Thursday, January 9, 2014

Local Government Debt: Threatening the Texas Model

TPPF Policy Orientation panel:
A Rising Tide: Local govt. debt.

James Quintero (TPPF); Beth Hallmark (Texas Comptroller's office); Peggy Venable (Americans for Prosperity -- Texas); Keith Self (County Judge -- Collin County); Ben Wilterdink (ALEC)

James Quintero:
  • $323 billion total across the state; $12,500 per person.
  • Since 2000: Local debt up 144%, Inflation + Population up 45%

Beth Hallmark:
Peggy Venable:
  • When local government debt grows, the public rarely knows.
  • Texas ranks 46th nationally in debt service per government revenue.
  • School Districts: $107 billion.  Municipalities: $96 billion.  Water districts: $50 billion.  Counties: $21 billion.  Special purpose districts: 
  • Leander ISD owes TWICE as much interest as principle on their debt.
  • What to do?!?
    • Government goes to those who show up!
      • City council, county commission, school boards.
    • Let policymakers know how you feel; especially when you agree with them!
  •  Policy Recmmendations
    • Ban Local governments from using capital appreciation bonds.
    • Require a minimum vter turnout to approve bond initiatives
    • If a bond election fails, prohibit another election to be held for at least one calendar year.
    • Ban taxpayer funded lobbying.
    • Tighten standards for local debt issuance.
    • Repeal the authority for local authorities to issue Certificates of Obligation in the first place.
Ben Wilterdink:
  • Defined benefit pensions aren't sustainable.
    • 8% annual ROI is a ridiculous assumption
    • Government entities use different accounting methods than private companies.
    • If a state doesn't contribute, beneficiaries don't have standing in court to sue.
  • Solutions
    • Zero based budgeting.
    • Transparency
    • Defined contribution for new hires.
Keith Self:
  • Colin county is one of the fastest growing counties in America.
  • Travis county debt per capita is only $585.

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