The Senate Committee on Intergovernmental Relations met on Wednesday, December 2 take up interim charges 2, 3 and 6. This report covers the discussion on interim charges relating to elections, ballot language and local debt (charge 2&6).
Charge 2: Examine the processes used by home rule municipalities to adopt ordinances, rules, and regulations, including those initiated by petition and voter referendum. Determine if additional statutory safeguards are necessary to ensure that ballot language accurately describes proposed initiatives. Identify ways to improve transparency and make recommendations, if needed, to ensure that local propositions and the means by which they are put forth to voters, conform with existing state law.

Bill Longley, Texas Municipal League

  • Most charters have multiple reading requirements and can require public hearings
  • Supreme Court case provided certain guidance which includes language addressing that the ballot not being misleading to voter
  • Sen. Lucio asked if there will be a variation in ballot language or does statute allow for uniformity of language?
    • Witness states there is a variation in language but the legal foundation insures adequate language is included in ballot propositions
  • Sen. Bettencourt points out that taxpayers are having to go to court to get ballot language guidance – example given in the drainage case earlier discussed, private citizens paid for the litigation out of their own pocket and would not be reimbursed for legal fees

James Quintero, Texas Public Policy Foundation (TPPF)

  • Lists three large issues with ballot propositions
  • Muddy ballot language
    • Provided example of ballot language which extended term of council but noted many were confused by language
  • Missing features
    • Provided example of CABs stating they allow for local governments to borrow now and shift future costs
    • The total payoff amount on CABs are not listed on ballot
  • Rogue policies
    • Plastic bag ordinances were provided as an example
    • Sen. Lucio was concerned about the ordinances and if it was just about a revenue source or something further
    • Sen. Garcia stated the policies were to address waste issue, etc
  • Provides 5 recommendations to address issues identified above (muddy ballot language, missing features and rogue policies)
  • Add enforcement mechanism to AG office (so that the AG can take corrective actions with cities that are in direct contradiction with state law)
  • They are still researching but believes Texas has standing and authority to prevent municipal overreach but also suggest legislation to possibly give teeth – still researching this
  • Codify the recent Supreme Court Decision 
  • Add ballot box transparency component which would provide voters with simple facts
  • Consolidate bond elections in Nov. time frame (would prevent things such as rolling polling)

Charge 6: Examine ways to improve government accountability in elections regarding the issuance of public debt. Include a review of the information that is currently provided to individuals in the voting booth and provide statutory recommendations, if necessary, to improve transparency.
Korry Castillo, Texas State Comptroller Office

  • Provided a review of agency resources (ie Debt at a glance, upcoming bond election roundup)
  • Sen. Bettencourt asked about Baytown golf course public debt
  • Sen. Lucio – golf course would be part of debt not all of the debt listed?
  • Castillo noted that not all details but many details are available on the Comptroller’s Transparency site and they are used to help further educate on public debt
  • HB 1378 – local governments required to list public debt information, staff is working on this
  • Will continue updating site and they now have a transparency division

Ashley Fischer, Texas Secretary of State Office

  • Handout given regarding requirements in statute for what appears on the ballot
  • Recent change included: added amount of bond
  • Order and notice of election – highlight given of bond details that would need to be included in the order and notice
  • Sen. Bettencourt asked witness what SB 1041 would have done
    • Would have added language to the ballot, would essentially provide more information about the bond proposal
    • Electronic voting systems do have capacity storage limitations as do printed ballots
    • Statewide voter database and county machines are two different things and Fischer is unable to say if 5k characters is standard but will review and let Bettencourt know

Robert Latsha- Texas Bond Review Board

  • Two largest debt categories are public schools and city debt
  • Tax supported debt chart shown to committee
  • In regards to HB 114 CAB limitation – he has seen decrease in use but cannot say if it is due to legislation or natural occurrence
  • Have tremendous data sets and many organizations/agencies use their data sets and working toward more meaningful analysis of the data sets
  • has searchable database – including that of bond elections
  • A challenge they have is that there is no central repository for bond elections
  • Sen. Bettencourt asked about pass/fail rate of bonds
    • It is a high figure but staff will have to bring exact figures back

Bill Longley, Texas Municipal Leagues (TML)

  • Discussion on transparency and information currently available to the voter
  • SB 637 – gives a variety of debt information and puts the information in every single polling place 
  • HB 1378 – TML supported
  • Concern of ballot language discussion is that the information that would be provided on the ballot would provide just a snapshot of information

