Texas County Redevelopment Bond Amendment, Proposition 4 (2011)

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Proposition 4
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Type:Constitutional amendment
Referred by:Texas Legislature
Topic:Bond issues
Status:DefeatedDefeatedd
The Texas County Redevelopment Bond Amendment appeared on the November 8, 2011 general election ballot in the state of Texas as a legislatively-referred constitutional amendment, where it was defeated.Defeatedd

Proposition 4 would have allowed counties to issue redevelopment bonds pledged by tax revenues from the increased property values in the redevelopment area. Under current law cities and towns can and do issue such bonds, but counties are not listed amongst the authorized entities. This amendment would have added counties to the approved list.

The author of the measure was Joe Pickett. The formal title of the bill was House Joint Resolution 63.

Election results

See also: 2011 ballot measure election results
Texas Proposition 4
ResultVotesPercentage
Defeatedd No399,20559.71%
Yes 269,272 40.28%

Text of measure

Ballot summary

The ballot text read:

"The constitutional amendment authorizing the legislature to permit a county to issue bonds or notes to finance the development or redevelopment of an unproductive, underdeveloped, or blighted area and to pledge for repayment of the bonds or notes increases in ad valorem taxes imposed by the county on property in the area. The amendment does not provide authority for increasing ad valorem tax rates."[1]

Constitutional changes

See also: Texas Proposition 4 (2011), constitutional text changes

If passed Proposition 4 would have amended Section 1-g (b) of Article 8 of the Texas Constitution.

Fiscal note

See also: Fiscal impact statement

The Texas Legislative Budget Board issued a fiscal note about HJR 63 to the Senate Committee on Intergovernmental Relations on May 17, 2011.[2]

According to the fiscal note:

  • "No fiscal implication to the State is anticipated, other than the cost of publication."
  • "The cost to the state for publication of the resolution is $105,495."
  • "According to the Texas Association of Counties (TAC), the fiscal impact to counties is not anticipated to be significant.

There would be a fiscal impact to local governments associated with an election; however, those costs would vary by locality and are not anticipated to be significant.

Based on costs reported to the Secretary of State (SOS) in 2010 by a sampling of counties, municipalities, and special districts, the average cost incurred by a local governmental entity for an election is $1.98 per registered voter."[2]

Support

Supporters

  • Bill author: House Representative Joe Pickett
  • Texas Senate sponsor: Jeff Wentworth
  • Texas Department of Transportation
  • Cameron County Regional Mobility Authority
Bond issues on the ballot in 2011
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Arguments

Supporters said:

  • Cities and towns already have the power to fund the redevelopment of underproductive areas through mechanisms such as incremental bond financing, and have done so with success. This amendment simply extends this important tool of local government to counties.[3]
  • This amendment allows counties to undergo critical redevelopment activities, such as investing in infrastructure, without having to raise taxes.[3]
  • David Garcia, Cameron County Regional Mobility Authority assistant coordinator and Cameron County deputy administrator supported Prop 4 stating: "Allowing counties the opportunity to identify and utilize an additional revenue source through a TRZ will help fund our transportation network and is important. It is another tool in the tool box."[4]

Donors

According to the state campaign finance database, there were no registered committees (PACs).

(last updated December 2011)

Opposition

Opponents

  • Texans for Fiscal Responsibility (Empower Texans)
  • We Texans
  • Texas Eagle Forum

Arguments

Opponents said:

  • This is not an appropriate use of property taxes. Linking a county's ability to fund infrastructure to property taxes could create an incentive to raise property appraisals in order to bring in more revenue.[3]
  • The type of financing arrangement allowed under this amendment restricts tax revenues from increases in property value to redevelopment areas. Tax revenues should be used to fund critical services countywide, not just in select areas.[3]
  • Bond financing is debt; debt is a form of back-ended taxation. Officials who want to fund redevelopment efforts should face voters directly by raising taxes.
  • Not only is this bond financing, but it is speculative bond financing. The county's ability to repay the bonds is dependent on property values increasing. Given our current economic downturn that was brought about through a housing market crash, perpetual rising home prices shouldn't be assumed.
  • We Texans, a limited-government and economic freedom advocacy organization, opposed Proposition 4. In an October 19, 2011 post they explained their reasoning: "Under current law, cities are authorized to use property tax revenue to secure loans to fund the development of blighted areas. This proposal would extend that authority to counties. This proposition continuing to incentivize local governments with the lure of increased property tax revenue is a recipe for further eminent domain abuse."[5]
  • Empower Texans, a limited-government advocacy organization, opposed Proposition 4. In an October 7, 2011 post they explained their reasoning: "This gives counties new authority for “Kelo”-style redevelopment takings. Such power should be restricted, not expanded."[6]
  • Texas Eagle Forum, a conservative and pro-family advocacy organization, opposed Proposition 4. In an October 7th, 2011 post they explained their reasoning: "Authorizing counties to implement tax increment financing to fund projects in reinvestment zones could create an incentive to inflate property values and appraisals in these areas. Redirecting future taxes for other than intended purposes will further stretch already overburdened local budgets."[7]

Donors

According to the state campaign finance database, there were no registered committees (PACs).

