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Constable's Notebook - February 2011

Last month while discussing the State budget deficit, I mentioned that one budget balancing strategy that state legislators have used is to require local governments to provide some services without providing funding. This practice known as unfunded mandates, has cost local governments hundreds of millions of dollars and requires local officials to either raise property taxes to fund the mandates or cut other services. Unfunded mandates can significantly impact city and county budgets by limiting their discretion and can adversely affect local bond ratings.

Previous examples of unfunded mandates placed on local governments include the Indigent Health Care and Treatment Act that was passed in 1985 which required counties to provide up to 8% of a county’s budget for indigent health care before being eligible for matching funds. In 2002 legislators passed an indigent care bill, known as the Fair Defense Act which required counties to pick up 94% of the more than the $100 million cost of the act.

In 2003 the Legislature, in an attempt to cut state costs, passed a massive reorganization of the state’s health and human services agencies. Many state services were reduced. As a result more people with health and mental illness issues ended up being treated in hospital emergency rooms or county jails, which is the most expensive way to treat people. At the same time the Legislature also cut by 65% the reimbursement to counties for the costs of visiting judges which added nearly $4 million in costs to Texas counties. In recent years local officials have also had to pony up more money for road projects that used to be primarily state funded. There are many other examples but perhaps the largest example of the state shifting costs to local taxpayers is public education, where the state share which once was 60% has dropped to 40%.

Already a number of bills have been filed this session that could further increase costs for local taxpayers. More than a dozen immigration bills have been filed, many of which would require more of local law enforcement officers and more local jail beds. Proposed cuts for mental health services would result in more people with mental illness sitting in jail and ending up at hospital emergency rooms. Sheriff Greg Hamilton has made clear his dissatisfaction that the Travis County jail also serves as Travis County’s largest mental health institution.

Last month Representative Burt Solomons filed a constitutional amendment, HJR 56, which would restrict the Texas Legislature’s authority to pass legislation that forces local governments to do something without paying for it. The Travis County Commissioners Court has endorsed this legislation. Similar legislation has been filed many times and state leaders including the governor and lieutenant governor have expressed their support but ending unfunded mandates has never even made it to the floor of either legislative chamber. And with a $27 Billion state budget deficit facing them, unfunded mandates legislation is not likely to pass this year either. State legislators might not tell you, but any mandates they pass this session will be funded - through local property tax increases forced by the state on cities and counties.



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