I've included the text of each proposed constitutional amendment, along with an attempt to briefly explain what the amendment is trying to do and how I'll be voting when early voting starts tomorrow. I've also included information on how various advocacy groups and media outlets on all sides of the political spectrum have endorsed. If I've left off a group you think should be included let me know in the comments and I'll add it.
Text"The constitutional amendment authorizing the legislature to provide for an exemption from ad valorem taxation of part of the market value of the residence homestead of a partially disabled veteran or the surviving spouse of a partially disabled veteran if the residence homestead was donated to the disabled veteran by a charitable organization for less than the market value of the residence homestead and harmonizing certain related provisions of the Texas Constitution."
What's this trying to do?In most states the government is funded by a "three-legged stool" of sales tax, property tax and income tax. In Texas we don't have an income tax and the state portion of the sales tax is capped at 6.25%. This means we rely heavily on property taxes to fund state government; accordingly we have the sixth highest property tax rate in the country. With property taxes so high state officials often ask the voters to permit vulnerable populations to pay lower property tax rates. In 2011 voters approved a constitutional amendment that allows the state to set a lower property tax rates for partially disabled veterans whose homes were donated to them. The specific wording of the amendment, however, doesn't apply to partially disabled veterans who have been given homes at discounted prices due to their disability.
The Helping a Hero Foundation brought this issue to the legislature's attention. Their program provides homes to disabled veterans adapted to their special needs. The veteran provides the first $50,000 of the cost of the home then Helping a Hero provides the rest up to $100,000. This amendment allows homes such as these to be taxed at a lower rate in the same way that homes where the entire value of the house was donated to the veteran.
The legislature also passed HB 150, which has the details of how the exemption in Prop 1 will play out, if the voters pass it. In order to qualify the portion of the value of the house gifted to the veteran cannot be more than 50% of the to total value. In the case of homes from the Helping a Hero Foundation that means that the only homes that qualify for the exemption will cost at least $100,000. The bill reduces the tax rate for qualified homes from 8% to 5%. The Texas Constitution requires that property taxes only fund local government, things like schools, cities and counties. So that reduction isn't coming from the state's budget, but local governments. The Legislative Budget Board found that since the passage of the 2011 constitutional amendment only 16 homes have been exempted. It's hard to say for certain how many more Prop 1 would exempt, but it seems unlikely that the number will be significant.
How I'll Be VotingThis is a tough one. Our system of taxing is fundamentally broken. The poorest 20% of Texans pay, on average, 14.6% of their income in taxes every year; while the wealthiest 20% pay 3.6%. That regressive taxing structure is, in part, due to our over-reliance on property taxes to fund government. That over-reliance also explains why our property taxes our so high. Lawmakers desire to relieve certain vulnerable populations from that burden is laudable, but wouldn't it be better to fix the broken system rather than keeping passing new carve outs? Additionally, the state legislature isn't playing with their own cash. The reduction in funding from Prop 1, however minor it might be, isn't coming out of state coffers, but from our schools, hospitals, community colleges and other local services. There's an ongoing pattern of the state claiming to "cut taxes," but instead shifting the burden on to local government. Local governments are limited in how they can make up the difference. For the most part they can either raise property taxes, charge more fees for services or increase fines for infractions of local laws (things like speeding tickets); all of which contribute to the regressive nature of our tax structure.
At the same time we do have a system that reduces the property tax rate for partially disabled veterans who are given the entire value of their home as a charitable gift. It seems unfair to do that and not also extend the same benefit to veterans who only receive a portion of their home as a gift. Fairness matters and there's no question that this is a population that is vulnerable and needs assistance.
At some point we've got to draw a line in the sand and start opposing these property tax carve outs, but I don't think this is that point. I'll be voting FOR Prop 1 with my teeth gritted. The effect on local coffers is minimal and there is an issue of fairness in how we dole out these exemptions that shouldn't be ignored.
