Chapter 28 City Government

Case Study: Tax Breaks and Economic Development Local governments across Texas are offering tax breaks and other benefits in hopes of attracting and keeping business, including sports franchises, in their communities. In 2004, Arlington voters agreed to pay for half of a $650 million stadium in order to keep the Dallas Cowboys football team from moving to another city. In order to pay for the deal, voters agreed to higher sales, hotel, and car taxes. –Those who favored the stadium deal said retaining the Cowboys in Arlington would help the local economy and enhance the image of the city. –Opponents of the stadium deal charged that while most of the costs would fall to ordinary taxpayers, the biggest beneficiaries would be the Cowboys millionaire athletes and billionaire owners. Supporters of the use of tax breaks as part of an aggressive economic development strategy say the loss of tax revenue that results from such deals is a wise expenditure because the businesses more than make up for these concessions through the jobs and economic stimulation they provide. Critics say that these are generally unnecessary because business location decisions are usually made on the bases of other factors.

The Legal Status of Texas Cities Incorporation –City governments in Texas have fairly broad authority to provide services, enact regulations, and levy taxes. –Cities may enact city ordinances, which are laws enacted by the governing body of a municipality to regulate such matters as building construction procedures, land use practices, and driving habits. –Cities finance their operations by levying property taxes, sales taxes, and a variety of other taxes and service charges. –Nonetheless, cities and other units of local government are subordinate units of government, subject to the constitutions and laws of the United States and the state of Texas. –State law sets the requirements and procedures under which unincorporated urban areas in Texas may become incorporated municipalities. –In order to form a municipality, an area must have a population of at least two hundred people and be outside the legal jurisdiction of other incorporated municipalities unless it receives permission from the established city. –Voters must also approve a city charter, which is the basic law of a city that defines its powers, responsibilities, and organization.

The Legal Status of Texas Cities General-Law and Home-Rule Cities –Texas cities are classified as either general-law or home-rule cities. –A general-law city is a municipality that is limited to those governmental structures and powers specifically granted by state law. –General-law cities are bound by Dillon’s rule, which is the legal principle that a city can exercise only those powers expressly allowed by state law. –A city with 5,000 or more people may choose to become a home-rule city, which is a municipality that can take any actions not prohibited by state or federal law or the constitutions of the United States or the state of Texas. –In contrast to general-law cities, home-rule cities are not burdened by the limitations of Dillon’s rule.

Forms of City Government Mayor-Council Form –The mayor-council form of city government is a structure of municipal government in which voters elect a mayor as the executive officer of the city and a council that serves as a legislative body. –In the weak mayor-council form of city government, the mayor and council together make policy for the city. –In the strong-mayor variation, the mayor is clearly the foremost figure in city government, acting as both a political leader and the city’s chief administrator. –In contrast to the strong-mayor system, the weak-mayor variation of the mayor-council form of city government fragments political authority by forcing the mayor to share power with council and other elected officials, including, perhaps, a tax assessor, treasurer, and even a police chief.

Forms of City Government

Council-Manager Form –The council-manager form of city government is a structure of municipal government in which the city council/mayor appoints a professional administrator called a city manager to act as chief executive of the municipality. –In this form of city government, the power of the mayor is limited to performing ceremonial duties and presiding at council meetings. –In the council-manager form, policy implementation is the responsibility of a professional administrator hired by the mayor and/or council—a city manager.

Forms of City Government

Election Systems Should city council members be chosen at large or by district? –Supporters of district elections believe that they make government more responsive to citizens and increase participation. –In contrast, defenders of at-large elections believe that council members chosen at large consider policy issues from a broader perspective than district council members. The adoption of at-large council elections in Texas cities reduced the political influence of ethnic and racial minorities, primarily African Americans and Latinos. The federal Voting Rights Act (VRA) provided a means for minority- rights groups to attack election systems they considered discriminatory. In the late 1970s and early 1980s, minority-rights groups, with the support of the federal Justice Department, used the VRA to force Dallas, Houston, San Antonio, El Paso, Fort Worth, and other cities in the state to abandon at-large election systems. The introduction of district election systems led to the selection of city councils in most of the state’s big cities that were more ethnically and racially diverse than ever before.

