Posted on 10/18/2013 9:44:36 AM PDT by thetallguy24
On November 5th, 2013, Texans will have the opportunity to vote on 10 proposed amendments to the state’s constitution. Hardhatters offers our views and recommendations.
Prop 1 (HJR 62)
Ballot: The constitutional amendment authorizing the legislature to provide for an exemption from ad valorem taxation of all or part of the market value of the residence homestead of the surviving spouse of a member of the armed services of the United States who is killed in action.
Summary: Proposition 1 will allow for the surviving spouse of a member of the U.S. armed services who was killed in action to receive an exemption for all or part of the total appraised value of their homestead residence, but only if the surviving spouse had not remarried since the death of the member of the armed services; and the property was the residence homestead of the member of the armed services at the time of death. Proposition 1 also would allow the Legislature to provide that the exemption follow the surviving house to a new homestead, limited to the dollar amount of the exemption in the prior qualifying homestead. The exemption would end if the surviving spouse remarries.
Cost to Taxpayers: $108,921
Our Recommendation: Vote Yes
Disabled veterans are already exempted on property taxes; however, spouses of deceased veterans are not. Prop 1 would extend this exemption to the widows/widowers of those killed in action while serving in our armed services. The only disadvantage is that it might dis-incentivize beneficiaries from remarrying. However, we believe that taking care of the families of those who made the greatest sacrifice for our nation is the right thing to do.
Prop 2 (HJR 79)
Ballot: The constitutional amendment eliminating an obsolete requirement for a State Medical Education Board and a State Medical Education Fund, neither of which is operational.
Summary: Proposition 2 will remove provisions for the now-defunct State Medical Education Board and the State Medical Education Fund from the Texas Constitution.
Cost to Taxpayers: $108,921
Our Recommendation: Vote Yes
Neither of these agencies is in existence, so this amendment simply cleans up any reference to them in our already extremely long Constitution.
Prop 3 (HJR 133)
Ballot: The constitutional amendment to authorize a political subdivision of this state to extend the number of days that aircraft parts that are exempt from ad valorem taxation due to their location in this state for a temporary period may be located in this state for purposes of qualifying for the tax exemption.
Summary: Current Texas law exempts property that is temporarily located in Texas from ad valorem inventory taxation for up to 175 days, after which the item must be shipped out of Texas. Eligible property includes, among other items, aircraft and aircraft parts used for maintenance or repairs by certified air carriers. Proposition 3 gives local governments the option to extend the exemption duration up to 730 days for these aircraft parts, after which the parts must be transported outside of the state. This change is temporary and expires in 2015.
Cost to Taxpayers: $108,921
Our Recommendation: Vote Yes
This is a non-binding, temporary tax break for personal property owned by airline companies, aircraft owners, etc. While this bill would allow companies to reduce tax expenses on the parts and man hours accounting for them, there is no guarantee any of the property owners would experience such a benefit. The extension of the exemption duration is only effective IF the local government instituting the tax allows it, so it remains to be seen if these local governments would voluntarily give up tax dollars. We recommend supporting this potential tax break with fair warning that it may not come to fruition even if passed.
Prop 4 (HJR 24)
Ballot: The constitutional amendment authorizing the legislature to provide for an exemption from ad valorem taxation of part of the market value of the residence homestead of a partially disabled veteran or the surviving spouse of a partially disabled veteran if the residence homestead was donated to the disabled veteran by a charitable organization.
Summary: Proposition 4 would allow the Legislature to exempt ad valorem taxation for all or part of the market value of the residence homestead of a disabled veteran if the residence homestead was donated by a charitable organization at no cost to the veteran.
Cost to Taxpayers: $108,921
Our Recommendation: Vote Yes
There are several organizations dedicated to donating housing to disabled veterans, yet those who receive the donation still have to pay taxes on it. We believe that helping disabled veterans on fixed incomes is the right thing to do. They should not have to pay taxes on the home given by a charity.
Prop 5 (SJR 18)
Ballot: The constitutional amendment to authorize the making of a reverse mortgage loan for the purchase of homestead property and to amend lender disclosures and other requirements in connection with a reverse mortgage loan.
Summary: Proposition 5 would allow for seniors, age 62 or older, to take out a reverse mortgage on their current residence in order to pay for a new homestead property, which the homeowner must occupy as a principal residence within a specified time after the reverse mortgage closing. Proposition 5 also requires a prospective reverse mortgage borrower and their spouse to complete financial counseling before the reverse mortgage closing, as well as requiring lenders to provide full disclosure to prospective borrowers about behaviors which could lead to foreclosure and other negative effects. Both the lender and borrower would have to sign the disclosure.
