked by an increase in approval from Republicans as more voters learned of the state’s new abortion law, which was passed in May.

Polls remained consistent on exceptions to abortion restrictions. More than 80% of voters said abortions should be allowed if a woman’s health was at risk, and nearly three quarters said they should be allowed in cases of rape or incest. Nearly 60% said they should be allowed if there was a strong chance of a serious defect to the baby, but support for other exceptions dropped substantially from there.

This is from the same poll we discussed last week. For the most part there are clear partisan splits, which makes these results less interesting to me overall, but as you can see there are some places where the consensus is greater. That should present an opportunity for Democrats in their messaging, which always sounds easier to do than to actually do it. Independents are particularly negative about everything, including Greg Abbott’s favorite anti-immigration toys, which may just be because these things come with partisan squabbles that independents always react negatively to, or maybe just because they’re grumpy about the state of the world, or maybe they really do represent some electoral danger for Republicans. I do agree that another weather-induced blackout would be bad news for the ruling party. I wouldn’t draw any broader conclusions than that.

Commissioners Court avoids quorum break

Good.

Harris County Commissioners Court this week unanimously agreed on a proposal to cut the overall property tax rate for the coming year, a compromise that avoids a potential quorum break by Republicans that would have forced an even deeper cut.

The rate of 58.1 cents per $100 of assessed value is 3 percent less than the current levy. This means the owner of a home valued at $300,000, with the standard 20 percent homestead exemption already factored in, could save up to $54 in the first year. However, as Harris County Appraisal District valuations continue to rise, homeowners could see slightly higher tax bills, despite the lower rate.

The overall rate is the sum of the rates Commissioners Court sets for four entities: the county as a whole, the flood control district, the hospital district and the Port of Houston. Compared to the current levies, the flood control district rate will increase slightly, while the other three entities would see a rate cut.

Democratic Precinct 2 Commissioner Adrian Garcia last week proposed a rate of 58.6 cents per $100 of assessed value, a 2.2 percent cut from the current rate of 59.9 cents.

The two Republican members wanted more significant savings for taxpayers, noting economic hardships wrought by the COVID-19 pandemic. Precinct 3 Commissioner Tom Ramsey proposed a rate of 57.9 cents.

County Judge Lina Hidalgo warned against cutting the tax rate, and thus revenues, too much because it will make raising more revenue in the future more difficult. That is because of a revenue cap the Legislature placed on cities and counties last year which limits year-over-year growth to 3.5 percent without voter approval.

“We should be negotiating on what the county needs,” Hidalgo said. “It does not benefit me, politically, to want to cut taxes less. I simply know we’re headed down a dangerous path.”

After hours of haggling at a hearing Tuesday afternoon, the panel agreed on the 58.1 cent rate, which Garcia offered as a compromise. The court at one point was mulling a half dozen options and County Administrator David Berry confessed he was struggling to keep track of who had proposed which.

See here for the background. They say in baseball that you gain more by avoiding dumb decisions than you do by making brilliant ones. I’m just glad we were able to avoid the dumb outcome here.

Republican County Commissioners ponder another quorum break

It’s a thing they can do, and have done in recent times. They shouldn’t, not for this, but they can.

The three Democrats on Harris County Commissioners Court on Tuesday proposed cutting the overall property tax rate for the third year in a row, though the two Republican members left open the possibility they may force the adoption of a lower rate by skipping the vote in two weeks.

County Administrator David Berry warned that option would leave the county scrambling to pay for essential services, including debt service for the $2.5 billion flood bond program. Republican commissioners Tom Ramsey and Jack Cagle, however, see an opportunity to compel the Democratic majority to cut what they view as wasteful spending.

“We are having a budget challenge because of wasteful spending, not because of tax rates,” Ramsey said, citing the creation of new county departments and hiring outside consultants for various studies. “So, when we adopt a tax rate, it should be in that context.”

Each year, Harris County sets the tax rate for the county government, flood control district, hospital district and Port of Houston; the first three together comprise an overall rate that is used to calculate each property owner’s annual tax bill.

Berry proposed an overall rate of 58.6 cents per $100 of assessed property value. This would save the owner of a home valued at $200,000 with the standard 20 percent homestead exemption $27 since their last tax bill.

The three Democrats on Commissioners Court have expressed support for that rate.

Cagle’s pitch of 57.5 cents per $100 of assessed value, which included lower county and hospital district rates, would save this same homeowner $48.

The Precinct 4 commissioner said residents who still are struggling through the COVID-19 pandemic deserve more property tax relief.

“When we do the tax rate hearings, we need to be very careful that we make sure we don’t keep just the tax-spender mindset,” Cagle said. “The taxpayers, right now, are going through a rough season in their lives.”

[…]

The pair of Republicans have rare power over the tax issue because while they frequently are out-voted 3-2 by the Democratic majority on the court, Texas law requires a quorum of four members to set tax rates.

That means they simply can skip the Sept. 28 meeting when the vote is scheduled and thwart the Democrats’ plan; Cagle and then-commissioner Steve Radack did this in 2019 to block a tax hike the majority had proposed.

If the court does not approve new tax rates before Oct. 15, by law they revert to what is called the no new revenue rate, a steeper cut than even Cagle had proposed.

Berry said that would leave the county unable to fully fund the budget Commissioners Court unanimously approved in February. It also would constrain the county budget in coming years under a Texas Legislature-imposed revenue cap, which limits annual growth to 3.5 percent unless approved by voters.

“Over time, going to no new revenue rates are going to be very, very difficult for the county, given what we see in terms of rising health care and pension expenses,” Berry said.

He cautioned that reverting to the bottom rates would leave the county flood control district without enough to pay debt service on the bond program voters approved in 2018. That also could spook creditors and threaten the county’s robust AAA bond rating.

All five court members agree falling behind on debt payments would be foolish.

See here and here for more on the previous quorum break. If everyone agrees that a Cagle and Ramsey walkout would lead to a bad fiscal outcome for the county, then the very simple and logical solution is for them to not do that. They’re getting some of what they want, which is not a bad outcome for a political minority, and they have the option of campaigning for their alternate vision in an attempt to win back a majority position on the Court for next year. Done and dusted, let’s move on.

But if they choose to break quorum to force an even lower tax rate, in the name of “cutting spending”, then it is incumbent on the Democratic majority to respond. They can’t change the quorum requirement, which is a quirk of the state constitution, but like the Republican majority in the Legislature there are things they can do to make the price of breaking quorum higher. I would endorse two things to do in response: One, rewrite the budget so that the full cuts that would have to occur come entirely from Cagle and Ramsey’s apportionment. Do whatever it takes to make them feel the pain, since they were the ones who wanted the pain in the first place. And two, absolutely go for a maximalist redistricting map, to eject one of them from their current positions. Don’t play nice, don’t let bygones be bygones, just respond in kind and let them absorb the lesson that their actions have consequences. It’s basic stuff.

Now again, none of this has to happen. Commissioners Cagle and Ramsey can show up and vote how they see fit, and still get a lower tax rate even if it’s not as low as they would like. You can’t always get what you want, especially when you’re outvoted. Or they can go their own way and force their will onto the county, and see if the Dems have it in them to do payback. We’ll know on September 28 what they choose.

Where are the stimulus funds for the schools?

Ridiculous.

For more than a year, the federal government has been pumping billions of dollars into school districts across the country to help them meet the demands of the pandemic. Most states have used that pot of stimulus funds as Congress intended: buying personal protective equipment for students and teachers, laptops for kids learning from home, improved ventilation systems for school buildings to prevent virus transmission and covering other costs.

But in Texas, local schools have yet to see an extra dime from the more than $19 billion in federal stimulus money given to the state. After Congress passed the first stimulus bill last year, officials used the state’s $1.3 billion education share to fill other holes in the state budget, leaving public schools with few additional resources to pay for the costs of the pandemic.

Now, educators and advocacy groups worry that the state could do the same thing with the remaining $17.9 billion in funding for Texas public schools from the other two stimulus packages. Because of federal requirements, Texas has to invest over $1 billion of the state’s own budget in higher education to receive the third round of stimulus funding for K-12 public schools. Experts said the state has applied for a waiver to avoid sending that added money to higher education, but the process has caused major delays in local districts receiving funds they desperately need.

“Principals’ budgets are being eaten up with personal protective equipment, with tutoring, with trying to get kids back engaged, while the Legislature is sitting on a whole bunch of money,” said Michelle Smith, the vice president of policy and advocacy for Raise Your Hand Texas. “And that will have an impact on our school districts not just this school year, but for several school years to come.”

A spokesperson for Gov. Greg Abbott told The Texas Tribune that state leaders are waiting for more guidance from the U.S. Department of Education before opening the spigot and letting billions flow down to school districts.

Because of the state’s waiver request, Texas lawmakers likely will not decide how to parcel out the money until they either hear back from Washington D.C., or until the Legislature finalizes its plans for the state budget. But the waiver only applies to the latest stimulus package, so the state could unlock $5.5 billion for education from the second relief bill at any time.

Libby Cohen, the director of advocacy and outreach for Raise Your Hand Texas, said dozens of states are already sending these federal dollars to public schools, and the most recent stimulus package also includes guidance on how to use that money. Texas and New York are the only two states that have provided no additional funding to public schools during the pandemic, according to Laura Yeager, a founder of Just Fund It TX.

“We find it baffling that Texas is pumping the brakes on this particular issue to the extent that it is,” Cohen said. “The dollars are there … and districts need to know if and when they’re coming because they’re writing their budgets right now, and they’re making decisions about summer programming right now.”

