On Friday, October 26, 2007 the Houston Property Rights Association hosted a trio of speakers to talk about several of the ridiculous number of bond issues which have been placed on the November 2007 ballot. Some talk was also given over towards discussing the 16 or so State of Texas constitutional amendments, some of which are also bond and finance related.
Before going any further, from my own personal perspective, I've decided already to go ahead and vote no on all of the bond proposals. Some regular readers of my blog will probably note this as a kind of knee jerk anti-government reaction to all of these proposals. And, I will say that largely you are right. It is quite disturbing to see so many of these things being put on the ballot all at once. That in turn reminds me of a proposal that Tom Bazan made a while back. He suggested that there be a minimal level of registered voter participation in an election for a bond proposal to pass. For example, if there are 100,000 voters in a school district, there should be a requirement that 25 percent (25,000) of all voters participate or else a bond issue automatically fails, regardless of whether a majority of those participating voted for it or not. As things are, it is quite possible for low voter turnout (see final paragraph for more) to cause as few as 3-5 percent of voters in a political subdivision to commit the other 95+ percent of voters to paying for a bond issue.
I have yet to spend a few hours of time wending my way through all these constitutional amendments. As always, even for a knowledgeable, tuned in guy like me, there are, how shall I say, informational issues involved in trying to keep up with all of these matters. Now then, for those of you who fervently believe in Democracy, if a guy like me has a hard time keeping up with all of this, then how do you expect the average Jane or Joe to do so? More to the point, what does that mean for how decisions are made in republics and democracies?
But we will leave these issues and my own voting plans aside for now. What follows is what transpired at the HPRA meeting.
The first speaker was Larry Tobin, speaking on the Port of Houston Authority's $250 million bond proposal.
As can be seen by looking at the links above, Mr. Tobin, a Taylor Lake Village Council member, has long been a watchdog of the Port and has been speaking out against port, or pork bonds. Tobin started his talk by asking the audience if anyone knew the primary difference between the PoH and most of the rest of the ports in America? When nobody raised their hands, Mr. Tobin then told them two things. First, the PoH has mostly liquids as its main source of cargoes, and second that the PoH is the only port in America that does not pay the bulk of its capital costs. Instead, the PoH lives primarily off of the levies of Harris County taxpayers. He stated that, in his view, the Port has practically no accountability. It is not a component of the City of Houston, Pasadena, or any other entity. He said that, "the board is composed of a bunch of flunky appointees that are running this thing."
Tobin told the audience that the really tough questions should come to heel at the Harris County Commissioners Court, but our esteemed Commissioners do not ask the tough questions needed to really turn things around. Tobin continued, saying that we could run the port with private terminal operators, with leaseholds which could cover debt service. He then noted that every time there is a new bond issue to be voted on, the campaigners for the bonds always talk about the jobs, jobs, jobs that will be created if we pass the bonds. Tobin asked the audience, who pays for all this? It's the pigs feeding at the trough.
Tobin told the audience that the cruise terminal operations cannot find new passenger ships for the immediate future, as Norweigan has left and only two ships call every week. However, these terminals can make for nice meeting facilities. Go figure.
Tobin told the audience that the Bayport terminal is not being served by rail, nor will it be for quite some time. He says he has $12 million worth of cranes that are idle and that the Bayport facility is poorly designed. Tobin said we are shipping freight to Barbours Cut to get cargo to rail heads. Additionally, Tobin told the audience that Long Beach has private operators who pay their own way. If they can, then so can the PoH.
Tobin said originally the PoH came before the Harris County Commissioners and asked for a $500 million bond issue, but the commissioners apparently didn't ask the PoH exactly what all this money was needed for. They seem to have simply gotten scared over the price tag of that bond request at an election where many other bond issues were on the ballot. The Commissioners simply cut the bond issue in half to $250 million and put it on the agenda. Tobin said we need to remove the levy off of the Harris County property owners who have $586 million in debt service to carry for 30 years, along with this bond issue.
Next came a debate over the 2007 $805 million HISD bond issue between City of Bellaire Commissioner Bill Borden and Ron Brunner, two Republicans active in local politics. Borden told the audience that the Harris County Republican Party formed 4 committees for studying the various bond proposals on the 2007 ballot. The HCRP came out neutral on port bonds, in opposition on SBISD bonds, in opposition on Cy Fair bonds, and neutral on HISD bonds. After going on with making normative statements concerning public schools in general, Borden then asked why HISD does not have in its budget money set aside every year for repairs or maintenance? Does it ever have intentions to set up a reserve fund for repairs?
Borden told the audience that HISD does not do this, but instead accused HISD of letting schools fall apart, then hitting up the public for bond issues for grand reconstruction projects. He noted that HISD keeps telling the public that there will be no tax rate increase, but asked what about the levels of taxes due to rising appraisals?
Borden asserted that HISD has a credibility problem. One issue he brought up is that HISD has a few schools where there are few nearby students living in the neighborhood. Borden suggests that HISD sell land if possible and use the proceeds to help build schools somewhere else. Borden also raised the issue of whether property owners should be the only ones who are allowed to vote in such bond elections.
Addendum: I should take a moment out here before going any further to address an issue which has plagued the HISD bond election. One prominent group which has been fighting the bond issue is the black community, I think for reasons that more than a few of schools in areas of town which have predominantly black residents are slated to be consolidated or closed.
