Special districts are local governments that exist separately from county and municipal governments and perform a single function or limited set of related functions. Special districts have significant powers, including the ability to impose and collect taxes and fees, issue bonds, borrow money, contract with other entities, and buy, sell, or lease property. The most commonly created special districts in Texas are independent school districts. Other examples of special districts include airport authorities, community college districts, library districts, municipal utility districts (which provide water, sewage, drainage, and other utility-related services to residents of the district), and economic districts.
“With the exception of school districts, historically most special districts have as their constitutional basis two amendments to the Constitution of 1876: (1) Article III, section 52 (1904), allowing the formation of special districts that could incur indebtedness up to one-fourth of the assessed property valuation, and (2) the conservation amendment, Article XVI, section 59 (1917), allowing the establishment of conservation and reclamation districts with no limit as to amount of debt or taxation.” (Smith, Tax Districts, Special, n.d.)
Similar to cities, special districts are formed through citizen input – residents within a proposed boundary may petition to create a special district. The Texas legislature or a state bureaucratic agency (depending on the type of special district in question) then decides whether to authorize its creation. Special districts operate under either the county commissioner’s court or a board of directors, which can be appointed by the special district or elected at-large by voters in the geographic boundary encompassed by the special district.
Even though special districts are the most common type of local government within the United States, special districts may be thought of as shadow governments or ghost governments because they tend to operate with little oversight from the state and/or the citizens who live within the special district.