Spend Wisely, Spend Well: Efficiency Audits Should Precede Tax Hike Elections

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In April, TPPF’s James Quintero testified before the Senate Committee on Local Government in support of Senate Bill 1437, a bill to require cities and counties to undergo a third-party efficiency audit prior to holding an election to exceed the voter-approval tax rate. The bill is currently pending in committee.

Below are his prepared remarks delivered orally to the committee.

Mr. Chairman and Members of the Committee—

My name is James Quintero and I represent the Texas Public Policy Foundation. I am here to testify in support of Senate Bill 1437.

One of the principles that undergirds this bill is the idea that Texans should trust but verify.

When a local elected official approaches the electorate with a petition to raise taxes, voters should trust that the request is legitimate, but also be able to verify that the need is real too—preferably with the aid of an independent authority.

One tool to trust but verify the need for a tax increase is the efficiency audit concept, which in its ideal form requires a third-party examination of an entity’s budget and operations. The purpose of these audits is different than the traditional audit as its focus is on fiscal management and operational efficiency. Where opportunities are uncovered to better perform, we open up the possibility to lower taxes, pay down debt, cut spending, and more.

Real-world experience demonstrates that there is real potential with this tool, as borne out by the three examples on the back of your handout. In each instance, significant savings were achieved through the faithful implementation of the efficiency audit.

I believe large cities and counties have a good chance to enjoy similar success, especially with the heavy influx of federal aid.

For those reasons, I humbly ask for the committee’s support of SB 1437.

Thank you for your time. I look forward to answering any questions that you may have.