Cost to Taxpayers: $108,921
Our Recommendation: Vote No
Reverse mortgages are a scam, plain and simple. This amendment would expand the abilities of reverse mortgage companies to take even more advantage of the elderly and their beneficiaries. This bill would allow seniors to take out a reverse mortgage on their current home and use it to buy a second home, which then becomes their homestead. The impact is that the seniors lose the equity in the first home, they make ZERO payments on the second home, and all of the debt is passed on to the inheritors. In fact, reverse mortgages allow seniors to take on additional debt without any risk to them. All of the debt is passed on to the beneficiaries without their permission. Reverse mortgages do what the federal government does, pass on debt to the children and grandchildren. We should not be expanding reverse mortgages in Texas.
Prop 6 (SJR 1)
Ballot: “The constitutional amendment providing for the creation of the State Water Implementation Fund for Texas and the State Water Implementation Revenue Fund for Texas to assist in the financing of priority projects in the state water plan to ensure the availability of adequate water resources.
Summary: Proposition 6 would allow for the Texas Water Development Board to create two funds: the State Water Implementation Fund for Texas (SWIFT) and the State Water Implementation Revenue Fund for Texas (SWIRFT). Over $2 billion will be transferred into SWIFT from the Rainy Day Fund, and this money will be used to give loans to applicants to finance water infrastructure and conservation projects throughout the state.
Cost to Taxpayers: $2.2 billion
Our Recommendation: Vote No
As we noted in Proposition 6: Texas Water Draining the Rainy Day Fund, voters already approved $6 billion worth of bonds (DFund II) for water infrastructure, rural water assistance, and clean water funds, yet the Texas Water Development Board has only used roughly 6% that. Prop 6 merely injects $2 billion in cash into a program where funds are readily available for the same purpose. This amendment will only drain our Rainy Day Fund, increase bureaucracy, and allow for more shady political appointments.
Proposition 7 (HJR 87)
Ballot: The constitutional amendment authorizing a home-rule municipality to provide in its charter the procedure to fill a vacancy on its governing body for which the unexpired term is 12 months or less.
Summary: In a home-rule municipality (a city with a population of more than 5,000 that has adopted a home-rule charter), the Texas Constitution requires the city to hold a special election to fill any vacancy of an elected city position that has an unexpired term of less than 12 months. Proposition 7 would allow for home-rule municipalities to amend their charters and decide for themselves whether they want to hold a special election or appoint someone to fill any vacancy that has an unexpired term of less than 12 months.
Cost to Taxpayers: $108,921
Our Recommendation: Vote No
This bill reduces democracy on the local level. Prop 7 allows city councils to choose (without voter approval) who will fill the vacant seat, thereby automatically creating an incumbent who potentially fits the ideals of the majority in the city council despite the voting preferences of that seat’s precinct. So, an appointee could fill a seat for up to a year’s time, which is a lot of time for a city council to pursue an agenda, especially with their newly appointed vote.
Proposition 8 (HJR 147 and SJR 54)
Ballot: The constitutional amendment repealing Section 7, Article IX, Texas Constitution, which relates to the creation of a hospital district in Hidalgo County.
Summary: While hospital districts in most counties in Texas are able to levy taxes at a capped rate of 75 cents per $100 valuation, Hidalgo County has been limited to a capped rate of 10 cents per $100 valuation due to an amendment to the Texas Constitution in 1960. Hidalgo County is the largest county in Texas without a hospital district, due in large part to their inability to collect enough tax funds to run a functional system. Proposition 8 will allow for the repeal of the restrictive 1960 amendment, and allow for the voters of Hidalgo County to create a hospital district and set their own tax rates if they feel doing so is in their county’s best interest.
Cost to Taxpayers: $108,921
Our Recommendation: Vote Yes
Prop 8 modernizes and brings the taxing ability of Hidalgo County to state standards. For over 50 years, they have been capped and unable to create a hospital district, while every other county in Texas was given the ability.
Proposition 9 (SJR 42)
Ballot: The constitutional amendment relating to expanding the types of sanctions that may be assessed against a judge or justice following a formal proceeding instituted by the State Commission on Judicial Conduct.
Summary: Currently, if a Texas judge does not comply with standards of conduct, the State Commission on Judicial Conduct (SCJC) has the ability to issue an order of public admonition, warning, reprimand, censure, or requirement that a judge or justice obtain additional training or education. Otherwise, if the offense goes to a formal proceeding, the Master presiding over the proceeding may only recommend censure, retirement or removal. Proposition 9 would expand the Master’s reach by also allowing him to issue a recommendation of public admonition, warning, reprimand, censure, or requirement that a judge or justice obtain additional training or education after a formal proceeding. This change is temporary and expires in 2016.
