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Local Officials Testify Against Revenue Cap Bill

By Elna Christopher
Director of Media Relations

Several county officials testified against a 5 percent revenue cap bill during a March 21 hearing in Senate Finance, and many other county officials and county representatives signed in against the bill. SB 720 by Sen. Tommy Williams (R-The Woodlands) — which was left pending in committee for now — would severely restrict local governments from making local determinations on how much revenue is necessary to provide services — including unfunded and under-funded mandates. The bill would lower the rollback rate to 5 percent unless certain harsh conditions are met, such as natural disasters that have already occurred.

Counties would only be able to go to an 8 percent rollback rate if any part of the taxing unit is located in an area declared a disaster area by the governor or the president of the United States during the current tax year, or the governing body finds that a higher tax rate is necessary to protect the health, safety or property of persons residing in the taxing unit.

The Texas Association of Counties (TAC) was represented by President and Roberts County Judge Vernon Cook and TAC Vice President and Travis County Constable Bruce Elfant. Cook also sent a letter to the committee in which he said, “I am at a loss to understand why we in local government are continually threatened with different kinds of revenue and appraisal caps. Bear in mind, the fact that we already have ‘caps.’ We have the 8 percent rollback rate.”

Williamson County Judge Dan Gattis testified for the Conference of Urban Counties, as well as representatives of the County Judges and Commissioners Association of Texas and Texas Municipal League. Five other county officials from various-sized counties around the state and several city officials and staff also testified.

Sen. Williams asked one judge from a rural county, Concho County Judge Allen Amos, if he would support the bill if small entities were carved out, to which Amos replied no, because larger counties have the same budget problems as small counties. Amos then reminded the committee that at least 60 percent of county budgets go toward public safety.

SB 720 would not allow for growth planning, road construction to meet the demands of growth, unforeseen cost drivers such as capital murder trials or mandated needs such as new jail construction. It could mean depletion of reserve funds that would lower bond ratings which would cost taxpayers more in the long run.

If the aforementioned natural disaster — be it a hurricane, tornado or huge wildfire — has already occurred, your county is undoubtedly spending funds from this year’s budget that were budgeted to deliver other services. What happens to the services from which budget money is borrowed for the natural disaster? This puts your county behind the eight-ball even before it’s time to set next year’s budget and tax rate, as Jefferson County Judge Jeff Branick noted when he told the committee his county is still paying for the aftermath of Hurricane Rita in 2005.

As Travis County Auditor Susan Spataro pointed out, just what is meant by the term “to protect the health, safety or property of persons residing in the taxing unit?” Does building a new jail to meet the burden of growth and the regulations of the Jail Standards Commission fall into the definition? Does a capital murder trial fit the definition? Does new road construction to help ease traffic gridlock match up with the definition?

The bill does not address the fallout counties will feel from proposed state budget cuts that could force counties and their taxpayers to pick up more of the tab for state programs such as adult and juvenile probation or caring for the mentally ill when there are no state hospital beds for them.

Lubbock County Commissioner Patti Jones reminded the committee that legislators are raising concerns about federal mandates being passed to the state and said the state’s lowering the revenue cap to five percent on local governments “violates that same principle.”

Parker County Commissioner John Roth discussed the effective tax rate (ETR) and how his county’s ETR is being driven down by the higher mineral values of the Barnet Shale, yet his county must deal with the heavy damage to roads caused by the drilling activities.

The bill does not address local control issues regarding “quality-of-life” services such as libraries, parks and restoration of historic courthouses that make our communities more dynamic and livable.

TAC has prepared a one-page document detailing some of the problems.