INCORPORATION in summary
The bottom line is, in the end, I took the correct position on incorporation, which was AGAINST it! In the final analysis, things might have a different calculus had George Mitchel created The Woodlands as a city with the ability to expand via an ETJ (Extra-Territorial Jurisdiction). The only calculation can be from where we are to a projection into the future. That calculation can be complex but also predictable. At the point of this writing, incorporation is not the best option for us. If that changes, I'll be among the first onboard to explain why. But for now, it is not.
INCORPORATION in full
First, I want to say that THE MOST VALUABLE thing we have in this community is our goodwill and neighborliness. If we lose this vote, it will be a real tragedy.
Second, I ran for The Woodlands Township for the past two years (and choose not to run in 2021) and I was told that politically you have to make a choice as to which side of the fence you sit on: for or against incorporation. And sit on that fence I did. I did so because I can't stand to be wrong and it is EXTREMELY important to me to get public policy correct.
This cost me because the political and financial support in The Woodlands came and still comes from where one stands on the incorporation debate. All entities who offered me monetary or political support were told I'd accept it under the condition that I will only make decisions I find are in the best interests of the residents and not the interests of any other group. You might predict I got no support from any group, only interested individual voters.
The first year, I didn't know which would be better and I objectively researched (and for some years prior) for the facts. I sat down and talked with Mike Bass over breakfast at the Black Walnut cafe. We went over the studies that exist thoroughly. He was anti-incorporation and I talked with many other pro-incorporation, including Gordy Bunch. One of the few conclusions, I was able to reach that first year was simply this: a lot of cognitive bias existed on both sides, few were truly objective, and I was told by people to my face that they held their views [literally] "at all costs". In other words, it doesn't matter what arguments are on the other side they are dedicated to their position come hell or high water. At least there was a strong sense of loyalty and commitment; however, The Woodlands deserves the best possible decision rooted in rational thought and facts.
The emotion should follow the facts - not the facts be dictated by emotion or misdirected political winds. The second year of running all I could say about incorporation is "I don't really know" because I/we/you don't have the information sufficient on the literal monetary costs of incorporation. But I can tell you when the new Novak study is completed. Neither faction embraced me because I was just too darn authentic and honest about the whole thing. But logically it is true that there is only one better thing to do than the other, that bothered me that I couldn't give THE ANSWER, but I had no clue what that was.
I examined and even made up several pros and cons for either side and collected every argument wherever I heard one from. If I came across a drunk homeless man on the streets of New York that gave an argument about incorporation of The Woodlands I would have given the argument some consideration. When people asked me to explain the pros and cons, I became a bumbling idiot 1. because there were so many, and 2. I couldn't always remember them at the time of being asked or be able to adequately summarize them in a way that was fair to the argument. Not too different today. If you really want to understand it's going to take some time.
I only have the understanding I do after 3 government internships, and many years of study, practical experience, and professional experience in government as well. During the second year, I was more convinced that the pros outweighed the cons and I favored increased controls because I thought that would be the best way to deal with the longer-term issues facing The Woodlands as it aged. I told people I would vote on the board to put it on the ballot two years from then (so now next year it would be on the ballot rather than this year) to allow the residents to decide for themselves. Just before the vote time, I found out that the projected increase in taxes was $311 per year for a $500k home and informed everyone I could, with no funding in the campaign, about that.
Gordy flat out denied there would be any tax increase to my face, and surely he and the majority of the board ensured that the model was changed to reflect a tax RATE increase of nothing, basically using reserves to not affect our cash flow and at that point, I was still on board for personally voting in favor of incorporation because I thought the small costs were worth it. I found out later, it was a windfall of projected revenue that allowed the claim of "no increase in taxes". But I did not know or had adequately considered the long-term costs to all of us.
In 2021, the third year I have made my mind up and believe with great confidence that I have examined every argument out there and given it sufficient depth and breadth of thought. It doesn't mean that I am 100% correct but my confidence that I am correct is really really high. There are some arguments that I researched that are about as absolutely true and equally un-get-overable that my personal decision is pretty much made up. You'd have to come up with something really significant and profound that no one has talked about yet and that negates the opposing arguments to change my mind at this point. Over 6 thousand people voted for me. If I have any influence or political capital whatsoever with anyone I want to use that to ask everyone to PLEASE VOTE AGAINST INCORPORATION.
At least if or until we are able to determine that the balance of the long-term consequences on our community is better than worse. All evidence I currently have indicates it is more likely to be worse than better over the long term. In the most likely reality, all we have is a short-term perception of increased controls, upset-ness from residents who thought it would be the answer, no way of going back, increased taxes, and reduced economic development (which also keeps our taxes low), therefore exacerbating the revenue stream problem and challenging our ability to keep taxes down - but to avoid exceeding the 3.5% max before putting it before the voters.
Then, we will have two factions of residents who want to keep our levels of service for increased taxation versus those who'd prefer to not increase the taxes for the specified amenities we would be proposed to lose. I can't tell you when this all would happen, this depends on how long our cash reserves will last us and potential sources of new revenues (like Amazon.com sales taxes): 3, 5, 10 years but within a year of their exhaustion it is the most likely outcome. I am not saying that the trend is inevitable to continue and a negative spiral of poorer economic development will continue until we become Greenspoint, you have to understand that it is in the realm of possible, but the movement toward that trend line can simply be avoided by NOT INCORPORATING.
