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For Immediate Release
September 26, 2012
Comptroller Releases Report Examining Government Debt in Texas
(AUSTIN) — Texas Comptroller Susan Combs released a report today entitled Your Money and Local Debt that gives Texas taxpayers a clearer understanding of the volume of debt issued by the governmental entities that serve them. This report examines the current levels of government debt in Texas, highlighting trends that have seen our debt load more than double in the past decade.
Debt is often not visible to the public, as few government entities make it easy for the taxpayer to determine what they owe. For example, when voting on a bond initiative, voters are typically only presented with information about current debt proposals and not with information about existing debt or how much this debt will ultimately cost them. All taxpayers are served by overlapping governmental entities that may have issued debt, and it is very difficult to find out these entities’ total debt outstanding.
“As taxpayers step into a voting booth to approve new debt, government should tell them how much debt they are already responsible for repaying and how much debt service is included,” Combs said. “Elected officials are responsible for telling the taxpayers they serve about the price tag associated with new and existing debt.”
Some local governments even issue bonds without voter approval in the form of certificates of obligation. Taxpayers need access to critical information detailing how much debt their local governments have accumulated and whether their tax dollars or other revenue sources will be used to repay that debt.
To increase the information presented to Texas taxpayers so that debt – both current and proposed – is transparent, the report also issues the following recommendations:
- As new debt is presented to voters for approval, consider requiring that the following be placed on the ballot:
- the amount of outstanding debt,
- debt service,
- per capita obligation as of the most recent annual financial report,
- the amount of new debt,
- estimated debt service, and
- estimated per capita burden being proposed.
- Certificates of Obligation (COs) — local debt generally not approved by voters — totaled 16.6 percent of all debt issued by eligible entities between 2005 and 2011. Consider significantly narrowing the authority to issue such debt without voter approval, amending the issuing process to provide increased notice and to include the information about debt proposed for ballots in Recommendation 1. Also, revise the petition process to make it easier for taxpayers to compel a public vote.
- Many local entities already post their annual financial reports online. To ensure greater transparency, consider requiring all governmental entities post their annual financial reports along with all long-term debt obligations on a public website. Such disclosure should include:
- the debt’s original stated purpose,
- total amount of debt authorized,
- issued and unissued amounts of authorized debt,
- total of issued debt spent and unspent, and
- per capita burden on taxpayers.
“It is my goal to continue making Texas government more transparent by providing the information and tools necessary for our citizens to understand the details of our state and local government finances, which they pay for,” said Combs.
This report is the second in a series of reports entitled Texas, It’s Your Money aimed at helping taxpayers know more about all the ways in which their wallets are impacted. The third report will provide a more in-depth look at education debt in Texas, followed by a fourth report shining a light on the state of Texas public pensions. Taxpayers can find the report and follow the series at www.TexasItsYourMoney.org.
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