Public Policies in Texas Cities Political scientist Paul E. Peterson divides urban public policies into three categories: developmental, redistributive, and allocational. Developmental urban policies are local programs that enhance the economic position of a community in its competition with other communities. Redistributive urban policies are local programs that benefit low-income residents of an area. Allocational urban policies are local programs that are more or less neutral in their impact on the local economy.

Public Policies in Texas Cities Budgetary Policy –Police and fire protection, sanitation, streets, and health are the major budget items for city governments in Texas. –The most important tax source for local governments is the ad valorem property tax. –The sales tax is the other major tax source for municipal government in Texas. –In addition to taxes, Texas cities raise revenues through federal aid, charges for services, fines, and borrowing. –Budgetary policies in urban Texas have historically been allocational and developmental. –Cities often use such tools as tax increment financing, tax abatements, and enterprise zones to promote economic development. –The proponents of tax incentives believe that cities must give tax breaks to business and industry in order to keep and expand their economic base. –In contrast, the opponents of tax abatements and other sorts of tax exemptions argue that tax breaks granted to new business enterprises increase the tax burden for homeowners and existing ­ businesses. –Furthermore, research shows that the developmental policies of city government have little if any impact on the location decisions of investors and business managers.

Public Policies in Texas Cities Annexation and Extraterritoriality –Annexation refers to the power of a city to increase its geographic size by extending its boundaries to take in adjacent unincorporated areas. –Traditionally, cities have annexed in order to enlarge their tax bases. –Another reason for annexation involves a large city’s desire to prevent encirclement by other incorporated municipalities. –Cities also annex to reap the political benefits of a larger population. –Texas cities can enhance their power to annex through their extraterritorial jurisdiction, which refers to the authority of a city to require conformity with city ordinances and regulations affecting streets, parks, alleys, utility easements, sanitary sewers, and the like in a ring of land extending from one half to five miles beyond the city-limits line, depending on the population of the city. –Extraterritoriality has enabled Texas cities to extend their control over vast expanses of unincorporated land. –Historically, Texas cities have been aggressive annexers.

Public Policies in Texas Cities Annexation and Extraterritoriality –Annexation is frequently controversial. –Land developers often favor annexation so city governments can provide services that will enhance the value of developers’ land. –Nevertheless, it is not uncommon for residents of unincorporated areas to resist a proposed annexation because they oppose paying taxes for what they feel are unnecessary and inferior city services. –Since the early 1980s, the pace of annexation by Texas cities has slowed. –The legislature has amended the state’s annexation laws somewhat to limit city annexation authority. –Even before the amendments to the state’s annexation laws, political factors induced city officials to slow the pace of annexation considerably.

Public Policies in Texas Cities Land-Use Regulation –Historically, land-use policies in Texas cities have been developmental. –Building and housing codes are established by city ordinance to set minimum standards for the construction and maintenance of buildings. Zoning is the governmental designation of tracts of land for industrial, commercial, or residential use. –Proponents of zoning and other types of land-use regulations believe that they help create an orderly city. –In contrast, opponents sometimes argue that deed restrictions are preferable to government regulation.

City Politics in Texas Before the mid-1970s, political power in big-city Texas was in the hands of an elite. The overriding goal of the business groups who dominated city politics was economic growth and development. Business leaders frequently exerted their influence through the vehicle of non-partisan “good government” groups. Candidates supported by these groups were nearly all non-Hispanic white businessmen. During the 1960s and 1970s, circumstances changed to weaken the power of the business establishment in Texas cities and increase the influence of new politics groups.

City Politics in Texas New voter registration procedures and single- member district elections enabled minority and neighborhood groups to gain a real share of political power in big-city Texas. Furthermore, by the 1980s, the business community in big-city Texas had grown too diverse for any one individual or small group of individuals to speak on its behalf. Contemporary urban politics in Texas can best be described as pluralist.