Transparency bill opposition exposes local bond election deceptions

Texas voters are a step closer to much needed transparency when it comes to city, county and school bond elections. Officials routinely claim support for open government policies, yet opposition to bills before the state’s legislature reminds this concept functions as a theory local governments more robustly espouse than routinely practice.

The May 6 election offers another round of local governments soliciting additional hard-earned dollars from taxpayers. This upcoming cycle will see at least 62 public entities – nine cities, three counties, 48 ISDs and two community college districts – pursuing bond packages that, if passed, will add nearly $6 billion of principal to our state’s current local government debt load. Interest, often an additional 40 percent of the principal, brings this figure closer to $8.4 billion.

In Red Ink Rising in the Lone Star State: FY 2016, the Texas Public Policy Foundation reported total FY 2016 local debt topped $342 billion or $12,278 owed for every man, woman, and child in the Lone Star State. Local debt outpaced population and inflation by more than 2-to-1. The analysis further noted that of the 10 most populous states, Texas’ local debt per capita ($8,350) ranked second greatest and only behind New York.

Taxpayers deserve real transparency and good faith efforts from local governments – especially on homeowner issues like future ad valorem tax rates and property valuations. As SB 461 passed in the Texas Senate and now heads to the House of Representatives, this bill seeks to thwart deception too often seen within the mechanics of local bond elections.

It first requires the tax impact per $100,000 valuation to be printed on election ballots. Taxing entity websites would additionally feature mandatory information detailing proposed new bond debt, current and future bond debt secured by ad valorem taxes as well as the new debt impact on property valuations. Per capita information listing current and future principal and interest on all existing debt along with the new debt’s timetable for maturity would also be included.

Language calling for ballots to include current debt information (including principal and interest) was stripped from SB 461 though it remains in HB 3335. For critical voter information not on the ballot, new legislation is likely to require a voter information document prepared in table form highlighting outstanding and new debt – including principal and interest. This document would be provided upon notice of the election, posted at the polls and on the political subdivision’s website.

If operating in good faith and with transparency as a goal, one would expect local governments and related associations – associations financed by members’ use of tax dollars – to support these measures. Unsurprisingly, the witness list from a March 27 hearing before the Senate Intergovernmental Relations Committee on SB 461 reflects differently.

At the hearing, opposition testimony was heard on behalf of the County Judges and Commissioners Association of Texas, the city of San Antonio, Harris County, the Harris County Toll Road Authority, the Texas Conference of Urban Counties and the Texas Municipal League.

Other individuals registering opposition though not testifying represented the city of Dallas, South Texas Association of Schools, the city of El Paso, Texas Urban Council, the city of Austin, Texas Association of School Boards, Travis County Commissioners Court, Tarrant County, Texas Rural Education Association, Texas Association Community Schools and the city of Houston.

This isn’t the first time taxpayer resources have been used to thwart efforts to increase local government transparency. A 2013 legislative hearing on similar measures brought an even larger coalition of local government officials and associations.

A review of local government actions easily demonstrates the need for transparency legislation. Belton ISD offers great examples.

In a 2012 bond election, BISD sought approval for a $60 million bond package. A Temple Daily Telegram article quoted John Fulwiler, a member of Concerned Citizens for Fiscal Responsibility, a group opposing the bond. The article offered educational opportunities not only in local bond debt levels, but also in bond election tactics.

Fulwiler said Belton ISD’s current debt load is $136 million, and he’s concerned about adding another $60 million to that.

District figures show the current debt load at $88.9 million.

The article offered no explanation nor questioned the discrepancy, but it’s easy enough to explain. At that time, Belton ISD’s most current information (based on Texas Bond Review Board FY 2011 numbers) indeed paralleled the district’s stated $88.8 million number.  This, however, was only the principal. It in no way reflected the additional $47.7 million in interest that brought Belton ISD’s total debt to $136.5 million, the number used by Fulwiler.

Let’s face it. It’s easier to promote $60 million on top of a $90 million debt load. Peddling $84 million (remember interest adds about 40 percent) on top of a $136 million debt load becomes a harder sell.

Of course, voters approved the measure. TBRB later listed this new debt as principal of $53.8 million, interest of $44 million for a package total of $97.8 million. With that, BISD’s bond debt level today is $190.5 million ($123.3 million principal, $67.2 million interest).

Now BISD is again asking voters to approve a new bond package. This package seeks $149.7 million to fund two new schools and other campus improvements. Of course, with interest (40 percent adds another $59.9 million) the package will cost taxpayers closer to $209.6 million and could functionally double the district’s debt load.

The district touts rapid growth as creating an urgent need for these funds. Perhaps so, but does that justify deceiving the public?

To its credit, the Temple Daily Telegram finally published Bond could double debt, an article detailing the district’s full debt picture and implications bond passage will likely bring.

On its website, however, BISD still only lists “aggregate principal amount of outstanding tax-supported debt” of $121.8 million. While not mentioning the debt further includes half again the principal amount as interest, the district does provide a Debt Obligations Report link for additional information.

Taxpayers in Belton and elsewhere deserve real transparency without tricks or word parsing by local officials seeking increased tax dollars from those whose interests they purport to serve.

This transparency legislation is critical as Texas voters deserve accurate information to encourage good decision-making outcomes regarding their communities, their property and their money.

The choice becomes simple: Should voters who can’t trust government officials to provide the reliable financial information bond elections warrant further trust these same officials with more hard-earned taxpayer dollars?

Lou Ann Anderson is a producer for The Lynn Woolley Show.  As a former contributor at Watchdog Arena and Raging Elephants Radio as well as policy analyst with Americans for Prosperity – Texas, she continues to write and speak on a variety of public policy topics. She additionally addresses the growing issue of probate abuse as the creator and online producer at Estate of Denial®, a web site that “shines light on the dark side of estate management.” 

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