Many Texas teachers and administrators say they need money now, and want the Legislature to start funneling the federal funds to school districts as soon as possible.

But state lawmakers holding the most power over budgeting and education funding want the Legislature, instead of local school districts, to decide what to do with these federal stimulus dollars.

“The federal funds will ultimately get to school districts but the overriding question is how should these funds be spent and who should make that decision?” said Rep. Harold Dutton, D-Houston chair of the House Public Education Committee. “I think the primary obligation for educating Texas children vests in the Legislature according to the Texas Constitution.”

I can accept that the Legislature should have oversight of this process, but I don’t accept that they must play the part of approving each allocation. All that does is put a bottleneck on things, at a time when the schools need the funds now. More to the point, it’s not even clear that it will be the Lege making these decisions:

I see even less point to that. There’s a lot of money at stake, not all for the schools, and it makes sense to want to ensure it’s being spent for its intended purposes. But it doesn’t make sense to sit on it and take a lot of time figuring that out, because that money is needed now, especially the money for schools and students.

One more thing to consider: Rising property values, which have fueled an increase in local property tax revenues, have already been used by the Legislature to pay for other things.

Because of the way public schools are funded, a rise in local property tax revenue means the state doesn’t have to send as much money to local school districts. The schools would get the same amount as before — it’s not a budget cut — but the money that might have come from the state comes instead from local school property taxes.

This year, that amounts to $5.5 billion — most of it from property value increases. About 21% of that amount — $1.2 billion — comes from what the Legislative Budget Board called “lower-than-anticipated Average Daily Attendance rates, increased non-General Revenue Funds revenues, and federal Coronavirus Aid, Relief, and Economic Security (CARES) Act funding.”

In plain language, that’s a drop in the average number of students that school funding is based on, money that comes from sources other than state taxes and money from the first round of federal COVID-19 relief.

That last one is a sore spot for local officials, who see the state skimming from a pot of money that was supposed to go to public education. Here’s how that scam works: The money is still going to public education, but the amount the state would have sent is being reduced by the same amount, freeing the state to use money it would have used on schools on some other part of government.

The budgeteers’ word for that is “supplanting” — instead of getting the state money that was coming to them, with the federal money on top, the schools get the same amount of money they’d have received without any federal aid.

Give the schools their money already. There’s no more time to waste. The Chron has more.

The infrastructure bill and the Ike Dike

This is encouraging.

President Joe Biden’s infrastructure plan sure seems to be considering building the Ike Dike.

His $2 trillion plan includes improving and strengthening infrastructure in coastal areas most vulnerable during hurricane season.

Biden pitched part of the American Jobs Plan on Wednesday in Pittsburgh.

The Biden Administration’s plan includes investing in improving “coastal resilience to sea-level rise and hurricanes.” While specific projects were not named in the plan, the Biden administration says the American Jobs Plan will “protect and, where necessary, restore nature-based infrastructure,” which could include funding the Ike Dike.

[…]

State Rep. Gene Wu, who represents part of Houston, circulated a letter to Biden last week requesting federal support for the Ike Dike. Mayor Sylvester Turner and Rep. Sheila Jackson Lee have also expressed support for the coastal spine.

The Houston Chronicle’s Benjamin Wermund reports that Biden’s plan also includes $50 billion to improve infrastructure strength against hurricanes and other natural disasters, especially in lower-income areas. Biden’s administration used the aftermath of Hurricane Harvey as an example of the need for increased federal support and infrastructure development.

“People of color and low-income people are more likely to live in areas most vulnerable to flooding and other climate change-related weather events. They also are less likely to have the funds to prepare for and recover from extreme weather events,” a statement from the White House says. “In the wake of Hurricane Harvey, Black and Hispanic residents were twice as likely as white residents to report experiencing an income shock with no recovery support.”

I’ll have more to say about the infrastructure plan, which is not yet a bill but an outline and a list of priorities right now, because if it is realized in its full form it would truly do a lot for Texas. That definitely includes the Ike Dike, mostly because it would solve how to pay for it, which I noted a few weeks ago.

To its credit, the Lege is at least thinking about that issue.

A proposed bill in the Texas Legislature would create a regional district with the authority to tax and issue bonds to raise money to build and maintain a $26 billion storm surge barrier on the southeast Texas coast.

The bill, SB1160, is sponsored by state Sen. Larry Taylor, R-Friendswood, with a companion bill in the state House sponsored by Rep. Dennis Paul, R-Houston. The bills would establish the Gulf Coast Protection District, an entity comprised of members from Chambers, Galveston, Harris, Jefferson and Orange counties.

The district would be empowered to operate the long-proposed coastal barrier, once known as the “Ike Dike,” as well as issue bonds and impose taxes to maintain the project. It would also have eminent domain power to seize property or land “for the exercise of the district’s functions,” according to the bill’s text.

During a Monday meeting of the Senate Water, Agriculture & Rural Affairs Committee, Taylor noted that the bill is vital to the Army Corps of Engineers’ proposed coastal barrier project, which aims to protect the region from the kind of catastrophic storm surge experienced during Hurricane Ike in 2008.

“This is a very important bill, and not just not just for the state of Texas, but for our country,” Taylor said. “The number one supplier of military aviation fuel is in this area. So if you’re talking about national security, this area gets wiped out and we don’t have the aviation fuel, that would be a security problem. It’s our number one military port. And it’s our number one petrochemical complex.”

[…]

A final report on the coastal barrier study will be completed in April, according to the Texas General Land Office, which is co-sponsoring the study. The report will released to the public in September and submitted to Congress for final approval.

The Gulf Coast Protection District would be governed by a board of 11 directors appointed by the governor in consultation with the respective commissioners courts from each county. Each of the five counties would have one representative except for Harris County, which, because of its larger population, would have two. The district would also include one representative for the regional ports; one representative for the environmental sector; one representative for the regional industrial complex; and one representative for the cities within the five counties.

The district would have to hold a vote among its member counties before it began collecting property taxes, but will be able to issue bonds.

I don’t know how likely this bill is to pass, but I tend to agree with Campos that this is at best an unwieldy mechanism for funding it. Read that last paragraph and ask yourself how likely it is that the member counties of this district are actually able to raise property taxes for this purpose. For more on what’s in the Infrastructure Plan That Is Not Yet A Bill, see Slate and the Trib.

What the American Rescue Plan means to Houston

First and foremost, no layoffs.

Mayor Sylvester Turner

Houston and Harris County are expected to receive more than $1.5 billion through the stimulus bill approved by Congress Wednesday, providing a massive cash injection that city officials say will help close a budget shortfall widened by the pandemic for the second year in a row.

The measure provides local governments with their most generous round of COVID-related funding yet, and it comes with fewer spending restrictions than last year’s aid. Houston will receive an estimated $615 million, putting the city at more than $1 billion in direct federal relief during the pandemic, while Harris County is projected to receive $914 million — more than double its allotment from the first round of local aid last March.

“I’m hopeful and optimistic that we will be able to use this money to, essentially, bail the city out of a very dire financial situation,” said City Controller Chris Brown, who monitors the spending of Houston’s more than $5 billion city budget.

[…]

Local governments will receive half their federal aid within 60 days of Friday, when President Joe Biden will sign the bill into law, according to White House press secretary Jen Psaki. They will receive the second half of the funds at least a year later.

That means Houston will receive more than $300 million to offset its revenue losses next fiscal year, along with any potential shortfall before the current fiscal year ends June 30. [COVID recovery czar Marvin] Odum said the city finance department is projecting a budget gap of between $160 and $200 million next year, while Brown — whose office generates its own estimates separate from Turner’s administration — said he expects the shortfall to be even higher.

Brown noted that while finance department projections assume the city will see a less-than-1 percent reduction in sales tax revenue this year, the actual decrease has been 7 percent.

“The (Turner) administration, I don’t think, has properly evaluated the reductions in sales and property tax,” Brown said. “There’s a $40 million variance between us and (the) finance (department) in sales tax alone.”

Brown estimated city officials will have to lay off about a dozen city employees for every $1 million trimmed from the budget, meaning Houston could have been looking at more than 2,000 layoffs without any federal aid.

Instead, Houston’s relief will far exceed its budget deficit. The city also is expected to devote a chunk of the aid to direct COVID relief, such as testing and vaccinations. Turner’s administration exhausted the previous round of aid, totaling $405 million, in December. Those funds covered contact tracing efforts, city workers whose jobs were consumed by COVID, and relief to renters and small businesses, among other areas.

As the story notes, the ARP aid comes with fewer restrictions on how the money can be used than the CARES Act did, though the city was able to plug its deficit last year with those funds as well. The need for more funding has been known for a long time, and it’s only happening now because of the Presidential election and those two Georgia Senate runoffs. Elections have consequences, y’all.

Can we please not screw the schools right now?

Really, we don’t have to do this.

Across the Houston region and Texas, school districts that lost enrollment during the COVID-19 pandemic are facing a drop in state funds starting in January if the Texas Education Agency or state lawmakers do not act.

Since the virus began sweeping across the state and nation last March, forcing schools to close, the TEA has given districts several grace periods in which it provided them the same funding they would have received in normal times. To date, that has provided a lifeline to districts that otherwise would have seen their state revenues plunge due to lower-than-expected student enrollments.

The current grace period, which the TEA calls a “hold harmless guarantee,” ends Dec. 31.

The Texas Legislature in 2019 allocated enough money to fund schools at their current levels until the end of the school year, but the TEA has remained mum on whether it will extend the hold harmless guarantee until then. Without another extension for the remainder of the 2020-21 school year, some local district finance officials worry they will be faced with two bad options: dip into and potentially deplete their reserve funds to keep their districts operating through spring, or lay off teachers and staff to make ends meet.

