Texas Comptroller Susan Combs unveiled a new website earlier this week which focuses on local government debt. The report features a child holding a sign “Will Work to Pay Public Debt.”
Austin.- A new government website provides insight for citizens about the state of local debt - money owed by cities and towns in Texas. The debt report is the second in a series of reports designed to help Texas taxpayers learn more about how government reaches into their wallets.
Before approving new debt, the Comptroller’s office recommends citizens ask three questions:
First, how much debt are we already responsible for repaying? Second, how much debt service is being paid or what is the interest? And third, what will the annual debt service requirement for any new bond issue be or how much will we be paying in interest?
Local debt comprises 83 percent of Texas outstanding state and local debt. Of the 10 largest states, Texas ranks lowest in state debt per capita but the Lone Star state ranks second in local debt per capita.
These are important questions as government debt represents money spent today financed with tomorrow’s dollars. And those dollars come with interest.
Of the $322 billion in local debt in Texas, fully 40 percent is interest. Local school districts carry the most debt of all the taxing entities in the state.
This data is particularly important as few voters cast bond election ballots. In 2011’s November election, turnout ranged from 5.8 percent to 16.2 percent.
In Bexar County, just 6.7 percent of registered voters cast a ballot in the recent bond election.
As important as the data, the Comptroller also recommends some changes to provide still greater transparency for taxpayers and voters. She recommends that all bond election ballots include information on the current debt, change to the tax rate required to support the new debt and the effect that the tax rate would have on the average residential homeowner.
The Comptroller also recommends that authority to issue debt without taxpayer approval through the use of Certificates of Obligation (COs) be limited and that the petition process to put it on the ballot for voter approval be simplified.
Finally, the Comptroller proposes that all governmental taxing entities post their annual financial reports and long-term obligations on their website and provides suggestions for other disclosure.
Americans for Prosperity applauds the Comptroller for this important transparency measure, the data provided as well as the recommendations to provide more information for taxpayers.
For more information, visit www.TexasitsYourMoney.org.
Peggy Venable is the Director for Americans for Prosperity-Texas.