I use to think that incorporating would help us avoid a similar fate to Greenspoint - that was my biggest motivator for it - now I have done the research and discovered it is the exact opposite and I hate to admit it, but my previous thinking was wrong. Meta-analyses clearly conclude that increased taxation leads to reduced economic development. Economic development is the engine that directly drives and keeps our taxes low and pays for things we don't have to. There is NO EVIDENCE for the opposite proposition that incorporation will enhance anything but our PERCEPTION of control. In the end, maintaining actual control of minor things will become too expensive or taxing on the bureaucracy that it will surely be short-term. To some people that slight temporary blip of actual control is worth it.
But think of what good it is for The Woodland's residents as a whole and, clearly, it is not a good deal. And not having control, is probably a good thing where there are added checks and balances on authority - the way it is supposed to be. I have left a lot out because I didn't intend to write a book here. I leave myself open to intellectually honest questions. Ask away.
THE AMBIGUITIES OF TRYING TO DO ANALYSIS IN THE PAST ON INCORPORATION
The question seems dichotomous enough: "Are you for incorporation or against it?" Either the township is incorporated or it is not. It seems straightforward enough.
I think we run the risk of providing overly simplified answers to enormously complicated questions when we have no way of conveying the background of the issues. It is simply unfair to voters when people are asked a yes/no question and there is so much more to it, and the best answer is in fact between the two. The question do you support incorporation fundamentally ignores so much that a simple yes or no answer is totally inadequate.
When someone asks do you support incorporation or not, what they mean is whose side of the two major political coalitions are you on? The real answer to the question is much deeper. Some people who say yes to that question, mean right now. They want a vote on it no later than 2022. Some mean yes sometime before 2057. People who say “no” mean either not now, not until 2057, or never as far as they are concerned. So, a person who says plainly yes to incorporation and no to incorporation can both mean: not now but later.
INCORPORATION AND IT’S IMPORTANCE
Make no mistake, this is the most impactful set of decisions The Woodlands has faced since its inception and we must treat it with the utmost care and concern. Imagine being responsible for creating the organization of the United States of America and writing its constitution. We are looking at essentially setting up an entire organization and writing its charter. Every little decision has the potential for massive significance over time, we need people who can foresee and avoid future problems.
At the same time, morality, stability, and community development demand some certainty as to what is going to happen. Importantly, some indicate that incorporation is a lesser issue and downplay its significance to our community. This is just wrong. It concerns me when people who want to lead this community do not see the import of incorporation and the need to bring certainty to it as soon as practicable.
I will explain it. If you are working to keep taxes low and you are trying to bring business into the community - smart businesses (the ones we want here) need the certainty to make long-term commitments. Even resident's hoping to make this a place for them and for their children and grandchildren need to know if this is the place for them when they have alternative choices for property ownership when the other place has a future that is more certain, and less risky, what will they choose?
INCORPORATION AND PREDICTING THE FUTURE
Because incorporation increases expenses by at least $9.2M every year, forever, never going down, and can only go up means we should assess its impact over the long term on our community. This is the hardest task but also the most important of analysis precisely because most of the impact of the decision will be felt in the future,
The most reliable and valid data would probably be one that assesses the impact of an increase of financial burden on the residents and its corresponding impact on economic development.
This meta-analysis provides the best information I have found to predict what impact incorporation will have over the long term. What it tells us, in brief, is that as the tax burden to the residents goes up, we may expect economic development to go down.
Economic Development is critical as it pays, through sales, use, and hotel, between 50-60% of our taxes. It is therefore crucial to our ability to: keep taxes low, provide high levels of service, and keep an attractive community.
A very important consideration is comparable existing cities. No comparable city anywhere has the same low level of debt as we do. Some believe that if we incorporated that we'd get to keep the same low levels of debt. This is based on an assessment of current budgets plus additional expected expenditures and in no way accounts for the politics involved that will inevitably change.
The cities of Sparta and Rome were undistinguished compared to surrounding cities and nothing explains their rise or fall except the politics involved. Increase the power of each seat on the board and I promise you, debt will also increase. No person has ever given an adequate explanation as to why comparable cities have more debt or adequately explain how The Woodlands would be so different. They can't and it is inexplicable. If The Woodlands became like the other cities in kind, the debt will also follow. There is no reason to believe The Woodlands would be any different. This is predictable.
THE PROCESS
The policy itself is complex, with: 1. agenda setting, 2. policy formation, 3. policy legitimation, 4. policy implementation, 5. policy evaluation, and 6. policy change (or feedback). The issue of incorporation itself is also complex.
I wanted to be as open and transparent in this process as possible. It is imperative that we have an effective means of public communication and education of the public and an input mechanism and dialogue to obtain the concerns of the community as we move toward the certainty of our future.
In no small part to the politics at play, there will likely be a gap between what the public perceives to be real and true and what IS ACTUALLY real and true; and so, we should have gone through a process to bring both together, as much as possible, before we ask the public to vote on it. This just makes sense and reduces some manipulation of the voters.
It will be a judgment between the costs, the benefits, and the value people place on them both. To make a value judgment, we first need to know the values. I would have endeavored to make the values explicit and provide information to the public concerning this issue, seek to arrange town hall meetings for open discussion, aim for maximal transparency, and to vote according to the principles I have told you.
It is important that we would have asked the fundamental questions and involved the vast intellectual resources available in this community in the process – this is why we should have followed the TX Municipal League’s handbook because they outline a best practice process for doing this very thing.
COMMON SENSE
The most ingenious thing is common sense. Applying a dose of that to this situation will tell us that things are good because of the way things are and if we change them we might undo what is presently good. This is a good instinct. The Woodlands HAS been successful, in part, because it has been unincorporated and although there is merit to controlling what happens in The Woodlands, it is also true that we have never lost a battle to prevent something we didn't want as a whole community. It might seem like it will make being a board member easier, but that is both not true and hardly a reason to increase the expenses to the taxpayers if it were true.
A video I created on this topic is found HERE !
