Texas Interlocal Contracts Amendment, Proposition 5 (2011)

Proposition 5
Type	Constitutional amendment
Origin	Texas Legislature
Topic	Admin of gov't
Status	Approved a

The Texas Interlocal Contracts Amendment, Proposition 5 was on the November 8, 2011 general election ballot in the state of Texas as a legislatively referred constitutional amendment, where it was approved. a

Proposition 5 allowed the legislature to authorize cities and counties to enter into interlocal contracts and agreements with each other for longer than a year without having to impose taxes and create sinking funds. Certain wording in Article 11 of the Texas Constitution had been interpreted to mean that if local governments entered into contracts with each other for longer than one year, that it automatically constituted debt, which triggered taxing requirements. This amendment clarified the constitutional language as to remove those taxing requirements on contracts longer than one year.

The author of the measure was Democratic Senator Royce West, and the formal title of the bill was Senate Joint Resolution 26. Democratic representative Sylvester Turner sponsored SJR 26 in the Texas House of Representatives.

Election results

See also: 2011 ballot measure election results

Texas Proposition 5
Result		Votes	Percentage
a Yes		384,083	57.77%
No		280,681	42.22%

Text of measure

Ballot summary

The ballot text read:

"The constitutional amendment authorizing the legislature to allow cities or counties to enter into interlocal contracts with other cities or counties without the imposition of a tax or the provision of a sinking fund."

Constitutional changes

Proposition 5 amended Sections 5 and 7 of Article 11 of the Texas Constitution. Note: Hover over the text and scroll to see the full text.

Sec.5.

(a) Cities having more than five thousand (5000) inhabitants may, by a majority vote of the qualified voters of said city, at an election held for that purpose, adopt or amend their charters. If the number of inhabitants of cities that have adopted or amended their charters under this section is reduced to five thousand (5000) or fewer, the cities still may amend their charters by a majority vote of the qualified voters of said city at an election held for that purpose. The adoption or amendment of charters is subject to such limitations as may be prescribed by the Legislature, and no charter or any ordinance passed under said charter shall contain any provision inconsistent with the Constitution of the State, or of the general laws enacted by the Legislature of this State. Said cities may levy, assess and collect such taxes as may be authorized by law or by their charters; but no tax for any purpose shall ever be lawful for any one year, which shall exceed two and one-half per cent. of the taxable property of such city, and no debt shall ever be created by any city, unless at the same time provision be made to assess and collect annually a sufficient sum to pay the interest thereon and creating a sinking fund of at least two per cent. thereon, except as provided by Subsection (b). Furthermore, no city charter shall be altered, amended or repealed oftener than every two years.

(b) To increase efficiency and effectiveness to the greatest extent possible, the legislature may by general law authorize cities to enter into interlocal contracts with other cities or counties without meeting the assessment and sinking fund requirements under Subsection (a).

Sec. 7.

(a) All counties and cities bordering on the coast of the Gulf of Mexico are hereby authorized upon a vote of the majority of the qualified voters voting thereon at an election called for such purpose to levy and collect such tax for construction of sea walls, breakwaters, or sanitary purposes, as may now or may hereafter be authorized by law, and may create a debt for such works and issue bonds in evidence thereof. But no debt for any purpose shall ever be incurred in any manner by any city or county unless provision is made, at the time of creating the same, for levying and collecting a sufficient tax to pay the interest thereon and provide at least two per cent (2%) as a sinking fund, except as provided by Subsection (b); and the condemnation of the right of way for the erection of such works shall be fully provided for.

(b) To increase efficiency and effectiveness to the greatest extent possible, the legislature may by general law authorize cities or counties to enter into interlocal contracts with other cities or counties without meeting the tax and sinking fund requirements under Subsection (a).

SJR 26 amended Article 11 to allow the Texas State Legislature "by general law to authorize certain cities and counties to enter into interlocal contracts with other cities or counties without meeting the tax assessment and sinking fund requirements."

Fiscal note

Administration of government on the ballot in 2011

See also: Fiscal impact statement

The Texas Legislative Budget Board issued a fiscal note about SJR 26 to the Senate Committee on Intergovernmental Relations on March 22, 2011.

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."

