The Onslaught Begins THIS WEEKEND:
Senate Committees Begin Attack on City Residents
City Testimony Needed
Texas Senate committees have wasted no time moving their anti-city agenda forward. The first special session began last Tuesday, and the Senate has set at least nine harmful bills for committee hearings this weekend. It is likely the committees (and later the entire Senate) will quickly move the bills, but interested city officials should come to Austin to testify.
The overall message to senators is that Texans don’t want to be told they must conform to one way of thinking or one way of living by overreaching big-government politicians – whether it comes from Washington or from Austin. Let Texans decide at the local level what’s best for their community.
If you can’t make it to Austin, you should call your Senator’s office to express your opposition, especially if he or she is on one of the committees.
The Senate Business and Commerce Committee will meet on Saturday, July 22, at 9:00 a.m., in the Capitol Extension Room E1.016 to consider numerous preemption bills. Summaries of the bills and talking points in opposition are included below.
- 1S.B. 12 (Buckingham) – Property Rights/“Super-Vesting”: would provide that: (1) a city or county may not enforce an ordinance, order, or other regulation that prohibits or restricts the use or development of real property that has been platted if the ordinance, order, or other regulation was not in effect on the date the owner of the property acquired title to the property; (2) the limitation in (1) does not apply to a parcel of land for which the owner has filed with the county clerk of the county in which the land is located a written waiver of the limitation; and (3) the bill applies only to a prohibition or restriction that is not subject to Chapter 245 (the “permit vesting” statute), including prohibitions or restrictions exempt from that chapter.
- 1S.B. 13 (Burton) – Expedited Permitting/Occupational Vesting: would make various detrimental changes to the law governing permit issuance and vesting. With regard to the issuance of any permit required by a city to construct or improve a building or other structure in the city or its extraterritorial jurisdiction, the bill would provide for detailed “shot clock” procedures. With regard to chapter 245 of the Local Government Code (the “permit vesting” statute), the bill would – among many other things – make engaging in an occupation subject to permit vesting.
Overriding Local Permitting Talking Points: City ordinances on the issuance of a wide variety of permits are adopted in an open and transparent process that seeks input from residents and businesses. The resulting rules are tailored to the needs and concerns of the local community. Any claims that cities have restricted economic growth through local permitting rules are simply absurd based on all the economic indicators that show Texas cities are booming. Three out of four new jobs in Texas are created in the state’s major urban areas because they provide the services, facilities and infrastructure businesses and their employees need to thrive. State government should not mess with the obvious success Texas cities have achieved in attracting and growing job-creating businesses.
- 1S.B. 14 (Hall) – Tree Preservation Preemption: would provide that: (1) a city, county, or other political subdivision may not enact or enforce any ordinance, rule, or other regulation that restricts the ability of a property owner to remove a tree or vegetation on the owner’s property, including a regulation that requires the owner to file an affidavit or notice before removing the tree or vegetation; and (2) the bill does not prevent the enforcement of an ordinance, rule, or other regulation designed to mitigate tree-borne diseases as recommended by the Texas A&M Forest Service.
Banning Local Tree Protections Talking Points: Responding to citizen concerns about property values and maintaining attractive, livable neighborhoods, about 50 Texas cities have adopted local rules on the removal and replacement of larger trees. Many cities have chosen not to adopt tree preservation ordinances. The decision on whether to have local tree protection rules should be made at the local level by the citizens in each community and not by an overreaching centralized government in Austin.
- 1S.B. 15 (Huffines) – Cell Phone Ban: would preempt a city from regulating or prohibiting the use of a wireless communication device while operating a motor vehicle.
Banning Local Safe Driving Ordinances Talking Points: It took the state legislature more than a decade to finally pass a statewide law this year on the use of cells phones while driving. During that time, citizens in many Texas cities pushed for adoption of local ordinances to deal with the increasing number of traffic accidents caused by distracted drivers. Many of those local ordinances are more comprehensive than the recently passed state law which contains a number of exceptions and loopholes. If Texans decide they want their community to have more safety precautions than provided by state law, they should be allowed to make that choice and not have their local traffic safety rules overridden by the state.
