In the past decade, Texas has acquired a string of “defensive cities.” The phrase may conjure an image of military fortresses, but what these cities are actually defending against is taxation. In Texas, a defensive city, sometimes called a “liberty city,” refers to a group of people who have banded together and incorporated themselves for the express purpose of keeping their taxes down.
A number of these cities owe their existence in part to Art Martinez de Vara, who is currently an attorney with a practice outside San Antonio. Earlier in his career, as a state legislative aide, he made a minor specialty out of setting up these new entities.
A decade ago, Martinez de Vara helped create a defensive city in his own hometown of Von Ormy, which has 1,300 residents. When the incorporation went through, he became the town’s first mayor. But Von Ormy got off to a rocky start.
The problems began with weak sales tax collections. From the start, the new city was heavily reliant on the sales taxes it collected from retail outlets along Interstate 35, heading southwest out of San Antonio. But thanks to setbacks in the oil industry, those sales soon began to dry up. Then came an unending series of policy squabbles among its leaders. One of those feuds was over whether to hire a full-time police chief or continue relying on the Bexar County sheriff. That argument soured relations between Trina Reyes, who succeeded Martinez de Vara as mayor, and members of the city council. “They had flunked every audit,” Reyes says of the Von Ormy Police Department. “When we went into the evidence room [housed in an old trailer], there was no documentation. All kinds of pipes, guns were just thrown into boxes with no tags, no documentation whatsoever.” Things continued to get worse. The city’s force ended its dispatch service and the state pulled its accreditation.
Meanwhile, the city of Von Ormy couldn’t find a home for its own operations. Its elected leaders had to hold meetings in a rented church hall and then in a bar that had once belonged to a member of the council. But the new bar owner “never knew we were in there,” says Reyes. “We had to break into the bar. He would not hand over the equipment, the computers, the radios.”
Amid all this acrimony and upheaval, three members of the council held a separate meeting in a fire station. They were investigated by the Texas Rangers for violating an open meetings law, and eventually were indicted, although the charges were dismissed. “For the last few years, Von Ormy has been in near-constant turmoil over basic issues of governance,” The Texas Observer noted in August.
Who’s to blame for the mess? Fingers get pointed every which way. The city voted in 2015 to amend its form of government, moving to a commission system and stripping the mayor of some authority. Reyes says that has deprived it of any balance of power. Martinez de Vara argues that conditions have actually improved. Von Ormy’s balance sheet is healthy, despite the elimination of the local property tax.“One of the benefits of gridlock is they didn’t spend a lot of money,” he says. “The council built up their reserves because they didn’t agree to spend money on anything.”
No matter how much bad press Von Ormy has gotten, it hasn’t soured Texas officials on the defensive cities concept. “If you look at the agenda in the special legislative session, it’s a liberty city agenda,” Martinez de Vara says. “They’re trying to check the growth of large cities, or give people more oversight.”
In August, the legislature gave anti-tax enclaves some extra political ammunition. Gov. Greg Abbott signed legislation making it more difficult for big cities to annex neighboring territory. Now, annexations have to win approval from voters. Citizens who want to keep their tax bills down will now have an even easier time doing it -- and perhaps they can learn from Von Ormy’s stumbles.