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Texas Education Loans Finance Amendment, Proposition 3 (2011)

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Proposition 3
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Type:Constitutional amendment
Referred by:Texas Legislature
Topic:Education
Status:Approved Approveda
The Texas Education Loans Finance Amendment appeared on the November 8, 2011 general election ballot in the state of Texas as a legislatively-referred constitutional amendment, where it was approved. Approveda

Proposition 3 authorized the issuance of general obligation bonds to finance the longstanding Hinson-Hazelwood College Student Loan Program. The program provides low-interest loans to students who aren't able to finance the full cost of college through other sources. Since the Texas Constitution prohibits the state from taking on debt without a constitutional amendment, voters had to approve additional bond authorization before the program could continue offering loans.[1]

The author of the measure was Royce West, and the formal title of the bill was Senate Joint Resolution 50.[2]

Election results

See also: 2011 ballot measure election results
Texas Proposition 3
ResultVotesPercentage
Approveda Yes 371,957 54.52%
No310,21145.47%

Text of measure

Ballot summary

The ballot text read:

"The constitutional amendment providing for the issuance of general obligation bonds of the State of Texas to finance educational loans to students.”[3]

Constitutional changes

See also: Texas Proposition 3 (2011), constitutional text changes

Proposition 3 added Section 50b-7 to Article 3 of the Texas Constitution.

Fiscal note

See also: Fiscal impact statement

The Texas Legislative Budget Board issued a fiscal note about SJR 50 to the Senate Committee on Higher Education on April 11, 2011.[4]

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."
  • "No fiscal implication to units of local government is anticipated."[4]

Background

Hinson-Hazlewood bond increases adopted by Texas voters since 1965

Proposition 3 aimed to authorize the issuance of general obligation bonds to finance the longstanding Hinson-Hazelwood College Student Loan Program. The program provides low-interest loans to students who aren't able to finance the full cost of college through other sources. Since the Texas Constitution prohibits the state from taking on debt without a constitutional amendment, voters must periodically approve additional bond authorization if the program is to continue offering loans.[1]

At the time of the election voters had approved a total of $1.86 billion in bonds over seven elections to fund Hinson-Hazelwood. Voters last approved an additional $500 million in bonds for the program in 2007. Previous authorizations were approved via election in 1999, 1995, 1991, 1989, 1969, and 1965. Of the $500 million authorized in 2007 approximately $275 million remained unissued. The remaining $275 million was expected to be exhausted by 2013. The program would not be able to offer student loans after the remaining bonds were issued without additional authorization.[1]

Texas voters had approved each of the seven preceding amendments proposing Hinson-Hazelwood bond increases. But Proposition 3 proposed something slightly different than past amendments. Traditionally lawmakers had asked voters to approve fixed amounts of bonding authority. Once those bonds were issued new approval had to be obtained at the ballot box before issuing more. This amendment proposed an "evergreen authority" to allow the program to continue issuing bonds in perpetuity as long as the amount of loans outstanding at any one time did not exceed the amount previously approved by voters - $1.86 billion.[1]

Support

Supporters

  • Bill author: State Senator Royce West
  • Texas State House sponsors: Daniel Branch and Roberto Alonzo
  • Raymund Paredes, Texas Higher Education Commissioner
  • Texas Students for Proposition 3
  • Independent Colleges and Universities of Texas

Arguments

Supporters of SJR 50 said:

  • Proposition 3 would authorize the important Hinson-Hazelwood student loan program to continue in perpetuity as long as the amount of loans outstanding does not exceed the amount previously approved by voters. The student loan program has been a success, and it's continued funding is critical given the Texas State Legislature's recent cuts to education spending. The program is self-supporting, being dependent on interest payments from loans and not general revenue.[5]
  • The evergreen provision makes sense because it eliminates costly tax-payer funded constitutional elections to ask for permission for funding authorization voters already approved in the past - since the amendment limits outstanding bond issuances to the total of previously approved authorizations.