The newly-formed Senate Select Committee on Government Reform will meet on Saturday, July 22, at 11:00 a.m., in the Capitol Extension Auditorium (Room E1.004) to consider revenue cap and other property tax reforms. Summaries of the bills and talking points in opposition are included below.
Note: According to the committee posting, “witness registration opens at 10am. Witness registration for ORAL testimony will close at 2:00 p.m. However, you may register a position or provide written testimony only at any point during the hearing. For ORAL testimony, proceed to the witness registration table located outside the Extension Auditorium, E1.004 to fill out a paper registration card. To register a position or provide written testimony only, please register at any electronic witness registration kiosk. After you have registered electronically, drop off any written testimony at the witness registration table located outside E1.004. Public testimony will be limited to two minutes. If submitting written testimony, please provide 20 copies to the committee clerk with your name on each copy.”
- 1S.B. 1 (Bettencourt) – Revenue Cap: this bill, known as the “Texas Property Tax Reform and Relief Act of 2017,” would make numerous changes to the process for calculating and adopting property tax rates. Of primary importance to cities, the bill would: (1) adjust the property tax rollback rate in the following ways: (a) define “small taxing unit” as a taxing unit other than a school district for which: (i) the maintenance and operations tax rate proposed for the current tax year is two cents per $100 of taxable value; or (ii) taxes of $10 million or less are imposed when applied to the current total value for the taxing unit; (b) maintain an eight percent rollback rate for all small taxing units (Note: this is the same as current law, although there would be a lowered petition requirement for a rollback election as detailed by (2), below); (c) for a taxing unit other than a small taxing unit, provide for a rollback rate of four percent; and (d) provide that the governing body of a taxing unit other than a small taxing unit may direct the designated officer or employee to calculate the rollback tax rate of the unit in the manner provided for a small taxing unit if any part of the unit is located in an area declared a disaster area during the current tax year by the governor or by the president of the United States; (2) provide that any adopted tax rate of a small taxing unit exceeding the rollback rate would subject the taxing unit to an election if a petition is signed by at least ten percent of the number of registered voters of the taxing unit who voted in the most recent gubernatorial election; (3) provide that any adopted rate of a taxing unit other than a small taxing unit exceeding the rollback rate would subject the taxing unit to an automatic rollback election held on the November uniform election date in the applicable tax year, at which the voters would determine whether or not to reduce the tax rate adopted for the current year to the rollback rate; and (4) make numerous calendar changes to the property tax appraisal, collection, and rate-setting process in order to have property tax rollback elections for taxing units other than small taxing units on the November uniform election date.
- 1S.B. 93 (Bettencourt) – Revenue Cap: would lower the property tax rollback tax rate to five percent and make several other changes to the property tax notice process. Among many other things, the bill would requires cities to pay for non-voter approved debt supported by property taxes with the maintenance and operations portion of the tax rate instead of debt service. This provision will force cities that have issued certificates of obligation, tax increment bonds, and other formal debt instruments that are not approved by the voters to adopt tax rates exceeding the rollback rate just to finance their existing debt obligations.
- 1S.B. 96 (Bettencourt) – Revenue Cap: this bill is essentially the same as 1S.B. 1, except that “small taxing unit” is defined to include taxing units that bring in property taxes of $20 million less when applied to the current total value for the taxing unit.
Revenue Cap Talking Points: Cities are not the cause of high property taxes in Texas because cities collect only 16 percent of the property taxes paid by Texans statewide. That is why imposing a state cap on city revenues will not provide any meaningful tax relief. The real problem is skyrocketing local school taxes caused by the state’s failure to adequately fund education. The burden of local school district taxes will continue to grow over the next two years. While trying to mislead Texans and shift the blame to cities, the legislature approved a state budget in May that calls for a 13 percent increase in local school property taxes.
Imposing a statewide cap on city revenues will not provide tax relief for homeowners but it will harm public safety, job creation and transportation funding. The largest item in every city budget is funding for police, fire fighting and emergency medical services – as much as 70 percent of the budget in some cities. Any state restrictions on city budgets will impact the ability to hire more personnel, improve salaries and benefits, upgrade technology and replace outdated equipment.
