Who’s doing the heavy lifting when it comes to protecting local taxpayers? By Jim Lewis
Who’s doing the heavy lifting when it comes to protecting local taxpayers? By Jim Lewis
The way some people see it, the idea of local governments spending taxpayer money to influence legislators mangles democracy.
“Taxpayer-funded lobbying really distorts the democratic process in that it allows government the ability to allocate dollars and really transform government from what we think it should be – a neutral policy-making entity to an advocacy entity,” testified Peggy Venable of Americans For Prosperity at a legislative hearing in March. “We think legislators should be insulted when your local officials have to hire lobbyists to lobby you to represent your local constituents, ostensibly. We really do expect our elected officials of the state local and federal levels to be talking to one another and working together on our behalf.”
Never mind that every interest group that seeks to be treated decently by the Legislature hires its own lobbyists (TXU had 46 lobbyists on board as of January and hired more a few weeks later). Or that many groups – corporate, non-profit or volunteer – have goals that conflict with the interests of counties, cities and schools – and more importantly, their taxpayers. In Venable’s view, a legislator considering a bill that affects local government can just pick up the phone and call up Commissioner Soandso to inquire about its impact. Sounds simple enough.
Massive Effort
But in reality, keeping up with the potential impact of the hundreds of bills that directly or indirectly affect local government requires a ton of work.
In Bexar County, for example, Leilah Powell said the average citizen may not readily understand why, say, a simple Senator-to-local- County-Clerk phone call won’t do the trick when a county bill comes up.
“The only way to truly answer that is go through a session working in the Legislature,” said Powell, who heads the county’s legislative effort. “But when you think about the fact that there are almost 6000 bills filed, these legislators hear from a lot of folks, and my job is to make sure that they understand how (Bexar County is affected) and help them in any way possible.
In fact, she said, many times legislators do call their local officials for input, but there are a lot of bills to read and consider, and only so many resources to get their job done.
“The legislators are part-time and they have a limited staff,” she said. “But an organized special interest group will be able to spend a lot of time and money to get their viewpoint across, in a coordinated way. If the public sector can’t do that too, then we’re at a disadvantage.” Powell and fellow staff members look at every bill that’s filed. “We send every bill that looks like it might be (a county-related) issue to the appropriate official or staffer,” said Powell, who works for the commissioners court. “We ask them to let us know if this is something we should take a position on and if so, does it rise to a level that is not incidental but is very important to us, in which case we should be more active.”
Bills are distributed throughout Bexar County government to determine their impact.
“A bill might impact us if a department has to do something differently, but we would only oppose something if, for example, we’d have to hire a new staff person,” she said. “We track every bill that we think might be an unfunded mandate.”
In Tarrant County, it is Mark Mendez in the Budget Office who coordinates the county’s legislative interests by following guidelines adopted by the commissioners court. Mendez can determine whether contact with legislators is necessary based on broad principles adopted by the court. Does a bill restrict current operational authority (including funding limitations such as revenue or appraisal caps) Is it an unfunded or under-funded mandate?
Mendez’ work starts way before legislators are sworn in on the second Monday in January of odd-numbered years. During the interim between sessions, he works with departments throughout the county to identify potential legislative changes that could enhance the effectiveness of county operations, especially in ways that save tax funds.
Among the issues the county focused on this year are measures dealing with bail bonds being reviewed by county magistrates, mental health hearings being conducted via two-way electronic communications, felony attorney appointments, exemptions to jury service, competency examinations, supervision of work-release inmates at non-profit organizations and community service records.
What prompts many such bills to be initiated is the fundamental rule of county government law that counties can only do what is specifically authorized by statute, he noted.
“Any bureaucracy can always be improved and counties are hamstrung in that we can’t just take it upon ourselves to do a lot of these things,” said Mendez, who has safeguarded Tarrant County’s legislative interest for the last 14 years. “We have to ask permission from the state for specific changes to the legislation that governs our operations. My job security is the fact that the state wants to maintain that control over county government.”
But the bulk of a county legislative advocate’s job is defensive, he said.
“Eighty-five percent of my job is usually fixing the unintended consequences of bills and working on bad legislation to try to either fix it or kill it,” Mendez said.
Bexar County’s Powell said that frequently, legislative changes affect counties in less than obvious ways. During the Special Session on school finance last year, for example, an adjustment in the school funding formula created a disincentive for school districts to help fund Juvenile Justice Action Plans, a problem that Bexar County is addressing this year on behalf of all affected counties.
