Response to Liberty ISD Tax Ratification Election EDITORIAL

LIBERTY, Septmeber 29, 2013 - At 3:35 AM on Sunday, September 19, 2013 i-dineout.com received a e-mail response from an administrator with the Liberty Independent School District who explained in great detail what the Liberty ISD Tax Ratification Election is all about.  We regret that we cannot share that with you, our readers, due to the following disclosure statement contained in the e-mail…

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We can share with you our reply to the administrator’s e-mail response.

Below is our reply…

Thanks for your detailed response. I understand it. That’s exactly the way it was explained to me in more general and less specific terms.

The problem with so many people is that they are myopic. There own concerns are the only thing that matter. Most never step back and look at the entire forest as whole always concentrating only on there own two or three little trees.


As a person who broadly serves the public I have to look at the entire big picture.

The reason the district is subject to a roll back election even though you intend to keep the tax rate the same is because, the way the LAW and I look at it, and there are two ways to increase taxes. One, by raising the tax rates the other by increase property tax appraisals.

Both raise taxes despite what school board members, city council men or county commissioners claim.

This is why you can keep the tax rate the same and still be subject to a roll back election.

To avoid being subject to a roll back election, the tax rate would have to be lowered sufficiently to offset the increased income obtained though property tax appraisal increases.

To avoid a tax increase a taxing entity would have to lower the tax rate when appraisals rise dramatically.

Without tax rates being increased every year citizens must write bigger checks for property taxes. That’s a tax increase and that’s why the laws governing tax rollbacks are written as they are.

The way state law looks at it and the way taxpayers look at it, it’s a tax increase whether the tax rate goes up or not. You’re just paying more and more taxes every year.

For a person or business within the City of Liberty there will soon be significant tax increases both from the City of Liberty, possibly the school district and the county as well.

But debt is the district’s problem and it’s going on Statewide. The public debt owed by local government, school districts and other small local taxing entities statewide has grown from $86.7 billion in 2001 to $192.7 billion dollars in 2011, a period of only ten years. It’s alarming.

Texas Comptroller Susan Combs has a very good grasp on the situation and makes the following recommendations to help control the amount of debt school districts and other taxing entities get the taxpayers into by taking on way too much debt.

Here are Comptroller Combs' recommendations

New debt often is approved by a small percentage of voters, who must make vital decisions about new debt with little information about its implications. And a large share of local debt—totaling $12.7 billion since 2005—is issued through “certificates of obligation,” generally, without any voter approval.

Furthermore, it is difficult for taxpayers to learn the full scope of debt in their area. While some local debt is reported to the Texas Bond Review Board, information not reported includes bank loans and some lease-purchase arrangements. Often, detailed research in budget and financial reports is needed to gather this additional detail.

You have a right to a full and complete disclosure of public debt. All government entities should reveal all debt obligations on a public website, including the debt’s original stated purpose, the total amount of debt authorized, the issued and unissued amounts of authorized debt, spent and unspent amounts of issued debt and the per capita debt burden on taxpayers. Any ballot for new debt should be accompanied by a similar accounting.

You have a right to approve debt issued in your name. Texas should significantly narrow public governments’ authority to issue debt without voter approval, and revise the petition process to make it easier for taxpayers to compel a public vote on proposed debt.

Would the Liberty ISD be willing to follow these recommendations? I doubt it.
Let’s look at the local situation as a whole.

The City of Liberty is in a similar situation to the school district. They want to keep the tax rate the same. But property appraisals have increased this year in the city and should they keep the same tax rate and not lower it, they will be subject to a roll back election.

They will go through the legally prescribed process of holding roll back hearings and more and in the end will keep the tax rate the same, claim they didn’t raise taxes and taxpayers will pay more in property taxes than in the previous year.

The City wants more money and they will get more money out of taxpayer’s pockets.

The situation in the County is even more dire. They’ve already had to raise taxes to fund the deficit spending in the budget they just pasted. Furthermore in four years they reduced a budget fund balance of 18 million dollars to 6.5 million spending 3 or 4 million dollars more each year for four years.
Their balance is now less than is required by bonding companies, which is 3 months of total expenses or one quarter of your annual budget.

Since going through Hurricane Rita and Hurricane Ike, the City of Liberty does not have the recommended fund balance required by bonding companies either, and in fact could not pay their vendors after Hurricane Ike for periods of 60 days. They’ve not been able to recoup or build back the necessary fund balance since and have gone into debt for all sorts of things since that time.
If this continues next year Liberty County will have to have a tax increase to raise 3 to 4 million dollars to fund operations or borrow and go into debt for the same amount because there is no fund balance left for them to keep dipping into every year to fund the spending called for in the budgets they pass.

The taxpayers in Liberty are now in the situation where every taxing entity you can think of wants a tax increase and feels they must have more money and will most likely get it.

The problem is an incredible appetite on the part of elected officials and administrators for spending and debt that their seems no way to satisfy.
This is why Texas Comptroller Susan Combs made the recommendations she did.

With all three of the largest taxing entities for citizens in the City of Liberty demanding a tax increase it’s just a bad time to be a taxpayer in Liberty.

Allen Youngblood

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