For Houston-area districts, which began the school year missing more than 20,000 students, the financial ramifications could run into the tens of millions of dollars. For example, Alief ISD could lose nearly $40 million after enrollment fell 3,500 short of initial estimates.

Cypress-Fairbanks ISD, which has 2,364 fewer students now than at the end of last year, estimates it could lose $29 million. Aldine ISD could “easily” miss out on $20 million after its enrollment fell 4,000 students shy of projections, and Pasadena ISD would face a shortfall of nearly $14 million due to a 2,261-student enrollment drop.

Houston ISD did not respond to a request for comment, but the district began the year with 13,000 fewer students than expected.

There is no one answer for why students have dropped off schools’ radars. Some may have moved with family in search of work. Parents of pre-kindergarten and kindergarten students may wait to enroll them until school operations are more normal. Others may have been kept at home by parents waiting for COVID infection levels to improve before sending their kids back to school.

Texas Education Commissioner Mike Morath told the Chronicle’s editorial board in November the agency “already provided unprecedented flexibility to offer remote learning, and with it, full funding.”

“However, we know that certain districts face challenges because of significant enrollment declines, and we are working to ensure that our schools and teachers receive the additional financial support we need,” Morath said.

The lack of a concrete assurance that districts statewide will continue to receive funding at current levels has many on edge, said Kevin Brown, executive director of the Texas Association of School Administrators.

“Everybody right now is holding their breath, hoping the state will come through with hold harmless,” Brown said. “But they’re also starting to look at what will happen if that doesn’t come through — are they going to have to do layoffs, and if so, how extensively?”

State Sen. Paul Bettencourt, R-Cypress, said while enrollments remain lower-than-predicted across the state, the situation is improving as the school year plays out and kids come back. He also said he expects more students to return as COVID-19 vaccines begin to be distributed.

Returning funding to the state’s attendance-based formula creates an incentive for districts to keep looking for students who have not shown up.

“You have to balance all these needs, because we have to keep the public school system making sure they make every effort to find students,” he said. “Otherwise children are left behind.”

I mean, look. Schools and school districts and teachers – and parents and students – are contending with a lot this year. They’re doing the best they can under extreme circumstances. While the state of Texas is also under financial constraints, this is exactly the sort of situation for which the Rainy Day Fund – also known as the Economic Stabilization Fund – was created, to smooth out unexpected downturns in revenue and tide things over till they rebound. And for the millionth time, I will note that our state Republican leadership could be loudly demanding that our two Republican Senators support a COVID relief package that gives financial support to state and local governments, including school boards, that are suffering through the effects of the pandemic. There are many things we could do that do not involve putting all the burden on the school districts. We just have to choose to do them.

Flooding affects toll roads, too.

This makes sense to me.

Commissioners Court on Tuesday voted to create a local government corporation to manage Harris County’s toll road system in a move expected to provide a windfall to county coffers and allow surplus toll collections to be spent on non-transportation purposes.

Approved by a 3-2 vote along party lines, the local government model would allow the Harris County Toll Road Authority to refinance its debt at historically low rates and divert funds to help the county respond to the COVID-19 pandemic and subsequent economic downturn, and invest more in flood control, supporters said.

Under the proposal by new Budget Director David Berry, the county will receive a $300 million lump sum in toll revenue and then $90 million annually from the system. The toll road authority collected $901 million in the fiscal year that ended in February.

Peter Key, interim executive director of HCTRA, urged the court in a memo to adopt the new governance model.

“This is an unprecedented situation that presents unique financial challenges for the county and may require additional levels of financial support for the county to effectively respond to these challenges for the foreseeable future,” Key wrote.

The toll road authority’s current bond indenture and state law limit the use of surplus revenues to non-toll roads, streets, highways and related facilities, according to a Q&A created by the county budget office. After refinancing under the new governance structure, HCTRA revenues can be used by other county departments.

The proposal would not affect toll rates, the budget office said, nor would it privatize the system or sell off any assets.

[…]

While Fort Bend, Brazoria and Montgomery Counties use local government corporations to finance and operate their toll roads, Harris County’s will serve as a financing vehicle only. The toll road authority estimates Harris County will save $60 million by refinancing the system’s roughly $2.7 billion debt at lower rates through the corporation.

County Judge Lina Hidalgo said she supported the idea because the county can “maximize every dollar” in a challenging fiscal environment.

Precinct 1 Commissioner Rodney Ellis said diverting some toll revenues would be an effective way to boost flood control spending. It also could be used as matching funds to state or federal appropriations on ambitious capital projects like deepening the Houston Ship Channel.

I’m fine with this. If the toll roads are generating more revenue than is needed to operate and maintain the roads, then sure, let’s use some of that money for other necessary purposes. Flood control would be high on my list, but other capital projects make sense, too. Commissioners Court will still be accountable for all this, as they currently comprise the board of this LGC, and they will be responsible for appointing subsequent board members. Let’s put this revenue to some good use.

(You may say, if the toll roads were bringing in such excess revenue, we should have cut toll rates. I say that’s a policy choice, and my preferred policy would be to do something like this instead. Lowering tolls is pretty far down on my priority list. Your mileage may vary.)

In the “Would you like some cheese with that whine?” department:

Both Republican commissioners voted against the proposal. Jack Cagle in Precinct 4 lamented the fact that there had been no public meetings on the topic before Tuesday’s vote, unlike the extensive campaign in the summer of 2018 seeking support for the $2.5 billion flood bond program.

Precinct 3’s Steve Radack derided the idea as a ploy by the court’s Democrats who, in his view, are looking to siphon money from the toll road authority instead of asking taxpayers for more.

“This is a money grab,” Radack said. “They’re going to use it to pay for things that are normally paid for via (property) taxes.”

Hey, remember when Commissioners Radack and Cagle broke quorum to prevent the democratically-elected majority on Commissioners Court from voting on a property tax rate hike that was intended to cover future downturns in revenue resulting from COVID-19 and the state’s rigid new revenue cap? Good times, good times. Maybe let the majority vote on its policies next time, and campaign against them on the places where you have disagreements? Just a suggestion.

Revisiting the May elections

I’m ambivalent about this.

Most cities in Texas — from Galveston to Lubbock — moved their May elections to November under a pandemic-era decree by Gov. Greg Abbott.

But the choices facing voters will remain limited to candidates who filed for office months ago — at least for now.

State Rep. Mayes Middleton, a Galveston County Republican, wants to reopen the filing period for candidates to lead cities and other political jurisdictions, including school boards. He believes voters may have soured on incumbents facing little or no competition.

Middleton is asking Attorney General Ken Paxton whether the state should give candidates who want to run in a postponed local election until mid-August to file for a spot on the ballot.

“I think it’s also only fair that this occur because there are a lot of people that have been frankly unhappy with how some of the decisions… have been made in local government during this pandemic,” Middleton said.

The legal rub: Abbott’s March 18 order was silent on the filing deadline. But Abbott’s secretary of state, Ruth Hughs, wrote local officials that “the postponement does not have the effect of reopening candidate filings.”

Middleton believes that guidance is not supported by election law and Abbott’s order. Middleton, who chairs the arch-conservative Texas Freedom Caucus, contends in his July 2 letter to Paxton that Texas law clearly states that if the election day is changed or moved, the filing period rolls forward with it.

He said the ripple effects of a legal opinion by Paxton go well beyond proving greater scrutiny for elected officials who have issued shutdown orders or mask requirements, which have drawn the ire of many conservatives. Some local officials believe that tax rates adopted by cities for the coming fiscal year could greatly exceed what voters have the appetite for amid curtailed local tax revenues due to the pandemic.

I mean, I don’t agree with Mayes Middleton on much, and I think his motives for this action are screwy. But I confess that a part of me thinks that an election held in November, even if it was supposed to have been held in May but had to be postponed for whatever reason, should have a filing deadline that’s standard for a November election. On the other hand, the original filing deadline for the May 2 elections was February 14, more than a month before Abbott’s order that rescheduled the thing. As such, it’s hard to argue that people may have been unfairly excluded from filing. Obviously, conditions have changed, and I think there’s a valid case to be made that if these elections had been scheduled for November in the first place, there would be a very different lineup for them than what exists now. I think you can also make a valid case that the voters have it in their power to persuade the candidates they do have to prioritize the things they want now, as opposed to the things they would have wanted then.

On the related question of whether we should have regular elections in May at all, I’m also ambivalent. No question, turnout would be much greater in November elections, and as a general principle I think that’s preferable. But November elections, especially November elections in even-numbered years, are full of races with a lot more money and noise-making ability, which combine to drown out whatever local issues would be heard in a quieter context. It would be so much better if people simply took a greater interest in their local and school board elections, so that they could be held at any time and didn’t need the boost of a Presidential or gubernatorial election to get even semi-decent participation. I’d like to have a robust debate about this, but I fear that only the hardcore, vote-in-every-election types would be tuned in for it, and that would miss the point entirely. I don’t know what else to say.

One more thing:

Republican Cheryl Johnson, the Galveston County tax assessor, wrote Paxton in support of Middleton’s position. She said the pandemic has “opened the eyes” of Texans to potential government overreach, namely local tax rates that could soar as cities try to bridge budget shortfalls. Johnson wants officials considering tax hikes to feel the pressure of a campaign challenge.

Johnson noted that Senate Bill 2, signed into law by Abbott during the 2019 legislative session, requires cities to receive voter approval before levying taxes that would result in collections 3.5 percent higher than the previous year. But the bill contains a disaster provision that permits a city to collect more than twice as much for at least two years if any part of the city is declared a disaster area during the current tax year.