Donors

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

(last updated December 2011)

Opposition

Opponents

  • Texas Tea Party
  • Houston Tea Party
  • Texans for Fiscal Responsibility (Empower Texans)
  • Texas Public Policy Foundation

Arguments

Opponents of SJR 50 said:

  • Proposition 3 would authorize long-term state debt on a continuing basis, something that has been traditionally done through the voters at the ballot box. The power to review the need for such funding should be retained by the voters on a periodic basis.[5]
Education on the ballot in 2011
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  • If the legislature wants to fund student loans, which is a commendable goal, it should pay for them through passing legislation to increase taxes, and not just "put it in on the credit card."[6]Bond financing is debt; and debt is back-ended tax. The legislature should face the voters with direct taxation if they want to fund student loans.
  • We Texans, a limited-government and economic freedom advocacy organization, opposed Proposition 3. In an October 19, 2011 post they explained their reasoning: "This proposal creates another evergreen revolving line of credit authorizing the Texas Higher Education Coordinating Board to issue additional student loans as long as the aggregate amount does not exceed the amounts previously authorized by voters (in other words, the grand total of all bonds approved for this purpose since voters began authorizing them in 1965.)... This proposal would increase their lending authority from the remaining $275 million to $1.86 billion with responsibility for unpaid student loan obligations falling on the Texas taxpayer."[7]
  • Empower Texans, a limited-government advocacy organization, opposed Proposition 3. In an October 7, 2011 post they explained their reasoning: "Like Proposition 2, this amendment authorizes permanent bonding authority to the Higher Education Coordinating Board, thus eliminating the ability of voters to re-check the need for such bonds. Tuition costs are too high as it is, and more availability of taxpayer-subsidized student loans only incentivizes universities to further raise rates without addressing costs."[8]
  • Texas Eagle Forum, a conservative and pro-family advocacy organization, opposed Proposition 3. In an October 7th, 2011 post they explained their reasoning: "It takes the state spending authority out of the hands of the voter. Although Texans need to encourage students to attend college, the problem lies in the ever-increasing costs of higher education, not with the ability of students to acquire loans. National student loan debt presently exceeds national credit card debt."[9]

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

  • The San Antonio Express-News supported Prop 3: In a October 10, 2011 editorial the San Antonio Express-News supported Proposition 3 stating that "The proposition merits voter support...Without loans some students cannot afford to attend college. Allowing the state to provide college loans with a low interest rate is an investment in the development of a well- educated workforce, and that is good for all of Texas."[10]
Bond issues on the ballot in 2011
NevadaUtahColorado 2011 ballot measuresNew MexicoArizonaMontanaCaliforniaOregonWashington 2011 ballot measuresIdahoOklahomaKansasNebraskaSouth DakotaNorth DakotaIowaMissouriArkansas 2011 ballot measuresLouisiana 2011 ballot measuresAlabamaGeorgiaFloridaSouth CarolinaIllinoisTennesseeNorth CarolinaIndianaOhio 2011 ballot measuresMaine 2011 ballot measuresVirginiaNew Jersey 2011 ballot measuresVermontVermontMarylandRhode IslandRhode IslandMarylandMassachusettsMichiganMichiganAlaskaHawaiiWyomingTexas 2011 ballot measuresMississippi 2011 ballot measuresMinnesotaWisconsinKentuckyWest VirginiaPennsylvaniaDelawareDelawareConnecticutConnecticutNew YorkNew HampshireNew HampshireCertified, bond issues, 2011 Map.png
  • The Lufkin News said, "With decreased state funding and tuition deregulation hitting intuitions and student alike, we recommend a vote for Proposition 3."[11]
  • The Dallas Morning News said, "For those families that might turn to state loan programs to help meet the cost of college, there’s bad news ahead, too: In two years, the state is expected to hit the limit of money it can lend for higher education. Voters on Nov. 8 can ease this squeeze by approving Proposition 3 on the list of state constitutional amendments. It’s the wise thing to do."[12]
  • The Austin Chronicle said,"This program would effectively continue an existing low-interest, fixed-rate student loan program (Hinson-Hazlewood, created in 1965 and managed by the Texas Higher Education Coordinating Board), which had a dollar limit periodically renewed and raised. This raises the current limit of $125 million to $350 million; the program has a long record of success and a good repayment record. Free public higher education would be the best alternative, but that's not currently in the cards. The market might one day blanch at these bonds, but they've been working well for nearly 60 years."[13]
  • 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 3...This is a no-brainer way to help Texas become brainier, especially considering cutbacks in federal and state financial aid."[14]
  • The El Paso Times said, "Quite simply, the future of Texas depends on the education of its young people. Low-interest loans are critical for many people seeking that education. The program is self-supporting and doesn't use tax dollars, which should be a relief. The loan program will help insure the future of the state and its students seeking higher education."[15]
  • 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."[16]
  • The Star-Telegram supported Prop 3.[17]

