Wednesday, August 7, 2013

Texas Public Policy Foundation on Local Government Debt and Transparency


This afternoon, we attended the Texas Public Policy Foundation's forum on Local Government Transparency and Debt; the following are from our notes.

James Quintero, director of TPPF's Center for Local Governance, spoke first:

  • Texas currently has $192 BILLION in principle and 96 BILLION in interest in local government debt outstanding.
  • Living beyond our means only works for a limited period of time.
  • 83% of total public debt in Texas is local.
  • Local Government debt has risen approximately 40% faster than inflation plus population growth in the last decade.
  • Sources of Debt:
    • School Districts -- $63.6 BILLION
    • Cities -- $62.9 BILLION
    • Special Purpose Districts (eg. Hospital Districts or MUD's) -- $48.6 BILLION
    • Counties --$13.3 BILLION
    • Community Colleges -- $4.3 Billion
  • Texas currently has the 14th highest property taxes in the United States; to get a handle on that, we have to get a handle on local government debt.
  • Positive state policy decisions don't filter down to the local level.
  • How to fix it:
    • Public Awareness
    • Ballot Box Transparency
    • Online Transparency
    • Local Government Debt Limits
  • Led off by passing the buck to the state government.
  • Local governments get the bulk of their money from property taxes; State gets it from sales....
  • A big chunk of property taxes go to schools.
  • Taxpayers get a "good bang for their buck" from municipal governments
    • Keep in mind, school and special purpose districts AREN'T INCLUDED in these numbers; while this is a money-laundering shell game, Sandlin still makes a decent point regarding the expenditures of municipal governments narrowly defined.
  • Special Purpose districts are the biggest driver of debt growth.  They grew by 244% from 2007 to 2011.  Unfortunately, in 2011 the clowns in the Republican leadership of the Texas Legislature exempted special purpose taxing districts from tracking.
  • Sandlin argued that everything that happens in local governments (except schools) should be handled by cities, not special purpose districts; we tend to agree.
Pam Waggoner, President Leander ISD:

Leander ISD has one of the highest debt loads in the state, which Waggoner's only noted in passing.  Her presentation moved extremely quickly and involved a lot of complicated numbers that made our eyes glaze over.  Personally, we think this was her strategy.

  • Local government debt is as big a threat to our economy as debt at the Federal level
  • The permanent school fund has guaranteed more debt that cash on hand.
  • 20 school districts in Texas owe over $2 BILLION
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Kudos to TPPF for taking on this growing economic threat!!!

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Update: TPPF has pictures from the event here; TXTrendyChick was the photographer.

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