Cost to Taxpayers: $108,921
Our Recommendation: Vote No
Prop 9 actually dilutes the disciplinary powers of Master in judicial conduct proceeding. Currently, only the most serious offenses go to a formal hearing before a Master, which is why the only disciplinary options available are recommendations for censure, retirement or removal. Prop 9 would allow the Master to recommend much weaker actions, something the SCJC already has the power to do. This opens the door for political favoritism, allowing a Master to recommend much weaker punishments for the most serious of offenses if the offender is a friend or party member.
Early voting starts Monday the 21st.
This is one of the better guides to the election. Another might be Empower Texans here http://www.empowertexans.com/features/recommendations-texas-constitutional-amendments
Good guide. Thanks for posting it.
Excellent Guide. Thanks for posting!
The author seems to be mistaken. Several online sources indicate that there are only 9 proposed amendments. I looked this up because I was suspicious that some liberal author might have omitted to mention a pro-gun proposition. Evidently not the case.
Very interesting.
Probably not the best place to ask this question, but re prop 5, I have a friend whose grandparents are getting along in age and since none of their children are interested in their house, have decided to reverse mortgage it. The language in this article about passing on debt to beneficiaries is disturbing - how can this sort of thing happen?
I’d rather not see my friend or his parents end up in a debt trap because of the grandparents fiscal folly.
Self ping
Thanks.
A reverse mortgage is still a mortgage. The lender is making payments to the owner which causes the amount owed to increase over time. At the owner's death, the heirs are entitled to any equity in the property, but it's probably in the fine print that the property must be sold to pay off the debt unless the heirs do so.
You know, everything’s bigger in Texas : )
This analysis sounds like nonsense to me.
If the seniors have equity in the home, they should be free to use that equity in any manner they wish.
The analysis makes it sound as if the reverse mortgage will result in negative equity in the home and that the heirs will have to pay off this debt. Somehow, I doubt that this is true.
What is perhaps true, and completely fair to every party involved, is that the debt may have to be paid off from the seniors' estate. This might involve assets beyond the property which has the reverse mortgage on it, but it would still be property belonging to the seniors and they should be able to do with it anything they wish.
There should be no obligation that seniors should have to live an unnecessarily frugal life or continue living in a home which doesn't suit them simply in order to preserve an inheritance for their offspring.
I've helped my kids get a financial start in life but I still intend to get a bumper sticker saying, "I'm spending my kids' inheritance." When the time comes, they can do the same.
Thank you!
Reverse Mortgages - 10 things to know
Frequently Asked Questions about HUD’s Reverse Mortgages
http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/hecm/rmtopten
6. Will we have an estate that we can leave to heirs?
When the home is sold or no longer used as a primary residence, the cash,
interest, and other HECM finance charges must be repaid. All proceeds beyond
the amount owed belong to your spouse or estate. This means any remaining
equity can be transferred to heirs. No debt is passed along to the estate or heirs.
Ah, very good. It’s one thing to spend their inheritance, but would be another thing to squander their future.
After all, that’s what the government is for.
This is not completely accurate. What if the house is underwater and sells for less than what is owed? Who is the reverse mortgage company going to go after if the house burns down and the owners die? The insurance companies? The kids? Someone would have to pay.
After all, they payments on the mortgage aren’t made until they die, so if they live well beyond the expected lifespan the interest payment would be enormous. Possibly greater than the value of the home.
Plus, the estate may be passed on to heirs, but the house would not, as it would have to be sold unless the beneficiaries can pay off the remaining debt with cash. If they are forced to sell the “family home,” there is also the cost of selling, like commissions, fees, etc.
The intrinsic problem is that it forces an individual or group to perform an action based upon the actions of another individual or group. It forces you to divest of something you have received without any consideration of your desire to keep it or not.
Sounds a lot like Obamacare
“If you like your [family home], you can keep it...NOT”
Well, ... If it's really a "family home" then the title should have the family members' names on it. If not, then it's not a "family home", it's the parents' home. There is no way to arrange a mortgage, reverse or otherwise, without the consent of all the parties on the title.
This is a really good reason not to put a lot of "sweat equity" into one's parents' home without having one's name put on the title.
I know next to nothing about the reverse mortgage programs. I thought it was based
upon the equity you had in the home to which a portion could be paid to you/spouse
via the reverse mortgage program. Maybe I’m wrong as I haven’t explored the
details in any degree.
Thank you !!!
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