Senator Lucio (Chair) and Senator Paul Bettencourt (Vice Chair) held a hearing of the Intergovernmental Relations Committee, on Monday August 15. The purpose of the hearing was to take testimony on the interim charges set forth by the Lieutenant Governors’ Office dealing with the petition and referendum process, management districts, and public housing. The years of local government abuse of the petition process by the City of Houston culminating in the Texas Supreme Court’s rocket docket and the management district shenanigans were center stage, liberals were squirming.
The First Interim Charge was proposed by Senator Bettencourt Court’s office and reads as follows:
Local Ordinance Integrity: 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
In hearings on interim charges the committee will often include invited testimony from panelists. This panel included Andy Taylor, Bruce Hotze, and Dave Welch. You knew from the composition alone that Annise Parker was not going to have a good day. Senator Lucio stopped Mr. Taylor early in his testimony to remind him that he was under oath. Senator Lucio made the quick assumption that Andy Taylor couldn’t possibly be telling the truth and stopped him. Unfortunately, for Annise Parker et al., Andy was telling the truth – I wrote about it here. I do not blame Senator Lucio because Andy’s recounting of the events surrounding the HERO ordinance sounds like a season of House of Cards. Andy was followed by Dave Welch, Executive Director of the US Pastor Council, who described the City of Houston’s attempts to subpoena the sermons of Houston clergy who opposed the HERO ordinance. Senator Lucio couldn’t play the “you know you’re under oath” game with Welch because the sermon subpoenas were widely reported. All of this goes into the “you cannot make this up” category.
Mr. Taylor went on to describe how local activists fought the government’s attempts to undermine petition drives involving the rain tax, HERO, and Bruce Hotze’s property tax cap, which passed 11 years ago and has yet to be implemented. Taylor outlined the legal talent hired by the City of Houston in these fights – large law firms who “donated” their time to the city. In reality, these firms receive large payouts in bond advisory roles or other litigation involving the city. If you live in Houston, you have seen these abuses by our elected officials – and Annise Parker was one of the worst. Thankfully, the Texas Supreme Court has rebuked the city’s behavior and Andy Taylor set the record straight during this hearing. Houston has been fortunate to have citizens with resources to fight city hall.
My friend David Furlow also testified about his battle over red light cameras. David represented our local heroes, the Kubosh family, in their very expensive battle to ban red light cameras. The Kubosh family also held a petition drive to put the issue of banning red light cameras on the ballot. The Kubosh battle was different because they won the initial fight of placing the proposition on the ballot and they won the election. Mayor Annise Parker defied the voters and tried her best to leave the cameras in place – a public display of local officials behaving badly. To their credit, the local press covered the story. Mayor Parker finally acquiesced and took the cameras down and Michael Kubosh was later elected to the Houston City Council.
The Second Interim Charge:
Municipal Management Districts: Study the means by which the Texas Legislature reviews the creation of municipal management districts (MMDs) by special law to determine if different processes should be used to evaluate new MMDs created within populated or developed areas from those created over undeveloped areas. Identify ways to better assess how the services and improvements of a proposed Page 5 of 5 MMD within populated or developed areas will supplement and enhance those provided by other local governments, as well as if the territory of the proposed MMD encompasses or overlaps area that is already within other assessment or taxing entities. Make recommendations, if necessary, to improve the notice provided to individuals and businesses within populated or developed areas proposed for inclusion in an MMD.
Management districts, one of my favorite subjects, are one of the most insidious tax mechanisms imaginable. Think of legalized racketeering with the force of government seizure and you begin to see the true nature of management districts. The first panel on management districts included Joe B. Allen’s successor, Trey Lary. Allen is the father of Texas management districts and their proliferation throughout the state is attributable to his law firm – now Allen Boone Humphries Robinson LLP. Those that have fought against the management districts often refer to Allen as the Darth Vader of taxes. I always enjoyed following behind Allen at the capitol and trying my best to undue this insidious tax on business.
The fight goes back many years and an uneasy truce was finally implemented. After some combative years, law firms and consultants who practiced in this arena realized that certain business interests would continue to win the battle at the capitol; so, they switched their focus away from large industry (like car dealers) and began preying on small business owners who generally do not have the financial or legal resources to do battle against this group of lawyers and lawmakers trying to grab revenue streams in the dark. Many of these business owners do not realize until it is too late that they are in a management district. Before anyone can say boo, law firms have sold bonds, lined their pockets, and the pockets of various other shady consultants, and the victimized business owner is obligated to make bond payments for the next 30 years.
Management districts are a huge scam and must be reined in. Once again, and it is always the same cast of characters, there is an effort to form a new district with a twist. There have been past attempts to form districts that include residential areas that have been shut down. One such district is St. George Place, off of Richmond in Houston, just west of the Galleria. Paul Bettencourt previously killed this district at the legislature because of the awful precedent it will set. A group led by Hawes Hill Calderon LLP, a company specializing in the management of management districts, circumvented the legislature and is now trying to form the management district through the TCEQ. What is so dangerous about St. George Place precedent is that all the management districts will then try to tax residences – as if Houstonians property tax bills are not high enough. It is all about the revenue stream and the quantity of bonds that will it support. The idea of placing residential areas in these districts is not new. Circumventing the legislature using the TCEQ to create one is a new tactic and Bettencourt seeks to end the practice this session.
The interim charges are a beginning to help reign in abuses by local government. The speakers offered suggestions on legislation to strengthen a citizen’s right to petition their government. I especially like the suggestion of reimbursement of legal fees for citizen activists. Another idea is to allow a member of a management district to remove themselves from the district after a three year period if they did not want to participate further. This would make districts more responsive to the needs of their members. Remember, management districts are unelected boards with the power to tax and spend.
The hearing was a long awaited event by conservatives and activists alike. There is a growing movement to effect change through initiative and referendum and charter amendments. Most of these fights can be traced back to the work of Barry Klein and the Houston Property Rights Association. Barry has led many fights over zoning, Metro, and red light cameras going back decades. Barry’s tireless pursuit for honest government often goes unrecognized. Many of the speakers before the committee coordinated their appearance through Barry who did an excellent job of organizing the presenters for the hearing. On most Fridays, Barry can be found at the Houston Property Rights Association meeting discussing, debating, and arguing over local issues in our area.