“We can’t expect them to be experts on how county government works,” Powell said. “Some proposals sound great, but when they’re explained, you get a better understanding of why, ultimately, it would be not in the taxpayers’ best interest.”
Alternatives to Taxes
Dallas County has the lowest tax rate in the state, 21 cents per $100 valuation. Assistant Administrator Craig Pardue thinks his county’s longstanding advocacy of user fees is a major reason. “Dallas County commissioners courts have been big proponents of fees for many years and that’s one of the reasons why our tax rate is so low. We’re big supporters of user fees paying for services so tax dollars don’t have to,” said Pardue, who can list dozens of fee authorization bills his county has initiated in Austin since he was hired in 1984. “It was the philosophy of commissioners court the day I started. That was my prime directive: to keep taxes down and figure out other ways to pay for things.”
Probably the most visible fees that Pardue has worked on include a fee on auto registrations to provide road and bridge funding and a courthouse security fee to fund x-ray machines and other protection for citizens and employees in the courthouse.
“When there was a shooting in the Tarrant County courthouse back in the ‘90s, everyone wanted us to do something but no one wanted us to raise taxes,” Pardue said. “That’s why we went after a fee.”
In each of the twelve Regular Sessions that Pardue has represented Dallas County’s interests, the county has pursued alternative revenue through fees, including a 9-1-1 fee to pay for street addressing, expanding the use of law library fees, a fee to pay for ignition locking devices required for convicted drunk drivers and a passport application fee, among others.
The Real Watchdogs
On Feb. 21, the House Committee on County Affairs held a hearing on HJR 61, which would provide local taxpayers protection from unfunded mandates from the state through a constitutional amendment. Testifying for the measure were 16 local officials and five staff lobbyists who were there at taxpayer expense. In addition to those who spoke on behalf of associations such as Polk County Judge John Thompson for the County Judges and Commissioners Association, Tarrant County Judge Glen Whitley for the Conference of Urban Counties and Brazos County District Clerk Marc Hamlin for the Texas Association of Counties, other county officials from throughout the state were there on their own accord, commissioners, judges and even constables from Comal, Fort Bend, Harris, Lubbock, Nacogdoches, Oldham, Tom Green and Travis counties. Notably absent were any spokespersons for Americans for Prosperity, Texas Public Policy Foundation, The Tower Institute or Texans for Fiscal Responsibility. Advocates for those organizations were withholding their testimony for April 18, when they spoke up for HJR 53, which would limit local revenue increases to the population growth and inflation, regardless of what local service needs citizens may expect to be addressed.
That pattern of testifying continued throughout the session – when a legislative committee was considering a measure that would increase local government costs, taxpayer-funded lobbyists were there, explaining to legislators how this change or that would harm local budgets. But the anti-tax crowd was nowhere to be seen. Absent were the organizations that testified for capping revenues.
Did Bexar County’s Powell notice anti-tax advocates standing shoulder-to-shoulder to fight bills that would impose unfunded mandates?
“It sure would be nice to say yes, but I can’t think of an example where that’s happened,” she said.
How about Mendez in Tarrant County?
“They have not shown up where we have common cause,” he said. “You would hope that they would recognize (the need to oppose unfunded mandates), but so far, they’ve been reluctant to see that side of county advocacy.”
Pardue in Dallas County said he doesn’t expect help from those who would cap local revenues. He cited as an example that caps would hurt local bond ratings, increasing borrowing costs. “These people don’t care about that because they can’t sell that as a sound bite to their membership and that’s how they make their money,” he said. “This is all about money. Nobody is out there working that hard for free. If there wasn’t a way to make money out of the deal, they wouldn’t be doing it.”
(Editor’s note: Just before this magazine went to press and just five weeks before the end of the legislative session, AFP announced its own unfunded mandate proposal, an excerpt from “model legislation” prepared by Colorado economist Barry Poulson. It recommended statutory (rather than constitutional) protection that would be tied to revenue caps on both state and local governments. Not drafted in bill form, the proposal to change Texas law refers to “the general assembly,” the term used to refer to the legislature in Colorado.)