I knew this was going to happen. I can tell a story here which happened in 1985 in SPISD. At the time, the SPISD district was experiencing declining enrollment of students because of the demographic passing of the baby boomer generation into young adulthood and the raising of the Generation X group, which was a much smaller cohort. I am one of those so called Gen-X types.
The result of this was that the sitting SPISD board of the day decided to close two public high schools for reasons that they were more expensive to operate. This reasonably rational decision was greeted with threats of lawsuits on the part of various parent groups whose kids went to some of the schools because the parent groups whose kids went to those schools were going to do everything within their worldly power to make sure their school did not get shut down! The result was that the district ended up closing two schools whose parent groups had not organized very effectively. You ended up with two public high schools that were only about one mile away from each other, while others were bussed for miles to attend their school.
This is the sort of stuff you get when you decide to use politics and the arm of government as a means of educating kids. The usual fighting over who is going to get what breaks out, and that is exactly what leaders in the black community are fighting over. They might understand that demographics is a reason for shutting down schools since HISD is expected to see a modest decline in enrollment, but people are forgetting that this rational fact is running straight into politics. "Go shutdown or consolidate some schools, but what? Y'all are going to shut down my school? You people are not going to shutdown my school!" And so the fighting starts, with possible lawsuits to be seen over the HISD plan until it gets resolved.
Continued: Ron Brunner, a local GOP precinct chair, spoke in favor of the HISD bond proposal. He first started off by saying he has no kids in HISD schools, but went into the debate open minded. He spoke with Diane Johnson, Harvy Moore, Sylvester Turner, Carol Mimns Galloway, and HISD Superintendent Abe Savedra.
Brunner stated that the bond issue is for capital improvements and cannot be used for teaching funds. In 1997, the HCRP rejected the first of these massive HISD bond proposals, which helped lead to its defeat. What the HCRP said was that the 1997 proposal was massive and that HISD was asking for a blank check. Brunner noted that HISD said nothing in the 1997 proposal about where the district intended to spend the bond monies.
Brunner then went on to tell HPRA that HISD came back in subsequent bond proposals that denoted line items where and which schools were to get rebuilt and refurbished. The first $678 million proposal passed and in 2002 the district asked for another $700 million, which passed without too much controversy. Brunner noted that there has not been mismanagement of funds. He challenged the group to name news scandals or corruption in HISD bond monies. He said that HISD has not been spending $80 - $100 million on football or athletic fields as has Cy Fair ISD.
Brunner stated that the real key to these proposals is to hold the bond issuers' feet to the fire. The schools that were listed have been the ones getting redone. The schools (sadly) are getting security mechanisms installed, new science labs and computers. The current HISD policy is when repair or renovation costs come near the costs of outright replacement, then they replace the school. 134 schools are on the list.
Brunner contrasted the HISD approach with the SPISD approach which he says is a band aid approach. He stated that HISD's maintenance budget is in the hundreds of thousands of dollars, which is questionable for a district of this size.
Brunner went on to talk about the upcoming State Constitutional amendments, stating that State amendments 2, 4, 12, 15, and 16 should be voted against. This includes the Proposition 15 $3 billion Cancer Institute vote. Brunner stated that this should not be construed that we are against cancer or cancer research, but that this allows the Legislature to get into the cancer research business which there is plenty of work going on to begin with. He noted this is a grant and not a loan, ergo it will never get repaid. The monies are also not line itemed, as it is an open grant. Brunner also noted amendment #12 is a $5 billion open check to Tx-DOT for which there is no prohibition for use in the Trans Texas Corridor.
Questions were raised by the audience, such as why is HISD letting the schools fall apart, then asking for the authority to issue bonds? Another interesting question was whether it is necessary to build new schools to have a quality education? In other words, when has a particular building been the driving force in a great education? Another person mentioned that there seems to be a very contestable assumption that more money means a better education, which in putting that money into buildings takes away from the stress behind education.
Bill Borden mentioned that the cost to educate an HISD student is $4,200 per student which he says is higher than that of a private school. HISD has boasted that it has greatly increased the number of advanced placement student, but failed to mention that 70% of those advanced placement students come from two schools - Westside and Bellaire. He advocates looking into breaking up HISD and also looking into how HISD handles its statistics. He also was critical of the issue that HISD does not budget very much money for maintenance.
The meeting ended with more commentary by Mr. Tobin. Tobin said in response to a question that the Port of Houston wants general obligation bond issues. That way, if they can float a general obligation bond, then he asserted that the Port Authority can build down on Pelican Island, as the island is not within the navigation zone. Tobin said that we may be seeing a changing set of economics in the Port soon, since he characterized the Port as being in the cul de sac of the Gulf of Mexico. In 2005, Kansas City Southern purchased controlling interest in Grupo Transportacion Ferroviaria Mexicana, possibly for use with the Trans Texas Corridor. Ships would not sail to Houston, but rather land in western Mexico, then transport overland.
And so it was. It was an interesting meeting, but early voting ended this evening as I was writing this. The turnout during early voting was light and turnout on election day is also expected to be light. Meanwhile we await the fate of those bonds, bonds, bonds.
Wizard