Other EndorsementsFor: TCCLC, TxAFT, Empower TX, TFR, Chron, LPT, Progress TX,
Text"The constitutional amendment to establish a lower amount for expenses that can be charged to a borrower and removing certain financing expense limitations for a home equity loan, establishing certain authorized lenders to make a home equity loan, changing certain options for the refinancing of home equity loans, changing the threshold for an advance of a home equity line of credit, and allowing home equity loans on agricultural homesteads."
What's this trying to do?When the Texas Constitution was written in 1876 the framers were highly suspicious of banks. The nation had just come out of a major banking crisis. Most of the constitutional framers were deeply connected to farming either as farmers or ranchers themselves or as professionals that provided services to farmers and ranchers. They had just seen their friends and neighbors lose homes and livelihoods to banks who repossessed over-financed properties. Accordingly, from its inception, the Texas Constitution has heavily regulated banking practices, requiring many changes to those regulations to be approved by the voters.
Prop 2 reduces the fee cap on home equity loans from 3 to 2 percent. While on the surface this would seem to be a good thing for homeowners the legislation also exempts a number of fees currently covered from the cap, including appraisals by third parties, property surveys, state premiums for title insurance and some title examination reports. There is nothing in Prop 2 that would prevent the total cost of home equity fees from rising due to these exemptions. Prop 2 also allows home equity loans to be refinanced as other financial instruments under certain conditions. This would give homeowners more flexibility to decide how best to structure their debt, but it also opens the door to homeowners, accustomed to the significant consumer protections afforded by home equity loans, converting their debt in ways that cause them to lose those protections unaware. As we saw with the housing crisis of '08, unscrupulous banks can sometimes push people to make poor decisions about their debt. A highly informed homeowner may be able to save money through this kind of refinancing under the right conditions, but it also creates new risks.
Prop 2 also cleans up a provision in the law that can sometimes cause people who have been approved for a home equity line of credit from accessing those funds if the total debt on the house exceeds 50% of its value. This provision is unique to Texas and can create headaches mid renovation that cause homeowners to spend more money, and go deeper in debt, than they planned. Additionally, it revokes a long standing prohibition on home equity loans for most agricultural properties (this can be an issue if your house is on your farm) and expands the types of financial institutions that can make home equity loans.
How I'll Be VotingThere's some good things in Prop 2 that need to happen, but there's also a lot of red flags. Unfortunately we the voters don't get to pick and choose what parts we like. We have to vote for or against the whole thing. It's telling to me who showed up to testify for this legislation during the session: The Texas Association of Realtors, The Independent Bankers Association of Texas, JPMorgan Chase, The Texas Association of Realtors, The Texas Bankers Association, the Texas Credit Union Association, The Texas Land Title Association, The Texas Mortgage Bankers Association... ...that's a whole lot of banks. What I don't see is a lot of consumer advocacy groups. Only the Texas Farm Bureau who clearly likes that provision that allows home equity loans for agricultural property (one of the provisions I like and makes sense to me).
Granted, there wasn't much testimony against the legislation either, just a couple of people representing themselves, but I have to wonder if the authors, Sen. Hancock and Rep. Parker, bothered to reach out to organizations that work to protect homeowners. Where's the Urban League? Where's the Texas Community Association Advocates? Did this whole thing get written with only banks at the table? Given the glaring hole in the purported reduction of the fee cap, I suspect that yes, only banks were at the table when this thing was written. Prop 2 seems to be opening the door to banking practices that exploit consumers and drive up the costs of homes. I'll be voting AGAINST this one.
EndorsementsFor: Empower TX, TFR, TAR,
Against: TCCLC, TxAFT, Chron, LPT, Progress TX,
Text"The constitutional amendment limiting the service of certain officeholders appointed by the governor and confirmed by the senate after the expiration of the person's term of office."
