Proposition One

One thing is certain in Houston: when it rains, it pours. At the polls on November 2, that old adage will take on a special meaning as citizens face a decision to approve funding for drainage and infrastructure improvements, or to say “no” to what some critics say amounts to a “Rain Tax,” similar to the one defeated by petition in 2003.

According to Mayor Annise Parker’s detailed plan, released September 29, Proposition 1 on the ballot would create a “pay-as-you-go” fund, dedicated to improving and maintaining Houston’s streets and drainage system, with a calculated contribution from every commercial, residential and instituti- onal property holder. The fund –– along with developer impact fees, remittances from Metro and an 11.8-cent ad valorem property tax already dedicated to street and drainage projects –– would cover capital improvements, ongoing maintenance and compliance with Federal and State Water Quality Laws through 2032. 

The proposed drainage fee, based on square footage of total “hard areas” within a residential or commercial property, would be fixed for 10 years and require a two-thirds vote by City Council to raise the rate. For properties served by curb-and-gutter streets, the fee would be calculated at $.32 per square foot of total “hard areas,” defined as impervious paved surfaces and the concrete slab forming the footprint of a building. For properties along “open-ditch” streets, the fee would be calculated at $.26 per square foot. 

The plan details the example of a typical homeowner with a 5,000-square-foot lot encompassing a 1,900-square-foot house and garage. This homeowner would pay either $4.12 or $5.07 a month, depending on the type of drainage system within the neighborhood, or an estimated an annual fee of $49.44 or $60.84.

“Hard areas” for each property would be calculated using Harris County Appraisal District data, Geographical Information System (GIS) data and other publicly available mapping systems, such as Google Earth. An online verification system and an appeals process through a neutral body would be implemented to resolve disputed calculations. The proposed plan (detailed on www.voteforprop1.com), has garnered the support of a number of neighborhood, civic and homeowners’ associations, and an endorsement from The Houston Chronicle, as well as Councilmembers Melissa Noriega and Stephen Costello and Harris County Constable Victor Trevino.

Opponents of Proposition 1 (www.stopprop1.com) point to a number of flaws, including the lack of exemptions for school districts, churches and charitable organizations. They claim the proposed “Rain Tax” would cost those organizations $520 per acre, or potentially $7,000 to $20,000 a year. “This is effectively a property tax –– except in name only,” said former Harris County Tax Assessor Paul Bettencourt. “And, unlike most property taxes where charities, schools, churches and even homeowners over 65 have an exemption, or at least, great protection, in this case they have none.”

“Proponents have been calling it a ‘lock box’ because all the money going into it will go for drainage. The problem is that it’s a lock box without a top because there is no limit to the fee they can charge,” he said. “This is the worst way to write a fee or a new tax. I think taxpayers should have some definition of what the maximum charge is. It’s as wide open a blank check as you can ask for.”

“The need for improved drainage will always be here in Houston, but this is a very flawed vehicle and a very expensive one,” he said. “What I strenuously object to is that a lot of this is already being handled in the property tax collections and now it’s going to be shifted to a fee, which means that no one is going to offer a discount on the property tax rate.” And City Hall has already raised water rates –– an 18 percent rate hike is already on the books, Bettencourt added.  “In a recession, why are we not cutting costs, instead of raising taxes?” he asked. “We’re going in the wrong direction.”

Bettencourt continued, “HISD and Spring Branch are Robin Hood school districts. If you tax them for x-number of millions of dollars, they can’t get the money from the state or any more from the taxpayer. They’re going to have to lay off teachers, at minimum. They have no choice. It really is preposterously bad public policy to be putting charities, churches and school districts into a tax like this.

”The plan’s exemptions are in compliance with the current state law, said Council Member Noriega who added that she would be in favor of considering other exemptions. Moreover, this is an opportunity for the City to fund improvements to the infrastructure with a “pay-as-you-go” plan,  instead of borrowing, she said. “It represents a step forward instead of doing nothing at all. 

“I don’t think that it’s perfect. I don’t think we’ve fleshed out all the details. I think if we have the money to address infrastructure — whether it’s enough money or not — we need to do what we say we’re going to do,” she said. “This may be the most important issue to come up in my time. Every time it rains, Houston is going under water, and every time someone pours a driveway or a patio, it gets worse.

“If mothers going to get their kids in the afternoons can’t get there because of the water, or folks can’t get to their offices, or if people can’t get in and out of our airports, then we can’t function as a city that makes people money and as a business center and international city,” she added. 

If Proposition 1 is approved by voters, the implementation ordinance would be presented to City Council in March 2011, and a database and website would follow in April and May, respectively. Fees will begin to be imposed in July 2011, and property owners would no longer be subject to individual assessments for street improvements. Undeveloped land would be exempt.

The mayor’s plan also includes a process for establishing which improvement projects would take priority. According to the plan, the current five-year Capital Improvements Plan would be used until a comprehensive street and drainage needs re-assessment could be completed. Needs assessments for street improvements would be based on a technical evaluation and the Pavement Condition Report. The needs assessment for drainage systems would also be based on a technical evaluation, as well as a Comprehensive Drainage Plan prepared in 1999, and a plan currently being updated by a Storm Water Enhanced Evaluation Tool (SWEET). Both needs assessments would be presented to City Council in July 2011. An oversight committee, consisting of parties with significant background in community development and infrastructure assess- ments, will be appointed. The plan stipulates that appointees may not be city employees nor drawn from contractors, engineers or firms participating in the street and drainage improvement programs. The City’s Small/Minority/Women/Disadvantaged Business Enterprise (SMWDBE) program will be enforced for selecting project contracts, and a “Hire Houston First” focus will be maintained. A mentoring program similar to that utilized during the Greater Houston Wastewater Program of the early 1990s and internships in partnership with local colleges will also be implemented.