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Texas Counties Lose Bid to Issue Bonds to Finance Redevelopment

Nov. 8 (Bloomberg) -- Texas voters rejected a measure to let counties finance redevelopment of unproductive or blighted areas with debt, an authority limited to cities in the second most-populous state.

The proposed constitutional amendment was losing by almost 60 percent to 40 percent with about 84 percent of the vote counted, according to figures posted today on the Secretary of State’s website.

Supporters said the measure would help counties participate in projects such as transportation improvements without raising taxes, according to the House Research Organization, a nonpartisan legislative agency in Austin. Opponents said using the increase in property-tax revenue generated by redevelopment to repay bonds diverts the gains from other needs.

Counties want similar authority afforded to cities to spur development of roads, mass transit and other transportation projects, said Elna Christopher, a spokeswoman for the Texas Association of Counties in Austin.

“When cities and counties try to work together on projects, the prohibition has made it very difficult,” Christopher said by telephone. “Transportation gridlock in urban and suburban areas” has made access to the funding mechanism more important, said Christopher, whose organization represents 254 counties.

The proposal has drawn criticism from Empower Texans and We Texans, both nonprofit groups that promote limited government.

Giving counties an incentive, with the lure of increased tax revenue, “is a recipe for further eminent-domain abuse,” Debra Medina, founder of We Texans, said in a statement on the group’s website. “We should not be increasing our debt.”

Only one of the state’s 181 lawmakers, Representative Van Taylor, a Plano Republican, voted against putting the measure up for a statewide referendum.

To contact the reporter on this story: David Mildenberg in Austin, Texas, at dmildenberg@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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