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:

• Local govt debt is a long-term threat to the Texas Model

• $323 billion total across the state; $12,500 per person.

• Since 2000: Local debt up 144%, Inflation + Population up 45%

Beth Hallmark:

• Tell the Truth Texas -- Website launched by comptrollers office in late 2013.

• Debt at a glance -- Putting all the information in one place.

• TexasTransparency.org

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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