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Cities & Counties Are Left Holding the Bag When State Money Dwindles

Graphic by the Texas Tribune
Campaign promises of no new taxes at the state level, don't address infrastructure needs in municipalities.

Lower taxes and less government spending are hallmarks of Texas Republican leadership, and any candidate hoping to get through a GOP primary in Texas.

But making cuts at the state level hasn't actually stopped some spending, or the need to raise revenues to pay for infrastructure projects that, without state and federal money, counties and municipalities can't shoulder on their own.

A few years back, people in Pflugerville were excited about the opening of State Highway 45. The congestion-free toll road and its connection to State Highway 130 to the East, would give people quicker access to a major road.

City officials like Mayor Pro-Tem Victor Gonzales hoped the road would provide economic development and tax revenue along its exits. Then the Texas Department of Transportation, which was supervising the construction, came calling.

“They asked us to contribute $6 million to the opening of a ramp which was already there," Gonzales says. "And all they had to do was just clear some areas and make it accessible to the exiting traffic.”

That’s a story that’s become more and more common across the state according to Bennett Sandlin. He heads up the Texas Municipal League, a lobby group for municipalities of all sizes.

“I think a lot of people perceive that the state builds state highways with state tax dollars. Not entirely true anymore," Sandlin says. "Cities and counties are being expected to pitch in money, donate right-of-way, in some cases do both of those, in order to get projects built.”

A proposed constitutional amendment on this November's ballot would send some new money to the Texas Department of Transportation, but really only enough to maintain current roads, not build new ones.

Sandlin says the state has more or less decided to not fund new state road construction, but that doesn’t mean cities don’t need the roads or new transit systems. Which is why local governments have increased spending and, in some cases, local debt.

“So you’re really having a case of tax dollars being funneled upwards from the cities to the state in these areas to do the state’s job. That’s what I mean by sort of the new reality of infrastructure funding," Sandlin says.

Back in Pflugerville, Mayor Pro-Tem Gonzales says the $6 million ramp was a bitter pill to swallow. But the city was given 30 years to pay it off. And instead of issuing debt, it’s been able to budget $200,000 a year to pay off TX-DOT. Gonzales says in the end, the town benefits from having the ramp.

“It did provide a reasonable exit, practical exit for 45 traffic coming into Pflugerville and our residents in the community. While a big investment, it was just something we felt like we needed to make," Gonzales says.

And those local investments go beyond transportation. From state universities asking to raise tuition to make up for less state funding, to local public schools raising property taxes, to city and county governments bracing to make up the costs of Texas not expanding Medicaid under the Affordable Care Act.

Bee Moorhead runs Texas Impact, a statewide religious grassroots organization that often focuses on healthcare and services for poor Texans. According to a widget on her group's website the state has lost "more than $2 billion in Medicaid funding so far...on our way to losing about $100 billion of federal funding over 10 years."

"When we don't take that Medicaid money and we have to spend those local taxes on healthcare services for somebody that could have been covered otherwise under federal dollars," Moorhead says. "Well it's not as if those federal dollars are now available to pay for parks or schools or roads or jail or anything like that. They're just gone out of our county resources."

And with tax and budget cuts near the top of this fall's campaign promises, Moorhead says, local governments will be skittish to make any long term investments in their community. Because they won't know if or when the state will cut another funding stream and push the costs down to the local level.

"In an interpersonal relationship, when the character in a position of power exercises that power in a capricious way and keeps the other character off-balance so that they're not able to plan, we describe that as abusive," Moorhead says.

The Municipal League’s Bennett Sandlin says it's probably too late to reverse the trend of traditionally state-funded projects asking for some or all of the money to come from local communities.

But he and the league's president, Fort Worth City Councilman Jungus Jordan, say if the state wants local governments to get things done, don't get in the way.

"Threats of appraisal caps, threats of revenue caps…other things. And then they turn around and don't fund streets and roads and interstate highways and mobility requirements," Jordan says. "But they want to pass the responsibility down to the cities to make sure we're doing those things."

Jordan says nobody wants to raise taxes. But somebody's got to build the streets, pay the police, and build the schools.

Ben Philpott is the Managing Editor for KUT. Got a tip? Email him at Follow him on Twitter @BenPhilpottKUT.
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