METROPLEX MAYORS SEND STATE BUDGET LETTER TO LEGISLATIVE LEADERS

The mayors of Arlington, Dallas, and Fort Worth sent the following letter to state legislative leaders expressing their concerns with the state budget.  It is reprinted here with permission.

March 30, 2011

Governor Rick Perry
Lt. Governor David Dewhurst
Speaker Joe Straus

Dear Governor Perry, Lt. Governor Dewhurst and Speaker Straus:

As mayors of major Texas cities, we understand the challenge of balancing the budget in these difficult economic times. Property values in Dallas, Fort Worth and Arlington have fallen dramatically, as have sales tax revenues. Even with these challenges, we’ve balanced our budgets, and now we ask that you not pass the buck as you balance yours.

Our cities have undergone a painful process as we have been forced into difficult, unpopular decisions to make ends meet. For example, we have eliminated between 6% to 18% of our civilian workforce and reduced the salaries of remaining employees. We have consolidated departments and cut our management support structure. Since 2008, we have cut library services, hours and activities at public pools and parks, and support for cultural programs. We have tapped into our fund balances and other dedicated funds. Our cities have found creative ways to deliver services, such as consolidating public health services with the county, partnering with the private sector, and outsourcing operations. Even with these efforts, we have been forced to reduce some of our most basic services, such as street maintenance and code compliance.

Though only one state in the country provides less financial assistance to cities than Texas, we are not requesting such assistance. We ask only that the State balance its budget in a transparent and thoughtful manner that does not pass the cost along to cities in the form of unfunded mandates, hidden fees, or increased expropriation of city-generated revenues.

We worry that the State is balancing its budget at the expense of cities. Every dollar that the State takes from cities is one less dollar spent on important local services, such as public safety and infrastructure, upon which our businesses and economy depend. There is a troubling contradiction when a state complains that the federal government inappropriately passes down expenses and program responsibilities, while that state itself operates in precisely the same way with respect to its own local governments.

For example, the State Comptroller of Texas keeps 2% of all city sales tax revenues to cover ‘costs of administration’. In most other states, the administrative cost is capped at 1% or less. In Texas, this 2% totals more than $100 million of taxes that were approved by local referendum for police officers, street repairs, water systems, and safe neighborhoods.

In 2009, the State once again required cities to act as its tax collector to fund the Texas Commission on Environmental Quality by increasing fees on cities by more than $20 million. Local contribution to the construction and maintenance of the state highway system has increased 44% since 2007. Additionally, the State has demanded a greater share of locally collected traffic fines, which decreases the amount available for cities to fund our criminal justice system.

In the current Legislative Session, the State is proposing even more drastic ways to balance its budget to the detriment of the cities. The cost savings proposals include threats to sweep revenues generated by the cities, such as the TABC tax, into the State’s coffers. Such transfers of revenue from the cities to the State force reductions in local services and possible increases in local taxes to compensate for the lost revenue. Every session, cities face attacks on local control through legislation that imposes restraints on the ability to determine revenue levels even though, from December 2008 to December 2009, combined population growth and inflation was at 4.6 percent, more than twice as much as growth in city revenue.

Budget cuts are necessary – no one will disagree with the need to streamline programs and eliminate duplicative or ineffective services. However, to avoid devastating cuts to public safety services, infrastructure and public education, the State should look at other options to balance its budget. For example, in the ‘Tax Exemptions & Tax Incidence” Report dated February 2011, the Comptroller shows that exemptions from the State’s sales, franchise, gasoline, motor vehicle sales and property taxes total $38.2 Billion — more than the amount needed to balance the budget for the next biennium. Eliminating just some of those exemptions will broaden the tax base while providing equity in taxation, and remove a taxing structure that favors some over others.

Our plea is that you stop the trend of delegating your fiscal responsibilities onto the next level of government. Be accountable for your own decisions, Allow your local elected officials to be accountable for theirs. Govern Texas the way Texans deserve.

Sincerely,

Dwaine Caraway
Mayor, City of Dallas
Robert N. Cluck, M.D.
Mayor, City of Arlington
Mike Moncrief
Mayor, City of Fort Worth

TML member cities may use the material herein for any purpose.
No other person or entity may reproduce, duplicate, or distribute any part of this document without the written authorization of the
Texas Municipal League.

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