Cities, counties, and school districts across the state are placing big bonds on the November ballot that would add billions to the local government debt already owed by Texas taxpayers.
All bond debt must be repaid, with interest, by local property taxpayers.
Texas local governments currently owe $186 billion in outstanding debt that their residents are obligated to repay with property taxes.
Any new debt approved by voters will be added to current debt levels.
Bond debt increases the local property tax burden by the bond amount plus interest. Thus, all bonds are property tax increases.
This is true regardless of whether the tax rate changes when a bond first passes.
To make the tax impact clear to voters, the state passed a law in 2019 requiring school bond ballot propositions to include the statement “THIS IS A PROPERTY TAX INCREASE.”
School districts are also required by state law to provide a voter information document by mid-October that shows the full cost of their proposed bonds with interest, as well as the amount of bond debt plus interest the district currently owes.
According to the Texas Bond Review Board, Texas has the third-highest local debt per capita among the nation’s 10 most populous states, behind New York and California.
The majority of the tax-supported debt—$104 billion—is owed by school districts.
Bonds are not the only tax increases on the November ballot.
At least 28 local governments, mostly school districts, are asking voters to approve tax increases higher than the amounts allowed by state law. If passed, schools’ voter approval tax rate elections (VATREs) will absorb state-mandated property tax relief back into the districts.
A handful of school districts are proposing both bonds and tax rate increases.
In addition to bond debt and tax increases on local ballots, all Texans’ ballots will include 14 proposed amendments to the state constitution.
Early voting starts October 23. Election Day is November 7.