State and local officials are at odds over whether the coronavirus pandemic qualifies as a “disaster” to trigger this provision.

“I’m of the opinion that COVID-19 is not the type of disaster that would warrant the disaster provision of Senate Bill 2,” she said.

The Texas Municipal League says it conducted a survey of cities recently and found the “vast majority” plan to keep increased collections below the 3.5 percent threshold allowed by Senate Bill 2.

Yeah, sorry, if you don’t think what we’re in now counts as a “disaster”, then I’m afraid I just can’t take you seriously. SB2 was a terrible bill for many reasons, and this is one of them. But look, if you don’t want cities and counties to try to deal with their massive revenue shortfalls on their own, then there is a simple alternative, and that’s to push the Senate to pass the HEROES Act, which the House passed months ago, to provide fiscal relief to local governments for precisely this purpose. If you’re not down for that either, then I think we know all we need to know about your priorities.

The rough fiscal road for school districts

It’s gonna be bad. How bad remains the question.

Coronavirus already has wreaked havoc on school districts — closing campuses for the remainder of the school year, shifting learning online, and exposing a wide digital divide between students who have ready access to the internet and those who do not. And that is only this year.

Next year, even if the restrictions are lifted, the coronavirus still could spark a budget crisis for traditional and charter school districts across Texas.

School finance officials and state leaders already are warning that the economic disruption caused by the pandemic, coupled with the ongoing oil slump, could result in a plunge in state revenues as sales taxes drop and commercial property values slip. Texas Comptroller Glenn Hagar already has said the state is in a recession.

As districts work to finish their 2020-2021 budgets for approval this summer, Rep. Dan Huberty, R-Humble, said it would be prudent for them to squirrel away some money, even if it is too early to tell how much of an impact the pandemic will have on funding next year.

“Talking to superintendents, my message to everybody is, let’s get through this year, let’s get to summer time, and next session we’ll need to watch things very closely,” Huberty said.

[…]

[2019 school finance reform bill HB3] requires districts to base their upcoming budget on current year property values, instead of the previous year’s values. Districts receive a larger infusion of state money too, but the rate at which they can tax local property owners effectively will be capped by the state, said Catherine Knepp, an associate at the Moak, Casey & Associates school finance consulting group. How much local tax rates have to be lowered depends on the rate local property values rise and several other factors.

“Districts were still figuring out how to do that,” Knepp said, “Then enter coronavirus.”

For local revenues, Knepp said districts most likely to be impacted by the coronavirus closures will be those in which a larger share of their tax bases are commercial or industrial property rather than residential. About 60 percent of Deer Park ISD’s tax base, for example, comes from industrial properties that could suffer if the oil slump continues or if businesses there shut down entirely.

[…]

Huberty said the Legislature plans to save $1 billion of federal stimulus money for the next session to help fund schools and other parts of the state’s budget. Although it is too early to tell how much damage could be done as businesses and much of public life remains closed, he said money could be tight next session and said superintendents should begin looking where they could trim their budgets.

“The bones of what we put together with HB 3 remain intact, and we got some stimulus money from the feds to help us out with next year,” Huberty said. “But we’re going to have to look at everything.”

It’s a whammy from multiple fronts, as state revenue as well as local property tax revenues will be down, and the deep drop in oil prices will mean the Rainy Day Fund isn’t as topped up as it has been lately. On top of all that, when local revenues do start to recover, they will have to deal with the cap imposed by HB3. Which, as I understand it, does have an exception for things like epidemics, though who knows how that will play out. Even if everyone agrees to waive the restricting revenue cap, even the previously existing one could force tax cuts at a time when the districts are starved for funds. This will be an issue for multiple Legislatures, not just the 2021 Lege. It’ll also be a fine how-do-you-do for the TEA-appointed Board of Managers in HISD, whose first task (assuming they eventually get seated) will be dealing with the expected ginormous budget hole. Bet all those people who applied for the position a couple of months ago are having second thoughts now.

Another review of Judge Hidalgo’s first year

Though, oddly enough in a story about Harris County Judge Lina Hidalgo’s first year in office, most of the text is about outgoing Commissioner Steve Radack and the two-year-long temper tantrum he’s been throwing.

Judge Lina Hidalgo

For many years, the Harris County Commissioners’ Court, which oversees the third most populous county in the country and one of its most diverse, had been a place of easy consensus. At the time of Radack’s outburst, four of the five members of the commissioners’ court were white Republican men. They included county judge Ed Emmett, a popular moderate in a party running out of them. Most sessions passed by with the placidity of a koi pond. By cheering activists who sued the county and asserting that commissioners were supporting a racist policy while simultaneously trying to join their ranks, [Commissioner Rodney] Ellis was cannonballing into the water.

Three years later, in July of 2019, Radack looked considerably more chastened when the newly elected Ellis and the rest of the commissioners’ court met to vote on a settlement to the lawsuit—a sweeping $100 million overhaul that largely abolished the practice of jailing misdemeanor defendants who can’t afford cash bail. Reformers across the country hailed it as a major step toward making the criminal justice system fundamentally more equitable. The settlement was possible only because, just eight months before, Harris County voters had handed control of the commissioners’ court to Democrats for the first time since 1990. Radack and Jack Cagle were now the only two Republicans left on the court. Most astonishingly, voters had seen fit to replace Emmett, the beating heart of the county’s political establishment for more than a decade, with Lina Hidalgo, a 27-year-old Latina who had moved back to Houston to run against the 69-year-old Emmett. She was the first woman and Latino to lead Harris County.

Now Hidalgo and the other two Democrats—Ellis and former Harris County sheriff Adrian Garcia—ran things. For years, meetings had rarely lasted an hour. Under the new management they felt like committee hearings in the state legislature, often going for more than five hours and sometimes as long as nine, as the new majority pushed to enact its agenda—criminal justice reform, bringing transparency to county government, and improving flood planning—while members of the public came to support, oppose, and debate.

At the July meeting, Hidalgo beamed as she introduced the bail-reform settlement to the court. “This is a proud beginning,” she said, in the fight to build a criminal justice system in which “fairness and justice are preeminent.” She quoted from Martin Luther King Jr.’s 1963 address on the National Mall. She exuded, as members of her generation would say, good vibes only.

Ellis, a political operator who served 27 years in the Texas Senate, spoke glowingly too, calling the settlement, somewhat hyperbolically, “just as big as” Brown v. Board of Education. But the most dramatic moment came when he moved closer to his mic and stared at the side of the room where Radack and Cagle sat. “A very oppressive system has existed for decades,” he said. “And I don’t point an accusative finger at anyone, but it did, I think, indicate a certain blind indifference to what was going on. I think it’s incumbent on us to admit that,” he said, slowing for emphasis.

When it was his turn to speak, Radack turned to address the packed chamber, where during the period of public comments, most had spoken in support of the settlement. He understood that there were racial injustices in the system, he said.

But then he began pounding his palms on the wood in front of him. “This is a public table,” he said, his voice rising to a shout. Issues such as bail reform were supposed to be discussed in public, “not [by] a few people from the commissioners’ offices and whomever, behind closed doors . . . sitting there and discussing what they’re going to do for all of us.” He stood up, getting angrier and flipping through the lengthy settlement for the audience. “Every single page says ‘Draft,’ ‘Confidential,’ ” he said. “I think that sucks!”

Hidalgo politely noted that the text of the settlement had been made available to the commissioners three days earlier. “And let’s be careful with the public table,” she said. Radack was learning something Ellis knew very well: It’s not fun to be in the minority in a lawmaking body. “There are consequences to elections,” Ellis added calmly. At the end of the year, Radack announced he was retiring, boosting Democrats’ chances of electing the fourth Democrat to the commissioners’ court this November—and giving them the same level of dominance Republicans enjoyed just a few years ago.

[…]

Now in the minority, Radack and his fellow Republicans have found other ways to show their displeasure. For one, they’ve made a lot of noise. At one meeting regarding transportation funding, Cagle brought copies of George Orwell’s dystopian novel 1984 to distribute to the audience, accusing Hidalgo’s court of engaging in doublespeak.

But the most important scuffle came in October. The commissioners met to pass a tax hike that would increase the county’s revenue by 8 percent before an annual deadline, citing the need to raise money before new laws passed by the state legislature went into effect that would restrict their ability to do so in the future. Cagle and Radack didn’t show up—depriving the court of a quorum and preventing a vote. (State law requires that four of the five members of county commissioners’ courts be present to vote on tax increases.) Hidalgo says the consequences of that missing revenue will hurt the county in the long run. “You won’t see a huge difference from one year to the next,” she said, “but it will compound over time.”

That anti-majoritarian maneuver is one reason why many Republicans in Austin are closely watching what’s happening in Harris County. Never huge fans of cities and counties to begin with, GOP lawmakers, led by several Houston-area Republicans, cracked down hard on local government during the 2019 session.

Now imagine if the Democrats tighten their grip on Harris County, finally flip Fort Worth’s Tarrant County (the last urban Republican holdout), and take over quickly growing suburban counties like Hays (south of Austin) and Fort Bend (southwest of Houston). Then they draw new county commissioner precincts to solidify their control. In this dark future for conservatives, Republicans in the Legislature work even harder to rein in Hidalgo and her colleagues across the state.

