TURF urges voters to defeat Prop 4 on Nov 8

IMMEDIATE RELEASE

TURF urges voters to defeat Prop 4 on Nov 8
Prop 4 allows counties to raise property taxes
and give tax breaks to their buddies

(SAN ANTONIO, TX - October 17, 2011) On November 8, Texas voters will decide whether or not to amend the Texas Constitution by approving 10 new ballot propositions passed by the 82nd Texas legislature, and TURF along with We Texans and Independent Texans, are urging voters to defeat Prop 4, which is based on the Constitutional Amendment HJR 63 authored by Rep. Joe Pickett (D - El Paso). Prop 4 would expand Tax Increment Financing (TIF) and Transportation Reinvestment Zone (or TRZ) authority to counties. Cities already have TIF and TRZ authority.

The amendment is also linked to HB 563, authored by Pickett. The Texas Attorney General has indicated that the TRZ authority granted to counties in HB 563 is not sufficient to withstand legal challenge, so he recommended a Constitutional Amendment (HJR 63/Prop 4) in order for counties to exercise this authority. So if voters say 'NO' to Prop 4, counties will not have the authority to establish TRZs.

Prop 4 ballot wording:
"The constitutional amendment authorizing the legislature to permit a county to issue bonds or notes to finance the development or redevelopment of an unproductive, underdeveloped, or blighted area and to pledge for repayment of the bonds or notes increases in ad valorem taxes imposed by the county on property in the area. The amendment does not provide authority for increasing ad valorem tax rates."

Prop 4 would give counties the authority to:
-Increase property tax (through higher property valuations) to pay for STATE transportation projects
-To use and/or increase sales tax (in the zone) for transportation projects without coming to voters
-To use property taxes to build TOLL roads (a DOUBLE tax) or ANY transportation project (transit, light rail)
-Enter into bond debt without coming to the voters
-Grant tax breaks to their buddies (special interests) in the zone (causing residential taxpayers to pay more)
-Use TRZ surpluses as unaccountable slush funds

The ballot wording is vague and misleading. It fails to even mention tax increment financing, transportation reinvestment zone, or even the the word 'transportation' on the ballot. However, it does reveal one of the purposes of the amendment which is to give the government more power to decide whose private property it wishes to "redevelop."  TRZs are as much about "economic development" as it is financing transportation projects, and means those who live in the zone will have their property taxes go up due to higher property values from the government-encouraged development.

TRZs allow local governments to use your property taxes to back bonds for transportation (or other) projects, WITHOUT COMING TO THE VOTERS.

"Your property taxes aren't going to go down once your city (which already has this authority) or county (who will get this authority if you vote 'yes' on Prop 4) sells bonds dependent on ever increasing property tax appraisals," said Terri Hall, Founder of TURF.

STATE OUTSOURCING TAX INCREASES
TRZs are a way for STATE legislators to punt on their responsibility to build and maintain STATE highways and their responsibility to end diversions of the gas tax to non-road uses. It allows them to outsource tax increases for roads by passing it down to the LOCAL level. By using appraisal increases to pay for transportation projects, it takes that revenue away from what cities and counties usually use that money to fund. So it's likely to necessitate further property tax increases in order to make up for the shortfall in city and county services that will be diverted to transportation.

TRZS CAN FUND TOLL PROJECTS
TRZs heist property tax appraisal increases within the designated zone to pay for transportation projects, including to subsidize toll roads (which would be a DOUBLE TAX). HB 563, would allow this zone to fund a pass through toll agreement with a private entity under Sec 222.107 (b) (which refers to Sec 222.104). Sec 222.104 (c) states: "(c)  The department may enter into an agreement with a private entity that provides for the payment of pass-through tolls to the department as reimbursement for the department's design, development, financing, construction, maintenance, or operation of a toll or non-toll facility on the state highway system that is financed by the department." Such deals begin to look an awful lot like public private partnerships that Texans have repeatedly rejected.

Also, in this legislation it states that any revenue collected in a TRZ that's over and above the amount needed to cover the bond debt on transportation projects can be used as a slush fund for politicians, without ever having to come to the voters again. Transportation Code Chapter 222.107 (h-1) states: "Any amount received from installment payments of the assessments not pledged or assigned in connection with the transportation project may be used for other purposes associated with the transportation project or in the zone" (which could mean virtually ANYTHING!). In addition section (k-1) says the boundaries of the zone can be expanded/amended at ANY time without the permission of the voters.

ROAD UTILITY DISTRICTS
Counties could also establish road utility districts under the TRZ law (Sec. 222.107 (i)) even if Prop 4 doesn't pass WITHOUT coming to the voters. However, the Texas Attorney General has determined counties would invite legal challenges because such authority is not expressly granted in the Texas Constitution. Counties can use ANY funds above the cost of the transportation project in a road utility district established under this section for ANY purpose (Sec 222.107 (k)).

TAX BREAKS FOR THEIR BUDDIES
Counties can also elect to grant tax abatements to ANY property owners in the zone (exceptions for their buddies) under Sec. 222.107 (h) which says: "The commissioners court by order or resolution may enter into an agreement with the owner of any real property located in the transportation reinvestment zone to abate all or a portion of the ad valorem taxes or to grant other relief from the taxes imposed by the county on the owner's property..."

INCREASE SALES TAX WITHOUT VOTER APPROVAL
Counties will also be able to grab sales taxes to fund transportation projects in the zone without coming to the voters, and possibly to raise sales taxes under the language. Section 222.110 (b) says: "The governing body of a municipality or county may determine, in an ordinance or order designating an area as a transportation reinvestment zone or in an ordinance or order adopted subsequent to the designation of a zone, the portion or amount of tax increment generated from the sales and use taxes imposed by a municipality under Section 321.101(a), Tax Code, or by a county under Chapter 323, Tax Code, attributable to the zone, above the sales tax base, to be used as provided by Subsection (e)."