By Bill Peacock, Texas Public Policy Foundation | 11 JUL 2017
Used to running roughshod over local citizens, i.e., exercising “local control,” local government advocates are out in force trying to build dikes to redirect the coming tsunami of the Texas Legislature’s special session.
They are right to be on the defensive. If the Legislature really tackles even a portion of the issues on the call of the special session, life will never be the same for local governments—or for Texans:
- Legislation reforming the laws governing ad valorem property taxes.
- Legislation using population growth and inflation to establish a spending limit for state government.
- Legislation using population growth and inflation to establish a spending limit for political subdivisions.
- Legislation protecting the private property rights of land owners from political subdivision rules, regulations, or ordinances that interfere with, delay, or restrict private property owners’ ability to use or enjoy their property.
- Legislation expediting the issuance of permits by political subdivisions and reforming the laws governing the issuance of permits by political subdivisions.
- Legislation preventing political subdivisions from imposing on private property additional or enhanced regulations that did not exist at the time the property was acquired.
- Legislation reforming the authority of municipalities to annex territory, to exert control over territory, or to regulate the use of annexed land or land in a municipality’s extraterritorial jurisdiction.
- Legislation preempting local regulation of the use of hand-held mobile communication devices while driving.
- Legislation prohibiting state or local government entities from deducting labor union or employee organization membership fees or dues from the wages of public employees.
Control by local government entities, e.g., cities, counties, and special districts, would turn into control by local citizens over their own lives, i.e., liberty. So don’t be misled by the myths being spread about what is going to happen in Austin over the 30 days starting July 18. Not that the Texas Legislature is always, in the words of Ella Fitzgerald, “the top,” much less “the Colosseum” or “the Louvre Museum,” when it comes to promoting liberty. But it does seem to have received the message that local voters are fed up with rising property taxes and heavy regulation that drastically drive up living costs and are rapidly making our cities unaffordable.
With this in mind, let’s examine a few myths being promoted out there in an effort to protect the control that local government officials currently have over the lives of local citizens:
Myth #1 “If we want to do something about tax relief, we need to discuss the State funding of our schools.”
Local government officials are furiously attempting to blame the ever growing burden on school district property taxes, and then blaming the Legislature for them. But the truth is very different. Yes, school property taxes are a problem, driven by the ever expanded budgets of Texas schools, that just can’t help from hiring administrators instead of putting money in the classroom where it belongs. Still, school property taxes are increasing at a snail’s pace relative to tax increases for cities, counties, and special purpose districts, as seen in this chart from my colleague, Vance Ginn, using Texas Comptroller data:
Average Annual Property Tax Levy Growth Rates by Local Jurisdictions: 2005-2015
Myth #2 “It is simply impractical and unwise to concentrate all authority in Austin.”
The special session is not about concentrating authority in Austin. Just the opposite. Just read the governor’s call: “reforming … valorem property taxes,” “using population growth and inflation to establish a spending limit for political subdivisions,” and “protecting the private property rights of land owners from political subdivision rules, regulations, or ordinances.” The special session is about restoring the liberty of Texans that continues to be usurped by local governments that can’t increase taxes and regulations fast enough. When it comes to regulations, Texas cities have fought for years against legislation that would subject them to paying compensation to property owners when city regulations like zoning reduce the value of private property by 25 percent or more. While that threshold is too high, at least it is better than current case law, under which Texas courts allow cities to take up to 90 percent plus of the value of a property without having to pay compensation. The special session is a perfect opportunity for the Legislature to rein in excessive local regulation to return control over their property to Texans.
Myth # 3 “When the state’s investment in public education decreases, local school property taxes are pushed higher to cover school costs.”
Local school property taxes are pushed higher because local schools continue to treat taxpayers like a bottomless resource for whatever spending ideas they can come up with, like AISD’s failed $850,000 ad campaign. Texas taxpayers spend about $61 billion a year on public K-12 education, up from $38 billion in 2003-04. The average teacher in Texas makes about $49,000 for about nine months of work; the average professional support staff makes about$58,000; the average school administrator makes about $72,000; and the average central administrator makes about $94,000. As of 2014, there were 334,510 teachers in Texas, a 70 percent increase from 1989. The 322,031 staff and administrators were up 78 percent since 1989. During the same time frame, students had only grown by about 60 percent. So the number of teachers increases faster than the number of students, and the increase in administrators outpaces them both. It is this runaway spending that increases school property taxes. And, by the way, state funding for public education continues to increase. Whenever folks talk about cuts or decreases in spending by the state, it is because state spending has not kept up with their expectations.
Myth #4 Annexation reform “will put an end to” Texas being “a great state with great cities.”
Texas is one of the few remaining states that allows forced annexation, a practice permitting home-rule cities to unilaterally expand their boundaries and capture property owners living on the outskirts. Texans forcibly annexed by a city are subject to higher taxes, tougher regulations, and a lot more debt, whether they like it or not. Cities view annexation as a way to expand their tax base and capture additional revenue. Thus they use annexation to cover up for the failed policies that are choking economic expansion within cities which has caused much of the growth to occur outside of the city limits. Texas is the great state is has been and is today despite the ever-increasing tax and regulatory burdens cities are imposing on Texans. Annexation reform is just one of the significant reforms needed in the special session to stop the Californization of Texas by local governments.