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.

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

• 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

Bennet Sandlin, Executive Director of the Texas Municipal League, spoke next:

• 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.

Representative Dan Flynn (R - Canton)

• Local government debt is as big a threat to our economy as debt at the Federal level

• His bill was killed in Calendars.

• 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.