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PROPOSITION 5

Nov. 1, 2011 at 6:01 a.m.


Official Ballot Language

The constitutional amendment authorizing the Legislature to allow cities or counties to enter into interlocal contracts with other cities or counties without the imposition of a tax or the provision of a sinking fund.

Explanation

Currently under the Texas Constitution, cities with a population greater than 5,000 and all counties and cities bordering on the coast of the Gulf of Mexico may not create any debt without levying a tax sufficient to pay the interest and provide a sinking fund of at least two percent. A contract longer than one year between local governments has been interpreted as a debt under certain circumstances, requiring the tax assessment and the creation of a sinking fund. Proposition 5, along with its enabling legislation, would authorize those cities and counties to enter into interlocal contracts longer than one year with other cities or counties without meeting the tax and sinking fund requirements.

Arguments For

This proposition would give local governments more flexibility to consolidate projects and services over a term longer than one year in order to improve efficiency and reduce costs to taxpayers.

Arguments Against

There may be some cases where multi-year interlocal agreements do constitute a debt and should require a tax and sinking fund; removing this constraint gives too much flexibility to local governments.

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