My position on the Constitutional Amendments proposed for November 8 follows. For a link to a more complete explanation of the amendments, click HERE.

1. The amendment authorizes the legislature to provide the surviving spouse of a 100 percent or totally disabled veteran with an exemption from ad valorem taxation of all or part of the market value of the surviving spouse’s residence homestead provided that certain conditions are met.

–My comment: I don’t suppose that a no vote is going to break the bank, and if anyone is deserving, it is the surviving spouse of a totally disabled veteran. Still, it continues the long legislative tradition of giving tax breaks that undermine the fiscal condition of the state. At some point, the Legislature has to stop handing out tax exemptions. I am going to vote no, on principle.

2. The amendment authorizes the issuance of $6 BILLION in general obligation bonds for water projects.

–My comment: This flies in the face of the pay-as-you-go principle. The Legislature doesn’t have the courage to pay for the water plan, so we just put it in on the credit card. There are plenty of ways to pay for the water projects we need without going into debt–taxing bottled water, for one; a tap fee on water for home consumption for another. I know I’ll hear from my friend Allan Ritter, but I’m going to vote no. Going into debt is a tax increase. You have to pay off the bondholders.

3. The amendment authorizes the Texas Higher Education Coordinating Board or its successors to issue and sell general obligation bonds on a continuing basis for the purpose of financing educational loans for students.

–My comment: 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.

4. The amendment authorizes the legislature to permit a county to issue bonds or notes to finance the development or redevelopment of an unproductive, underdeveloped, or blighted area within the county, and to pledge increases in ad valorem tax revenues imposed on property in the area by the county for repayment of such bonds or notes.

NOTE TO READERS: An advocate of Proposition 4 writes: Cities already have the authority in Prop. 4, but counties do not. This makes it very difficult for counties and cities to work together on much-needed local transportation projects. And, as you well know, the state has basically bailed on keeping up with the infrastructure needs of our fast-growing communities. For example, unincorporated Harris County is the fifth largest city in the nation, yet cannot use this common economic development tool that cities use.

–My comment: 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 is that I am not as confident as she is that property values always go up.

5. This proposal allows cities and counties to enter into interlocal contracts with other cities and counties without having to assess an ad valorem tax and set aside a specified amount of funds for the payment of costs under the interlocal contract.

–My comment: 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.

NOTE TO READERS:

The same advocate who sent me information about Proposition 4 writes about Proposition 5: Under current law, cities and counties that provide joint services through interlocal agreements must renew those agreements annually. This is inefficient, prohibits long-range planning, often inhibits collaboration and causes duplication of services. Such inefficiency costs taxpayers.

6. The amendment allows the Legislature to increase the amount of principal that is available for withdrawal from the permanent school fund each year and would also clarify certain references to that fund in the constitution. Increased access to the principal of the state public education trust fund would be based upon HJR 109 granting the authority to consider alternative market calculations when determining the amount of principal that is available for distribution to the available school fund. HJR 109 would also provide authority to distribute to the available school fund annual revenue from school fund land or other properties up to $300 million per year.

–My comment: The idea of letting the Legislature take money out of the endowment for public education gives me heartburn. Who knows how the Lege might spend the money? Remember when Craddick, Dewhurst, and Perry were talking about an infrastructure bank for toll roads?

UPDATE: Rob Orr, the author of the constitutional amendment, called to say that the Legislature cannot get its hands on the money. That relieves my principal concerns, although it does seem to be inconsistent with the wording of the amendment.

7. The amendment adds El Paso County to the list of counties authorized to create conservation and reclamation districts to develop parks and recreational facilities financed by taxes.

–My comment: If local voters are willing to tax themselves, that’s their business.

8. The amendment requires the legislature to provide for taxation of open space land devoted to water stewardship purposes on the basis of its productive capacity.

–My comment: Another tax break. I guess this means that if a landowner builds a stock tank or a fishing lake, he gets a tax break.
NO MORE TAX BREAKS!

Another view: Harold Cook writes that this amendment is important for ranchers in the Davis Mountains area, who were hard-hit by fire: “The measure to create a water conservation tax break is only eligible to those who already have an ag tax break. Thus, what it does is give an additional option to those who already have the same (money-wise) tax break, during tough times for many of those who have the ag break.”

9. The amendment authorizes the governor, on the written recommendation and advice of the Board of Pardons and Paroles, to grant a pardon, reprieve, or commutation of punishment to a person who successfully completes a term of deferred adjudication community supervision.

