Does local government debt threaten Texas's fiscal reputation? (Houston, Dallas: how much, school districts)

[Walter Benjamin]

Steven Malanga: Deep debt threatens Texas

Steven Malanga thinks so. Or will continued growth solve all problems?

"While state government debt is relatively modest — just $40 billion, or $1,577 per resident — local government debt is more than four times as high: $192 billion. That’s $7,505 per person, according to Combs’ report — the second-highest sum in the nation, behind only New York’s municipalities and far ahead of third-place California’s."

Many more alarming numbers at the link.

Locally, not encouraged by the police pension's stewardship of museum tower, or council district 14 candidate Philip Kingston's stance that we need to pay police and fire a lot more money...because that's worked out so well for the blue states.

[MurphyPl1]

I don't think you can look at it easily that way. Lots of cities keep their tax rates low and bond out infrastructure needs. Some cities get away with higher tax rates and pay for items that way.

Also, you can't take a city like Addison and look at it's debt in relation to per person. That debt is paid for by all property owners not just residential homeowners. So every restaurant, high rise and liquor store is paying that debt off as well. Not just that poor put-upon homeowner and school child.

[TX75007]

This is really about reigning in education spending.

In Texas, that means huge expenditures by local school districts on athletic facilities. When I attended a legislative conference in Texas last summer, the talk was all about the $60 million high school stadium just opening in Allen, population 83,000. The 18,000-seat facility, which boasts a massive high-definition TV screen, was built with funds from a $119 million bond offering.

Drags down Allen, for sure.

[TheOverdog]

In Texas, that means huge expenditures by local school districts on athletic facilities. When I attended a legislative conference in Texas last summer, the talk was all about the $60 million high school stadium just opening in Allen, population 83,000. The 18,000-seat facility, which boasts a massive high-definition TV screen, was built with funds from a $119 million bond offering.

Bond elections are voted for by the people in the city/ISD and paid for by them from their local taxes. If they collectively want to spend their tax money on fancy football stadiums and video boards, then more power to them. Allen is just a generic suburb north of Dallas, if you don't like their tax policy, it's pretty easy to move somewhere else.

[TX75007]

Originally Posted by TheOverdog

Bond elections are voted for by the people in the city/ISD and paid for by them from their local taxes. If they collectively want to spend their tax money on fancy football stadiums and video boards, then more power to them. Allen is just a generic suburb north of Dallas, if you don't like their tax policy, it's pretty easy to move somewhere else.

And people are. Allen is rapidly heading to the bottom among DFW's Suburbs in terms of academics. That stadium is a financial albatross as the cost of upkeep will far exceed its capital outlays from the bond measure.

Allen could have gotten the stadium built for far less money and invested in academics.

There is a segment of the population that thinks schools are about sports. They are not. If people knew how much money goes into benefiting a TINY part of the school population, they would be very upset.

[War Beagle]

Some of the local debt is misleading in that other places some of that debt would have been paid for by the state. The way American government works (but especially in Texas), higher levels of government can force lower levels of government to pay bills through unfunded mandates.

For instance, down in the Houston area we have subsidence issues that are the result of pumping groundwater. Rather than the state spending the money to solve this problem, local jurisdictions are told they have to foot the bill to pay for this. The solution is generally groundwater conversion or desalinization - both of which are very expensive and require debt to be issued in order to pay for the new facilities. Localities having to spend money to maintain or expand TxDOT roads also increases local debt.

I'm generally very conservative to libertarian, but the honest truth is that a good part of the high local debt is because TX has no income tax. I prefer higher local debt to a state income tax because I support decisions being made at the local level, but the reality of higher local debt in Texas is in good part a result of shifting funding that would occur at the state level in most states to the local level in TX. It's a similar concept to the fact that we have high property taxes as a result of revenue generation being shifted elsewhere to make up for not having an income tax.

[TheOverdog]

I'm generally very conservative to libertarian, but the honest truth is that a good part of the high local debt is because TX has no income tax.

I don't see how that moving to an income tax from a property tax would change a thing, except shift the burden of a "Houston" problem in your example (problems are limitless in terms of locality of course) to being a statewide problem. If the taxes are not high enough at a local level to pay for the local things you need, then you should blame your local government, not shift those costs to others to the people in Austin or El Paso.

The problem, in other words, is that people want a functional safe society, but they also want their own portion to be as low as possible, hence unfunded mandates. If you don't want unfunded mandates, then you should not be advocating a shift from property to income tax, but rather from Republican/liberartian to Democrat/Socialist.

Or if you really want to stick to your conservative/libertarian beliefs, you should move somewhere else that doesn't have sinkholes.

[War Beagle]

Originally Posted by TheOverdog

I don't see how that moving to an income tax from a property tax would change a thing, except shift the burden of a "Houston" problem in your example (problems are limitless in terms of locality of course) to being a statewide problem. If the taxes are not high enough at a local level to pay for the local things you need, then you should blame your local government, not shift those costs to others to the people in Austin or El Paso.

The problem, in other words, is that people want a functional safe society, but they also want their own portion to be as low as possible, hence unfunded mandates. If you don't want unfunded mandates, then you should not be advocating a shift from property to income tax, but rather from Republican/liberartian to Democrat/Socialist.

Or if you really want to stick to your conservative/libertarian beliefs, you should move somewhere else that doesn't have sinkholes.

You must have missed the part where I said I would prefer the high local debt to the state income tax because I like decisions to be made and problems solved at the local level.

The problem is not that we don't have a state income tax. The problem is that the state legislature often wants to engage in big government, but lacks either the money to pay for the programs or the political willpower to operate a program at the state level. The end result is to bully the local governments into doing and paying for the state's bidding.

Subsidence is an example of the state getting involved when it shouldn't. Let Harris County, Galveston County and Houston deal with subsidence if they want to. The way I see it, if one level of government is going to tell a subordinate one what to do, then that bossy level of government should be the one footing the bill. It's not different than when the Federal government tells Texas to do something but then expects Texas to pay for the program. You are 100% correct that Austin or El Paso shouldn't have to pay for Houston subsidence, but the flip side of that is representatives from Austin or El Paso shouldn't have a role in the decision making process as far as Houston subsidence is concerned.