Wrestling with MUDs to Pin Down the Truth about Special Districts
40 Pages Posted: 10 May 2007 Last revised: 1 Jun 2021
Federal, state, and local governments encourage and empower special districts - board-run, special purpose local government units that are administratively and fiscally independent from general purpose local governments. Special districts receive incentives, grants, and freedom from limitations (such as limitations on tax and debt) imposed on general purpose local governments. Special districts are treated favorably because they are small in size, which theoretically means they foster democratic participation; are limited in purpose, meaning that states can tailor the special districts' powers to serve specific problems; and are viewed as efficient solutions to specific problems. Though special districts have tripled in number over the last fifty years, the rationale justifying their favorable treatment has not been thoroughly scrutinized. One obstacle to such scrutiny is the difficulty in determining a metric of assessment: Too many different kinds of special districts exist, and the scope of districts changes constantly. An imperfect, but no less revealing method is a close investigation of one type of special district.
This Article provides one of the few in-depth reviews of special districts in the academic literature, focusing on the Texas municipal utility district (MUD), originally designed to supply water to unincorporated areas. MUDs - the most common type of special district in the state with the third largest number of special districts - embody both the strengths and weaknesses of special districts. Texas's failure to address MUDs' negative effects reflects our nationwide failure to analyze and correct problematic special districts. This Article discusses MUDs' formation, powers, and scope, and analyzes how MUDs operate without real democratic checks, have too much power, and ineffectively work toward their goals. Throughout, it attempts to engage the central question in modern local government law: the optimality of certain units of government.
Keywords: Local government, municipal utility district, special district, special purpose district, Texas.
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