On Monday, the House Public Education Committee voted 8-1 to allow school districts to bust their debt spending caps that have been in place since 1991. The bill, HB 506 by Eddie Rodriguez (D-Austin), does not directly increase school spending, but instead makes borrowing increases more accessible for school districts. The bill requires that the district must first demonstrate ability to pay interest on all its bonds, provide capital improvement plans for new projects, and have at least a three-star rating from the Financial Allocation Study for Texas (FAST).
These conditions seem like reasonable restraints on spending, but they lack teeth. The 85 school districts affected by the bill serve 80% of Texas’ student population, and eight of Texas’ ten largest school districts already have at least three stars on the 2014 FAST study. Most school districts already appear to be in compliance, so the criteria likely will not be difficult to meet. If additional debt spending is a possibility, it is almost guaranteed to happen.
Removing these school districts’ debt spending caps would show that the House doesn’t care much about limits in the first place. Under HB 506, districts who have already maxed out their borrowing ability must undergo minimal scrutiny to borrow even more money.
Texas is already among the nation’s worst offenders in regard to local debt, in the company of liberal states such as California and New York. Making it even easier for school districts to raise their rates seems counter-intuitive if the goal is reversing rampant debt addiction in the Lone Star State.
The prospect of increased debt service spending, which is paid for by property taxes, is also counteractive to property tax relief efforts taken elsewhere in the Legislature. In his State of the State and further remarks, Gov. Greg Abbott has called for tax relief in any budget that crosses his desk. The Senate responded by passing SB 1 on March 25. By contrast, the House has shown striking reluctance to follow suit. The budget passed by the House last Wednesday included no provisions for tax relief. The vote by the Public Education Committee demonstrates an apathy towards the burdens of property taxpayers by further enabling egregious debt.
Citizens must stay attuned to bond proposals submitted by their school districts. This is true regardless of the future of HB 506. School districts often take advantage of low voter turnout to ram through expensive, wasteful projects, resulting in higher property taxes and increased local debt. HB 506 would make those reckless habits even harder to break.