[.. This is part 1 of a likely 3 part series .. part 2 should publish in a few days ..]
In September 2014, a group called Citizens for Taxpayer Relief NOW (CTRN) asked Austin City Council candidates to sign a “candidate pledge“. The pledge consists of three items, or requirements, that CTRN believes will lead to greater accountability and fiscal responsibility. Ostensibly, a candidate signing the pledge is agreeing to advocate, implement, and/or vote for the requirements in the pledge, should that candidate be elected.
Of the 17 mostly conservative candidates that signed the CTRN pledge, three have survived the general election and are currently competing in runoff elections: Ellen Troxclair (District 8), Laura Pressley (District 4), and Don Zimmerman (District 6).
I have analyzed the requirements detailed in CTRN’s candidate pledge and found several concerns:
- One of the pledge’s requirements seems to already exist in the city charter and is thus unnecessary.
- Another requirement would result in across-the-board cuts to the City of Austin budget (salaries, programs, etc) of about 3% a year.
- One of the pledge’s requirements would require large-scale changes in the budgeting process for the city and require extensive training of significant numbers of city staff. All three candidates committed to the change, despite having no cost estimate, no estimate on how long it would take to implement, and very little idea of its impact on the budget calendar.
I have investigated the groups behind the pledge and found issues of concern there as well:
- CTRN is not the only group connected to the pledge; CTRN exists as part of coalition of several groups.
- Various ties exist between CTRN (and its founder, Cindy Mallette) and the Austin Texas Tea Party (and its founder, Dean Wright).
- Ties also exist to Koch-backed organizations like TPPF and AFP.
- Dean Wright, who runs the Austin Texas Tea Party, as well as several related groups, owes $3,500 in fines to the Ethics Commission for filing violations going back to 2011.
- According to the Ethics Commission, they referred the matter to the Attorney General for litigation against Wright in 2012 (case number C106169543)
- The Ethics Commission told me that the fines are still outstanding, which is why Wright continues to appear on the “Late Filers” list on the Ethics Commission website.
- I am awaiting an open records request from the AG’s office for more info on the litigation and to see if they indicate whether the fines were paid or not.
Certainly some hypocrisy detectors will be going haywire right about now, as it dawns on people that for years the Tea Party groups have promoted the idea that Tea Party types are fiscally responsible, while Austin city government is derided for being inefficient, lazy or corrupt.
Worth noting are various other randomish connections between the Tea Party and the runoff candidates, or between these groups, their founders, and the candidates:
- Dean Wright donated $145 to Laura Pressley on July 20th, 2014.
- Troxclair is chief of staff to noted Tea Party representative Jason Isaac.
- Dean Wright and Don Zimmerman both wrote letters about private school vouchers/home schooling/etc that are included in an Americans for Prosperity letter to the legislature in 2011 (coincidentally, Mallette was an employee of Americans for Prosperity in 2011).
Though I am concerned that any candidate would sign the CTRN pledge, and some voters would question the judgement of these candidates, I am going to give them a partial pass on the fact that they signed. I’m going to assume that these three candidates simply signed the pledge without giving it much thought – perhaps they didn’t bother to investigate, thinking the pledge was just a photo op. While it is bad that a candidate would not do their due diligence to determine what they were signing & who was behind it, that scenario is still preferable to the alternative narrative where the candidate did understand everything on the pledge & exactly who was behind it, and decided to sign it anyway – that scenario scares me.
So, in the same somewhat-forgiving spirit, rather than tee off on all 3 candidates, I would rather invite the candidates to “un-sign” the CTRN pledge and essentially reverse their mistake without consequence.
Praise for any who un-sign ..
Ellen Troxclair, Laura Pressley, and Don Zimmerman, I formally request that you please “un-sign” the CTRN pledge.
For those that refuse to un-sign, then I won’t let the end of election season prevent me from making sure everyone understands exactly what you pledged to do, if elected, and exactly who came up with those ideas that you put your name next to.
Timing of Article
Yes, today is election day. Many people will not see this article until after they have voted, probably after the election, if at all. That’s fine, I don’t need people to vote the way I want them to — but Austin does need these candidates to “un-sign” the pledge and to govern using their own brains, rather than someone else’s talking points.
This article has been ready to go for several days, but I’ve been delaying in hopes of receiving a response from the Attorney General for a public records request. Unfortunately, that still hasn’t arrived and I have waited until the last possible moment to publish an article related to election candidates … I will be doing a Part 2, and possibly a Part 3 over the next few days.
