by Andrew Lindsey

Texans are very hands-off when it comes to taxes. Unlike many other states, Texas has no state personal income tax, property tax, or inheritance tax, and local taxes are not allowed to exceed low percentages of the state taxes that do exist. In addition, all local taxes are subject to further taxpayer protections collectively referred to as “Truth in Taxation” laws, which is a combination of state constitutional and statutory provisions that restrain local governments from raising taxes through accountability mechanisms such as requiring notice of higher tax proposals and the holding of public hearings for citizens to question and oppose proposed tax increases.

School boards are just one of the many kinds of local government entities that Texans support through their taxes. Even if one does not work for a local school or send children there, it is obvious that the maintenance of a public school system is one of the most important (and expensive) government functions for any community. Perhaps for this reason, Texas law treats the process for setting school district tax rates differently than other local tax rates. Truth-in-taxation requirements were expanded for school districts during the 79th Texas legislative session through an initiative originally contained in House Bill 1006, and eventually incorporated into House Bill 1. This initiative both lowered the tax rate that school districts would be allowed to charge in the future, and made it more difficult to increase those rates above what was charged in the preceding year. One component of this increased difficulty (in addition to notice and public hearings) is that school districts must hold a district-wide election for the approval of tax rates which exceed the statutory default rate by a certain amount of cents. If a simple majority of voters support the new tax rate, then the district may adopt it. These elections are known as “tax ratification elections” (or TREs).

TREs are demanding endeavors both in terms of effort and expense. At a minimum, school districts must walk the fine line of conducting an informational campaign to communicate the proposed tax rate to voters without violating electioneering statutes which prohibit using school district resources to promote such proposals. Districts must also prepare alternative budgets in light of the possibility that voters might reject the proposed tax rate (which currently happens approximately 30 percent of the time). Moreover, the authorized timeframes for holding TREs are somewhat limited, and if done in a place or manner which is notably different than other local elections, the school district will have to petition the Department of Justice for preclearance under the Voting Rights Act. Finally, compliance with these and numerous other logistical requirements from the Texas Election Code, Tax Code, and Education Code will likely necessitate consultation with attorneys and/or coordination with other entities that assist with administrative issues such as voting technology.

These demands are exacerbated for school districts whose boundaries cross more than one county. Booker Independent School District (ISD), which held a TRE earlier this month, is a good example. Like the town of Booker itself, Booker ISD is located primarily in Lipscomb County, but also covers land in the neighboring counties of Hemphill and Ochiltree. Mike Lee, the former superintendent of Booker ISD who initially proposed the higher tax rate to the school board, was heavily involved in the administration of the TRE and talked to me about all of the logistics that had to be arranged for its implementation.

A major inconvenience that Mr. Lee faced was the timing of the TRE. School district tax rates are substantially affected by annual property values, and state law precludes districts from setting tax rates until property values are certified and received from the county appraisal district. As one can imagine, this process may take quite a while, especially when the school board must wait to receive property values for multiple counties. As a result, Booker ISD missed the initial timeframe authorized by statute for holding a TRE, and instead had to administer the TRE months later on the same day as the general election. This was problematic for two reasons. First, since Booker local elections usually occur at a time and place when no other important elections are occurring, Booker ISD had to seek and obtain preclearance by the Department of Justice. Second, county voters are statistically less likely to approve tax increases in local elections that are held in conjunction with general elections, and indeed Booker ISD experienced both record voter turnout and opposition in its TRE.

Equally frustrating was the fact that Booker ISD was required to create a polling place in each county within its boundaries, no matter the number of qualified voters living in the covered areas. This meant that the school board had to rent a voting machine and hire poll workers to set up a voting location in the 12 square miles of district land protruding into Hemphill County, even though it was all known to be open ranch land owned by two landowners who had both moved away. Similarly, the board had to establish a voting location within its land in Ochiltree County, despite the fact that no more than 25 people lived on that land.

Booker ISD is just one of many inter-county school districts in Texas that would benefit from setting a slightly higher local tax rate, but the substantial costs associated with this process may discourage some school districts from even attempting a TRE. As Mr. Lee put it, “[a]ttorney fees, rentals, and labor for the elections were probably $15,000 … [but] a simple paper ballot for a one-question election where people put a check mark on the ‘for’ or ‘against’ circle could have been done for less than $500. I think once this scenario is multiplied across Texas and all of its political divisions, it can be a rather large issue.” If Texas is so concerned about wasting even a penny of taxpayer dollars, it seems strange that school districts would be required to undergo all of these tedious arrangements given that they too are ultimately paid for by taxpayers. This begs the question of whether it is possible to have too much transparency in local tax elections.

Permalink: http://electls.blogs.wm.edu/2013/01/08/4770/

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