As Texas lawmakers begin preparing legislation for next year’s session, a grassroots advocate for Texas taxpayers testified to state senators about reforms that would protect citizens from out-of-control local taxing entities.
The Senate Committee on Local Government held a hearing on November 7 to consider recommendations for further property tax relief and reform, including “methods to improve voter control over tax rate setting and debt authorization.”
During the hearing, activist Amy Hedtke offered specific suggestions for reining in school districts and other local governments that impose property taxes and tax-funded bond debt. Her testimony came almost 8-1/2 hours into the hearing.
Hedtke, who is known for organizing grassroots campaigns against bonds and tax hikes, outlined eight reforms to improve transparency and accountability:
1. Eliminate taxpayer-funded lobbying.
Organizations like the Texas Association of School Boards (TASB) are funded by property tax dollars and use those dollars to promote higher property taxes.
State Sen. Paul Bettencourt (R-Houston), who chairs the Local Government Committee, noted that the Senate had passed a taxpayer-funded lobbying ban during three past sessions, but each time it failed to pass in the House.
Bettencourt said he would support another ban carried by State Sen. Mayes Middleton (R–Galveston) in the upcoming session.
2. Stop school district electioneering.
State law prohibits spending school resources to electioneer for ballot measures. Yet school officials maintain that their tax-funded promotion of tax hikes and bonds is “information” only—although they often misinform voters about the true tax impact of their proposals.
“Crack down on entities who profess to be experts in education from lying to people instead of honestly educating about how the tax rate adoption process works,” said Hedtke. “Those people represent the state, and they’re lying to people.”
3. Require Voter-Approval Tax Rate Elections (VATREs) to use plain ballot language.
Local governments are required to hold a VATRE when they want to increase property taxes used for maintenance and operating (M&O) expenses above a maximum amount allowed by state law.
“The verbiage is horrible,” Hedtke told the committee members. “Districts are funding crazy, expensive, dangerous, un-mandated programs while whining about unfunded mandates. Some are playing financial shell games with the I&S [debt service] rate and even threatening a higher rate if the VATRE does not pass.”
4. Limit Certificates of Obligation, which are like property tax-backed bonds but do not require voters’ approval.
“I think we’re all on board that these are abused,” said Hedtke. “We need an easier process, like a standardized petition form, for the average resident to oppose these.”
5. Eliminate municipal utility districts (MUDs) and other special purpose districts, “especially the ones that are established by one voter who moves in a camper onto an empty piece of property. That is insane,” said Hedtke.
Texas has thousands of special purpose districts that levy property taxes. Developers often pay “rent-a-voters” to establish a temporary residence within a district for the express purpose of approving the developers’ preferred board members and authorizing property taxes and bonds.
6. Increase election thresholds for passing tax increases and tax-funded bonds.
Hedtke said propositions to approve higher tax rates and bond debt should need at least a 60 percent threshold to pass and require participation by 51 percent of registered voters, which would effectively push the elections to November.
“May elections are different voters,” she said. “Voter fatigue is real.”
7. Require bond and tax increase elections to be run through county elections departments.
Hedtke explained to senators that several school districts had “separate ballots in this election that voters did not expect and completely missed.”
“Whoa, whoa, whoa, separate ballots?” asked Bettencourt. “You mean they were at a county polling station in November and this was not on the consolidated ballot?”
Some school districts conducted voting in a different area of a county’s general election polling place. In others, Hedtke said, voters had to go to a separate location or even a different county to vote on a school bond or tax increase.
8. Bring back the statewide bond election database and add tax rate elections.
Hedtke called this “my hugest recommendation.”
The Texas Bond Review Board discontinued publishing its bond election roundup, and it never did track tax increase elections.
“And it was not a mandatory thing. It was strictly voluntary,” said Hedtke.
My solution is that the state simply create a statewide database mandating submission of all elections ordered by all taxing entities within 72 hours of ordering them. Just… the order and that there is an election happening.
Dozens of tax rate increases and tax-funded bond debt elections were on the November 5 ballot, as they are in every May and November election.
Hedtke created a tax hike spreadsheet that showed at least 62 school districts held VATREs and almost 40 proposed bonds.
Some districts, like Frisco and Rockwall ISDs, proposed both tax hikes and huge bonds and spent undisclosed amounts of taxpayers’ money promoting their ballot propositions.
At least two districts—Canyon and Turkey-Quitaque—openly advocated “for” their proposed tax increases on their official taxpayer-funded websites and social media.
More than half of the tax rate increases on the November ballot failed.
Bettencourt complimented Hedtke’s documentation and her suggestions for reform.
“Let’s see if you guys can pull it off,” she responded.
In the Texas House, State Rep. Brian Harrison (R–Midlothian) also committed to supporting measures that protect taxpayers from school districts and other local governments and return more control to voters.
“Your tax dollars should never again be used to fund campaigns to raise your property taxes,” Harrison posted on X. “Will file a bill next session to end that insanity.”
The Texas Legislature meets every other year for 140 days. The next regular session begins on January 14, 2025.
Early “pre-filing” of proposed legislation (bills) begins November 12.