(last updated December 2011)

Media editorial positions

See also: Endorsements of Texas ballot measures, 2011

Support

  • Conroe Courier of Montgomery County said, "Counties also already have the ability to offer incentives to private businesses and companies through tax abatements to develop land...Also, the type of financing in this amendment restricts tax revenues from increases in property value in specified areas to those redevelopment areas. Tax revenues should be used to fund projects and services countywide. We do not support Proposition 4."[8]
  • The Lufkin News said, "Critics have a point that sometimes “pet projects” are funded via this mechanism. However, if the residents remain informed about these projects and allow themselves the opportunity to approve them this method of financing development or redevelopment generally works. Counties should have the same development tools cities and towns can employ. We recommend a yes vote, providing county residents stay informed."[9]
  • The San Antonio Express-News said,"Proposition 4 is a straightforward remedy that merely clarifies language giving counties a finance option that cities already possess. Bexar County would especially benefit by gaining the ability to utilize transportation reinvestment zones. We urge voters to support the measure."[10]
  • The Dallas Morning News said, "We say yes to Proposition 4. Let’s give elected officials at the county level the authority to explore creative financing for transportation projects and trust them to decide what is right for their constituents."[11]
  • The Austin Chronicle said,"TIFs are already a municipal tool; this would extend bonding authority to counties. There is some opposition from anti-tax absolutists, although the program seems largely self-limiting. In Travis, it would likely enable better city-county collaboration on specific projects."[12]
  • The Corpus Christi Caller-Times said, "The Caller-Times Editorial Board recommends approval of all 10, and urges that all registered voters exercise their right to vote...Proposition 4...Cities have this authority, which allows them to pay off bonds by capturing increases in property tax revenue that result from the growth generated by a tax increment financed project."[13]
  • The El Paso Times said, "This is similar to the Tax Increment Reinvestment Zones already being used in El Paso, except that it allows counties the same type of authority. The money would be raised by taxes generated from increases in property valuations, NOT through increased tax rates."[14]
  • The Statesman said, "Ten proposed amendments to the Texas Constitution are on the ballot for your approval or disapproval. We recommend you vote for all 10."[15]
  • The Star-Telegram supported Prop 4.[16]

Opposition

  • The Burka Blog, written by senior editor for the Texas Monthly Paul Burka, opposed Proposition 4. In an October 18, 2011 post he stated "The only thing worse than bonds is speculative bonds. As I read the amendment, the county will only be able to repay what it borrows if the redevelopment increases the value of the property. If that doesn’t happen, how are the bonds going to be paid off? My only quarrel with the advocate[s] is that I am not as confident..that property values always go up."[17]

Path to the ballot

See also: Laws governing direct democracy in Texas

The measure was passed by the Texas State Legislature on May 25, 2011, and was filed with the Texas Secretary of State on May 26, 2011. HJR 63 passed the Texas State Senate by a vote of 28-3[18] and paased the Texas House by a vote of 133-11.[19]

As laid out in Article 17 of the Texas Constitution, in order for a proposed constitutional amendment to be placed on the ballot, the Texas State Legislature must propose the amendment in a joint resolution of both the Texas State Senate and the Texas House of Representatives. The joint resolution can originate in either the House or the Senate. The resolution must be adopted by a vote of at least two-thirds of the membership of each house of the legislature. That amounts to a minimum of 100 votes in the House of Representatives and 21 votes in the Senate.

Timeline

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The following is a timeline of events surrounding the measure:

Event Date Developments
House vote May 25, 2011 House voted 133-11 in favor of the proposed measure
Senate vote May 25, 2011 Senate voted 28-3 in favor of the proposed measure
Certified May 26, 2011 Measure received by the Secretary of State for the 2011 ballot

See also

By Jimmy Ardis
Texas state writer

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Articles

External links

References

  1. Texas Secretary of State, "Explanatory Statements for the November 8, 2011 Texas Constitutional Amendment Election"
  2. 2.0 2.1 Fiscal Note on HJR 63 prepared by the Texas Legislative Budget Board
  3. 3.0 3.1 3.2 3.3 [*Texas House Research Organization: "Focus Report for Amendments Proposed in November 8, 2011 Election," July 20, 2011
  4. Brownsville Herald, "Transportation group hopes for passage of Proposition 4," November 7, 2011
  5. We Texans," "PROPOSITIONS VOTERS’ GUIDE: Just Say No," October 19, 2011
  6. Empower Texans," "2011 Constitutional Amendments," October 7, 2011
  7. Texas Eagle Forum, "Analysis of Propositions on November 8th 2011 Ballot," October 7, 2011
  8. Conroe Courier,"Vote no on Prop 4, yes on Props 9 and 10," October 25, 2011
  9. The Lufkin Daily News,"EDITORIAL: Our review and our recommendations on amendments to our state constitution," October 25, 2011
  10. San Antonio Express-News,"Proposition 4 merits approval by voters," October 6, 2011
  11. Dallas Morning News,"Editorial: Yes to Proposition 4," October 12, 2011
  12. Austin Chronicle,"'Chronicle' Endorsements and Election Info," October 21, 2011
  13. Caller-Times,"10 unexciting but worthwhile reasons to vote," October 24, 2011
  14. El Paso Times,"Propositions: Amendments would affect El Paso," October 22, 2011
  15. Statesman,"Voters, approve all 10 constitutional changes," November 1, 2011
  16. Star-Telegram,"Texas Constitution needs more attention," November 6, 2011
  17. Burka Blog, "The proposed Texas Constitutional Amendments," October 18, 2011
  18. Senate Journal 5/23/11
  19. House Journal 5/5/2011