What Can Taxpayers Do When Local Governments Waste Their Money?

What can taxpayers do when local government leaders either waste or misappropriate their money? It depends, experts told The Center Square.

Recent and ongoing local issues are raising questions about what recourse taxpayers have, including in rural and urban areas in Texas.

In Point, Texas, city officials didn’t pay payroll taxes for years leading to a budget shortage. The city owed obligated retirement, health insurance, life and other insurance costs and could barely cover utilities this month, raising questions about operational costs next month. The town’s entire police force was laid off as a result.

In Corpus Christi, residents are facing a water shortage, even though $1 billion has been directed to proposed solutions. Conflict among officials continues, The Center Square reported.

“In some ways, the answer to this question differs on whether the city in question is general law or home-rule. In the latter instance, taxpayers could potentially organize and initiate near-permanent reforms through a successful charter amendment election. Such charter changes might include imposing tax-and-spending limits, creating efficiency audit requirements, or instituting a wide variety of budget transparency measures. Unfortunately, this avenue is not available to residents of a general law city, like those in Point,” James Quintero, policy director for the Texas Public Policy Foundation’s Taxpayer Protection Project, told The Center Square.

“Another option is to run for local office. Very often political scandals involving widespread corruption, incompetence, or institutional failure spur on the next generation of passionate reformers. In Point’s case, there is an obvious need for good people to step up and make changes,” he said.

When asked what can be done when taxpayer money is misappropriated and basic services can’t be provided, Quintero said, “Currently, there is no clear-cut solution to protect taxpayers. In some instances, affected parties may be able to seek relief through either litigation or legislation; but each of those avenues requires a long time and a lot of money. And even then, someone may not be successful.”

When asked what a county government or state legislature could do, Quintero recommended that the state legislature next year could “establish a clear framework for the State to temporarily assume control over failing local institutions, other than school districts, for the purpose of restoring security, stability, and self-governance. If local governments are creatures of the State, then robust state legislative action should be part of any solution.”

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