Whether it be in aggregate, or per-capita, the Lone Star State now holds the distinction of having the 2nd largest local debt in the nation. Unlike the state government, Texas’ local governments do not have a uniform spending limit to encourage fiscal responsibility. Since 2010, our state has seen its level of local debt increase by $30 billion, or $13,000 for every new Texan.
Common sense limits on government spending, like population and inflation, would go a long way toward shoring up a spreading epidemic of bureaucratic red ink. From 2002 to 2011, population growth (18.2%) and inflation (25%) reached a combined 43.3% while local expenditures increased by over 63%, indicating a seriously problematic trend.
These rising debt levels are contributing to runaway taxing and borrowing by cities, counties, and school districts. Of the $338 billion in total local debt, roughly $130 billion of that is in debt service, the amount of money required to make payments on the principal and interest on outstanding loans and bond obligations. Such lack of constraints is a major contributor to Texans paying 6th highest property tax burden in the nation.
One solution to this growing problem could be expanding the state’s constitutional tax and spending limits to include political subdivisions. With a few modifications, those provisions could be made to apply to funds at all levels of government and based on growth metrics like population and inflation.
The local spending bonanza stands as a stark contrast to our state government, which has largely come to be known for fiscal restraint, cutting taxes, and savings via the rainy-day fund. Without the right reforms to bring sanity back to Texas’ population centers, we risk municipal budgets bordering on bankruptcy and local officials looking to the state for solutions to problems borne out of their own profligate spending without any meaningful controls.