The Players – Overview
Citizens for Taxpayer Relief NOW (CTRN)
CTRN was founded by Cindy Mallette and she remains its only member as far as I can tell. While that may make it tempting to dismiss CTRN and its pledge as a minor sideshow, voters should note that CTRN managed to get 17 candidates to sign the pledge. At least 7 of those candidates showed up and made speeches at the CTRN “pledge” press conference. CTRN’s press conference, held in front of city hall, was well covered by Austin media, including several TV stations.
CTRN’s About page describes the organization this way:
“Citizens for Tax Relief NOW! is non-partisan a citizen-led issue organization. It is not financially supported by any candidate or special-interest group. It is a strictly volunteer grassroots organization, and its goal is to educate Travis County residents about local government spending and debt and give them ways to obtain better transparency and accountability in local government.”
“a non-partisan coalition of organizations calling for transparency, accountability and fiscal responsibility at Austin City Hall.”
CTRN appears to operate as both its own organization and as part of broader coalition of cooperating groups. Indeed, CTRN’s website domain name, “citizensfortaxreliefnow.com” is actually registered to Dean Wright (screenshot), the founder of the Austin Texas Tea Party (which is itself a member of CTRN’s “coalition”).
It is not immediately clear how CTRN reconciles bits of assistance from other coalition members, such as we see with the CTRN domain name being provided by Dean Wright, with CTRN’s description of itself as “not financially supported by any candidate or special-interest group.”
The CTRN Coalition
On its website, CTRN lists a few groups that cooperate to form a “coalition“, including:
The Austin Texas Tea Party (website, meetup), which is run by founder Dean Wright. Wright apparently controls a number of other related organizations. In part 2, we will take trip into the rabbit hole and see what turns up.
The Center for Local Governance (website) is part of the Texas Public Policy Foundation (TPPF), which is a conservative & libertarian think tank that puts out a regular stream of articles and position papers. It is part of the State Policy Network (SPN), which is a large network of think tanks and other organizations that work together to push far-right and libertarian policy initiatives. (there is no equivalent to SPN on the Left .. not even close, so if you are unfamiliar with it you owe it to yourself to just browse through its network in awestruck silence at the sheer size, organization, and money that it takes to push your agenda out daily across 50 states in a coordinated effort across fundraisers, think tanks, opposition research types, campaign consultants etc. Various entities in the SPN are funded by the Kochs, but they are just a couple of several billionaires providing guidance and funding.)
The Coalition of Citizens for Sound Governance is listed as part of the coalition, but I was unable to find any group using that name. Need to look further.
The Gray Panthers of Austin is the local affiliate of the national Gray Panthers organization. The local group is run by Richard Franklin. It’s not clear to me if the local group has diverged from the priorities of the national group or not. There is a leftover blog from 2012, but I’m not finding much else from the local group that aligns with the goals of the national group. Someone complained on RipOff Report that the local group no longer appears to be helping the elderly. This bears further investigation. [Update: the National Gray Panthers organization has recently disbanded]
North Austin Neighborhood Association is also listed as a coalition member, but I cannot find a group that goes by that name (at least in 2014 anyway). Need to look further.
The Pledge – Overview
CTRN’s pledge appears to be modeled on Grover Norquist’s “never raise taxes” pledge that is prevalent at the federal level. Though the concept sounds good at first, Norquist’s pledge has been criticized as one of the major causes of Washington gridlock. Many signers of Norquist’s pledge have claimed that they have felt “blackmailed” by the morphing interpretations of the pledge’s requirements, as well as by threats of retaliation by Norquist and by the voters he influences. Indeed, those reasons are often cited by legislators as to why Congress can’t eliminate hundreds of millions of dollars in taxpayer payments [subsidies] to the oil industry every year. Eliminating such loopholes are (now) considered ‘tax increases’ by Norquist, unless the loophole is shifted to another group – a definition not included in the pledge’s original specifications.
Certainly, Mallette doesn’t wield the kind of retaliatory threat power Norquist does, and there is no indication her seemingly innocuous pledge could ever be twisted into the Faustian contract that Congress finds itself locked into now. Nevertheless, pledges can be dangerous things for politicians. Council candidates would do well to be cautious of signing anything without a thorough investigation of each of the provisions they are putting their names next to. Likewise, candidates should never sign anything without a careful vetting of the people behind what is being offered up for signing.
The Pledge – Candidate Requirements
CTRN Pledge – Candidate Requirement 1 – Audit the City of Austin
“Support and advocate for an independent operational and financial audit of all city departments and functions.”