What's this trying to do?We like public input on government in Texas. Got an opinion about proposed legislation? You can testify in committee and speak directly to your lawmakers about it! Don't like a local judge? Unlike most states you can vote them out of office in Texas! Accordingly the state has set up hundreds of volunteer boards that provide recommendations on how the state should run. These volunteers are appointed by the Governor and confirmed by the Senate. Most of the appointees serve six year terms. In theory they have to be reappointed after their term is up, but a "holdover" provision allows them to stick around until their replacement is confirmed. The provision is there to allow for continuity of service and ensure that public input continues to shape public policy. In practice some appointees have stuck around for years, continuing to sit on these boards long after the terms of their appointment are up. Prop 3 limits the holdover provision to only allow these volunteers to continue to serve without reappointment until the end of the next regular legislative session after their term expires (late May/early June of odd numbered years).
How I'll Be VotingIf we had better elected officials this wouldn't be an issue. Why isn't the Governor just re-appointing these volunteers for another term? Would the Senate (which, remember, routinely has to inform the House that they're taking a long weekend during the legislative session) be too hard pressed to confirm those re-appointments? Particularly if the volunteers are doing such a good job that currently they continue to serve for years after their appointments expire? These boards are influential. They can shape policy and legislation in important ways and the only check we have on the influence of the Governor in appointing their members is the Senate's confirmation power. The current practice of holding over these appointments for years limits the public's ability to check the power of the appointees (ironic, given that the point of the boards is to enable public input). In a perfect world I'd say elect a new Governor and Lt. Governor who do their job and that way we won't have to amend the Constitution, but we don't live in a perfect world. Without a turnover in the state's leadership on the horizon I've got to vote FOR Prop 3.
EndorsementsFor: Empower TX, TFR, LPT,
Neutral: TCCLC, TxAFT, TAR, Progress TX,
Text"The constitutional amendment authorizing the legislature to require a court to provide notice to the attorney general of a challenge to the constitutionality of a state statute and authorizing the legislature to prescribe a waiting period before the court may enter a judgment holding the statute unconstitutional."
What's this trying to do?In 2011 the Texas Legislature passed HB 2425 (Thompson/Hegar) creating Government Code 402.010, requiring courts to notify the Attorney General if a party to a case makes a motion to challenge the constitutionality of Texas law and allow the Attorney General 45 days to intervene before rendering final judgment. The bill passed with little fanfare and no opposition. The only testimony offered in support of HB 2425 in either the House or Senate committee hearings was from Jonathan Saenz of Texas Values, an anti-LGBT group.
In 2013 the Texas Court of Criminal Appeals ruled that an unrelated law concerning online solicitation of a minor was unconstitutionally broad. The Attorney General filed a motion for rehearing on the grounds that the trial court had not provided the Attorney General with the notice required under Government Code 402.010. In 2014 the Court of Criminal Appeals denied the motion for rehearing and found Government Code 402.010 unconstitutional under the Texas Constitution’s guarantee of separation of powers and prohibition against one branch of government (the legislative) attempting to exercise the powers of another (the judicial). Said the court (quoting Armadillo Bail Bonds v. State): “Our state's express provision 'reflects a belief on the part of those who drafted and adopted our state constitution that one of the greatest threats to liberty is the accumulation of excessive power in a single branch of government.'"
If passed Prop 4 would amend the Constitution to require the notification of the Attorney General if a challenge to the constitutionality is made in a criminal case.
