Essay/Opinion: This is an opinion article based on county-produced documents and quotes from Bowie County’s bond counsel and outside attorney.
County internal Problems:
This is the second article on the illegal financing and taxation practices of the Carlow Administration (the first article, Illegal Financing and Taxation – the ‘Sins of the Past,’ is available here). That the county has financial problems is obvious. County commissioners have been resistant to look back further than January 2011 in trying to find the cause of these problems. They appear to have decided all problems were caused by the the current administration.
Some problems were caused during the current administration. Such as a commissioner over-budgeting his department’s current year revenue by $1,100,000 and another commissioner also over budgeting his department’s current year revenue by $200,000 (the money was received the prior year). That will certainly cause a $1,300,000 problem. And budget adjustments lowering their departments’ revenue budget late in the year does not fix it.
But if the cause of a financial problem traces back to a prior administration and its property tax “practices,” that practice has to be stopped or the problem will continue. Looking only at the current administration is like picking the head off a dandelion and expecting the weed not to reproduce. You have to look beyond the visible part of the problem – you must go back and find the root practice to eliminate it.
Public information produced by and filed in the county suggests the cause of current financial problems is rooted in the property tax practices of the Carlow Administration. This administration violated the trust between county officials and citizens. James Carlow used his position as County Judge to take the citizens’ money through an illegal taxing scheme. He has not yet been held accountable for this but the evidence is there as displayed in Exhibits 1 and 2 of the first article concerning the property at 601 Main Street. The information is in the Commissioners Court minutes and deeds of trust in the County Clerk Office, available to the public, press and prosecutors. It is also found in Schedule B of the Property Tax Notice published annually in the New Boston Tribune and stored in their files. (See images below)
County Problems – Outside Opinion:
Carlow’s property tax scheme built a slush fund he could do with as he pleased. After County Judge Lacy was voted in, the taxing scheme was exposed over time. It was first brought to light by Boyd London, Bowie County’s bond counsel on the Highway 82 project. When he did his due diligence he found illegal debt financing on Bowie County’s balance sheet. He informed the county the “practice” that put it there had to be stopped and the loans had to be removed from the county books before Highway 82 bonds would be sold.
Required in this tax scheme was the manipulation of money between accounts, moving money from the I&S side of the books to the M&O side of the books, as noted by outside county attorney Jim Allison who said, “It appears that taxes levied for debt service have been transferred into the general fund… [which] violated the requirements and restrictions on county taxation, budget, and financial transactions.” And Allison further said, “Additional investigation will be required to determine how this erroneous practice occurred.”
Those serious charges were made in 2011. Since then, other than Judge Lacy, who has been seeking “to determine how this ‘erroneous practice’ occurred” or has even recognized there was an “erroneous practice,” your commissioner, treasurer, auditor, FAC (Financial Advisory Committee)?
While looking out for the interest of the citizen, Judge Lacy has exposed himself to ridicule by commissioners, treasurer, auditor, and let’s get real here, Mike Sandefur and Joe Dike of the FAC and rude attendees of Commissioners Court. These people have resisted discussing the “erroneous” practice. Why? Apparently, to put former Judge Carlow back in office. Read, “Did Bowie County’s Financial Advisory Committee Have A Hidden Agenda?” And while you’re there, look at the people CC’d on the emails – they were included because they’re helping deflect your attention from the facts.
Jim Allison referred to 2010, Carlow’s last year in office. Allison said, “In 2010, this debt rate [‘9 cents per taxable $100 value’] tax levy produced taxes for debt service of $3,548,790. This amount would be sufficient to pay the entire amount of county debt due within the year. The 2010 Financial Statements for Bowie County report expenditures for debt service of $171,749. The 2010 Financial Statements report an ending debt service fund balance of $30,243.” In Carlow’s last year in office more than $3,500,000 dollars was collected to pay county debt and only $200,000 is accounted for as either paid or in a fund balance account. Where is the unaccounted for $3,300,000?
Applying Allison’s Observations:
Looking at Exhibit 3 (annual tax collected for debit service) it would appear the “practice” Jim Allison noted in 2010 had been going on for more than a decade. For at least 12 years the county collected an average of $3,400,000 annually for debt service, totaling over $40,000,000.
What does the county have to show for $40,000,000? Let’s put this into perspective. For $40,000,000 the county could have purchased 106 properties like 601 Main Street or leased 167 motor graders every 3 years… or it could have lowered your property taxes.
The Texas Constitution is clear about the separation between the operation side and the debt side of property tax. Because, under certain conditions, citizens are allowed to petition for a rollback election on the M&O side (operations) of property tax and not allowed to petition for a rollback election on the I&S side (debt service), money raised on the I&S side is not permitted to be moved to the M&O side.
What happened to over $40,000,000 raised on the I&S side of property taxes? No one outside the Carlow Administration knows for sure. It is missing, unaccounted for. This question should be asked of Carlow Administration officers, starting with the current County Treasurer, Donna Burns and current County Auditor, William Tye, who held these offices in the Carlow Administration.
Top county officials are required to be bonded. If an audit or criminal investigation, as asked for by Judge Lacy, shows malfeasance of office the county could receive insurance payment(s) according to the terms of the bond. This would alleviate some of the pain thrust upon the taxpayers by the collapse of the former administration’s house of cards.
The citizens of Bowie County deserve a forensic audit on the county books to look deep into the transactions between accounts and checks written. But it takes 3 out of 5 votes on commissioners court to get it. Right now there are 2 out of 5 votes for it. Where does your commissioner stand on the subject? Does a “practice” of “illegally taxing and collecting” annually an unaccounted for $3,000,000 each year for more than a decade justify the audit?
Citizens, what will you do?
Pastors, Black Robe Regiment, what will you do?
County District Attorney, what will you do? This is not a blame game. Exhibits listing data that indicate illegal taxation and the illegal financing that allowed it to happen have been provided. The source documents are county documents filed in the County Clerk Office and at the New Boston Tribune. There are 40 million reasons to investigate… or pass it on to the Texas Rangers.
This essay is the collaborative effort of several members of the Bowie County Patriots.
Click to enlarge: