Opinion ID: 2104074
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Heading: The Statutory Purpose

Text: The underlying purpose of the truth-in-taxation notice is to help taxpayers evaluate a tax increase proposal. See Tex. Const. art. VIII, § 21. To do so, taxpayers need to know how the proposal will affect them; the effective tax rate and rollback tax rate help them compare next year's potential tax burden to this year's. See Tex.Tax Code § 26.04(e)(5). The court of appeals noted correctly that total fund balances are irrelevant to computing the effective tax rate and rollback tax rate, but it failed then to consider why the statute requires balances at all. See 4 S.W.3d at 73. To evaluate a tax increase proposal, taxpayers need to know whether the current year's revenues, including the tax levy, were more or less than the taxing unit needed to meet its debts and provide its services. See Tex.Tax Code § 26.04(e). If a taxing unit has leftover money available for maintenance and operations, as the District acknowledges that it has, that surplus may be of interest to taxpayers in evaluating the taxing unit's financial condition regardless of whether the surplus came from property taxes or from some other source. By allowing the District to report only leftover property taxes, of which it has none, the court of appeals' holding thwarts the purpose of the truth-in-taxation notice. Because its policy is to spend Dispro funds last, the District shows no surplus on its Section 26.04(e) notice. Aside from this discretionary policy, though, the only relevant restriction on the District's use of Dispro funds is that it must use those funds to provide medical care to poor people. This care is the District's primary function, and in fact the Constitution authorizes the District to collect property taxes only if it assume[s] full responsibility for providing medical and hospital care to needy inhabitants of the county. Tex. Const. art. IX, § 4; see also Tex.Health & Safety Code § 281.002. We must assume that the Legislature intended the truth-in-taxation disclosure to have some meaning to taxpayers who read it. See Hunter v. Fort Worth Capital Corp., 620 S.W.2d 547, 551 (Tex. 1981). On the record before us, the District could have chosen to spend Dispro funds before taxes to care for El Paso County residents who cannot pay. If it had, any reserve the District maintained would include some unspent property taxes, and the court of appeals' interpretation of Section 26.04(e)(2) would require the District to show some remaining fund balance on its truth-in-taxation notice. We do not believe that the Legislature meant the content of a taxing unit's truth-in-taxation notice to vary depending on the unit's discretionary choice among accounting methods. The District makes two arguments for the proposition that its notice fulfills its taxpayers' information needs. First, it argues that taxpayers already have more than enough information, because its annual financial reports are matters of public record. See Tex.Health & Safety Code § 281.092. But this case is not about the District's public financial statements; certainly, a taxpayer could gain more complete information by studying the District's books. Rather, the truth-in-taxation statute reflects the Legislature's determination that taxpayers should not have to work that hard to get the information that the statute covers. Alternatively, the District argues that taxpayers could be confused or even misled if they saw that the District had by 1997 accumulated unspent funds that totaled more than twice as much as the property taxes the District collected in that year. But the effect of the truth-in-taxation notice is a policy matter for the Legislature's consideration; therefore, we take the argument to be that the Legislature could not have intended to confuse or mislead voters with disclosures meant to enlighten them. Given the District's stipulation that it could have used Dispro funds for any maintenance or operations purpose consistent with its mission, though, we think that the Legislature could have concluded that including these funds in the District's maintenance and operations balance disclosure would not misinform taxpayers. Moreover, nothing in Section 26.04(e)(2) prevents the District from explaining to taxpayers why it has accumulated the surplus, what it plans to do with the money, and why it nevertheless needs property taxes. Finally, the District and amicus curiae, the Tarrant County Hospital District, suggest that Dispro funds deserve special treatment under Section 26.04(e)(2), because hospitals are ineligible for Dispro funds if they use them to reduce local revenues. See 1 Tex.Admin.Code § 355.8065(c)(8). They argue that if taxpayers read the notice, see the large amounts of leftover money, and vote for a tax rollback, the District will lose its Dispro funds. To avoid reducing local revenues, and to protect the District's ability to provide health care for poor people, their reporting method keeps Dispro funds separate from property taxes. While the District's concerns over protecting its Dispro funds and ensuring proper indigent health care are commendable, its arguments raise policy issues that only the Legislature can resolve. We understand the argument here to be that the Legislature would not have intended its disclosure requirements to jeopardize funds for indigent medical care. But the District's uses of Dispro funds for indigent care are for maintenance and operations purposes, and a rollback election does not reduce local maintenance and operations revenue. Rather, a rollback election refuses to raise such revenue as far as the taxing unit's governing body proposes. See Tex.Tax Code § 26.04(c)(2) (defining rollback tax rate); id. § 26.07 (allowing voters to reduce the annual tax rate to the rollback tax rate if the taxing unit has adopted a rate higher than the rollback tax rate). Furthermore, given that the District's full financial statements are available to the public, the risk already exists that its accumulation of Dispro funds will provoke a tax rollback. The truth-in-taxation rules may increase that risk, but we are not persuaded that the danger is so great that the Legislature, assuming that it intended to maximize the use of Dispro funds for indigent care, could not have intended to require full disclosure. C