Lawsuit Against TAC Legislative Efforts On Hold
Efforts by staff of the Texas chapter of Americans for Prosperity to restrict communications of the Texas Association of Counties have been on hold for three months since a Williamson County District Judge issued a preliminary opinion to halt what the plaintiffs call “taxpayer funded lobbying.” Still undecided is the question of how a court injunction might restrict TAC’s conduct under statutory law without interfering with the organization’s First Amendment rights.
Two paid staff members of the anti-government Americans for Prosperity organization joined with another Williamson County citizen in June 2005 to sue Williamson County for allegedly violating the statute that authorized the payment by counties of dues to TAC. Filing the suit were AFP State Director Peggy Venable and staff member Jan Brauner, along with fellow Williamson County resident Judy Morris.
The trio originally sued Williamson County to prevent it from paying dues to TAC on grounds that the authorizing statute provides that counties may only pay dues to a state association of counties if “neither the association or an employee of the association directly or indirectly influences or attempts to influence the outcome of any legislation pending before the Legislature, except that this subdivision does not prevent a person from providing information for a member of the Legislature or appearing before a legislative committee at the request of the committee or the member of the Legislature…” TAC was later added as a defendant in the suit.
Prior to the trial in November 2006, attorneys for both sides of the case acknowledged that TAC has engaged in a number of actions that communicate to county officials about the positive or negative effects of pending legislation and has urged officials to take positions for or against specific bills. The stipulated facts agreed to by both parties also stated that TAC does not contribute to legislators’ campaigns, participate in lobbysponsored events such as golf tournaments or provide “lavish entertainment, food or other benefits to legislators.”
In an opinion issued on Jan. 5 of this year, District Judge Ken Anderson wrote that in 2005, “TAC implemented a coordinated lobbying effort to defeat any measures that would lower appraisal caps. The effort included press releases, a draft anti-cap resolution sent to counties for their commissioners court to adopt and several emails which can best be described as ‘legislative alerts’ instructing members what specific actions to take to help defeat the various cap proposals.
“The ‘legislative alerts,’ complete with exclamation marks and capitalized phrases, exhort TAC members to go to war against caps,” Judge Anderson wrote. “There are specific instructions which range from capitol parking instruction, to where to obtain ‘talking points,’ to making sure your legislature (sic) knows you will be in the gallery to ‘watch the vote.’”
The judge did not agree with the legal justifications presented by Robert Heath, the attorney representing TAC and Williamson County.
To understand the meaning of the statutory language on influencing legislation, Heath said, one must examine the history of state regulation of lobbying by public entities as it existed in 1969, when the TAC statute was passed. The language in the TAC law, he noted, was almost identical to legislative “rider” language that was (and still is) routinely inserted in state appropriations bills, providing that state funds shall not be used for “influencing the outcome of any election, or the passage or defeat of any legislative measure.”
Many state agencies employ staff with specific responsibility to advocate for their agencies’ budgets as well as encourage or discourage bills that affect their operation.
The state “prohibition” on influencing legislation was already in place in 1964, Heath noted, when the Third Court of Appeals issued a ruling clearing the lobbying efforts of Jake Pickle, a member of the Texas Employment Commissioner (and later a Congressman). Specifically, the court acknowledged that Pickle directed state employees to participate in a series of meetings around the state to encourage changes in Texas’ employment laws and said that the campaign did not violate state law.
“Thus, at the time the Legislature enacted the TAC legislation it had a Third Court of Appeals holding that language virtually identical to the language it included in the TAC statute did not prohibit state employees and officers from drafting legislation, urging legencouraging members of the public to contact their senators and representatives to ask them to vote for the measure,” Heath argued. “Certainly, the Legislature knew what the language meant, and that meaning clearly authorizes the actions of TAC that are challenged in this lawsuit.”
Judge Anderson’s ruling indicated his intent to issue an injunction to prevent TAC from “any further ‘direct or indirect attempt’ to influence legislation.”
“The injunction will include specific prohibitions on ‘legislative alerts,’ other activities to coordinate efforts of members to influence legislation and issuing press releases designed to influence legislation,” Anderson wrote in his opinion.
As is common in civil lawsuits, the judge directed the plaintiff’s attorney to work with the defense side to draft a judgment that both parties agreed to and submit it to the court for its consideration.
Immediately, AFP began a public relations campaign bragging about its court victory and encouraged legislators to file similar legislation affecting other local government associations.
Two weeks after the initial opinion was released in January, Venable’s lawyers presented a draft judgment for Heath’s consideration.
Heath quickly pointed out how, as written, it violated the First Amendment, citing cases to show the violation. Eleven weeks later, the plaintiffs attorney finally submitted a proposal. At press time, no ruling had been issued.
Americans for Prosperity-Texas is a non-profit organization that would have the media believe that they are the leaders of 16,000 Texans who are demanding revenue caps on local governments and various other ways of reducing government. When AFP-Texas State Director Peggy Venable or Operations Manager Jan Brauner issues a press release, it is not uncommon for them to characterize the group as a “grassroots” organization committed to less government. To hear them tell it, thousands of Texans are organized under AFP’s umbrella.
But an examination of the Texas group’s background and tactics reveals that in fact, their press releases are not necessarily the consensus of their “members” so much as the calculated political propaganda of two ladies in a downtown Austin office building who are the well-paid agents of a Washington front group that has a history of promoting the political interests of corporate contributors that have given them millions of dollars over the years.
Not that there aren’t thousands of Texans concerned about increasing property appraisals in a hot real estate market, but a closeup look at who’s behind Americans for Prosperity and similar antigovernment foundations in Austin suggests that rather than being the “grassroots” advocates they claim to be, instead they are more akin to “Astroturf” – fake grassroots. Consider the organization’s history.
Americans for Prosperity- Texas is the local branch of the national Americans for Prosperity organization. The national AFP group was created in 2004 after the breakup of the wellknown Citizens for a Sound Economy (CSE) into two groups – AFP and FreedomWorks, which is headed by former Texas Congressman Dick Armey. AFP’s current directors, and many of the employees (including Venable) are the same as CSE’s former directors and employees. Review of the organizations’ income tax filings and media reports reveal that both CSE and AFP have long been supported by corporate interests that are likely to have an expectation that the organization’s employees will do their bidding under the guise of “grassroots activists.”
CSE was founded in 1984 with start-up funding from the Koch
Foundation, which derives its funding from Kansas-based Koch Industries.
With 30,000 employees in 50 countries, the pipeline company
is the largest privately held business in America. It is also a
major polluter – in the 1990s, an oil spill in South Texas prompted
the firm to agree to pay not only $45 million to settle two lawsuits
but also a $30 million fine, the largest civil penalty ever levied under
any federal environmental law at the time.
The Koch family is also well-known for its generosity in supporting libertarian causes that espouse a philosophy of eliminating government regulation – and government itself – wherever possible. David Koch, who ran for president on the Libertarian ticket in 1980, was a founding member of CSE and now serves on the AFP board. According to their filings with the Internal Revenue Service, the Koch Family Foundations gave away $9 million in 1991, according to the Center for Media and Democracy:
Numerous other large business interests have also bankrolled the CSE/AFP efforts. In 2000, the Washington Post reported that 85 percent of CSE’s funding came from major corporations – Amoco, Bell Atlantic, Citibank, General Electric, Johnson & Johnson, Phillip Morris and General Motors, among others. The Post said groups such as CSE “provide analyses, TV advertising, polling and academic studies that add an air of authority to corporate arguments – in many cases while maintaining the corporate donors’ anonymity.”
Examples were found by County Magazine in the massive tobacco company archives that were made public after the industry lost a classaction lawsuit .
“Thank you for the Lorillard Tobacco Company’s contribution of $100,000 to Citizens for a Sound Economy,” wrote CSE’s then-president Paul Beckner Oct. 13, 2000, to the tobacco firm that makes Kent and Newport cigarettes. “CSE will work on the ground in our state chapters across the country, and through volunteer networks in other states, to harness the power of our activists into a focused, free-market and limited government message.”
Also found in the tobacco archives are dozens of documents from Beckner and others associated with CSE in support of tobacco company interests – press releases, congressional testimony, scripts for radio ads and various studies.
In 2000, the liberal public interest research group Public Citizen reported that it obtained CSE internal documents revealing that in 1998, tobacco companies donated $1,124,050 to the foundation. “Internal budget documents obtained by Public Citizen detail $13.9 million in donations in 1998. Those donations account for 85 percent of CSE’s 1998 revenues of $16.2 million, as reported on the organization’s IRS’ filings,” Public Citizen reported. “While CSE purports to be a grassroots voice of consumers, it is, more accurately, a front group for corporate lobbying interests that refuses to reveal its funding sources.”
