Texas local debt creation: The mechanics of seeding and growing

The Nov. 3 election will bring new taxpayer-funded debt opportunity as voters weigh in on adding a total $9 billion – $12 billion or more with interest – to the state’s already hefty $328 billion debt load.

Texans take pride in our fiscally responsible, small government image, but reality paints a different picture.

In fact, the state’s Your Money and Local Debt report noted that 2001 to 2011 population and inflation grew at a combined 53.3 percent yet outstanding local government debt simultaneously increased 122.4 percent. And sadly, growing this debt more than twice as fast as population growth and inflation has left California and New York as our only rivals in this category.

Seeding the debt

To begin with, people don’t know the realities of their own community-based debt. Information is available online at sites like the Texas Bond Review Board and Texas Transparency, but too often it goes unchecked.

A transparency initiative started by former State Comptroller Susan Combs, a strong open government proponent, has fueled contentious debate in the last two legislative sessions. Local governments’ opposition suggests how securing new taxpayer funds can outweigh even the simplest open record action.

The proposed measures advocated printing current debt levels (principal and interest) on ballots when bond proposals are put before voters; ongoing posting of financial information online along with detailed long-term debt obligations; releasing more debt information prior to issuing certificates of obligation (CO), a financial instrument increasingly used to sidestep bond elections; and blocking taxing authorities from issuing COs for projects failing to get voter approval through a bond election.

In a predictable betrayal of taxpayers, organizations like the Texas Association of School Boards, Texas Association of School Administrators, Texas Municipal League and Texas Association of Counties along with a host of other allies who benefit from taxpayer funds viciously fought these measures.

These organizations and their local government members feared that when confronted with actual current debt figures (including interest), voters would be less apt to approve new government spending. And increased transparency on COs would potentially dissuade use of that commonly employed debt-securing tactic that avoids voter approval.

This betrayal was noteworthy as local governments use taxpayer funds to join these organizations that aggressively serve their members’ interests. Sadly, this example highlights the influence of taxpayer-funded lobbying and how extremely different local government and taxpayer interests can be.

Taxpayer-funded lobbying, another contentious legislative issue, is the specific practice of local governments using public dollars to hire lobbyists who promote policies that serve government interests, and again, interests which are not necessarily the same as those of taxpayers.

TASB, TASA, TML and TAC develop their legislative agendas – priorities that serve the interests of their member local governments. Local governments may adopt these, create their own list or do some combination.

Local governments sometimes directly hire lobbyists. More than 50% of Austin lobbyists report having at least one taxing entity as a client.

Armed with their own agendas, organizations like TASB, TASA, TML and TAC also have taxpayer-financed lobbying arms to advocate for policies that often dig still deeper into taxpayer pockets. And as with local governments, these organizations may directly work to influence policymakers or use public funds supplied by member government entities to hire lobbyists who then promote policies that serve their members’ interests,

And priorities aren’t always about getting legislation passed or legislation seeking to commandeer more tax dollars.  Sometimes it’s about blocking legislative efforts – particularly on issues like school choice, transparency or taxpayer-funded lobbying prohibitions.

Growing the debt

Bond elections are funny things. Patterns emerge – especially in the government world of monkey-see, monkey-do. Election templates appear a shared resource with school districts providing the best example.

These elections are routinely positioned as “for the children” despite that, given the state’s staggering debt load, what we’re doing “to the children” seems more appropriate.

Overall scheduling of bond elections is contrived. It’s no accident that the city does an election, then the school district and next up, the county or a community college district wants their shot at additional tax dollars.

From renting voting equipment and polling venues to printing ballots and hiring election personnel, public funds are used and significant expense can be generated.

Voters are accustomed to an official uniform election day (May or November) and an established time frame in which early votes can be cast. School districts maximizing ballot-casting opportunities by setting up early voting branch locations at school campuses – also known as “rolling polling” – has become another troubling issue.

The Temple Independent School District provides a good example of one approach. With a May 2011 bond election, TISD officials scheduled voting opportunities at 11 campuses creating an additional 19.5 early voting hours. In doing so, officials could ensure increased voter access for district employees as well as for parents and friends attending end-of-school events seemingly coordinated with the branch location schedule.

A September 2013 Tax Ratification election brought the same opportunity with early voting conveniently falling as students returned back to school and 13 campuses hosted early voting sessions generating a total of 58.5 additional early voting hours.

With a $136.5 million bond on the November ballot, the district is offering another 19 early voting hours scheduled over six evenings at different campuses. A four-hour Friday evening voting session scheduled for the high school campus coincides with an at-home football game between Temple and Waco High School.

The promotion of any bond election brings a specifically targeted campaign circulated within the community to rally support for the proposed measure. Other public officials as well as business leaders and prominent citizens are encouraged to register support or else risk community “team membership” status.

Peer pressure, even bullying, are great deterrents to real public discourse that fosters accountable government. Constructive opposition to civic issues with public officials who may be neighbors, fellow church or civic organization members, etc., requires courage, an attribute these elections show to exist more in theory than in reality.

An always-present notion within campaigns reminds that passage of the proposed measure will not raise impact the frozen tax rates of voters age 65 and older.

The tactics are seen repeatedly.

New debt sometimes makes sense. The November bond proposals undoubtedly include some legitimately needed packages. That said, the reckless abandonment with which voters have rubber-stamped the last years’ spending has brought dangerous debt levels for not only us, but for future generations. Let’s hope voters take a more discerning look at the new debt proposed – if not for themselves, then maybe for the children.

Lou Ann Anderson is an information activist. As a contributor at Watchdog Arena, Raging Elephants Radio and Examiner Austin, she writes and speaks on a variety of public policy topics. Lou Ann is the creator and online producer at Estate of Denial®, a website that addresses probate abuse via wills, trusts, guardianships and powers of attorney as well as other taxpayer advocacy issues.

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