How I'll Be VotingIt's tempting to just take the support of Texas Values as a reason to vote against Prop 4, and frankly the support of an organization dedicated to depriving people of the equal protection of the law is reason enough to look twice at legislation, but there are other reasons to vote against Prop 4. Trail courts don't generally consider the constitutionality of the law. Their job is to establish the facts of the case and determine how the law applies to it. Appeals courts are responsible to asking if the law is constitutional, but in order to appeal a case based on constitutionality the question has to have been first raised in the trial court. That means that any decent criminal defense attorney should raise those questions in the trial court if there is any chance at all they might create the grounds for an appeal. Under Prop 4 every time that happens it could trigger up to a 45 day delay in the case. Most people who find themselves in criminal courts aren't murderers (or people who solicit minors online), and the basis of our criminal justice system is that all of them are innocent until proven otherwise. Creating new delays creates new costs. It means that people defending themselves in court have to do so for longer which means they may stay in jail longer awaiting trial, or may have to comply with the terms of their bail longer, restricting their travel, costing money and potentially affecting their employment and family. District Attorneys are agents of the state and are just as capable of (and just as responsible for) defending the state's laws as the Attorney General. There is no reason why the additional costs and time of a delay to allow the AG to intervene is necessary.
Additionally, just as Props 1 and 6 are about an ongoing trend of passing costs down on local governments Prop 4 is part of a trend of consolidating power at the state level. Over the last few years we've seen more and more legislation designed to expand the powers of the Attorney General. The framers of the Texas Constitution purposefully created a diffuse executive branch with powers split between multiple state-wide elected officials and local governments. Prop 4 punctures that separation. I'm strongly AGAINST Prop 4 and will be voting no.
EndorsementsFor: Empower TX, TFR, Chron,
Against: TCCLC, TxAFT, LPT, Progress TX,
Text"The constitutional amendment on professional sports team charitable foundations conducting charitable raffles."
What's this trying to do?In 2015 Texas voters approved a Constitutional amendment allowing the 10 major sports teams in the state to hold charitable raffles at games. Typically these raffles are set up as 50/50 games with half the proceeds going to the winner and the other half going to charity. The raffles are administered by non-profits set up by the teams; the team itself does not receive any money. Prop 5 expands that program to include more kinds of sports and removes a requirement that the non-profit holding the raffle had to exist before 2016. The legislature originally created this requirement to prevent charities being created for no other reason than to hold raffles. The intent was to only allow non-profits that were already up and running to participate, but with the expansion of the program under Prop 5 it might prevent smaller teams that don't already have a charity from participating.
The legislation only enables the legislature to allow the games. HB 3125, also passed by the lege this spring, creates the details of how that works. Because the details are in statute and not the constitutional amendment if abuses of the system develop the legislature can make adjustments, or even revoke the whole program, without going back to the voters.
How I'll Be VotingHow you feel about Prop 5 really comes down to how you feel about gambling. If you're opposed to gambling and feel the state should do everything it can to keep it out of the public sphere then you should oppose Prop 5. For me, I think it's important to note that Prop 5 evens the playing field (no pun intended) and allows teams that are attractive to a broader cross-section of the state to participate in charitable raffles. Currently WNBA teams can't participate, neither can our many professional soccer teams or the minor league baseball teams that dot our suburbs. I'm not a huge fan of charitable gambling. I think it masks a vice as a virtue and I'm personally more likely to make a donation to a cause I support than buy a raffle ticket, but that's me. Prop 5 takes a privilege that was formerly just for the charities favored by the millionaire owners of professional sports teams and makes it just slightly more accessible. I think that's a good thing and will be voting FOR Prop 5.
EndorsementsFor: TCCLC, TxAFT, Chron, Progress TX,
Against: Empower TX, TFR, LPT,
Text"The constitutional amendment authorizing the legislature to provide for an exemption from ad valorem taxation of all or part of the market value of the residence homestead of the surviving spouse of a first responder who is killed or fatally injured in the line of duty."
What's this trying to do?As with Prop 1 this amendment continues a trend of reducing the property taxes for specific vulnerable populations while failing to address the fundamental flaws in our tax system. Prop 6, along with SB 15 which creates the details of how the exemption created by Prop 6 will work, will completely exempt from property taxes the homes of surviving spouses for first responders who were enrolled in the state's employee retirement system and who do not remarry. Not surprisingly, the legislation is supported by all of the major professional associations for first responders.
