Testimony on SB 637
by Peggy Venable, Americans for Prosperity
Senate Committee on Intergovernmental Relations
March 20, 2013
We at Americans for Prosperity support SB 637 which provides greater transparency by making the ballot proposition and notice requirements for a bond election applicable to a taxing unit.
Texas is second in the nation in local government debt – second only to New York on per capita debt and second only to California in total local government debt.
Some taxpayers are paying into as many as 17 local taxing entities, and many of them are carrying debt.
Why is this important?
We at Americans for Prosperity-Texas have traveled the state talking about local government debt. We recognize there are times when local debt encumbrance is appropriate and necessary, but we found that most Texans could not even estimate how much debt any of their local taxing entities were carrying.
As voters, we should know how much local debt we are carrying.
We appreciate that the Senate Finance Committee’s interim report indicated a need to better inform voters of current debt prior to a bond election.
The Texas Bond Review Board does a good job of maintaining information, but most voters do not know how to access the data, or that it is available. As I travel the state, I bring local debt information for the major taxing entities – ISD’s, City and County debt.
Though the ISD’s carry more debt than cities and county governments, only cities and counties but their posting requirements are less stringent than cities and counties.
We support this legislation and view it as a good government transparency bill. It requires the political subdivisions to publish the total debt – principal plus interest – and the current debt tax rate. It also requires notice of the election and actual proposition language to be posted on internet websites for the political subdivisions as well as in the newspapers and public posting.
We also believe it significant that the ballot language indicate that the bond election will impose a property tax, if taxpayers are responsible for repaying the debt. Often, local debt is described as “investments” and taxpayers need to know that these investments are coming at a price – plus interest – that taxpayers and future taxpayers are responsible for paying.
We have accrued $324 billion in local government debt a little bit at a time. But we are leaving a mountain of debt to our children and grandchildren. This “legacy of debt” is the legacy we are leaving the next generation – and it is not the legacy most of us want to leave them.