While fighting the the Tex-Mix invasion,
we learned that incorporation was the only way we could gain land use control. Our County Commissioner, Jen Crownover, sent us a list of Texas cities (with populations, assets, and tax rates or
indebtedness) and pointed out that 53 cities had no tax and no
indebtedness! We wondered how this was possible? What services do
these cities offer, what assets do these cities own, and how do the cities raise the revenue needed?
talked to the mayors of five of these cities ranging in population in 2015 from just
under 200 to over 3,000. Every one of the Mayors we talked with said their
motivation for incorporating was to keep from being annexed by a neighboring city. The neighboring city's ETJ
expanded until it threatened them with future involuntary annexation, so they
incorporated. The following pattern emerged.
No Tax Cities Pattern
an Interlocal Agreement with their County for
Sherriff (police protection) and road maintenance.
They have a volunteer fire department (that owns the
firefighting equipment and facilities), or they have an agreement with an
encompassing Fire Department (like Bulverde Spring Branch Fire & EMS)
They do not supply or facilitate an EMS, but they may or may not
be supported by an encompassing EMS.
They do not supply or facilitate a water supply, but often have
a water supply available to some portions of the city which are close to an
independently operated water supply.
They do not supply or facilitate sewer. Typically everyone
is on septic.
The governance positions (e.g. Mayor, Councilmembers”) are
(as in, “no pay”) but are still elected.
They often have a donated building for the “City Hall” and the
City Hall is only open limited hours on limited days. In one case they
used a bedroom in the Mayor’s house, and in another case the city built a City
barn raising) on a donated parcel of land.
They have no assets other than City Hall.
They don’t have any employees but often have a contracted
part-time City Secretary (paid, but not an employee).
About half of the cities control land use, but those cities that
land use control typically exist around Home Owners
Associations or land that has Deed Restrictions, which provide the
control. One city uses building permits.
They raise revenue needed to maintain City Hall and pay the City
Secretary (if paid) by one of more of the following methods:
- 1 cent sales tax
- Building permits
- Franchise tax on utilities (mainly electricity)
Each of these cities has existed for 15 to 50 years using only these
revenue methods without resorting to any debt obligations.