A recent court ruling invalidating an amendment to the Texas Constitution could complicate Harris County’s plan for financing the Toro District and send ripples through a network of little-known taxing districts the county formed prior to the ruling.
The amendment, which voters approved as Proposition 2 in 2021, was framed as giving county reinvestment zones the ability to issue debt. But some counties responded by creating these zones for the first time. Harris County has since created four and is negotiating with the Houston Texans and Howard Hughes Communities to form a fifth in northwest Harris County.
The deal would fund infrastructure around a new headquarters and training facility for the Texans on an 83-acre site in the Bridgeland area.
But state District Judge Jan Soifer’s July 10 ruling in a lawsuit brought by a group of conservative organizations may frustrate those plans.
Soifer agreed with the plaintiffs’ allegation that the ballot language used to describe the amendment failed to inform voters how the zones’ investments would be paid for – namely, by issuing bonds.
“Therefore,” Soifer wrote, “the ballot language of Proposition 2 … omitted a chief feature of the amendment and misled the voters.”
The lawsuit was brought against the Texas Secretary of State’s Office by Texas Uniting for Reform and Freedom, Grassroots America — We the People PAC and the True Texas Project. The organizations warned the language was misleading in a letter one of their lawyers sent state officials in August 2021, before the issue appeared on the ballot.
Attorney Garrett McMillan pointed to a “nearly identical” proposal voters rejected in 2011. That proposal, he wrote, made clear that the reinvestment zones would fund projects through property taxes, unlike the 2021 measure.
McMillan warned that his clients intended to sue should the proposition be put before voters unchanged.
“Our clients would prefer that Texas voters be informed of what they are voting on rather than misled and would like the wording of the proposition to be changed to reflect (its) effect,” McMillan wrote.
While Proposition 2 primarily empowered counties to issue debt against the tax revenue collected through reinvestment zones, some counties took it as a signal that they could begin creating zones, as cities had for decades before them.
Commissioners Court approved the first county-run reinvestment zone in December 2022 covering the Aldine area. Commissioners have voted to create three more since then, with the commissioner whose precinct the zone is in typically appointing a majority of the board members.
I didn’t pay much attention to this proposition, which was broadly endorsed and seemingly anodyne. I don’t know if the outfits that filed this suit waited until a county did something that they claimed was illegal based on the wording of the proposition or if it just took a long time to get to this point, but it sure is at least a bit annoying that it took almost five years to get to this point, well past the time that counties had been doing things based on its passage. What happens next is unclear – there will surely be appeals, but in the meantime counties need to interpret the ruling based on what they have done. That’ll be Abbie Kamin’s assignment. Maybe there’s a workaround for this, and maybe counties will have to completely redo what they’ve done or risk getting sued by their own local antagonists. I guess I’m a little mad at whoever worded the prop as they did, but whatever concerns there were about that at the time were not taken seriously enough to affect it. So here we are.