When a vinyl record suffers a scratch, the record needle jumps causing a section of the recording to repeat until the needle is removed or shifted.
Two years ago commissioners courts across the Lone Star State were looking to get scratched – or, more accurately, gouged. Facing a $27 billion deficit, the Texas Legislature proposed major shifts in public policy through the Appropriations Bill. Many of these shifts would have stolen chunks of money necessary to continue mental health services, criminal justice programs, juvenile justice services, disaster relief, and other local assistance programs. Additional state proposals were set to divert dedicated revenues, in essence instituting policy changes that would renege on long-standing commitments to counties and their taxpayers.
Enter the broken record.
County judges and commissioners tag-teamed one another, accompanying the officers of the County Judges and Commissioners Association of Texas (CJCAT) and their general counsel, Jim Allison, as they traveled to the Capitol to present a united message to both champion and protect county government. Facing cut after cut, scratch after scratch, local elected officials showed up both literally and figuratively, sending e-mails and faxes, making phone calls, and putting in personal appearances to safeguard their county, their community, and their taxpayers.
Truth be told, this isn’t the first use of the broken record. For years, if not decades, commissioners courts have shown up protesting the use of unfunded mandates, and more recently, proposed revenue and appraisal caps.
“Believe me, I know how you feel about those unfunded mandates,” Sen. Royce West, D-Dallas, told an audience of county officials at an educational conference.
However, the 82nd Legislative Session presented a particular challenge, with lawmakers seeking deeper cuts and targeting dedicated funding. For example, proposed legislation originally zeroed out the Lateral Road Fund, meaning an elimination of $14.6 million, or 100 percent of the portion of the gasoline tax dedicated to county roads by the Transportation Code. Lawmakers also put forth elimination of Overweight Truck Permit Fees valued at $15 million; the fees from these TxDOT permits are dedicated to counties for partial reimbursement for overweight truck road damage.
Officials replied with a firm and consistent message: Infrastructure is critical. Roads carry our emergency vehicles, school buses, our employers and employees. When it comes to roads, we are in maintenance-mode, using every penny to support and repair an outdated and over-burdened transportation system. Officials repeated the message, broken-record style; when all was said and done, both funds were fully restored.
To ensure their message was not only heard but understood, officials took an extra communicative step last session, translating proposed cuts into actual impact.
For example, former Houston County Judge Lonnie Hunt prepared a detailed document titled:
What Happens in Austin
Doesn’t Stay in Austin
Impact of House Bill 1 and Senate Bill 1
(Appropriations Bills) on Houston County
With regard to transportation, the communique stated the following:
Elimination of Lateral Road Distributions
Although these gasoline taxes are dedicated to county roads by state law, they would not be distributed during the next two years. This would cost Houston County about $68,000.
Elimination of Distribution of Overweight Truck Permit Fees
Even though the fees from these TxDOT permits are dedicated by law to counties for partial reimbursement for overweight truck damage, House Bill 1 and Senate Bill 1 propose to retain these fees in the state treasury. TxDOT would continue to issue the permits, and the overweight trucks would continue to tear up our county roads. Direct loss to Houston County in the biennium: $64,000.
The Ector County auditor also put pen to paper and equated proposed cuts with actual impact:
Juvenile Probation: Estimated 15 percent cut in funding, or about $150,000. Number of juveniles served is increasing which will require Ector County to allocate additional tax revenues to this function. Current direct allocation is $2.6 million.
Law Enforcement: Criminal Justice Division grants down 55.8 percent. State funded programs such as drug enforcement will require additional local funding to support. Prior to FY2010, Ector County received an average of $150,000 per year.
Indigent Defense: Grant program to be cut 13.6 percent requiring additional local tax dollars to fund. FY2010 funding was $194,000. Program cut equates to approximately $27,000.
Jury Pay Reimbursement: To be cut 14.8 percent; again, additional local tax dollars will be required. Funding represents some $60,000. Cut represents approximately $9,000.
When the 82nd Session of the Texas Legislature adjourned sine die, commissioners courts breathed a collective sigh of relief, as the adopted version of the state budget partially restored funding to most county programs. In addition, revenue caps and most unfunded mandates were defeated.
“Our system worked this time like our system is supposed to work,” summarized CJCAT Legislative Committee Chairman and Polk County Judge John Thompson, during a follow-up conference. “We found the key, and now we just have to keep refining that key.”
Get Ready, Get Set…
With the 83rd Session of the Texas Legislature underway, it’s time to pull out that key and get out those broken records. As the session advances, time will tell if the messages require adjustment. No doubt the usual issues – unfunded mandates and caps – will make an appearance. However, as proposed legislation morphs its way through legislative channels, swift and sure response will be required as counties once again put pen to paper to determine the impact at the county level.
“Give us a true picture of what your concerns and needs are so we can address them,” stated Sen. Eddie Lucio Jr., D-Brownsville, during the last CJCAT educational conference.
Extra Education Effort
Along with data on specific legislative impact, Lucio suggested an overall education effort considering this year’s freshman class; approximately one third of the 83rd Texas Legislature is comprised of members who are new to either the House of Representatives or the Senate.
“It is our responsibility to seek out legislators – our senior partners in the state-county partnership – and educate them on our needs and responsibilities,” Allison echoed.
Perhaps a review of the basics is in order.
County Government 101
State and Local
As a part of the State of Texas, the structures and duties of county government are set forth in the Texas Constitution. As an arm of the State, Texas counties can only do those actions that are specifically authorized by Texas law. Equally important, Texas counties must do those actions that are required by law.
