As the May 10 election approaches, many local government entities – school districts, cities, counties, community colleges, health/hospital districts, water districts and authorities along with other special purpose districts – are seeking new debt via bond elections. With voters paying little attention to these elections, debt levels have risen to a point of threatening not only Texas’ economic outlook, but also the future prosperity of generations to come.
Despite the Lone Star State being second only to California in total debt and second only to New York in per capita debt, local governments are seeking to increase the state’s $322 billion of existing debt by another $6.5 billion in new debt (more than $9 billion with interest).
This video, produced by Texas Comptroller Susan Combs’ Tell the Truth Texas initiative, provides the information that local governments are legally required to provide in the days and weeks before an election.
The 2013 legislative session provided opportunity for lawmakers to pass transparency bills that would have required local governments to put forward a more honest presentation of information than currently occurs. Local governments, however, strongly opposed being forced to provide taxpayers a clearer, less deceptive picture of their current financial status. A stringent opposition effort was coordinated using organizations funded by tax dollars from local governments and the legislation died.
The Tell the Truth Texas website also offers a Bond Election Roundup page that includes upcoming bond election information as well as debt totals and trends for Texas’ local government entities. The page will also feature bond election results.
As election day nears, taxpayers should be aware that tactics not in taxpayers’ best interests are routinely used by governments seeking new tax dollars. Savvy voters should scrutinize bond figures to determine if they are principal only or if they include the interest. Obviously, interest will be part of the overall debt and should therefore be part of the overall discussion although rarely – by design - is it included. This becomes especially significant as interest is typically 40 percent of the principal.
Total existing debt (principal and interest) is another piece of information with which savvy voters should be armed. Tell the Truth Texas can provide that information as also can the Texas Bond Review Board site.