Bankers behind Unlawful Property Taxes in Support of Texas Public Education

By Mark Anderson

AUSTIN, Texas—While “the band played on” Oct. 22 here inside the Travis County Courthouse—the scene of chronic court proceedings on eternal but never-resolved arguments over ensuring “fair” public education funding—area activist Ron Avery sang a dramatically different tune that day outside the courthouse, handing out literature to remind fellow Texans that it’s not just how you “cut the pie” for such funding but how you collect the filling and for what purpose.

Avery strongly stressed that school funding is currently created through a locally levied ad valorem property tax from state subdivisions known as school districts—yet the state government can only contribute to education with revenue raised by other means, because the Texas constitution itself, in Article 8 Section 1-e, categorically forbids Texas from levying an ad valorem property tax to support state functions.

Ad valorem tax reduces “property owners” to mere peasants who are taxed to pay bond payments to nine major national banks that hold the liens for $106.8 billion in Texas public school debt. It’s like being at constant “gunpoint,” since any sizable personal financial downturn could lead to eviction from your property for nonpayment of the property tax. But seizure of your property happens at the moment of the institution of an ad valorem property tax where the state becomes the new owner and the real owner (you) become the tenant who can be evicted for failure to pay (your) annual rent to the state. When property taxes are levied to borrow money from banks the state becomes a mere servant to the banks, acting as both revenuer and land-collector for the money men. Ultimately this makes the banks the owner of the state. The banks holding their debt can leverage the state to not only create the market for their loans but guarantee their payments with the threat and actual eviction of the owners (tenants) from their property.

Countering the redundant state versus state arguments from the education establishment, Avery advocates a lawful non-confiscatory type of taxation—a separate statewide sales tax—which naturally applies equally and uniformly to all and is equally and uniformly divided on a per-student basis to each school district, in conformity to Article 8 Section 1(a), regardless of community wealth, and for which non-payment does not result in eviction of the owner from their property.

Avery passionately explained the matter in a recorded interview, contrasting the courtroom proceedings with that of constitutional law as he saw it:

“About 400 school districts are suing the Texas State Board of Education, because they feel some of the school districts are not getting [an] equal share of the property tax system established by the state, and our complaint is that the whole system of ad valorem property taxation is totally unlawful not merely how it is devised or manipulated.”

“The reason we’re out here on the curb is because we’ve tried to go through the courts. But the courts will not let citizens bring a case against unlawful property taxes, because [individual citizens] would have to prove a unique injury separate from all their fellow citizens. Well, anybody [who] is charged an unlawful tax cannot claim a unique injury so we cannot go to court—we cannot challenge unlawful property taxes.”

“But they allow the school districts to do that and they don’t have any constitutional rights,” Avery added, meaning that he’s asking how the school districts, who do not have constitutional rights but only duties, and are mere subdivisions of the state, can sue the state for violation of same and levy a property tax that is forbidden to the state.

And he wonders why citizens are denied their constitutional rights under Article 1 of the Texas Constitution to challenge unlawful taxation and state subdivisions are granted constitutional rights to sue the state. “So we’re complaining that, number one, the courts are closed to individual citizens on this issue forcing us into the street; and number two, the funding of public education is unlawful. Article 8, Section 1-e forbids the institution of a property tax on any property in Texas. But they turn around in Article 7, Section 3(e) and say that the state legislature has authority to authorize school districts or subdivisions of the state to impose an ad valorem property tax. Well, how did the state get that authority to authorize what it can’t do? How can a subdivision have more authority than the state itself? How can the state delegate to its subdivision an authority that is denied to it? We’re saying that’s impossible. Whoever wrote Article 7 Section 3(e) didn’t understand law and how it works and they didn’t understand the law of delegated authority.”

Avery continued, “Since ad valorem property taxes supporting public education is a state function under Article 7 Section 1 and Texas Education Code §42.001(a), the state “should not permit school districts to raise money by a means forbidden to it. TEC §42.001(a) also requires the state to fund public education and it therefore requires a means lawful to the state.”

At the end of this unconstitutional system of funding public education consisting of architects, contractors, school districts, school teachers, the State Board of Education, the Texas Education Agency, the State Legislature, the Texas Supreme Court etc, what do we find? Avery believes “The result is that there are nine banks that unlawfully underwrite all the bonds issued by the 1200 plus Texas School districts. The present public school debt in Texas is $106.8 billion, of which about half is interest. And our public education debt should be zero, because all of this public education, including all the new construction, should be paid for with taxes lawful to the State or a sales tax, because Article 8, Section 1(a) requires all taxes in Texas to be equal and uniform. And that can’t come from property taxes, because they can never be made equal and uniform and are specifically forbidden to the state. The purpose of lawful government being the protection of the property of each individual citizen, it cannot be funded by a means that threatens to, or does in fact, lien, seize or confiscate that which it is to protect.”

Avery said: “These nine banks: Bank of America; Bear Stearns; Citigroup; Goldman Sachs; J. P. Morgan; Merrill Lynch; Morgan Stanley; RBC Dain Rauscher; and UBS underwrite all the bonds issued by not only the 1200 plus Texas school districts but all other public debt in the United States and we now know a lot of it is unlawful in Texas.”

“K-12 public education curriculum,” he adds, “should be limited to that authority which the state has which is limited to teaching the principles of property that are the basis of our federal and state constitutions. All authority of the state comes from the people, Article 1 Section 2, and the authority of the people is not unlimited. No one has authority to teach their neighbors kids about astronomy, welding, auto repair, medicine, tennis, football, etc., but they do have authority to protect their property by teaching their neighbors kids what property is and who owns it and how to protect it from their fellow citizens, foreigners, and the state, and the necessity of respecting the property of others. This authority is in the people and they can, and do, delegate that to the state. But, because the public school pays its bills by an unlawful confiscation of private property they cannot teach the principles of property without exposing their crimes so they teach all things to all students and that the state owns the property, or socialism, which is unlawful in Texas.”

So, Avery doesn’t like the recipe for public education pie in Texas. Not only is it cut up badly and the curriculum crust too heavy to carry but the filling or funding is actually the property of the people stolen from them against the law. The bottom line, he says, is: “We shouldn’t be borrowing any money from banks to do this.” For much more information, including three of my radio interviews of Avery about this matter, go to


Mark Anderson is a veteran journalist who divides his time between Texas and Michigan and is a roving editor for the American Free Press. Email him at