This is a particularly perplexing item on the CTRN Pledge, as this function is already required by Article VII section 16 of the Austin City Charter. I can only assume that CTRN and its coalition were unaware of that fact. This item is essentially just a duplicate of what’s already in the city charter, so … seems just a bit redundant. In 2013, the City of Austin used the firm of Deloitte & Touche LLP as the independent auditor. For those that don’t want to click the link, here is the text of Section 16:
At the close of each fiscal year, and at such other times as may be deemed necessary, the council shall cause an independent audit to be made of all accounts of the city by a certified public accountant. The certified public accountant so selected shall have no personal interest, directly or indirectly, in the financial affairs of the city or any of its officers. Upon completion of the audit, the results thereof shall be published immediately in a newspaper in the city of Austin and copies placed on file in the City Hall as a public record.
Additionally, section 17 of Article VII provides for an independent City Auditor’s office. The City Auditor reports to Council, rather than to city staff or to the city manager. The Auditor is tasked with, among other things, creating and executing performance audits of city departments, operations, etc. As you may know, a performance audit is simply the government version (follows GAO standards) of the business world’s “operational audit”.
Thus, both of the audits that Requirement 1 is asking for are already provided by the city charter, already exist in real life, and reports of both types have existed for some time. Honestly, I’m reluctant to completely blame CTRN for this. It’s pretty obvious that this is yet another in a long line of ideas from the business world that the Tea Party thinks would fix government, only to find out that government already does it. That’s the risk you run when you throw up someone else’s talking points rather than doing your own original thinking. CTRN seems to be doing exactly that.
Anyway, Requirement 1 of the pledge is meaningless, since we already do it.
CTRN Pledge – Candidate Requirement 2 – a 20% Homestead Exemption
“Support and advocate for immediate tax relief for homeowners by implementing the full 20% Homestead Exemption.”
The 20% Homestead Exemption is not a very good way to help homeowners, because it heavily favors multi-million dollar homes. This topic has been covered, but if you need a refresher, see Color Me Exempt in the Austin Chronicle.
A homestead exemption could be acceptable on a short-term basis, just until Austin’s housing crunch passes. To make that happen, people need to advocate for a sunset date — 2 years, 3 years, whatever. I have been advocating that for some time, and you know how many homeowners have agreed that that makes sense? Zero.
Really, it would be much more fair to just lower the property tax rate, which can be done just as easily and quickly as a 20% local homestead exemption. Why then, would anyone want to do the 20% local homestead exemption? The main reason is that they (homeowners) will get a bigger bump off their property taxes from a 20% homestead exemption than from a tax rate reduction (assuming both solutions cost $36 million). That is because the benefits of a homestead exemption are concentrated – the benefits go solely to homeowners and are not shared by the rest of the city (who will likely end up paying somewhat more in order to fund the homestead exemption year after year after year). Instead, if you were to lower the rate, everyone would benefit, not just homeowners. I have been advocating that position for some time now as well. How many homeowners have agreed that its more fair and make mores sense to just lower the rate? Zero.
I have offered 2 variations that would both provide relief to homeowners now, without mortgaging the future in an unfair and unbalanced way against other taxpayers: a 20% homestead exemption with a sunset date, or no homestead exemption and instead just lower the property tax rate. Both ideas are more fair than a 20% homestead exemption. Neither has received the slightest attention by the 20% homestead exemption pushers.
I believe there are a lot of homeowners out there who would like to improve affordability for everyone, not just for themselves (at the expense of everyone else). It’s time for those homeowners to speak up!
CTRN Pledge – Candidate Requirement 3 (part A) – Budget at the Effective Rate
“Support and advocate for annual operating budgets that do not exceed the effective tax rate .. ”
To “Budget at the Effective Rate” would result in a yearly City of Austin budget cut roughly equal to the rate of inflation – typically about 2-4%. So, that might start as a 3% cut to salaries and program budgets in year 1 of governing at the Effective Rate, but you can’t keep cutting things by 3% each year and expect them to keep functioning properly, so clearly you would need to chop programs entirely and lay people off in big chunks as well.
I suspect very few people understand what it would mean to actually govern at the Effective Rate, or what the Effective Rate even is. As proof of that, I give you the fact that the Austin Firefighters Association (AFA) has endorsed Ellen Troxclair, one of the three candidates who has signed the pledge.
It is difficult to believe that the Austin Firefighters Association would knowingly endorse anyone who is going to vote for a policy that will result in yearly pay cuts of about 3%, but that is exactly what they have done.
