State Rep. Eric Johnson of Dallas wants to take elected officials out of the affordable housing tax credit awards process to avoid the potential for bribery like the case that ensnared former Dallas City Council member Carolyn Davis, who pleaded guilty to taking bribes last month.
AUSTIN — Calling it an effort to “end the corruption” that ensnared a former City Council member who pleaded guilty to taking bribes last month, a Dallas lawmaker on Thursday presented a bill in a House committee that would take all elected officials out of the affordable housing tax credit award process.
Rep. Eric Johnson, a Dallas Democrat who is running for mayor, said the Legislature had to provide relief to taxpayers who had been abused by local officials who used the application process to enrich themselves, like former Dallas City Council Member Carolyn Davis, who pleaded guilty to taking bribes last month, and his predecessor in the Texas House, Terri Hodge.
Because the Legislature had added local elected officials into the application process, Johnson said, it was the only body that could take them back out. State representatives can write letters in support or against a planned project, which affects the overall score in these applications.
“When we added elected officials into the process, we created a situation … where we opened ourselves up to some pretty rampant corruption and that’s something we just can’t deny,” he said. “When you have the situation where an elected official is the make-or-break point in a scoring process where millions of dollars of tax credit are on the line, it’s just an inevitable consequence. It’s something that we need to address head-on, and we are the only people who can fix it.”
Johnson stressed that his proposal was separate from his mayoral campaign and that it was part of a long track record at the Legislature of fighting to end corruption in the tax credit awarding process. In 2015, Johnson pushed a bill in the House that would have eliminated state representatives from the process.
“This bill fixes the problem by eliminating all of the elected officials from the process,” he said.
Bobby Bowling, a representative for the Texas Affiliation for Affordable Housing Providers, said he supported the bill because too many applicants for the tax credit had gamed the system by gaining political support from politicians without providing the best amenities for tenants.
“The lack of political support by a city council member cannot be made up in other parts of the scoring process,” Bowling said. “You just lose if you didn’t play your politics right.”
Johnson’s bill was left pending in committee but he said he was confident it would get a vote and could gain some traction before the session ends on May 27.
Another bill that has already won initial approval in the Texas House would cede the points allocated to a state representative’s letter to a local municipality if the lawmaker chose not to express their position on a project. But critics said that could make distinguishing good projects over bad ones more difficult.
Under the current system, a project receives points if a state representative writes a supportive letter and loses points if the lawmaker opposes the project. Writing a neutral letter or not writing a letter has no effect on the project’s overall score.
Under a new proposal by state Rep. Angie Chen Button, R-Garland, projects would continue to receive points if a state representative writes a letter in support and lose points if the lawmaker does not support the project. A neutral letter would have no effect on the score. But if the state representative writes no letter, their points would be transferred to the local municipality which could still award them to a project.
Rep. Ramon Romero, D-Fort Worth, said that would make the jobs of local representatives who prefer one project over many others in their district more difficult.
“If I decide that I want to choose because I believe that one project is head and shoulders better than the rest, then I would write a letter for that project,” said Romero, who had to consider seven projects in his district last year. “Under this legislation, then I would also have to write a no letter [against the other projects]. Otherwise my points would go to my city council and the city council would be able to award my points.”
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If a local municipality could award those points to less deserving projects, Romero said, that would push state representatives to write letters against projects to ensure that the more deserving ones would rise to the top.
Button, however, said her proposal should not change how state representatives approach these tax credit applications.
“There’s no change to your current practice at all,” Button said. “Please continue to do what’s best for your district.”
If a state representative did not want to turn over their points to a local government, she said, they would just write a neutral letter.
“The letter doesn’t have to be long,” she said. “It’ll just have to say ‘I stay neutral.’”
Button also received some pushback from state representatives who were wary that the Senate could choose to strip them of their power to weigh in on the tax credit awarding process when the bill reaches that chamber. The Senate removed itself from the process in 2013.
“I’m asking you to commit to us that if the Senate decides that they want to take our points away that you would refuse to concur with their bill,” said Tom Olliverson, a Republican from Cypress.
Button said she could not make that commitment because the Senate was an independent body. But she asked her colleagues to trust her.
“You all know I have a real good reputation out there,” she said.