Texas local government debt ranks second highest among the top 10 most populous states. Undeterred, however, May 9 will bring a new round of bond elections in Temple and throughout the state whereby voters donning financial personas of the oft-used and ever so appropriate drunken sailor spending analogy will approve new debt opportunities promoted by city, school and/or county officials through peer pressure-laden partnerships with influential community leaders.
The city of Temple is currently seeking voter approval for a $27.6 million bond package for parks improvements. A “Quality Parks. Quality Living.” tag line is used to describe a plan for new parks including a water recreation facility as well as upgrades to existing facilities.
Missing from the discussion is the package’s total cost – principal plus interest. The $27.6 million price tag is a principal-only figure government entities use to sell bond packages. As interest generally causes the actual taxpayer obligation to be about 40 percent greater, this election is asking voters to assume closer to $38.6 million in new debt ($27.6 million principal/$11 million interest). For instance, while the Temple Independent School District promoted a $55 million package with its 2011 bond election, the new debt was closer to $85 million due to the interest not mentioned by school district officials.
Another facet of bond elections avoided by local governments is existing debt. Any decision regarding new debt can’t responsibly be made without understanding existing debt levels. Of course, if taxpayers understood the full debt picture of individual local government entities (cities, schools, counties, etc.) and the impact the entities’ combined liability could have on an area, perhaps these bond packages wouldn’t be so easily sold.
An argument – a good argument – can be made that this information should be included on bond election ballots, but thanks to organizations which cities, schools and counties use tax dollars to fund, that isn’t likely.
In the 2013 legislative session, taxpayers were seriously betrayed as organizations including the Texas Municipal League (TML), Texas Association of School Boards (TASB), Texas Association of School Administrators (TASA) and Texas Association of Counties (TAC) – all of which exist based on public funds supplied by their respective member cities, school districts and counties – joined a host of other taxpayer-funded organizations in killing legislation that would have provided taxpayers with new transparency regarding local government spending and debt.
So while local governments successfully avoid giving more complete financial data, the public can access this information thanks to online resources available through the Texas Bond Review Board and the Texas Comptroller of Public Accounts’ Texas Transparency website.
The Texas Bond Review Board site lists nearly $620 million (as of Aug. 31, 2014) of current debt level for local governments under which city of Temple voters likely live.
City of Temple
Principal: $ 85,959,429
Temple Junior College District
A comprehensive view of this information takes on new significance as TISD is currently considering a $135 million bond package. Remember, with interest that’s closer to $189 million.
Bell County also recently announced plans to next month issue up to $35 million in certificates of obligation. Designated for upgrading and expanding the Bell County Expo Center, the funds with interest will actually represent closer to $50 million in new taxpayer liability.
Transparency with regard to the issuance of certificates of obligation has been another area of interest for taxpayer advocates as CO’s do not require voter approval and have been increasingly used for projects failing to get voter approval through a bond election.
Bond campaigns routinely tout how support equates to minimal dollars on a $100,000 taxable valuation. That may be so within a limited scope, but as Temple area voters flirt with nearly $1 billion in total taxpayer liability, those dollars no longer sound so minimal.