Perhaps the AFA was unaware that Troxclair had signed the CTRN pledge, since the pledge has received only limited press coverage since September. If I were a firefighter, I would be seriously questioning the wisdom of the AFA’s leadership.
The Effective Rate is a calculation that is performed each year to determine what property tax rate you would need to set this year that would generate the same amount of property tax revenue as was generated in the prior year. The calculation adjusts for new construction or additions and also for properties no longer on the tax rolls by excluding them – meaning they are not included in calculating the effective rate, but you still get tax revenue from new properties/additions/annexations at whatever the effective rate ends up being, and that revenue is above and beyond what you had last year. In effect, you get the same amount of money as you had last year, plus property tax revenue from new additions that exceed any losses to the tax roll vs the prior year. However, the calculation does not adjust any values for inflation. Thus, even though you end up with the same amount of money as the prior year, plus some extra to cover new additions, it results less purchasing power this year than the prior year, due to inflation, which is running about 2%/yr right now. Thus, the result of following Pledge Requirement #3 (A) is that the City of Austin budget will be cut by the rate of inflation – every year.
The Effective Rate calculation is there for reference, and as a fallback rate in case a city council cannot agree on a property tax rate by the deadline each year. No one ever dreamed that it might be used as a rate that council members would pledge to use every year, since that would result in self-destruction of the city government within a few years. Because conservatives, and in particular the Tea Party, are generally in favor of cutting away large chunks or almost all of government, it is difficult to know if CTRN and its coalition were unaware that inflation wasn’t factored into Effective Rate calculations, or if they were aware and simply considered the yearly cuts as a hidden benefit. Either way, it’s disturbing.
It’s worth pointing out that freezing spending, or worse, governing at the Effective Rate, during a time of rapid growth would be a disastrous policy for the city. During a boom you must spend, not contract, otherwise you will blow up affordability and destroy any chance of getting traffic under control in the near future. You can reduce your spending as your boom slows down, but you don’t want to get them out of whack or you will put the affordability issues on overdrive.
CTRN Pledge – Candidate Requirement 3 (part B) – Zero-Based Budgeting
” .. and for zero-based budgeting for all operations.”
Also included in Requirement 3 of the Pledge is a mention of moving to zero-based budgeting (ZBB). ZBB can be an effective tool to improve efficiency and reduce cost when implemented properly. However, in some circles it has become a shortcut to hack and slash budgets without regard to rationality or logic. Assuming candidates signing the CTRN pledge intended the former, rather than the latter, then this is something that should be investigated to determine its feasibility.
Implementing ZBB is a complicated task. It could require extensive training of many city employees (department heads). Additionally, it probably has to be done outside of the normal budgeting process, due to time constraints during that period. Furthermore, it’s a process you would want to do every few years, not yearly.
A search of Council documents shows that ZBB has been mentioned only once, briefly. Thus, it appears that no investigation of implementing ZBB has been done (or at least not discussed in public). It seems reasonable to investigate how much it would cost to implement ZBB, assuming that it is feasible to implement it. However, it seems premature to commit to something without knowing the impact, cost, or if it’s even possible.
.. check back soon for Part 2, where we journey into the rabbit hole .. here’s a teaser:
New Revolution Now Institute, Inc. was administratively terminated by the Texas Secretary of State in 2011 and it is no longer a valid corporation that can be used for business in Texas (you can see this at the comptroller search entity / franchise tax permit page for free, or you can pay $1/search on the SOSDirect page at the Secretary of State’s website).
Though it is no longer a valid corporation, its name appears at the bottom of most of the pages at http://newrevolutionnow.org including some donate pages. It is also listed as the name to use, along with an address, if you wanted to mail in a donation via check to New Revolution Now Institute, Inc.
There are also references to NRN PAC and ATX PAC, which are described as political action committees, yet Wright has never filed any contribution or expenditure reports for any PAC at the state, federal, or local level that I can find. There was a PAC with a good Treasurer’s Appointment in the Ethics Commission system in 2010 and it was called New Revolutions Now PAC Inc. However, that PAC was administratively terminated by the Ethics Commission after repeated missed filings (resulting in the $3,500 in outstanding fines). Likewise, it was terminated at the federal level after numerous warning letters about incomplete and missing filings. All of this information is public information, easily discoverable to any individual doing even the most basic vetting of people. It begs the question as to why any candidate running for a governmental position — any of those 17 conservative candidates — would ever sign their names on documents produced by or associated with groups having such a checkered past of government interaction.
.. those are some of the things we will examine in greater detail in Part 2 … stay tuned …