–My comment: At last, an amendment that doesn’t offer a tax break or try to avoid our pay-as-you-go system. I’m for it.

10. The amendment extends the length of the unexpired term that causes the automatic resignation of certain local elected officeholders if they announce candidacy or become candidates for another office from one year to one year and 30 days.

–My comment: same as the previous comment.

Tagged: Allan Ritter, constitutional amendments, pay-as-you-go, permanent school fund, water plan

Chairman Ritter posted a comment about the water bond thread of discussion. Rather than having it buried in the comments section, I am going to post it separately, below.

Paul,

I can certainly understand your frustrations with the legislature not finding a dedicated source of revenue to fully implement our State Water Plan. As you know, I carried legislation this year that would have provided a mechanism for funding the plan. I also carried the joint resolution that resulted in Proposition 2. I cannot stress enough that a dedicated source of funding is only one component in the overall implementation of the plan which cannot be accomplished without bonding authority. The passage of Proposition 2 is a crucial step towards accomplishing this goal for the State of Texas.

Proposition 2 furthers our progress in meeting the future water needs of Texans. The importance of Proposition 2 is that it allows a self-supporting debt which is borrowed from the state through the Texas Water Development Board. These bonds would be issued only to provide funding requested by local communities, and the debt is then repaid by the borrowing entities.

Currently, many local entities are not able to access the financing necessary to complete projects without partnering with the state. The bonding authority enables a water provider to borrow funds backed by the good faith and credit of the state, lowering the cost of the loan, and thereby lowering the bottom line cost to the consumer. In fact, authorizing this type of bonding authority is the most fiscally conservative and responsible way to do business.

The failure of Proposition 2 means the imminent end of that partnership for water projects around the state, with or without a dedicated source of funding. I strongly support the passage of Proposition 2, and I hope that you will encourage your readers to do the same.

Representative Allan B. Ritter
Committee on Natural Resources, Chairman
Texas House of Representatives

* * * *

I appreciate Chairman Ritter’s contribution to the discussion. My encouragement is surely not needed, as I am certain that the water bonds will pass (voters know when they are getting something for nothing), and I will probably end up voting for them. One can only reflect how much better off the state would be if, at the start of the Perry governorship, it had invested in water and transportation infrastructure through normal revenue-raising means–highway bonds secured by an increase in the gasoline tax, and water bonds secured by a tap fee. The state has made little to no progress in these areas in that time. No doubt the public would scream bloody murder if there was a serious proposal to increase the gasoline tax, but it never occurs to them that their opposition to raising the gasoline tax dooms them to drive on toll roads, which are not only costlier, but in some cases are not meeting their traffic projections.

Tagged: Allan Ritt, proposition 2, water plan

[This post has been revised since it was first published yesterday to reflect that the water bonds will not have to be paid for with general revenue. Since then, a reader has posted the fiscal note. It says that the bonds include both self-supporting and not self-supporting debt, and that the latter (which is paid for from general revenue) counts against the state's 5% debt limit.]

* * * *

The answer is obvious, right? Of course we should vote for them. We’re in the middle of an historic drought.

Well, I’m not so sure about this. Governor Perry and the legislature are up to their old tricks. We’re supposed to have a pay-as-you-go fiscal system, but that is just a fiction. In fact, we’re borr0w-as-we-go. We borrow to build highways. We have borrowed to buy “equipment.” We borrow to build college buildings with tuition revenue bonds, knowing that the tuition will not cover the cost of the bonds and they will have to be paid out of general revenue. As will the water bonds. The debt service will eat away at the meagre general revenue that our tax system produces. Can you imagine how much it is going to cost to pay the debt service on $6 billion in water bonds?

The boosters are lining up behind Senate Joint Resolution 4, which will be proposition 2 on the November 8 ballot. In this case, the boosters are the H2O4Texas campaign, which they self-describe as “a newly created 501(c)4, nonprofit corporation – brought into existence to develop the Texans for Prop 2 Campaign, which will educate voters about the importance of passing Proposition 2 in November.” (more…)

Tagged: Lyle Larson, proposition 2, rick perry, water plan

We sat down with Allan Ritter, chairman of the House Natural Resources committee, to ask him about HJR 138, his proposed constitutional amendment to provide funding for the state water plan.

Tagged: Allan Ritter, On the Lege, water plan