McALLEN — The city will have to play defense when it comes to next year’s legislative session as state lawmakers deal with a potential shortfall of up to $7.4 billion, Mayor Jim Darling said Thursday.
Darling laid out the city’s priorities for the upcoming session during a virtual meeting with members of the McAllen Chamber of Commerce on Thursday.
Local governments generally look to the legislature for one thing, he said: money.
“Otherwise we look for them to leave us alone,” Darling said. “The majority of cities in Texas are home-rule cities, which means we don’t have to look to the legislature for authority to do things. What they (legislators) look at is, what they prevent us from doing — what powers they take away from cities.”
Each year, the legislature reviews anywhere between 5,000 to 6,000 bills, and about 1,500 of them focus on limiting the authority of cities. The trend has been especially prevalent in the last eight to 10 years because of the legislature’s make up, the mayor said.
“We’re kind of on the defensive on the legislative session. So when I talk about what they’re going to do, from a city’s standpoint, it’s not always necessarily pleasant,” he said.
Cities are still reeling from legislation passed in 2019 that restricts their annexation authority, as well as Senate Bill 2, which was intended to provide property tax reform, Darling added.
“Here’s the problem with property tax reform. What they really need to do is talk about appraisals. Everybody complains about appraisals. Nobody really complains about tax rates cause tax rates have been stable and actually decreased over the years — primarily because appraisals (keep rising),” he said. “So when they talk about tax reform in Texas, they attack the tax rate because appraisals are too complicated for them. That’s as nice as I can say it.”
This year, the legislature will try again to stop cities from hiring lobbyists. Lawmakers took up the issue in 2019, but the bill died in the House just days before the session ended.
“They don’t think they should have lobbyists to lobby against the taxpayers,” Darling said about municipalities. “I don’t know why we can’t lobby. … How about all the businesses that lobby? You think they’re lobbying so that they can reduce the rates for their customers?”
The city will also keep a close eye on discussions surrounding the distribution of sales taxes from online purchases, including international ones.
“That’s very important for us, obviously, especially as the pandemic (unfolds),” the mayor said, noting McAllen’s sales taxes are down to the tune of $7 million. “People are used to buying on the internet now.”
But perhaps the most pressing issue for McAllen is the state budget and its implications. In 2019, legislators adopted a biennial budget of $254 billion. However, Texas ended up in a hole and spent the projected $3 billion budget surplus, the mayor said.
“And then with the pandemic, et cetera, they are now $4.7 billion short going into the new fiscal year. So that means they have to come up with about $7.4 billion to maintain the surplus and or get out of the hole,” Darling said, noting he spoke Wednesday to state Sen. Juan “Chuy” Hinojosa, vice chair of the Senate Finance Committee.
Darling also noted the state received about $11.2 billion in federal relief funding for COVID-19, but has only distributed about $5 billion, leaving about $6.2 billion on the table for recovery efforts.
“Even with the best-case scenario, if they had all the COVID money to make up the shortage, they’d still be $1.2 billion short. So we’re going to start the session not in a very generous mood,” he said.
Cities traditionally receive the most funding from the state for efforts involving transportation, and next year, flooding is also expected to be another big-ticket item. Still, with the potential shortfall, some of those efforts might be postponed or otherwise affected, Darling predicted.
It’s especially frustrating when it comes to transportation because of the recent regional merger that is now the Rio Grande Valley Metropolitan Planning Organization (MPO). The merger of three former Valley MPOs led the way for the area to become the fifth largest region in the state and allows it to dip into a special state fund for transportation projects.
“We made the big five, so we’re entitled to get all that roadway money, and they’re not going to have as much as they usually do,” Darling said. “Kind of the story of our lives here in McAllen, right?”
Still, he remained optimistic about the tone of next year’s session.
“I think it’ll lighten up a little bit,” Darling said. At least when compared to last session when Texas House Speaker Dennis Bonnen “called me and the rest of the mayors dumbasses.”
Darling suspects the Tea Party’s influence on Gov. Greg Abbott and the decisions he’s made in the wake of a pandemic will impact Texas politics.
“I think it’s the Tea Party’s attitude that got the governor in trouble — and COVID, I think — pushing him to make decisions prematurely. And I think they’re going to see that in the election,” he said, noting he’s not a Democrat, but rather an independent. “I think you’re going to see some pushback, and depending on how much they push back, or how many people they lose in the House, for instance, I think there’s going to be change.
“I think they pushed too far.”
But despite any changes caused by the upcoming election, McAllen must remain vigilant.
And that means remaining active in Austin, McAllen Chamber President and CEO Steve Ahlenius said.
“Obviously, mayor, we’ve always done a McAllen Day in Austin, and I think 2021 may be a little bit different, but I think it’s important to have some type of presence in Austin,” Ahlenius said.
“Yea,” Darling responded. “We need to be in Austin more every day. We go up there and McAllen Day is certainly very important, but we need to have somebody up there, city commissioner or mayor, all the time.
“You got a project? You better babysit it.”