Opposition

  • The Conroe Courier of Montgomery County opposed Prop 3: In a October 22, 2011 editorial the Conroe Courier of Montgomery County recommended voters oppose Proposition 3.[18]
  • The Burka Blog, written by senior editor for the Texas Monthly Paul Burka, opposed Proposition 3. In an October 18, 2011 post he stated "I strongly support the state’s student loan program. However, it makes no sense to fund the program with general obligation bonds. It is just a way of hiding a tax increase from the public. If we want to fund student loans, and I hope we do, we should raise taxes to fund the loans."[19]


Path to the ballot

See also: Laws governing direct democracy in Texas

The measure was passed by the Texas State Legislature on May 26, 2011, and was filed with the Texas Secretary of State on May 27, 2011. SJR 50 paased the Texas State Senate by a vote of 26-5[20] and passed the Texas House by a vote of 142-3.[21]

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

Calendar.png

The following is a timeline of events surrounding the measure:

Event Date Developments
House vote May 26, 2011 House voted 142-3 in favor of the proposed measure
Senate vote May 26, 2011 Senate voted 26-5 in favor of the proposed measure
Certified May 27, 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. 1.0 1.1 1.2 1.3 Texas House Research Organization: "Focus Report for Amendments Proposed in November 8, 2011 Election"
  2. Texas Legislature, "SJR 50," accessed May 31, 2011
  3. Texas Secretary of State, "Explanatory Statements for the November 8, 2011 Texas Constitutional Amendment Election"
  4. 4.0 4.1 Fiscal Note on SRJ 50 prepared by the Texas Legislative Budget Board
  5. 5.0 5.1 [*Texas House Research Organization: "Focus Report for Amendments Proposed in November 8, 2011 Election," July 20, 2011
  6. Burka Blog, "The proposed Texas Constitutional Amendments," October 18, 2011
  7. We Texans," "PROPOSITIONS VOTERS’ GUIDE: Just Say No," October 19, 2011
  8. Empower Texans," "2011 Constitutional Amendments," October 7, 2011
  9. Texas Eagle Forum, "Analysis of Propositions on November 8th 2011 Ballot," October 7, 2011
  10. San Antonio Express-News, "Proposition 3 merits support," October 10, 2011
  11. The Lufkin Daily News,"EDITORIAL: Our review and our recommendations on amendments to our state constitution," October 25, 2011
  12. Dallas Morning News,"Editorial: Vote yes on Proposition 3," October 11, 2011
  13. Austin Chronicle,"'Chronicle' Endorsements and Election Info," October 21, 2011
  14. Caller-Times,"10 unexciting but worthwhile reasons to vote," October 24, 2011
  15. El Paso Times,"Propositions: Amendments would affect El Paso," October 22, 2011
  16. Statesman,"Voters, approve all 10 constitutional changes," November 1, 2011
  17. Star-Telegram,"Texas Constitution needs more attention," November 6, 2011
  18. Conroe Courier of Montgomery County, "Vote against Props 7 and 8 on Nov. 8 ballot," October 22, 2011
  19. Burka Blog, "The proposed Texas Constitutional Amendments," October 18, 2011
  20. Texas Senate Journal: 82nd Legislature, April, 28 2011
  21. Texas House Journal: 82nd Legislature, May 24, 2011