If Democrats can pick up Radack’s seat, only one Republican would remain on the commissioners’ court, which would prevent that Republican from breaking the quorum again. But what if the Legislature, learning from Radack’s example, changed the law to require all five members of the commissioners’ court to be present? Many blue counties, even the big Democratic ones like Dallas and Travis, have at least one Republican commissioner who could, if the law were changed, nullify the wishes of the other four and hold one-person veto power over budgetary matters, with huge consequences for local governments across the board. “That would be a pretty major thing,” said Radack, who’s given the issue a good deal of thought. “Probably one of the most major pieces of legislation to come around in a long time.”

I should note, this story was written, and I wrote my draft post of it, before coronavirus took over all of our lives. It should be clear that every politician going forward will be judged on how they performed during this particular crisis. I think Judge Hidalgo is doing quite well on that score so far, but we still have a long way to go. Now here’s what I wrote when I first blogged about this.

Putting Radack’s jackassery aside, I’ve been thinking a lot about what might happen in the near future as Republicans continue to lose their grip on the larger counties and maybe possibly could lose control at the state level. We saw what they did on the way out the door in states like Wisconsin and North Carolina, after all. Imagine if Dems do take over the State House this November. Would Greg Abbott call a special session to get one last shot at passing bills in a full-GOP-control environment? Maybe even take some action to clip a future Democratic Governor’s wings? He’d want to act now and not wait till his hypothetical loss in the 2022 election, because if there’s a Dem-majority House, he’s out of luck. For sure, the assault on cities and counties will be much harder to pull off without a Republican monopoly. The good news for us Dems is that it would be hard for Republicans here to make like their counterparts in WI and NC, but not impossible. We need to be thinking about this, and have some strategies prepared for just in case.

Anyway. To reiterate what I said before, I think Judge Hidalgo has done a very good job, and has positioned herself and the Court to do a lot more good this year. It’s not necessary to trade out Radack for a better model – that 3-2 majority is fine almost all the time – but it would help. And Lord knows, the man has had more than enough time in the spotlight. Move along, already.

(By the way, Fort Bend has already flipped. In the same way that Harris did, by Dems winning one Commissioner’s Court seat and the County Judge’s office, to go from 4-1 GOP to 3-2 Dem. And as with Harris, Fort Bend Dems have a chance to win a Republican-leaning set this year to get to 4-1 in their favor.)

City wins final judgment in revenue cap lawsuit

Wow, is this ever a blast from the past.

The city of Houston has prevailed in a lawsuit challenging the amount it can collect in property taxes, ending 14 years of litigation over a set of measures approved by voters in 2004.

At issue in the suit were two ballot measures from 2004, specifically Proposition 1, which limited the annual increases in property tax and utility revenues to the combined increases in population and inflation for Houston, or 4.5 percent, whichever is lower.

Prop 1 was approved by voters in 2004, as was was another measure, Proposition 2, that further limited the city’s ability to collect revenue. The city, under then-Mayor Bill White, abided by the first measure because of a directive in it that stated whichever cap received more votes would be the one adopted.

Individuals from a conservative group then filed suit, accusing the city of violating the caps by not also adopting Proposition 2.

After years of court battles, a state district judge has ruled that the city has “fully complied” with Proposition 1.

See here for the city’s statement. The most recent update I can find in my own archives is from 2008 (!!), though it is likely there has been more action on the lawsuit that either wasn’t reported or went unremarked upon by me. However you look at it, this is some old, old business, and now it is done. Think of it as an alternate thing the city of Houston can celebrate now that the World Series didn’t work out the way we’d hoped.

Another ReBuild Houston lawsuit

Gotta say, this puzzles me.

Mayor Sylvester Turner

A pair of Houston residents filed a lawsuit against Mayor Sylvester Turner and city council Monday, accusing them of failing to follow the will of voters who approved a charter amendment last year for funding drainage and street repairs.

The lawsuit accuses city leaders of shortchanging the dedicated drainage fund by failing to transfer the full amount required by last year’s ballot proposition.

The proposition, which essentially was a “do-over” vote on the city’s 2010 street and drainage repair program known as Rebuild Houston, requires the city to dedicate 11.8 cents of its property tax rate to the street and drainage fund. The city, under former mayor Annise Parker and Turner, has transferred less than the full amount generated by the 11.8 cents for the last five years.

The plaintiffs allege a roughly $44 million discrepancy in what the city currently has budgeted compared to the amount generated by 11.8 cents of property tax rate. Over 10 years, the funding shortfall could exceed $500 million, the plaintiffs say.

Turner’s office issued a statement disagreeing with the premise of the lawsuit, saying that transferring the full amount generated by 11.8 cents of tax rate would require moving some $50 million more annually and would “cripple” city services.

“That would mean cuts to essential services like police, fire, solid waste, and other services,” the statement said. “Mayor Turner doesn’t support that.”

The plaintiffs, Allen Watson and Bob Jones, are engineers who were part of the campaign that put the program, then known as ReNew Houston, on the 2010 ballot. It later was renamed Rebuild Houston.

They said they were suing because the city had failed to meet the expectations outlined in Proposition A, which 74 percent of voters approved last year. They are seeking a court order to force the city to direct more money and “to fund the things they said they were going to fund,” Jones said.

“Houstonians spoke loud and clear just one year ago when they voted to create a fund to fix our streets and drainage,” Jones said in a later statement. “…We are undertaking this suit to ensure that the law is upheld, that the promised funding is protected so that our street and drainage infrastructure receives the investment necessary to repair, replace and upgrade our street and drainage systems throughout the city over the next 20-30 years.”

Here’s what I wrote in 2018 about the ReBuild re-vote. You can click the links to the Chron stories, but there’s nothing in either of them that mentioned a percentage of property taxes. The story mentions this was a part of the original mix of funding for ReBuild Houston, and here I have to confess I don’t remember that. There was so much noise and drama about the drainage fee that anything and everything else got overpowered. If this is what’s supposed to happen, then the consequences will be unpleasant. On the plus side, maybe it’ll take another decade to get settled via the courts.

Cagle and Radack break quorum

They did it.

Two Harris County Commissioners Court members skipped Tuesday’s meeting to prevent the Democratic majority from voting on a property tax rate hike that would increase revenue by 8 percent.

Republican commissioners Steve Radack and Jack Cagle were absent when County Judge Lina Hidalgo gaveled in the session at 10:03 a.m. A staff member for Cagle placed a two-foot stack of constituent comments at his place on the dais, indicating their widespread opposition to the tax increase.

Without a vote, Harris County will revert to the effective tax rate for the upcoming fiscal year, which will collect more than $195 million less than the rate Democrats had proposed, according to county budget analysts.

[…]

Cagle and Radack remained at large when their colleagues began discussing the tax rate at 11 a.m. In a statement, Cagle said he and Radack skipped the meeting to block an “unwise, unfair and unjustified” tax increase.

“The residents of Precinct 4 elected me to represent them. They did not elect me to lord over them or to repress them,” Cagle said. “This is the taxpayers’ money, not the government’s.”

See here and here for the background, and here for a statement from Commissioner Ellis. I will just say this: The people of Harris County, who voted 52-46 for Lupe Valdez over Greg Abbott, and 56-42 for Mike Collier over Dan Patrick, did not vote for the imposition of a restrictive and damaging revenue cap. Collier, for that matter, carried Radack’s precinct and came damn close in Cagle’s, so one could plausibly argue that their own constituents didn’t vote for that revenue cap, either. I can appreciate that Radack and Cagle opposed this plan and used the tool that was available to them to stop it, but they picked a really short-sighted hill to die on. The property tax system in Texas is rigged against homeowners, and Radack and Cagle’s fellow Republicans in the Legislature refuse to do anything about it. By this action, they demonstrate they are part of the problem. Commissioners Court can’t do anything about what the Lege has imposed on them now, but the voters can do something about Steve Radack next year. The Court has undergone a lot of change, but clearly more is needed.

Will Radack and Cagle break quorum to stop a tax rate hike?

We’ll find out today.

Harris County Commissioners Court has scheduled a vote Tuesday to hike property taxes by 8 percent, though the two Republican members can thwart the plan by simply skipping the vote.

A quirk in the Texas Government Code requires a quorum of four court members, rather than the regular three, to vote on a tax increase. The rule affords Republican commissioners Steve Radack and Jack Cagle rare power, as they repeatedly have lost votes to their three Democratic colleagues this year.

The pair said they would not reveal their intentions ahead of the meeting.

First Assistant County Attorney Robert Soard said Radack and Cagle could attend the rest of Tuesday’s court meeting and leave the room when County Judge Lina Hidalgo decides to consider the tax increase.

“They can be present for part of the meeting and then leave,” Soard said. “That’s their option.”

Soard said that unlike the governor, Hidalgo has no power to compel any member to be present for a vote.

[…]

The Democrats on the Harris County Commissioners Court proposed a property tax increase of 2.26 cents per $100 of assessed value, which the county budget office estimates would add $37.65 to the tax bill on a $230,000 home in the first year. The county would collect more than $200 million in additional revenue.

Garcia said the prospect of Republicans skipping the vote was “disappointing but not surprising.”

“It is their responsibility to come to court and be a part of the process, even if they don’t agree with it,” he said in a statement.

The relationships between court members have been fraught at times since Democrats took control in January. Divided votes have become the norm, and commissioners sometimes snipe at each other from the dais.

See here for the background. The main thing I would add here is that the fraught-ness and the sniping and the divided votes are not because of some generic notion of “politics”, or incivility, or even partisanship, as former Judge Robert Eckels says. It’s about a sincere and significant difference in values and priorities. Which, to be fair to Eckels, is reflected in the differences between the two parties. The Republicans had their way for decades, and then the voters voted for change. That’s how this is supposed to work, minus the anti-majoritarian avoidance techniques. We’ll see what these two do.

