The everything’s bigger in Texas claim certainly applies to our local government debt. While indeed the state enjoys many economic advantages stemming from sound policies promoting economic freedom, limited government and low taxes, Texas local debt stands at an abysmal $322 billion and if assorted school districts, cities and a few other government entities get their way – the May 10 election will bring up to $6.5 billion (more than $9 billion with interest) in new debt.
For context, understand Texas is second only to California in total debt and second only to New York in per capita debt. Local debt is growing faster than the increase in population and inflation.
Many of these bond packages are sold as being “for the children” or as “investments in the future.” And our children are certainly invested in these actions, both now and in the future as the ones who will be left paying for all this spending — for years, decades even to come. When all is said and done, the most lasting legacy with which future generations will be left is one of opportunity-killing debt.
The May ballot will bring about 65 jurisdictions asking voters to consider nearly $6.5 billion in additional debt. Two things rarely mentioned in these elections: existing debt and the interest (roughly 40 percent of the principal) that will be added on to the principal amount promoted in local elections. So with this election cycle, $6.5 billion debt more realistically equates to $9.1 billion.
For example, Arlington Independent School District is seeking to pass a $663.1 million package. What’s rarely mentioned is how the $663.1 million principal combined with about $265 million in interest makes the package on which votes are being cast more accurately valued at $928 million.
On top of that, with current debt at $567.4 million ($445.1 million principal/$122.3 million interest), passage of this package will leave district residents with a debt burden of nearly $1.5 billion – nearly triple their current amount. Note in reporting on the current debt, this Star-Telegram article lists only the $445 million principal.
The Frisco ISD is another heavy-hitter in this equation seeking $775 million (slightly more than $1 billion with interest). The Texas Public Policy Foundation offers an interesting analysis entitled A Profile in Runaway Debt: Frisco ISD’s $775 Million Bond Proposal which reminds how this amount will be on top of an existing $2.6 billion debt load ($1.4 billion principal/$1.2 billion interest).
The report also notes that the current debt represents nearly $56,000 per enrolled student, an amount higher than all adjacent large school districts. If passed, the new bond’s spending on short-term non-facility projects will cost more than $67,000 for every student the new facilities are intended to accommodate through the 2020-2021 school year.
These are the larger numbers, but smaller district bond elections also have significance when viewing the dollars sought in terms of the students served. For instance, Navasota ISD voters will weigh in on a $61.6 million package ($86.2 million with interest).
This district of 2,868 students currently has debt of $48.6 million ($31.9 million principal/$16.7 million interest). The bond is positioned as needed for major infrastructure upgrades throughout the district.
Similarly, Cameron ISD with its 1,601 students is looking to add to its current $24.5 million debt load ($17.2 million principal/$7.3 million interest) with a $5.6 million package ($7.8 million with interest).
School Board President Alan Patterson said the district will seek voter approval to issue $5.65 million in bonds to finance upgrades and construction of athletic facilities including improving the district’s vintage football stadium, upgrading the track at the Oxsheer M. Smith Athletic Complex and adding new tennis courts there and construction of a new baseball field as part of the Cameron Business Park Phase 2 development off Hwy. 190/36.
CISD Superintendent Collin Clark said a tax increase of 7.65 cents per $100 property valuation will be needed to cover the bond issue. Voters will have to approve the increase and the financing. The election will be held May 10, in conjunction with regular school board elections.
The Texas Association of School Boards, Texas Association of School Administrators, Texas Municipal League and Texas Association of Counties are largely taxpayer-funded organizations that work to serve the interests of member organizations’ officials. Note this is far different from serving taxpayer interests and these groups are commonly linked with a practice called taxpayer-funded lobbying.
During the 83rd Texas Legislature’s regular session, these and other publicly-funded groups mounted an effort to defeat bills that would have provided taxpayers with new transparency regarding local government spending and debt. One of those provisions: printing debt levels (principal and interest) on ballots when bond initiatives are put before voters.
Recognizing that taxpayers may not authorize new debt if provided the accurate current debt information an election ballots, the groups were successful in killing this legislation making it now easier for their member organizations to be out “selling” these bond packages to voters.
Public buildings wear out, need upgrading and sometimes new facilities are required. Technological and other infrastructure improvements can indeed legitimately be needed.
The problem comes when government entities – especially school districts – have too often appeared on irresponsible spending sprees. It’s an “everyone’s doing it” mentality that questionably brings a tablet to every student, opulent athletic facilities and other measures the public is increasingly questioning – especially as debt continues skyrocketing while our economy remains largely stalled out.
And again, as the excuse for this spending keeps coming back to the children and the future, the responsible question to ask is if saddling our children – both now and in the future – with decades of debt is truly the legacy with which to leave them.