Lawmakers Propose Raiding Auto Theft Fund

A little-known state agency could be celebrating its 20th anniversary this year by closing its doors. But you might still be paying for it.

Under the House and Senate initial budget proposals, funding is nixed for the Texas Automobile Burglary and Theft Prevention Authority, a five-person shop that lawmakers created in 1991 and awards grants to police agencies to help prevent and investigate the crimes that are its namesake.

But even though they’re planning to shutter the authority, lawmakers are not planning to stop collecting the $1 fee that Texans pay annually on their auto insurance policies to fund the agency. Instead, the money would get swept into the state’s general fund to help close that gaping $15 billion to $27 billion budget hole. Some budget hounds think that’s a bad idea. “Sounds like a misuse of the fee to me,” says Talmadge Heflin, a former House budget writer and director of the Texas Public Policy Foundation's Center for Fiscal Policy.

What’s more, even while you’re paying for an agency that no longer exists, insurance premiums will likely rise. Why? Without the prevention programs, auto thefts could proliferate, just as they did before the agency was created, resulting in rate hikes by insurers trying to cover their losses.

“It’s going to be like Mardi Gras in the streets with these car thieves,” says Lt. Tommy Hansen, assistant commander of the Galveston County Sheriff’s criminal investigations division. “The theft rate in the state of Texas is going to skyrocket."

You probably didn’t know it, but every year, you pay a $1 fee — fittingly called the Automobile Burglary and Theft Prevention Authority Assessment — on your auto insurance policy to keep the tiny agency afloat. Lawmakers created the agency and the fee to support it in 1991 as auto thefts surged statewide. That year, Texans reported more than 163,000 auto thefts worth $849 million.  

The authority’s main role is to dole out grants to local police and sheriff’s departments to help prevent and investigate auto theft and burglary. Since its inception, the agency has awarded grants totaling more than $230 million, and in fiscal year 2010, it gave local departments 28 grants worth more than $14.1 million. The money helps pay all or part of the salaries of about 200 police officers whose main job is to investigate auto theft. Without money from the authority, many of those officers could lose their jobs, says Lt. Joey Canady, president of the Texas Association of Vehicle Theft Investigators. If grant money to pay the officers’ salaries goes away, it will fall to local cities or counties to pay, and they’re in the same financial straits as the state.

Although it’s not always the case that money spent by the state government produces results, the auto theft authority’s work seems to have been effective. Auto theft rates have fallen by at least 50 percent since 1991. And from 2002 to 2009, departments that received grants from the authority recovered more than $1 billion worth of stolen vehicles, including some from Mexico. “That’s a pretty good bang for your buck,” Hansen says.

An increase in auto thefts likely means more money out of your pocket. “The more cars stolen, the more cars burglarized, the higher the [auto insurance] rates,” says Mark Hanna, a spokesman for the Insurance Council of Texas. Auto insurers have benefited from the authority's work because it means fewer claims they have to pay out for stolen cars. “This organization has done well,” Hanna says. “They had the numbers to back it up.”

Though Heflin disapproves of the budgetary tactic of using funds specified for a particular purpose for simply plugging the budget hole, he says it’s not an uncommon strategy in the Texas Legislature. When he was helping write the budget in the Texas House, Heflin says, legislators would often take unused fees from one entity to help fund other priorities. But completely axing an agency subsidized with a specific fund, he says, is a different matter. “If they do away with the use of that fee totally, then the fee should be taken off,” Heflin says.

State Sen. John Whitmire, D-Houston, agrees. The chairman of the Senate Criminal Justice Committee says the auto theft authority has been an effective program. He says he understands the financial jam the state is in, but that this seems like a “sneaky way” to help solve the problem. “These are strange times, but it’s just wrong; they just shouldn’t do it,” Whitmire says. “Either use the funds for the stated purpose or don’t charge.”

Even state Sen. Steve Ogden, R-Bryan, the Senate's lead budget writer, says using the auto theft prevention fee for something other than auto theft prevention "sounds like a problem." Without making any promises, he says, he'll consider the issue. "But at the end of the day, balancing the budget’s a higher priority," Ogden says, "so I’ll look at it."