The Legislative Budget Board created a projection of how much of a reduction in property tax revenue Prop 6 will create over the next 5 years. By 2022 Prop 6 will cost the state more than 2 million dollars a year. That's $1,258,000 from schools, $364,000 from counties, $361,000 from cities and $274,000 from other local government services. As mentioned with Prop 1, local governments are very limited in how they can make up the difference. Generally their only options are to increase property tax rates, increase fees for services or increase fines for breaking local laws, all of which contributes to Texas' regressive taxing structure.
How I'll be votingI said on Prop 1 that at some point we the voters need to draw a line in the sand on these specific carve outs to the property tax. I understand the sacrifices made and challenges faced by the surviving spouses of first responders. Losing a spouse is a terrible situation and this legislation will help keep this population of surviving spouses from potentially losing their homes as well. But unlike Prop 1, it comes with quite a price tag. That price will be paid by everyone else, including a whole lot of other surviving spouses. We need to reduce our property taxes, but the best way to do that is find progressive ways of raising revenue at the state level and stop pushing costs down on local governments. For me, this is where I draw the line. I'll be voting AGAINST Prop 6.
EndorsementsFor: TCCLC, TxAFT, Chron, Progress TX,
Neutral: Empower TX, TFR, TAR,
Text"The constitutional amendment relating to legislative authority to permit credit unions and other financial institutions to award prizes by lot to promote savings."
What's this trying to do?The Texas Constitution does not allow raffles and lotteries unless they are conducted by the state, or by specific non-profits in specific situations (expanding that list of non-profits and situations was the subject of Prop 5). Prop 7 adds a new category to the list: banks and credit unions, and a new specific situation: prize-linked savings accounts. If passed, Prop 7 (and its accompanying legislation HB 471) would allow banks to offer prizes drawn from a list of people who made deposits in a special kind of savings account. The money deposited continues to belong to the depositor and can be withdrawn at any time and is not use to pay the prize. Prize-linked savings accounts have been used in other states as a way to encourage people who would not otherwise save their money to do so.
Unlike Prop 2, Prop 7 is supported by both the banking industry and advocates who work to ensure that people aren't exploited by the banking industry. In addition to The Independent Bankers Association of Texas, The Texas Credit Union Association and The Credit Union Coalition of Texas (Yes, those are two different groups for some reason) the legislation is supported by RAISE Texas, United Ways of Texas and (one of my favorite advocacy organizations and one that I really trust) Texas Impact.
There's some disagreement about whether Prop 7 is actually needed. Since the deposits are not paid to the bank organizing the game but continue to belong to the depositor prize-linked savings accounts aren't strictly gambling and probably don't violate the constitutional prohibition on games of chance. However two years ago Gov. Abbot vetoed HB 1628 which created an identical program to the one enabled by Prop 7 on the grounds that it would violate the constitution. That's a weird interpretation, but he's the Governor and he gets to use whatever grounds he'd like for his veto. Prop 7 would clarify any confusion that might exist and make it clear that prize-linked savings accounts are allowed.
How I'll Be VotingJust like with Prop 5 how you feel about Prop 7 comes down to how you feel about gambling (and how some people feel about gambling might explain Gov. Abbot's veto two years ago), but in this case there is absolutely no risk to the player. Anything deposited in a prize-linked savings account continues to belong to the depositor. If that helps make saving for tomorrow more attractive to some people then I can't imagine why we shouldn't allow it. I'll be voting FOR Prop 7.
EndorsementsFor: TCCLC, TxAFT, Chron, Progress TX,
Neutral: Empower TX, TFR, TAR,
Daniel, thanks for the rundown. As usual, you present these multitudes of propositions in language a lay person can understand!ReplyDelete
Last line before "Endorsements" under Prop 7 should be corrected--it currently reads "I'll be voting FOR Prop 5."ReplyDelete
Thank you for this lucid and useful post. I really appreciate it.
Thank you for catching that! CorrectedDelete