James Quintero, Texas Public Policy Foundation (TPPF)

  • Local debt outstanding totals $225 billion, $8,500 owed per Texan
  • When accounting for interest FY 2015 data local debt is $340billion, $12,250 local debt per capita
  • Cities and School districts hold most of the debt
  • Debt is growing fast according to Texas Comptroller Report – grew 3 to 1
  • Sen. Lucio asked if debt is just going upward and not down in anyway?
    • Witness says he expects trend to continue up in light of population growth
  • Sen. Lucio would like to know more about school districts debt trend, he sees schools being built where they only last 30 years and then collapse, infrastructure should be built to last longer and wants to see a decline in trend of debt for schools
    • Quintero said news article pointed out CAB use by school districts
    • This will have a cost in the future
  • Sen. Lucio – how would you address the mandate given to schools dealing with population growth? How do we address the infrastructure needs?
    • Quintero – not just for school districts but across the board, there needs to be a budget that better uses existing resources
    • Quintero points to AAS article that discusses individual who voted for all bonds but is now overwhelmed by property taxes – does not want to overload voters with information but wants three items on ballot: total cost of bond, existing debt load and what will happen to homeowners tax bill

Paul Sugg, Texas Association of Counties

  • 10 are Texas counties out of the top 25 nationally growing counties
  • County share of local debt is a small percentage of all local debt
  • Handout provided to committee to illustrate areas of infrastructure the debt is being applied to
  • Does not think voters can be provided all the information they need at the polling place
  • Sen. Bettencourt inquired of witness his thoughts on SB 1041, Bettencourt attends to re-introduce it
    • Happy to discuss further
  • Sen. Garcia said it bears repeating that there a lot of information provided before bond elections and asked witness if they keep tracks of any complaints about the information being provided
  • Sen. Garcia said her guess is there will be a lot of under votes on the November election – in light of straight ticket voting
  • Sen. Bettencourt asked witness if there is such a thing as there is a “no-tax” increase bond
  • Sen. Bettencourt provides Harris county as an example using marketing materials that promoted a bond as a no-tax increase bond and calls it disingenuous 

Don Lee, Texas Conference of Urban Counties 

  • Says slippery slope when providing information on the ballot – doesn’t think it is possible to get all the critical detail on there
  • Use ballot language to identify proposition, not educate voters on the proposition
  • According to Comptroller transparency website, there were 110 bond propositions and 10% were defeated in last election, gives further statistics which avg. about 1 in 6 ratio for bonds passing
    • Witness says those stats are evidence that voters are determining which ones they want to vote for
  • Offered further evidence that he says illustrates voters are getting enough information to be discerning
  • Texas has high amount of local debt, of course, because of what local governments pay for
  • Argues the only real way to compare debt loads is to look at total debt including local and state debt
  • Sen. Lucio said he would like to look at what Texas spends on public education versus other states and says witness makes a very valid point 
  • Proposes that it will be hard for state to be low tax state and high growth state as well as a low debt state
  • Texas is a low tax state (10th lowest out of 50th)
  • Sen. Bettencourt said none of the policies being discussed restrict local government access to capital – how does ballot transparency restrict local government access to capital, how does transparency effect?
    • Is transparency being effectively provided by putting some details on the ballot, asked witness
    • Initiatives done under label of transparency can restrict access to capital
  • Sen. Lucio said he is concerned about loss of local control but agrees that information needs to be made available to taxpayers
  • Sen. Garcia asked if witness is suggesting when looking at debt, do they need to extract certain numbers?
    • Disaggregate numbers is one way to go but has not seen it done
    • Could just add state and local debt numbers to realistically compare to other states
  • Sen. Garcia says Texas Bond Review Board takes a simple approach to data analysis
  • There is a lack of evidence that voters do not have good bond information

Q&A – Sen. Bettencourt refers back to Quintero to follow up

  • Quintero – a number of school districts have used the similar marketing ploy Bettencourt mentioned earlier of a “no-tax” increase bond
  • Points to another AAS article – points to defeat of bond for Travis County Courthouse and that county is moving forward with it anyway
  • In regards to the idea of local governments must decide to either finance a project or pay for it now – why can’t efficiencies be identified in the budget and reserves set aside for future use?
  • Look to AISD – for first time in years AISD is suffering declining enrollment because debt is too high and taxes are too high and people can’t just do it anymore

Lucio notes there will be more discussion on the subject and thanks witnesses for coming out. These issues will continued to be addressed throughout the interim. Meeting adjourned.