State restrictions on city revenues will reduce or eliminate discretionary spending on economic development incentives that help attract and retain job-creating businesses. Revenue restrictions will force cities to reduce or eliminate local funds that subsidize state highway construction projects which will increase traffic problems in urban areas.
- 1S.B. 18 (Estes) – Expenditure Limit: would provide that: (1) a city or county’s total expenditures from all available sources of revenue in a fiscal year may not exceed the greater of statewide changes in population and inflation, according to a formula provided in the bill, or the previous year’s expenditures; and (2) revenue received from the issuance of bonds approved by the voters or from a grant, donation, or gift is not considered an available source of revenue for the purposes of the bill.
Spending Cap Talking Points: Imposing a one-size-fits-all cap on the budget of every Texas city would be a disaster for Texans for many of the same reasons that apply to revenue caps. Texans should continue to decide at the local level what is best for their community. The level of services and spending desired by the residents of any community can vary significantly from one year to the next. In addition, city governments are large employers and service providers. Their expenditures for street repairs, heavy equipment, lawsuits and employee training, pensions and health insurance are vastly different from the expenditures of a typical household.
Cities in the Panhandle must budget for snow removal which can vary from year to year. Cities that attract a large number of visitors, like San Antonio and cities on the Gulf Coast, must provide services to more people than their resident population.
Setting one statewide spending cap that applies to every city in a state as vast and diverse as Texas is simply unworkable. The limitations on law enforcement, firefighting and emergency medical services would endanger public safety. Restricting spending for maintaining streets, parks and water, sewage and drainage systems would make Texas cities less livable and less attractive to potential employers and investors.
State legislators should trust Texans to make decisions on the level of services they want in their community and their neighborhood.
The Senate State Affairs Committee will meet on Sunday, July 23, at 1:00 p.m., in the Senate Chamber in the Capitol to consider annexation limitations. A summary of the bill and talking points in opposition are included below.
- S.B. 6 (Campbell) – Annexation: would completely rewrite the Municipal Annexation Act to severely curtail the ability of cities to annex property. Of most importance, the bill would provide that: (1) a “Tier 1 county” means a county with a population of less than 500,000; (2) a “Tier 2 county” means a county with a population of 500,000 or more; (3) a “Tier 1 municipality” means a municipality wholly located in one or more tier 1 counties that proposes to annex an area wholly located in one or more tier 1 counties; (4) a “Tier 2 municipality” means a municipality: (a) wholly or partly located in a tier 2 county; or (b) wholly located in one or more tier 1 counties that proposes to annex an area wholly or partly located in a tier 2 county; and (3) a tier 2 municipality is authorized to annex an area with a population of 200 or more only if the following conditions are met, as applicable: (a) the city holds an election in the area proposed to be annexed at which the qualified voters of the area may vote on the question of the annexation and a majority of the votes received at the election approve the annexation; and (b) if the registered voters of the area do not own more than 50 percent of the land in the area, the city obtains consent to annex the area through a petition signed by more than 50 percent of the owners of land in the area.
Annexation Talking Points: Since the creation of home rule cities in Texas over 100 years ago, the process of municipal annexation has produced dynamic cities that are among the nation’s leaders in job creation and economic growth. The annexation process has proven to be the most effective and efficient way to deal with population growth and provide the essential services needed by residents and businesses. Legislation that would allow unincorporated subdivisions to veto annexation plans would effectively freeze the current boundaries of Texas cities and begin a process of urban decline that doomed cities in other states. When cities can’t grow, they die. When the city core begins to deteriorate, it affects the entire metropolitan region making it harder to attract and keep job-creating businesses. The slower job growth and lower incomes infect the entire state economy. A study conducted by the economic analysis firm, TXP, Inc., last year found that states that restricted annexation had lower personal income and economic growth and lower municipal bond ratings. If the legislature had passed the proposed annexation restrictions 50 years ago, Texas today would not have cities that lead the nation in job growth and business relocations. We would not have cities with vibrant downtowns attracting people with commerce, the arts, entertainment, shopping and nightlife.
City official opposition to the bills above is vital to defeating the centralization of government in Austin. Please contact Shanna Igo, TML Director of Legislative Services, at email@example.com with questions.