Support

Supporters

• Bill author: State Senator Royce West
• Texas State House sponsor: Sylvester Turner
• Texas Association of Counties

Arguments

Supporters of SJR 26 said:

• Article 11 of the Texas Constitution has been interpreted to mean that if a city or county enters into a multi-year contract with another city or county, that multi-year contract counts as a debt and therefore requires the city or county to impose a tax and create a sinking fund. This limits the ability and willingness of cities and counties to enter into mutually beneficial multi-year contracts even in situations where a debt is not incurred.
• This amendment clarifies a technicality within the Constitution, allowing local governments to contract with one another to efficiently deliver services without the requirement of levying a tax.
• Empower Texans, a limited-government advocacy organization, supported Proposition 5. In an October 7, 2011 post they explained their reasoning: "This amendment gives more flexibility for cities and counties to consolidate projects and services, therefore reducing the duplication of efforts and costs to taxpayers."

Donors

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

(last updated December 2011)

Opposition

Arguments

• We Texans, a limited-government and economic freedom advocacy organization, opposed Proposition 5. In an October 19, 2011 post they explained their reasoning: "Currently, cities and counties may not create debt unless a tax is levied that is sufficient to pay the principle and interest on the debt. Cities and counties frequently enter into “interlocal contracts” whose term is less than one year because the costs associated with those agreements are funded from the current budget. To enter into a contract that extends beyond the current year would have the effect of creating a debt that will carry to future tax years. Debt of that type should require voter approval on a case by case basis and not be permitted unilaterally through a constitutional amendment."
• Texas Eagle Forum, a conservative and pro-family advocacy organization, opposed Proposition 5. In an October 7th, 2011 post they explained their reasoning: "This would make spending easier for local governments without fiscal accountability."

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 Conroe Courier of Montgomery County supported Prop 5: In a October 22, 2011 editorial the Conroe Courier of Montgomery County recommended voters support Proposition 5.
• The Lufkin News said, "However, this amendment could increase efficiencies and lower taxes by enabling entities to develop long-term agreements for sharing services. We recommend a vote for Proposition 5."
• The San Antonio Express-News said,"Proposition 5 will make it possible for city and county governments to enter into interlocal contracts without imposing a tax. Voters should support this sensible reform."
• The Dallas Morning News said, "Proposition 5 has widespread support. State Sen. Royce West, D-Dallas, and state Rep. Sylvester Turner, D-Houston, carried the enabling legislation through the session, and the amendment is backed by the Texas Municipal League, the Texas Association of Counties and Texans for Fiscal Responsibility, a conservative Austin-based taxpayer advocacy group. This sensible good-government proposition deserves voter approval."
• The Austin Chronicle said,"Under existing law, interlocal contracts longer than one year have been treated as incurring a debt obligation and therefore require a tax provision and sinking fund for the projected "debt." This provision would make it easier and more efficient to enter into interlocal agreements; it might even help with Austin-Travis County collaborations."
• 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 5...A constitutional quirk defines interlocal contracts longer than a year as a debt that must be backed. The amendment would dispense with the quirk."
• The El Paso Times said, "Interlocal agreements can be important tools of progress and cooperation between local government entities. This proposition would allow certain cities and counties -- including El Paso -- to enter into interlocal agreements for longer than one year without meeting certain taxing and sinking fund requirements currently mandated by the Constitution."
• 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."
• The Star-Telegram supported Prop 5.

Opposition

• The Burka Blog, written by senior editor for the Texas Monthly Paul Burka, opposed Proposition 5. In an October 18, 2011 post he stated "This just looks like another way of allowing cities and counties to get around raising taxes. If they don’t have the money to cover the payment of costs, they shouldn’t be entering into the contracts."

Path to the ballot

Royce West, author of SJR 26

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 26 passed the Texas State Senate by a vote of 31-0 and passed the Texas House of Representatives by a vote of 144-0.

SJR 26 was approved by the state senate's Intergovernmental Relations Committee on a unanimous 5-0 vote and by the state house's State Affairs Committee on a 9-0 vote (with four members of the committee absent) before moving to consideration by the full membership of both bodies.

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

The following is a timeline of events surrounding the measure:

Event	Date	Developments
House vote	May 26, 2011	House voted 144-0 in favor of the proposed measure
Senate vote	May 26, 2011	Senate voted 31-0 in favor of the proposed measure
Certified	May 27, 2011	Measure received by the Secretary of State for the 2011 ballot

See also

• Texas 2011 ballot measures
• 2011 ballot measures
• List of Texas ballot measures
• Texas Legislature

Articles

• Election aftermath: 7 Texas amendments approved, 3 defeated
• Texans to vote on ten constitutional amendments next week

External links

• Texas House Research Organization: "Focus Report for Amendments Proposed in November 8, 2011 Election"