As a unit of state government, county government responsibilities include:
- Conduct elections
- Process and maintain voter registration
- Maintain and construct county roads and bridges
- Provide for public safety
- Maintain and operate the court and jail system including provision for indigent legal defense
- Provide medical care for indigent county citizens
- Facilitate the issuance and recording of public documents
- Process motor vehicle registration and title transfers
- Collect and remit state motor vehicle taxes
Provide local support for state agencies such as Texas Department of Mental Health and Mental Retardation, Department of Public Safety, Texas Parks & Wildlife, and the Alcoholic Beverage Commission
As a unit of local government, the commissioners courts of Texas are often described as “grassroots government,” and county judges and commissioners are oft portrayed as “those closest to the people” who live and work where “the rubber meets the road.”
In his presentation on “County Expenditures Services,” Denton County Auditor James Wells writes, “…Texas counties have long operated under the idea that their primary purpose is to provide services to the citizens. All actions of county government and all expenditures of county funds are connected to the goal of providing services to the citizens.” In the majority of Texas counties this means going beyond the mandatory services and expanding into “discretionary” services, such as parks, community centers, libraries, senior centers, and emergency medical and family services – those special functions that enhance the quality of individual lives and the community as a whole.
As costs continue to increase, counties face the growing concern that they will have to focus solely on mandated expenditures and abandon existing discretionary programs – often referred to as “quality-of-life” services.
To complicate matters, taxpayers may not understand county government and the state/local dynamic. They only see diminished quality-of-life programs or the lack of pursuit of additional needed (yet discretionary) services. When election time comes around, voters seek change without realizing the true problem: LACK OF REVENUE.
County Revenue – The Property Tax
The property tax, or ad valorem tax, is inarguably the largest revenue source for Texas counties.
According to the Texas Constitution, Article VIII, Section 9, the county cannot levy a tax rate in excess of $.80 per $100 of property value for the county’s general fund, permanent improvement fund, road and bridge fund and jury fund.
On top of the $.80, the county is authorized to levy a $.15 road and bridge tax and a $.30 farm-to-market road/flood control tax; however, these taxes are subject to voter approval. In addition, counties on the Gulf of Mexico can levy a special tax for construction of sea walls, breakwaters, or sanitary purposes, not to exceed $.50 per $100 valuation.
Counties are also authorized by several statutes to levy certain special purpose taxes. However, these taxes when combined with the general fund tax may not total more than $.80 per $100 assessed valuation.
Property tax rates across the state are as varied as the counties themselves, with some counties hovering in the 20- to 30-cent range and others approaching or even reaching the maximum.
While county officials statewide are well aware of the overburdened property tax – and taxpayers’ frustration with their property tax bills – they are limited by law.
In addition to the property tax, counties rely on fines and fees, intergovernmental revenue, and interest, along with miscellaneous revenues or transfers.
Common Challenges
When it comes to Texas county government, the precariousness of county coffers is nothing new. In its April 2005 Local Government Survey, “The Challenges of Governing,” the Office of the Texas Comptroller asked participants two key questions:
What are the greatest internal obstacles to fulfilling your organizational goals?
What are the greatest external obstacles to fulfilling your organizational goals?
Some 44 percent of respondents cited lack of revenue as their greatest internal challenge, while 37 percent said inadequate funding from the State of Texas represented their most significant external obstacle.
According to the survey analysis, an overwhelming majority – 82 percent – of the 540 county, city and special-purpose district officials who voluntarily responded to the survey supported legislation to prohibit unfunded mandates on local governments. In addition, officials reported that declining and insufficient revenues were being met with an increasing demand for services, driven by population growth, newly identified needs in the community, additional state laws, and changes in the economic conditions.
Survey Question: Specific Challenges Facing Your Governmental Unit
Answer: Unfunded mandates, aging population with no new revenue sources, disappearance of opportunity to attract workforce and new ventures. Tax base used to fund basic services and regulated and mandated obligations thus eroding ambition and hope.
Tough Choices
Many taxpayers do not understand the stress and strain on the counties across the Lone Star State that are inching closer and closer to the maximum tax rate of $.80 per $100 of property value. As costs continue to increase, some counties face the growing concern that they will have to focus solely on mandated expenditures and abandon existing discretionary programs. In the meantime, the State of Texas continues its age-old habit of issuing mandates without funding to support the required service.
CJCAT Past President and Oldham County Judge Don R. Allred explained the plight of many struggling counties as follows:
County budgets are driven by the laws that are implemented in Austin by the Texas Legislature.
Counties are limited to property taxes for their main revenue source.
Taxes, for the most part, are determined by mandates put on the county by the State Legislature.
Discretionary spending for local services is the first to be cut because spending for state-mandated services is just that, mandated.
If the state would fund the laws that they adopt, then our property taxes could be more closely tied to local services and therefore could legitimately be used by local taxpayers and local governments to indicate the need for higher or lower taxes based on their desire for services.
As things stand today, local governments tend to be the state’s scapegoat to blame for higher property taxes, when in reality higher budgets are, more often than not, the result of the state’s unfunded, mandated programs and services.
When this happens local officials must either raise taxes, cut local spending, or both. Local taxpayers see higher taxes and fewer services, leading to frustration.
The State of Texas, by our Constitution, is prohibited from having a state property tax; however, the ability to require counties to spend local property taxes on state programs allows the state to circumvent this prohibition.
If we are ever to have complete truth in taxation, the state should fund the programs and services they require by mandate. This will allow local property taxes to be used for local programs and services, the purpose for which they were designed.H
– By Julie Anderson