Do you believe in magical thinking?

I did not read this long profile of Tony Buzbee, because life is short and we all have better things to do. I did briefly scan the print version a bit, and in doing so I noticed the following paragraph, which tells you everything you need to know about Tony Buzbee, Loudmouth Rich Guy Who Wants To Be Mayor:

Buzbee opposes the idea of lifting Houston’s property tax revenue cap. Instead, he wants to enact budget cuts he says will fund his proposals, such as hiring 2,000 police officers in eight years — which would spike the department’s budget by almost 40 percent — and granting firefighters pay parity with police.

This is impossible. It literally cannot be done. Do you remember when Mayor Annise Parker was faced with a big deficit in 2010 following the economic crash, which caused property tax revenues to plummet? She ran on a promise of balancing the budget without making any cuts to the police or fire departments, and she achieved that in large part by laying off over 700 municipal employees. Someone with a more detailed knowledge of the current budget would have to run the numbers to check this, but to hire that many new police officers and give the firefighters a raise of that magnitude, I would question whether there are enough municipal employees left to lay off to pay for it. I mean, if we don’t want trash collection or a permitting department or building inspectors or anyone working in the parks and libraries – and maybe if we also defaulted on our bonds – you could make it work. I guarantee you, Tony Buzbee has not done the math to show how he could make it work.

On a side note, let me refer you to this:

Houston Police Officers’ Union President Joe Gamaldi questioned whether the department would even have enough cars, uniforms and equipment to handle the increased headcount.

“We would love to see that type of growth,” Gamaldi said. “But realistically, we’ve never hired more than 375 people in a fiscal year, so we would really need to look to see if HPD’s infrastructure can even handle that.”

Note that this story has Buzbee hiring those two thousand cops over his first four years. I mean, when the president of the police officers’ union says that your plan to hire 500 cops a year every year for four years is a bit much…

Other counties also considering property tax rate hikes

I have four things to say about this.

A statewide property tax relief plan that takes effect next year is prompting hefty tax increases this fall in many of the biggest cities and counties in Texas, even in places that have historically kept rates flat or decreased them.

Elected officials in some cities and counties say they have no choice but to raise taxes as high as they can this year to brace for the implementation of property tax reforms that Republican Gov. Greg Abbott and the Texas Legislature called historic earlier this summer. The average effective tax rate for single-family homes in Texas was 2.18 percent in 2018, third-highest in the nation, according to a study by ATTOM Data Solutions.

Starting next year, cities and counties will be barred from increasing property tax collections more than 3.5 percent in any year without a vote of the public. Currently, the state has an 8-percent limit, called the rollback rate, that state lawmakers say has allowed cities and counties to overtax homeowners. The lack of a state income tax makes Texas municipalities especially reliant on property tax revenue.

A look around the state shows many counties and cities are pushing rates to the 8-percent rollback rate this year to bank money or, in a few cases, even to fund pay raises for themselves, in reaction to the new law. El Paso, Harris, Tarrant, Webb and Travis counties are among those pushing to the current rollback rate, or near it. And cities including El Paso, Arlington, Corpus Christi and Austin are similarly considering rates at or near the 8-percent limit.

“I think a lot of cities and counties know that we are putting them on a diet and they are going on one last bender before it happens,” said State Rep. Dustin Burrows, R-Lubbock, who was a key player in crafting the property tax reforms as the leader of the House Ways and Means Committee.

[…]

In Harris County, which hasn’t raised the tax rate in decades, county officials say the state’s new restrictions are forcing them to react by raising the tax rate by 2.26 cents per $100 of assessed value. County Judge Lina Hidalgo said the county needs to create a contingency fund to ensure it can pay for services, such as health care, transportation and flood control, once the state’s 3.5-percent cap goes into effect. The rate increase, if approved next month, would allow Harris County to collect more than $200 million extra in tax money than last year.

1. There are some extremely bitchy quotes in the story from Sen. Paul Bettencourt, who pushed the bill that led to this in the Senate. I may have rolled my eyes so hard that they will never unroll.

2. The counties and cities that are considering this are acting in what they believe is their best interest, and the best interest of their residents. Plenty of expenses that counties and cities face, from disaster relief to health care to salaries and pensions, aren’t subject to any kind of rate limit. HB3 radically changed their long term financial picture. They had no choice but to adjust.

3. Just as a reminder, there are plenty of things the Legislature could have done to improve our property tax system without putting the squeeze on local governments. The Lege could also greatly help counties on the expenditure side of the balance sheet by expanding Medicaid, which would do a lot to reduce the cost of health care on counties. The whining from the likes of Bettencourt on this is just beyond rich. All that is without even pointing out that having a property tax-based system, in which the main expense is completely disconnected from people’s annual incomes, instead of an income tax-based system, is always going to have problems like this.

4. The same voters who will be given the power to approve or reject future tax collection levels also have the power to approve or reject the local officials who may be raising tax rates now ahead of that. They also have that power over people like Paul Bettencourt and Dustin Burrows and Greg Abbott and so forth. Maybe some day that power will be exercised.

Quorum question

Who knew?

A quirk in Texas law could allow the two Republicans on Harris County Commissioners Court, despite being in the minority, to prevent the three Democrats from enacting a proposed property tax increase.

Typically, three court members constitute a quorum, the minimum number needed to conduct business. The Texas Government Code, however, requires four members be present to vote on levying a tax.

That exception affords rare power to Republican commissioners Steve Radack and Jack Cagle, who have been steamrolled on 3-2 votes on enacting bail reform, appointing a judge and a resolution on gun violence.

The pair simply would need to skip a tax hike vote to prevent the three Democrats from passing it, First Assistant County Attorney Robert Soard said. The trio on Sept. 10 proposed raising the overall property tax rate 2.26 cents per $100 of assessed value. The existing rate is 63 cents per $100 of assessed value.

“We don’t know how exactly it would play out,” Soard said. “But if there are not four members present, Commissioners Court can’t vote on a tax increase.”

A final vote is scheduled for Oct. 8, and the deadline to set the county tax rates is Oct. 11, leaving the Democrats with little margin for error. Commissioners Court has scheduled public hearings on the proposal on Sept. 20 and Sept. 24.

Radack pointed out that he has not missed a meeting in more than five years, and said Oct. 8’s session is marked on his calendar.

Cagle, through a spokesman, said he has made a decision on the issue but does not want to share his strategy publicly. Cagle proposed a compromise at the Sept. 11 meeting, only increasing the flood control district rate, but his motion was defeated on a party-line vote.

[…]

The proposed property tax increase, which would be the first increase since 1996, would collect more than $200 million in additional revenue over the current rate. Hidalgo said the measure is necessary to ensure the county can continue to pay for services, including billion in flood control projects, after the revenue cap passed by the Legislature takes effect next year.

That cap limits year-over-year growth of city and county revenue to 3.5 percent, down from a previous ceiling of 8 percent. Revenue increases above that threshold would need voter approval.

The county budget office estimates the average Harris County homeowner’s tax bill would increase by $38, based on a home valued around $230,000.

You have to love an anti-majoritarian law. I had no idea this existed, but I can’t say I’m surprised. Let’s please dispense with this nonsense about Radack and Cagle being “steamrolled”, however. They’re on the losing end of majority votes. That’s how this is supposed to work.

The story notes that Rodney Ellis participated in a big quorum break in 2003, while he was in the State Senate and was trying to hold off the Tom DeLay re-redistricting effort. The Senate quorum-busting, which lasted for weeks while Ellis and his Democratic colleagues holed up in New Mexico, followed a similar effort by 51 Democrats in the House. This is fair to bring up. I will note that in these cases, the threshold for a quorum in each chamber was set by the rules they adopted at the beginning of the session, not by state law, and that one of the things that happened as a result of all this was that the quorum rules were changed to make this kind of exercise futile. Also, the reason that Ellis and others fled the state is because the DPS is authorized to round up wayward members and drag them back into the chamber for the vote they’re trying to scuttle. Whether the DPS has the power to place quorum-busting legislators under arrest was unsettled the last time I checked on it, but I feel confident saying that if Radack and Cagle try this, they will not be hauled back downtown in handcuffs by Sheriff’s deputies.

As to the matter of the tax rate increase itself, this is something that Judge Hidalgo and Commissioners Ellis and Garcia think is necessary to enable the county to pay for the things it needs to do, including flood mitigation. They are concerned that thanks to the revenue cap provision of HB3, the county will be hamstrung going forward, forced to implement rate cuts because the county’s growth has been too fast for the law, so they’re taking action to mitigate against that now. You can certainly disagree with that, and you can express that at the next Commissioners Court meeting and at the ballot box. I’d just note that if the Legislature had left the county to its own devices, this wouldn’t be happening now.

Ed Emmett is not a fan of SB2

So he opines.

Ed Emmett

At its core, SB 2 continues state leaders’ war against local governments. For years local governments have had to make up for the state’s underfunding of public education. But the state’s top elected officials, Gov. Greg Abbott and Lt. Gov. Dan Patrick, didn’t want the public to understand that those state budget decisions were the main reason property taxes were going up. So they criticized city and county policies.

In its final form, SB 2 limits revenue growth from property taxes for cities and counties to 3.5 percent annually. School districts are limited to 2.5 percent, although implementation for school districts is delayed for two years so that for now, the state won’t have to pay an even higher share.

The bill fails to recognize that Texas counties differ widely, so an arbitrary, one-size-fits-all approach is bad policy for a county such as Harris, where almost 2 million people live in the unincorporated part of the county and so rely on county government to provide roads, flood control, parks and other infrastructure — as well as law enforcement.

