Unfunded mandate costs mount for Texas counties

COVID-19 drove up some costs in 2020

By Tim Brown

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Texas counties continue to face costs from unfunded mandates that outpace inflation and population growth, according to results from the 2020 Unfunded Mandates Survey. Most costs also increased faster than the voter-approval tax rate, which limits property tax growth to 3.5% per year.

Over a six-year period, property tax growth of 3.5% per year results in an overall increase of about 18.8%. This is slightly more than the combined growth in inflation and population from 2015 to 2020. Yet, most of the tracked mandates had expenditures growing significantly faster than 20% from 2015 to 2020, as demonstrated by the examples below pulled from the 2020 survey report.

For comparison, inflation, as measured by the consumer price index for all urban consumers, increased by a relatively mild 9.2% from 2015 to 2020, according to the U.S Bureau of Labor Statistics. And the state’s population grew by 5.6% between 2015 and 2019, according to the U.S. Census Bureau. 2020 figures are not yet available.

Jail operating costs typically account for a significant portion of county budgets. Counties that own and operate jails saw their operating expenditures increase by 29.4% from 2015 to 2020. In 2020, counties spent an estimated $1.9 billion dollars just to operate their jails.

Although overall county jail operating costs grew much faster than either inflation or population, some costs within the jails grew even quicker. Spending on mental health evaluations for jail inmates increased by 82.6% from 2015 to 2020. Most of the increase occurred prior to 2020, when expenditures only increased by 2.9%. Data from at least two more years will be needed to confirm if these expenditures are plateauing after the implementation of recent legislation, or if this is a merely short-term impact of the COVID-19 pandemic.

In response to the COVID-19 outbreak, the Texas Department of Criminal Justice halted the intake of prisoners from county jails in April 2020. Prior to the policy change, the number of convicted felons in county jails had been falling. However, from March 2020 to September 2020, the number increased by 62.3%. While the population of jail inmates fluctuates on an annual cycle, this represented a 62.7% increase between September 2019 and September 2020. As a result of the increase in the number of state inmates in county jails, the total inmate population fell only 6.4% from September 2019 to September 2020, even though the number of inmates convicted of misdemeanors fell 54.7% from March 2020 to September 2020.

Because the state stopped picking up convicted felons, the cost of holding state inmates in county jails, which had been on a downward trend, reversed course in 2020, resulting in an increase in expenditures of 11.7% from 2015 to 2020. 

The increase appears even more significant given that many courts closed around the state to limit the spread of the virus, and they remained closed or limited the number of cases heard, creating a three-year backlog of criminal cases, as of early 2021.

For more on how COVID-19 impacted county jail populations, see "Trends in jail inmate populations" in the November-December issue of County magazine.

Similarly, the cost of holding blue warrant inmates (inmates held under a parole revocation warrant for violating a term of their parole or mandatory supervision) in county jails, which appeared to be leveling off, grew to $56.8 million in 2020, a 62% increase over 2015.

Costs for the judicial system grew faster than jail operating costs. The judicial system includes all courts for which the counties provide funding, such as constitutional county courts, statutory county courts-at-law, justice courts and district courts. It also includes all court-related personnel, such as court coordinators, court reporters, prosecutors, court-appointed attorneys and district clerks.

Growth in judicial system expenditures increased 39.4%, reaching an estimated statewide total of $1.89 billion by 2020 — slightly less than statewide jail operating expenditures.

Although not the largest expenditure for counties, jury pay also fluctuated over the survey period. However, since 2019, jury pay expenditures have fallen each year to end at $10.1 million — an overall increase of only 1.4% over six years. The decrease in 2020 is possibly a result of fewer jury trials during the COVID-19 pandemic as ordered by the Supreme Court of Texas.

Expenditures for voting equipment and jury pay demonstrate another key takeaway from the survey results. Costs for many county mandates are highly variable. It is difficult, if not impossible, to predict how much these required expenditures will change from year to year.

Expenditures for court-appointed attorneys ad litem and guardians ad litem has been a hot topic over the past few years. The 2020 survey requested information on these combined expenditures from counties, but only for Child Protective Services cases. While overall expenditures increased 28.1% over the survey period, a noticeable drop-off occurred in 2020. 

It remains unclear why expenditures fell, but reduced court activity related to the pandemic could offer an explanation. Consequently, the drop in expenditures during 2020 may be an aberration.

Some expenditures typically increase every year, such as jail operating costs and judicial system costs, although the extent of that increase can vary annually. Expenditures for other mandates can increase or decrease significantly from year to year. County expenditures for voting equipment is one of the more extreme examples. 

Though 2015 and 2016 expenditures were less than $10 million, voting equipment expenditures spiked to $108.1 million in 2019. Tropical Storm Imelda made landfall near Freeport and flooded a large part of Southeast Texas. Several counties noted needing to replace voting equipment damaged or destroyed by the storm. Additionally, other counties stated that they began purchasing voting equipment in 2019 in preparation for the 2020 election.

This representative sample of results from the 2020 survey report highlights some of the mandates under which counties operate. Most of these costs, including those not highlighted here, continue to increase at rates significantly greater than the consumer price index, population growth or the 3.5% limit approved during the 2019 legislative session. As noted, there are exceptions. While some expenditures increase more or less every year, others are less regular — spiking up or down at what may appear to be almost random intervals. However, also as noted, reasons exist for those spikes. These reasons, while apparent in hindsight, are not always foreseeable and seldom adhere to a 3.5% per year limit.

For more information on county mandates and trends in the expenditures they require, see the 2020 Unfunded Mandates Survey report. When the report is completed, it will be posted on the TAC website (www.county.org/Legislative/County-Legislative-Issues/Unfunded-Mandates).

Methodology

The Unfunded Mandates Survey began, and continues, as a collaboration among TAC, the County Judges and Commissioners Association of Texas, the Texas Conference of Urban Counties, the Texas Association of County Auditors and the County Treasurers' Association of Texas. It attempts to answer two fundamental questions about counties: How much do certain required individual county services cost and what trends can be found in those costs?

A survey was developed asking counties to provide budgeted expenditures for 2020 and actual expenditures for prior years. As the survey was ending in January, additional data was collected from state agencies. 

For more information on how this report was developed, see the 2020 Unfunded Mandates Survey report. h