87th LegislatureState HouseState SenateAfter Last-Ditch Floor Fight, Voter Check on Local Spending Passes Without County Exemptions

The Texas House gave final approval to legislation restricting localities' use of non-voter-approved spending, intending to cut down on the use of Certificates of Obligation.
May 30, 2021
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Legislation aimed at curtailing localities’ issuance of non-voter-approved spending passed the House Sunday without an array of amendments exempting specific counties.

House Bill (HB) 1869, by Rep. Dustin Burrows (R-Lubbock), would reclassify under the voter-approval rate certain spending previously permitted without voter approval. The most notable examples of this practice are Certificates of Obligation (CO) — non-voter-approved spending that, as of last year, totaled over $22 billion across the State of Texas.

Originally intended as emergency spending, CO use has expanded well beyond that function for purposes as prudent as refinancing existing debt and as outlandish as a 45-foot tall floating head statue.

While a substantially watered-down version of its original, it still would curtail the issuance of superfluous projects like the Bexar County aluminum statue or Amarillo’s water park.

On the House floor, members who had successfully tacked on the county exemptions put up a fight against HB 1869 while Burrows defended it. When push came to shove, the body adopted the conference committee report by a vote of 72 to 67.

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Initially, the bill failed by a vote of 71 to 72. But after verification, a handful of members were found not to have been on the floor at the time of the record vote, despite having voted “nay.” That likely means other members voted for them in their absence, something that happens often in the Texas House.

“What I fought against [in the conference committee] was using broad language like public safety because it can apply so broadly,” Burrows said on the House floor laying out the bill.

The first version of the bill would have reclassified all COs under the voter-approval rollback rate — meaning that after a locality reaches its 3.5 percent increase limit under last session’s Senate Bill 2, the additional spending must be approved by voters.

That was adjusted substantially by the House Ways & Means Committee, which created certain criteria by which to classify acceptable CO use without voter approval versus unacceptable CO use without voter approval.

On the House floor, the legislation was amended heavily to outright exempt eight counties: Travis, El Paso, Cleburne, Jim Wells, San Patricia, Bee, and Nueces.

The City of Grand Prairie also received an exemption.

But the Senate, after the House’s passage, stripped those amendments and thus the bill went to conference committee to hash out a final version. That final version lacked any of the exemptions and the lone House Democrat on the committee, Rep. Eddie Rodriguez (D-Austin), was the only member not to sign the report.

State Sen. Paul Bettencourt (R-Houston), the bill’s Senate sponsor and chair of the Local Government Committee, told The Texan upon final passage, “I was proud to return HB 1869, stripped of bad House carve-out amendments, to Chair Burrows on a 20 to 10 vote from the Senate.”

“For the first time, COs will be covered under the SB2 debt calculations — and that’s a huge win for taxpayers to stop their excessive use!”

“After looking at the policy in total, I felt better about exempting my county entirely. I’m sure there are county officials somewhere abusing this but that’s not the case in my home,” Rep. Trey Martinez Fischer said in opposition to the bill. Martinez Fischer was the first member to exempt his home county of Bexar, which snowballed into a number of others doing so as well.

COs in the final version are subject to voter approval if they fail to meet one of the following categories:

  • Self-supporting, e.g. not financed by property taxes
  • Part of a state or federal assistance program
  • Issued for designated infrastructure
  • Refinancing of debt
  • Emergency response
  • Renovation of existing facilities
  • Purchase of vehicles or equipment
  • Economic development
  • Construction or upkeep of a highway or tollway

The “designated infrastructure” category has its own criteria, including more typical infrastructural projects like “streets, roads, highways, bridges, sidewalks, parks, landfills, parking structures, or airports.”

Others include telecommunications, cybersecurity, or utility projects as well as police and fire stations and school districts.

The Senate approved the final version of the bill on Saturday and so, after this House passage, it will now move to the governor’s desk — giant, metal, floating head statues beware.

Editor’s Note: This article has been updated to include comment from Sen. Paul Bettencourt.

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Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.