To make matters worse, the state has saddled counties with unfunded mandates, particularly in criminal justice and courts. The bond rating agencies have already issued warnings that the legislation might cause Texas local governments’ credit ratings to be downgraded, which will increase the amount of interest that taxpayers pay.

So when county services or infrastructure lag behind growth, don’t blame county government. Blame the state officials who supported SB 2.

Beyond the impact on local governments, SB 2 is actually bad for homeowners because it keeps in place a complicated, convoluted property tax system. The big winners from the so-called property tax reform are property tax consultants and their clients.

It is not a coincidence that the author of SB 2, Sen. Paul Bettencourt, makes his living as a property tax consultant. Bettencourt even had the audacity to advertise his services on the radio during the legislative session while SB 2 was being considered.

Sick burn, y’all. There sure is a certain freedom in not having to run for re-election. Emmett is of course correct about the main purpose of SB2, but let’s not overlook the side benefit.

A look at the Constitutional amendments we will see this November

There are ten of them, including a couple I will vote against as hard as I can.

House Joint Resolution 4 would let the Texas Water Development dole out dollars from a flood infrastructure fund — created by Senate Bill 7, which would spend $1.7 billion from the rainy day fund — to be used for planning, seeking permits for or constructing flood-related projects. SB 7 is awaiting Gov. Greg Abbott’s signature.

If approved by voters, the flood infrastructure fund would be created at the start of next year.

HJR 34 would let the Legislature temporarily lower tax rates on property damaged during a disaster declared by the governor. House Bill 492 would set the initial tax exemption rates, up to a full exemption, according to the extent of the damage.

HJR 38 would ban the creation of a state income tax, doubling down on a constitutional amendment approved by voters in 1993 that requires voters’ permission for the Legislature to create a state income tax.

[…]

HJR 95 creates a tax exemption for precious metals held in the Texas Bullion Depository, which opened in North Austin in June 2018 with its permanent location in Leander expected to open in December.

While that depository made Texas the only state to have a state-operated depository, HJR 95 author Rep. Giovanni Capriglione, R-Southlake, said it is at a competitive disadvantage because it is also the only state allowing local property taxes on precious metals.

HJR 72 intends to ease the pressure put on smaller communities to find municipal judges by allowing one person to be elected to multiple cities’ judgeships. Currently a person can only hold multiple municipal judgeships by being appointed to each one.

Senate Joint Resolution 32 would let police dogs and other law enforcement animals retire in their old age to live with their handler or other caretaker. The state constitution currently prevents law enforcement from transferring valuable property to a private person or organization for free.

The other four are HJR12, HJR151, SJR24, and SJR79, all of which are financial in nature. As you know, I’m going to cast an enthusiastic but almost certainly futile vote against HJ38, the double secret illegal anti-income tax proposition. HJR95 also looks ridiculous to me – the whole Texas Bullion Depository thing is ridiculous, so it comes with the territory, while HJR72 and SJR32 seem reasonable. The rest I’ll figure out later. The ballot wording should be set in August. What do you think about these?

The real goal of SB2

Let’s take a look at the quotes from the supporters of SB2, the new law that will impose revenue caps on all Texas cities, to see what they say about it.

“They’re going to have to start looking at spending this money like it was their own and not somebody else’s money,” said the bill’s sponsor Sen. Paul Bettencourt, R-Houston. “And they’re going to have to look at priorities.”

[…]

But Ellen Troxclair, senior fellow at the Texas Public Policy Foundation and former Austin City Council Member, said those dire warnings imply a city has no control over its spending.

The reason this bill was one of legislators’ top priorities this year, Troxclair said, is because Texans are frustrated by rising taxes, and if it forces cities to rethink their spending, that’s a positive.

“The bottom line of SB 2 is it brings the rate at which cities are spending money more in line with the people’s ability to pay,” Troxclair said. “I hope that what the cities do is hear the pleas from citizens who elected them to make more responsible decisions when it comes to spending.”

Troxclair added that the bill doesn’t stop cities from going to taxpayers and asking to raise their taxes above 3.5 percent if officials deem it necessary.

[…]

Austin and San Antonio, which both have the highest credit rating of AAA, are also concerned that the caps will have an effect on their ability to borrow. The nation’s three major credit rating agencies have warned that the caps could have a negative impact.

Bettencourt and Troxclair, however, dismissed those concerns, saying that as long as cities are being fiscally responsible, credit rating agencies will have no reason to dock their scores. Bettencourt added that SB 2 doesn’t affect the debt portion of the tax rate, which are set by bond elections.

SB2 was sold as a way of reining in property taxes, to provide savings to homeowners. (Renters are on their own, the Republicans don’t care about them.) But no honest broker actually believes there will be any real savings. Literally no one is going to review their household expenses at the end of a year and say “thank goodness for that revenue cap, it saved us so much money”. Just look at the Houston experience, in which the typical reduction in taxes is less than $100 per year, while the city has been starved of revenue. The whole point of this exercise to to constrain cities’ ability to prioritize its spending needs, because with a revenue cap property tax reduction, no matter how trivial, always comes first. Paul Bettencourt and his cronies want cities to spend less. If that means laying off employees, if it means deferring maintenance and repairs, if it means not offering new services to meet the needs of a changing and growing population, that’s too bad. Or not bad at all, from his perspective, because what does he care about any of that? He wants government at all levels to spend less – more specifically, to spend less on things he doesn’t like – and SB2 will help accomplish that goal. Mission accomplished.

More info on the school finance bill

Here’s what we know.

Before final negotiations, the House’s version of HB 3 cost $9.4 billion, and the Senate’s cost a whopping $14.8 billion, according to Texas Education Agency calculations. The final cost is around $11.6 billion, according to lawmakers, though an official cost analysis has not been made public.

The House wanted to raise the base funding per student from $5,140 to $6,030, while the Senate wanted to raise it to $5,880. They decided on an even higher number of $6,160.

Both chambers had previously agreed to spend $6.3 billion on public education, including salary increases for teachers, and $2.7 billion for property tax cuts. This final bill appears to include about $6.5 billion for public education, including extra raises and benefits for school employees, and $5.1 billion for tax cuts.

Lawmakers estimated the negotiated version of the bill would lower tax rates by an average of 8 cents per $100 valuation in 2020 and 13 cents in 2021. That would mean a tax cut of $200 for the owner of a $250,000 home in 2020 and $325 in 2021. Legislators also said it would increase the state’s share of public education funding to 45% from 38%. They said it would lower school districts’ cumulative recapture payments, which wealthier districts pay to subsidize poorer districts, by $3.6 billion over two years.

[…]

In the negotiation, lawmakers also decided to drastically change the formulas that determine how local and state funding is allocated to school districts — taking heavily from the Senate’s school finance proposal.

The House had proposed a decrease in school district tax rates by 4 cents per $100 valuation statewide, as well as a mechanism to further decrease higher tax rates. State Sen. Larry Taylor, R-Friendswood, unveiled a version of HB 3 near the end of April — relatively late in the legislative process — that included billions of dollars to lower rates by about 15 cents per $100 valuation, more than either chamber had budgeted.

The negotiated bill lowers tax rates statewide by 7 cents per $100 valuation, with the potential to go lower in future years. That’s a $175 annual cut for the owner of a $250,000 home, not counting other mechanisms in the bill to lower tax rates further.

According to lawmakers, HB 3 includes about $5.1 billion for school district tax cuts — again, more than the initial budget proposal of $2.7 billion. Some of the additional money comes from a new fund established to pay for those cuts. The state comptroller is required to deposit some money from the Available School Fund, which provides funding for schools derived from state-owned land and fuel taxes, and some money from an online sales tax into the new fund.

It is not immediately clear exactly what other sources of money contribute to cuts this biennium or how lawmakers expect to pay for tax cuts in the future. The bill requires the state’s nonpartisan budget board to study potential sources of money for future school district tax cuts and their anticipated impacts on taxpayers, schools and the state.

There’s more, but it doesn’t really answer my initial questions. I hope someone I trust who knows this stuff well comes forward with an analysis, because this is big stuff and it’s going to get passed in the next day or two without a whole lot of public vetting.

Also, too, there are the property tax changes.

In its final form, Senate Bill 2, the reform package, appears to have changed little from when it passed out of the House earlier this month on a 109 to 36 margin.

If signed into law, the measure would require cities, counties and emergency service districts to receive voter approval before raising 3.5% more property tax revenue than the previous year. Community colleges and hospital districts will need to hold an election before surpassing 8% property tax revenue growth.

The constraints only apply to revenue collected on existing property, not new developments.

School districts appear to have been carved out of the bill, but their tax revenue increases are constrained in a high-priority public education bill, House Bill 3. That legislation could lower school tax rates by an average of 8 cents per $100 valuation in 2020 and 13 cents in 2021. For the owner of a $250,000 house, that could yield a tax cut of $200 in 2020 and $325 in 2021.

Currently, taxing units can raise 8% more property tax revenue before their voters can petition to roll back the increase. The 8% figure was set during a period of high-inflation in the 1980s.

The final version of the bill, now titled the Texas Property Tax Reform and Transparency Act, appears to have several provisions intended to add flexibility around the reduced election trigger.

Some of the money taxing units spend providing indigent defense attorneys and indigent healthcare would not be factored into the revenue growth calculation. Taxing units would be able to bank unused revenue growth for three years, allowing them to exceed the 3.5% threshold in some of them. And tax districts can raise $500,000 without having to hold an election, as long as that increase does not exceed 8% revenue growth.

