Friday, August 23, 2013

Legal Issues Behind Early to Rise

UPDATED: 8/24/13

 The Early to Rise Initiative is being reported by many as a basic ballot initiative and anyone questioning it is simply a crazy right winger.

But not much is being said about all the legal issues involved that made County Judge Ed Emmett call this a “fiasco” and has the County Attorney and Senator Dan Patrick asking the Texas Attorney General for a legal ruling BEFORE it goes on the ballot this November.

So I am going to cover just a FEW of the legal questions in this case. I can’t write about them all because nobody would ever get to the end.

After you read them, you can decide if Judge Emmett is against pre-k or simply trying to follow the letter of the law in a very confusing case.

But first, you may need a brief history:

In the late 1800s, the Texas Legislature put counties in charge of operating local public free schools through the election of County School Trustees.

In the early 1900s, Texas established a new system of Independent School Districts (ISDs)  - the system we have today.  “Independent” meaning “independent from county school control.”

In 1937, Harris County taxpayers passed a “county-wide school equalization tax” with a maximum rate of  of 1 cent per $100 property value. The following is the law used and the ballot wording”:

hcde 1937 law wording hcde ballot wording 1937
According to a 1939 ruling from the Texas Attorney General, the proceeds of the county-wide school equalization tax were to be distributed to the public school districts of the county on the same basis as the state  distribution – “equality of distribution… based on scholastic (student) population.”

It was a tax separate from the ISD property taxes and the County School Trustees  were responsible for the distribution of the equalization funds to the school districts.

By the 1960s, ALL students in Harris County were zoned to ISDs, but our county school board refused to close.

The Legislature abolished all state funding for county school  boards in the 1970s, but allowed them to remain open using local equalization tax dollars if desired. Harris County School Trustees chose to stay.

In 1991, the Harris County School Trustees filed a Certificate of Assumed Name to operate under the dba of HCDE-  Harris County Department of Education -  even though it is a separate political subdivision of the State of Texas and is not actually  a “department” of the county government.   The two are separate governmental entities. Thus, the dba confuses many people.

hcde assumed name 1991

In 1993, the Texas school funding system was found unconstitutional. The Legislature adopted the "Robin Hood Plan" which repealed the laws allowing counties to adopt new school equalization taxes and TEC 18.31 which allowed counties of over 500,000 to increase their equalization tax rate.

By 1995, all counties in Texas had closed their County School Boards -  except Harris and Dallas Counties. The Legislature removed Chapters 17 and 18 from the Texas Education Code  – the laws governing county schools – because Texas no longer operated county school systems.

But again, the Legislature allowed the Dallas and Harris County school boards to remain open, under the repealed laws as they existed on May 1, 1995,  and under any new law that “does not conflict” with the former laws.
(You can read the former laws received directly from HCDE via a public information request here)

This is why this Early to Rise Initiative is such a confusing mess and causing so many legal issues.

What are some of these legal issues?

Question #1: Can citizens file a petition for a tax election using a law that was removed from the statute in 1995?

Because the Legislature did not add any wording about future tax elections when they allowed HCDE to remain open after they repealed the laws governing it, the correct answer is up for grabs.

Also, the statute does not outline the process for an “additional” taxation election, but it doesn't specifically forbid it either.

But because TEC 18.31, which did allow Harris County residents to petition to raise the equalization tax rate was repealed in 1993, it appears the intent of the law was to cap the amount at 1993 levels. 

So this tax election may or may not even be legal.

Question #2: If they can, then what wording must be on the ballot?

The former law dictates the ballot wording to be “substantially as follows”:
For county tax not exceeding one cent on the $100 valuation”
“Against county tax not exceeding one cent on the $100 valuation

But the Early to Rise petition reads:

“For Harris County Department of Education additional tax not exceeding one(1) cent on the $100 valuation to be used solely and exclusively for early childhood education purposes.” 
“Against Harris County Department of Education additional tax not exceeding one(1) cent on the $100 valuation to be used solely and exclusively for early childhood education purposes.”

Should the Judge use one of those or should it read:
“For or Against an additional county equalization tax not   exceeding one cent on the $100 valuation?”
Or maybe the old tax and the new tax should be added together to read:

“For or Against a county equalization tax not to exceed two cents on the $100 valuation.”
So which shall it be?

If we are a nation of laws, it will be the one dictated by law.

If we are a nation that lets people change laws with simple petitions, it will be worded as in the petition – and I will start a petition to stop ObamaCare  tomorrow!

Question #3: If the ballot language is the same as the petition, can an assumed name for a governmental taxing authority legally be used on a ballot?

Again, statute dictates the legal name of the Harris County School Trustees. Can their dba – HCDE - legally be used on a ballot?

If it can, then why does the Texas Railroad Commission require an act of the Legislature to legally change its name? Why can’t it simply file a Certificate of Assumed Name as HCDE has done and make up any name it likes – such as the Texas Commission of Oil and Gas?

Question #4: Can a completely new type of property tax be created by simple petition, or does it need to originate in the Texas Legislature?

The former statute dictates the use of the equalization tax. It is to be used for the maintenance of the public free schools of the county. And Texas statute defines the age of students who may participate in Texas K-12 public free schools.

The equalization tax is to be distributed to the ISDs of the county according to their average daily attendance.

Therefore, it can be argued that the tax to support pre-k outside of the public school system, is a totally new type of tax. It is not an equalization tax which is the only tax HCDE is allowed by law to levy.

Some would argue that the law allows County School Trustees to do anything within the law to support education in the county. Thus, they can spend the funds on pre-k in private homes and day care centers because it may improve public school performance in the long run.

Yes, they can do anything “within the law” to promote education in the county, but others would argue that “within the law” limits them to distributing tax funds according to the letter of the law – to ISDs within the county. With other funds, like grants and fees, they can be more flexible.

And these are just a few of the questions.   We aren’t even touching on the legal concerns involved in the deal in which HCDE will turn over  the $300 million in new tax funds to a private non-profit to distribute over the next 10 years.
(You can read about the agreement on Big Jolly Politics here)

Now do you see why Judge Emmett called this a “fiasco”?

Now do you see why he asked for a legal ruling by the Attorney General BEFORE the ballot is approved?

It has nothing to do with supporting pre-k. It has to do with using the proper laws and taxing authority to make sure everything is done within the framework of the law.

Because if it is not, it will get torn up in the courts by whichever side loses.

So, if the Attorney General does not rule on this before August 26th, I would not like to be in Judge Emmett’s shoes. No matter what he does, lawsuits are eminent.

The Early to Rise group already stated publicly in an HCDE meeting that they will file a lawsuit  if their petition is not on the ballot.

If it passes with the petition language and HCDE signs the contract to give $30 million per year to the private non-profit, my guess is we will see a conservative lawsuit against HCDE.

The Early to Rise group claimed that if HCDE does not agree to their partnership deal, they will pull their petition. So my guess is if it passes and HCDE does not sign the contract to give them the $30 million per year, they will sue HCDE to recoup the $100,000s they spent on the signatures and the election.

And as we have seen over the past few of years, HCDE won’t want to be left out. They will have to sue someone over something.

And  guess who will get stuck with the legal bills?

The TAXPAYERS, or course.

So, not only is this all a “fiasco”, the only ones who are going to come out ahead are the LAWYERS.

You can read the brief our Harris County Attorney sent to the Attorney General and the ruling request from Senator Dan Patrick  here

Colleen Vera


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