Significant Unfunded Mandates

Overview (Updated Feb. 25, 2011)

Please don’t pass the buck to local taxpayers!

Texas counties have long faced unfunded and under-funded mandates from the state and federal governments, whereby the state and federal governments pass the buck of paying for services decreed by the larger governments to the local governments – and the taxpayers of local governments.

Unfunded mandates impose costs on Texas counties and their taxpayers into the millions of dollars statewide and force counties to increase local property tax rates to pay for edicts from above – edicts most often in the form of legislation that is passed and sometimes from state agency regulations. High-dollar examples include indigent defense and indigent health care, but there are many other “nickel-and-dime” mandates that add up to major costs, such as the 2007 passage of HB 3693 that requires counties with websites to post their utility usage and costs.

Many times, unfunded mandates are unintended consequences of legislation, not a massive plot to foist additional costs onto county government and local property taxpayers. Unfortunately, the end result is the same – local property taxpayers bear the financial brunt of state directives.

Federal mandates also run up local governments’ costs, some of which are passed to states and then on down to counties. The National Association of Counties (NACo) continues to push at the federal level to end such mandates.

The 78th session in 2003, when the state faced a $10 billion shortfall, brought a rash of increased mandates to counties as the Legislature sought its way out of its own $10 billion budget deficit. Shortly after that session, the TAC Policy Analysis Group (PAG) decided to push for a constitutional amendment prohibiting state unfunded mandates. In support of the PAG initiative, 253 counties approved resolutions calling for the Legislature to pass a constitutional amendment.

Education efforts were stepped up, both at the state level through TAC’s media relations program and at the local level through county officials explaining the problem to their constituents and local news media. The education and media effort was highly successful – with many newspapers across the state adopting the term “unfunded mandates” and editorializing on behalf of counties against such state mandates.

But while the news media decried the unfairness of costly mandates being passed down to the local level, the Legislature continued to pass unfunded mandates in the 79th session of 2005, including SB 6, which expanded the types of CPS parental termination cases in which counties are mandated to appoint attorneys for indigent parents.

During the interim of the 79th session, county officials maintained their education efforts, and newspapers continued to join the clamor against such mandates. An important turning point in the battle was an interim report on unfunded mandates and cost drivers by the House Local Government Ways & Means Committee, chaired by then-Rep. Fred Hill (R-Richardson). Hill’s interim report clearly laid out the historical and on-going problems of unfunded and under-funded mandates.

Thanks to the efforts of county officials, the news media, Hill’s committee and other legislators supportive of counties, the 80th session in 2007 and the 81st session in 2009 did have a different ring regarding the talk about unfunded mandates. Legislators actually debated on the floor whether a bill would be an unfunded mandate, as legislative supporters of local government constantly reminded their colleagues about the dangers of unfunded mandates. Both sessions saw constitutional amendments introduced that would prohibit many future unfunded mandates, one by Rep. Wayne Smith in 2007 and one by Rep. Garnet Coleman in 2009. The bills passed out of committee but never made it out of Calendars.

The 82nd session in 2011 is a grave concern, since the state has found itself with up to $27 billion less in revenue than the previous biennium. The most pressing danger during the 82nd session is that more unfunded mandates will be pushed down on counties due to the state’s revenue problems, along with sweeping dedicated funds, some of which go to counties in the form of grants, into general revenue.

Constitutional amendments against unfunded mandates have been introduced in 2011 – HJR 56 by Rep. Burt Solomons and its Senate companion, SJR 17 by Sen. John Carona, as well as HJR 89 by Coleman. Counties across the state are passing resolutions supporting the constitutional amendments, but it remains to be seen if the Legislature will finally act to send an unfunded mandates ban to voters.