In recent years, however, the AFP organization’s funding has dropped significantly, according to a County Magazine review of their tax statements in recent years. As recently as 1999, CSE reported contributions of $7.3 million. Contributions since then have totaled:
• 2000 $6.5 million (CSE Foundation); • 2001 $4.4 million (CSE Foundation); • 2002 3.8 million (CSE Foundation); • 2003 $2.4 million (AFP Foundation); and • 2004 $2 million (AFP Foundation and AFP). The IRS documents indicated that in 2004, Texas’ Venable was AFP Foundation’s highest paid state director, at $89,850. Apparently, the organization is also experiencing a declining membership, although from scouring their Website, it is impossible to tell what level of commitment or annual dues is necessary for a person to qualify as a member.
In a 2002 press release issued by Armey’s FreedomWorks group, Venable was identified as “director of “48,000-member Texas Citizens for a Sound Economy” By 2005, however, in a letter to Gov. Rick Perry last year asking him to veto Senate Bill 18 (the truth in taxation measure that apparently failed to gain their support because it was a reform other than tax caps), Venable stated AFP-Texas represented 22,000 members. And then in a letter to Perry last year asking him to appoint a commission to study property taxes, she said they had 16,000 members. A press release last June from the Ohio chapter claims 200,000 AFP members nationwide. But if the membership totals and fundraising seem to be in the dumps, it’s not for lack of trying.
In March, AFP-Texas conducted their second annual “Texas Taxpayer Summit” at the plush Stephen F. Austin Hotel in Downtown Austin. A promotional flyer revealed that their target audience was Big Money, not the smalltime taxpayers to which their press releases often refer. A fundraising flyer asked potential attendees to purchase “donor packages ranging from $500 (“Patron”) up to $100,000 (“President’s Cabinet”). Extra advantages afforded to those who make the largest donations include “exclusive briefings” and “private strategy meeting with (AFP) President and members of board of directors.”
Last July, the Washington Post reported on an arrangement in 2001 in which people who thought they were signing up for tax-free medical savings accounts were joining CSE without knowing it. The paper reported that brokers for Medical Savings Insurance Co. sold high-deductible policies and tax free savings plans at a group discount to buyers who were unwittingly joining CSE, adding that the arrangement “has netted more than $638,000 and about 16,000 members through the sale of insurance policies.
“Critics see the effort as a way for political groups to inflate their membership rosters – and their bottom lines – by taking dues from people with no interest in the groups’ politics,” the Post stated.
Determining Lobby Expenses Too Difficult for Anti-Tax Group
Americans for Prosperity has published dozens of press releases and Internet posting over the past two years complaining about lobbying efforts by local governments.
In March, Operations Manager Jan Brauner complained to state legislators about the difficulty she had in interpreting the lobbying reports on file at the Texas Ethics Commission. Difficulty, indeed.
In 2005, AFP released to the press a 90-page study that alleged that as much as $52 million may have been spent the prior year by various public entity lobbyists. They acknowledged that the total may be high, since Ethics Commission reporting categories are broad. Lobbyists do not reveal their exact compensation but must identify that a contract was for more than $50,000 but less than $100,000, for example. The study did not calculate the low end of the range.
The document includes page after page of filings by not only counties, cities and school districts but also by transit and port authorities as well as dozens of special districts – water districts, utility districts and reclamation districts, for example.
But it erroneously listed more than 120 private companies or organizations that could easily have been identified as ineligible for the list, including developers, health care networks, Native American tribes and water companies. Examples include
• Ross Perot’s land development arm, Hillwood Development;
• T. Boone Pickens water firm, Mesa Water Inc.;
• American Cancer Society;
• Blue Cross Blue Shield of Texas,
• Texas Farm Bureau;
• Greater Dallas Crime Commission;
• American Diabetes Association;
• Municipal Service Bureau; and among others,
• Alabama-Coushatta Tribe of Texas, a group that has sued the
public relations firm that was co-founded by AFP’s national
president for their role in a widely known ethics scandal.
“If a local government group had prepared such an error-ridden report, Ms. Venable would be jumping up and down with scathing criticism,” Elna Christopher, director of Media Relations at TAC, said in a press release that pointed out the numerous errors. “But she apparently feels it’s okay for her to inaccurately report the facts when trying to push her own political agenda.”