Again, what I really want to know is how this will affect the big cities like Houston, because we’ve had a big target on our backs this session. Thankfully, some of the nastier bills did not survive, but cities’ revenues have already been reduced, for no obvious reason. I just want to know at this point how much worse things will be. And how it will change in the coming years.

Deal apparently reached on school finance

We await the details.

Texas’ top three political leaders declared Thursday that the Legislature had reached agreements on its three main 2019 priorities: A two-year state budget, a comprehensive reform of school finance and legislation designed to slow the growth of rising property taxes.

Republican Gov. Greg Abbott broke the news on the lawn of the Governor’s Mansion in Austin, just a few days before the Legislature is scheduled to gavel out. Both chambers will need to sign off on the three negotiated bills — House Bill 1, the proposed budget; Senate Bill 2, the property tax bill; and House Bill 3, the school finance bill — before the regular session ends Monday. Language for the compromised legislation, much of which was worked out behind the scenes between lawmakers from the two chambers, had not yet been made public as of Thursday afternoon.

“We would not be here today, making the announcement we are about to make, without the tireless efforts of the members of the Texas House and Senate,” said Abbott, flanked by Republican Lt. Gov. Dan Patrick, House Speaker Dennis Bonnen, R-Angleton, and other House and Senate members who played key roles in negotiating the three pieces of legislation. Almost five months beforehand, as state lawmakers began tackling the issues before them, Abbott, Patrick and Bonnen had pledged from that same spot in front of the Governor’s Mansion to work together and deliver on meaningful school finance and property tax reform.

“Frankly, we’re more together than we’ve ever been,” Bonnen said. “The people of Texas are those who win.”

[…]

According to a flyer detailing some of the components of the compromise reached Wednesday night, the school finance bill will include funding for full-day pre-K and an increase in the base funding per student, which hasn’t changed in four years. It also pumps in $5.5 billion to lower school district taxes up to 13 cents per $100 valuation on average by 2021 — though leaders dodged questions Thursday on exactly how and where the extra money would come from.

The compromise bill, Bonnen said, would reduce recapture payments that wealthier districts pay to shore up poorer districts by $3.6 billion, about 47%. But he also said the state could not afford to completely eliminate recapture, also known as “Robin Hood,” because it would cost too much to completely reimburse school districts from state coffers alone.

The bill will include funding for districts that want to create a merit pay program, giving more to their higher-rated teachers. Though the House decided to nix this from its initial version of the bill, the Senate put it back in and apparently won the fight to keep it in.

On the surface, it sounds pretty decent, though of course the devil is in the details. Where is that $5.5 billion coming from? What does “funding for full-day pre-K” mean? How would recapture change? By necessity, we will have answers soon, as the session ends on Monday, but until then this is more a possibly tantalizing promise than anything else. Stay tuned.

A tale of screwed cities

That’s my unofficial title for this legislative session.

The interest group representing Texas cities used to be one of the most powerful legislative forces at the Capitol. This session, it has become the GOP’s most prominent adversary.

Its members have been harangued at hearings. Targeted by a proposed ban on “taxpayer-funded lobbying.” And seen multiple proposals sail ahead over its protests.

When, around March, one mayor inquired about the reasoning for a controversial provision in a property tax bill, he said an advisor to Gov. Greg Abbott suggested, “you reap what you sow.”

The message was clear, said McKinney Mayor George Fuller: Local officials had been obstructionists in the past.

Though the antagonistic relationship between Texas cities and the state has been building for years, this session has reached the fever pitch of all out legislative assault, said Austin Mayor Steve Adler, in April. Typically, the Texas Municipal League tracks bills it opposes that are gaining momentum in the Legislature. This session, the group had amassed more than 150.

Among them, was a cable franchise fees bill authored by state Rep. Dade Phelan, a Beaumont Republican and chair of the powerful State Affairs Committee. After the Texas Municipal League warned its members the proposal could cut into cities’ revenue, Phelan had a concise response for the group, which represents 1,156 of Texas’ roughly 1,200 cities.

“When you are in a hole — you should stop digging,” Phelan recommended, in an email obtained by The Texas Tribune.

In an interview, Phelan said he harbored no animus toward the organization, but took umbrage with its opposition to legislation his constituents want. The sentiment is widely-shared in the Legislature, Phelan said, as evidenced by the support the bills on taxpayer-funded lobbying and franchise fees have garnered.

“Those bills have never gotten out of committee before,” he said. The Texas Municipal League represents “their own interests and we are representing the taxpayers.”

“I think there’s a disconnect sometimes,” he added.

The group’s leaders see a different trend. They say model legislation with an anti-city bent has been exported from conservative think tanks and taken root at statehouses across the country. At the same time, Republican strongholds have shifted to the suburbs, making progressive city leaders convenient whipping boys for politicians from the president on down.

There’s more, so go read the rest. It really does boil down to two things. One is the Republicans’ refusal to address our tax system in a meaningful way. There are things we could do to make the property tax system more equitable. There are things we could do with sales taxes to bring in more revenue in a way that wouldn’t be so regressive. Our whole tax system is a byzantine mess, but the only thing that we’re allowed to talk about is cutting property taxes. This session that means putting the screws to cities, even though local property taxes aren’t driving the growth of property tax collections. The Republicans are looking for a political solution, and cities are a convenient target.

Which leads to point two: Cities are liberal and Democratic, so it’s a twofer for state Republicans to stick it to them. And don’t think that having a Republican mayor would change anything:

“I understand the political atmosphere to reduce taxes; there’s no one that would be more aligned with that than I am,” said El Paso Mayor Dee Margo, a former Republican state lawmaker. “But I’m also trying to deal with basics. I say I’m the mayor of public safety, potholes, and parks.”

El Paso’s property values — and so its tax base — is growing at a slower clip than other parts of the state, he said. Though the factors differ from city to city, each municipality has different needs and budgets, and local leaders say they are unaccounted for under a blanket property tax reform policy.

“The frustration is that we are grouped, coupled with across-the-board perceptions,” Margo said.

That’s because your Republican former colleagues don’t care about any of that, Mayor Margo. The only way forward here is to vote them out.

The tax swap is dead

For this session, at least. Most likely, barring anything strange.

State Rep. Dan Huberty, the top public education leader in the Texas House, postponed two items of legislation Tuesday that would pay for long-term, ongoing school district tax cuts by raising sales taxes — effectively killing any chance of passing the legislation this year.

Huberty tabled until 2021 — the next legislative session — House Joint Resolution 3 and the accompanying House Bill 4621, which would ask voters to increase the state sales tax by one penny to buy down school district property taxes. The Houston Republican’s move came the day after the Senate, headed by a lieutenant governor who had endorsed the proposal, stripped such a provision from its version of the school finance bill in what was perhaps a signal that the measure would be dead in the upper chamber anyway.

Despite Tuesday’s postponement, the idea could still be revived this session; lawmakers could use a different bill as a vehicle to fund school district tax cuts.

Huberty criticized members of the Senate on Tuesday who “have spent their whole careers calling for property tax relief” but did not vote for the school finance measure the day before. And he repeatedly affirmed questions by House colleagues that suggested state Sen. Paul Bettencourt, the Houston Republican who leads the upper chamber’s property tax committee, had failed to take responsibility for coming up with a viable mechanism for property tax cuts when he was part of a school finance commission last year and during the current legislative session.

Bettencourt has arguably been the most vocal GOP senator opposed to the tax swap proposal, a position that has caught some by surprise since he’s closely aligned — both personally and professionally — with Republican Lt. Gov. Dan Patrick, who has made clear he supports the measure. Bettencourt marked himself “present, not voting” on the school finance bill Monday, while the majority of the upper chamber approved the legislation. And on Tuesday morning, ahead of business in both chambers, Bettencourt took to Facebook to once again reiterate his opposition to the tax swap, saying there is “simply no need to raise taxes even higher.”

In response to House members’ criticisms, Bettencourt said he’s long been clear about his concern that the tax swap proposal could amount to a tax increase. When Huberty proposed that the tax swap devote 80% of the new sales tax revenue to property tax cuts and the remainder to public school funding, for example, “I immediately red-flagged that,” Bettencourt said.

“Emotions run high when bills fail,” Bettencourt said. “If you have the votes, pass your bill — don’t blame somebody in the other chamber. That’s just kind of a rule that I’ve learned.”

[…]

On Tuesday morning, before the House gaveled in for the day, Bonnen told House Republicans during a caucus meeting that there would be no point in bringing up the proposal for a vote in the lower chamber if it was considered dead in the Senate, according to multiple people who were at the gathering. Caucus members at the meeting, according to those sources, largely agreed with Bonnen, who said the Senate stripping such a provision from its version of the school finance bill Monday suggested the upper chamber couldn’t muster enough support to approve a tax swap proposal.

After Huberty postponed the tax swap legislation, a Bonnen spokesperson said in a statement that the proposal had been “an opportunity for lawmakers to further reduce property taxes” and sustain tax relief found in the lower chamber’s school finance bill.

“Speaker Bonnen believes it is in the House’s best interest to devote the limited time left in session to our Day One priorities — passing legislation to provide meaningful school finance and property tax reform for all Texans,” the statement read.

See here for some background. To an extent, I agree with Bettencourt, in that a sales tax increase is a terrible idea. Of course, Bettencourt sees no need to pay for tax cuts. He just wants to cut them, and nothing else really matters as far as he’s concerned. The tax swap is a terrible idea that deserved to die, but at least Huberty was trying to pay for what he wanted to do. What happens next, with school finance and everything else, we’ll see.