Texas Patriots PAC Voter's Guide to the Nov. 5 TX Constitutional Amendments Election

The Texas Patriots PAC offers the following voting recommendations for the November 5, 2013 propositions:

Proposition 1 - Property tax exemption for spouses of service members killed in action.

RECOMMEND VOTING YES. Texas already grants this exemption to disabled veterans. The same benefit should be extended to widows of US armed service members who are killed in action.

Proposition 2 – Eliminate the State Medical Education Board and State Education Fund.

RECOMMEND VOTING YES. We support limited government. This board and the fund it administered were never implemented and should be eliminated.

Proposition 3 – Special property tax exemption for aircraft parts.

RECOMMEND VOTING NO. Texas is one of the few states that levy a property tax on inventory. This proposition benefits one specific company; pimping our Constitution for one company is wrong. If the property tax is inhibiting business development in Texas, which we suspect it is, it should be repealed for all companies, not just for one. What is the difference between this and Obama granting exemptions from ObamaCare to select businesses and governmental bodies?

Proposition 4 – Property tax exemption on homes donated to veterans by charities.

RECOMMEND VOTING YES. Disabled veterans need all the help we can give them.

Proposition 5 – Expands rules governing reverse mortgage loans.

RECOMMEND VOTING YES. Texas Patriots PAC is not a fan of reverse mortgages because they are a very expensive way for seniors to borrow money against their home equity. But we believe that individuals should be free to make their own decision, and that they should be responsible and accountable for those decisions. Texas voters changed the Constitution in 1977 to permit reverse mortgages. This is the fourth amendment to the Constitution relating to reverse mortgages since then. The changes made by this proposition would enable Texans to qualify for a U.S. Department of Housing and Urban Development program that was established in 2009. The amendment, therefore, would give those who wish to use a reverse mortgage more options. What we like most about this amendment is that it would also require pre-loan counseling on the advisability of reverse mortgages and the other financial options available. It also would improve lender notice requirements.

Proposition 6 – Raids $2 billion from Rainy Day Fund for water projects.

RECOMMEND VOTING NO. In 2011, Texas voters approved giving the Water Board authority to borrow up to $6 billion on an ongoing basis to help fund critical water projects. The legislature never provided funds to pay interest on this borrowing, and the water projects being considered for funding by the Water Board apparently cannot pay the interest either, at least not during the construction period. So no water projects have been funded using this borrowing facility.

If water is a core function of government, the funding should come from General Revenues (GR). Instead, the 83rd legislative session used GR for all kinds of other expenditures (much of which being for non-core government functions) and claimed, because of the emergency they themselves had partially created, that Texas must raid the rainy day fund primarily to support economic development.

Texas Patriots PAC has five fundamental problems supporting Proposition 6:

1. First, supporting this proposition would reward incompetent behavior by the legislature and encourage more of the same in the future. Core functions of government should be funded from GR. If Texans support this proposition, we will be establishing a precedent for the legislature to raid the Rainy Day Fund to fund expenditures that should be funded out of GR. This is a bad precedent.

2. Second, we are skeptical that this proposition will actually fix Texas’ water problems. The 82nd legislative session in 2011 came up with Proposition 2, which was presented to the voters as the solution to the state’s water problems. As noted above, the $6 billion borrowings authorized when Texans approved Proposition 2 has done nothing to solve the water problem. Now the legislature is back for more; and none of the politicians are even mentioning the 82nd session’s water “fix,” which didn’t work. Does this give anyone much comfort that Proposition 6 will solve our water problems?

3. Third, does Proposition 6 reduce the Rainy Day Fund too much? Proposition 6 drains the Rainy Day Fund of $2 billion. Can we afford to reduce the Rainy Day Fund by this amount? No one knows, because there has been almost no analysis by the legislature about how much is needed in the Rainy Day Fund to protect Texas from unexpected spending requirements. It is important for voters to send the legislature a clear message that before they start raiding our security fund, they must first assess what amount Texas needs to preserve in the Rainy Day Fund to protect our state from the unexpected.

4. Fourth, exacerbating the risk of not maintaining an adequate Rainy Day Fund is the fact that the fund’s revenues are entirely linked to oil and gas prices. The legislature is acting as if the revenues into the fund are an annuity. Anyone who understands the industry knows oil and gas prices are extremely volatile (anyone remember 1986?). Present income levels of the fund are not a prediction of the future. The legislature needs realistic assumptions on how quickly the Rainy Day Fund will be replenished.

5. Fifth, we are extremely uncomfortable that there are not adequate procedures and guidelines in place to ensure that the raided funds will be used on economically viable projects that have reasonable prospects of repaying the loans. Proposition 6 proposes that the Water Board essentially functions as an investment bank. Investment banking is a very sophisticated business; where success depends on astute analysis of project completion and economic viability risks, minimizing funding costs and establishing comprehensive repayment terms that minimize the risk to Texas that the loans will not be repaid and maximize Texas’ security interest in the project until the loans are repaid. Until we see: 1) transparent guidelines and procedures in place to ensure that the Water Board’s management and board will be composed of investment banking experts instead of political appointees; and 2) detailed procedures and guidelines to ensure that our funds are spent only on economically viable projects that will be capable of repaying the loans received from Texas (instead of squandered on politically expedient projects), we cannot support putting any more taxpayer resources into the Water Board.

Proposition 7 – Permit municipalities to fill vacancies rather than hold special elections.

RECOMMEND VOTING NO. Elections are the only means voters have to hold those who represent them accountable. Allowing elected officials to fill vacancies, even if it is only for a short period of time, is akin to letting the fox into the henhouse. Yes, it is expensive to hold short term special elections. But a lot of damage can be made by unaccountable officials in a short time. Representative government is not inexpensive to maintain; but this expense is more than worth the potential damage that might result by allowing this proposition to pass.

Proposition 8 – Allow Hidalgo County to create a viable hospital district.

RECOMMEND VOTING YES. The reason this proposition is needed should be a case study on the unintended consequences of trying to get special treatment. Hidalgo County does not have a hospital district because their specially arranged current cap on the district’s tax rate is too low to support the cost of such a district. This proposition would raise the cap to the level applied to all other counties in Texas and allow the voters in Hidalgo County to vote on whether to pay a higher tax rate to enable the county to support a hospital district. The voters should have the right to make such a decision.

Proposition 9 - Greater flexibility to punish judges for minor wrongdoing

RECOMMEND VOTING YES. This proposition gives the State Commission on Judicial Conduct more ways of addressing lesser judicial flaws than presently allowed. The Commission should have a wider array of sanctions to apply than they currently have.


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