Local taxes, debt are rising in Texas

Published 7:18 pm Wednesday, October 22, 2014

A new report from the Texas Tribune emphasizes two things for East Texans. First, it reminds us how wise the city of Tyler’s decision to eliminate its bonded indebtedness was. And second, the report reminds us how big of an impact local taxing entities can have — and therefore, how important local elections are.

“Over the past decade, the growth in local debt in Texas has far outpaced the growth in population, state records show,” the Tribune reports. “Across Texas cities, tax-supported debt has grown 78 percent since 2004, while the population grew by just 18 percent. It’s a similar story with the state’s counties, with tax-supported debt held by counties growing by 58 percent since 2004.”

The trend is even more dramatic in public school systems.

“Between 2004 and 2013, the student population at Texas public school districts has grown 14 percent,” the Tribune says. “During the same period, voter-approved tax debt for school districts has grown 97 percent, from $32.6 billion to $64.2 billion.”

The trend in rising municipal debt is seen in both urban and rural areas, in regions that are growing, and in regions that aren’t.

“Many communities with flat growth are still finding reasons to issue debt, often to finance infrastructure improvements or to pave the way for possible growth,” the Tribune adds. “Carl Jones, city manager of Prairie View, a community of 5,700 people 40 miles northwest of Houston, said much of the city’s $4.5 million in debt is tied to upgrading water supply and other infrastructure that dates back to when the city was incorporated in 1969. Prairie View opted to borrow the money because taxing residents upfront to raise it was not practical, he said.”

The Tribune notes that the city of Tyler is bucking that trend.

“The city of Tyler is the largest in the state with no taxpayer-supported debt, paying the last of it off in 2008,” the Tribune explains. “Since then, city leaders have found that freeing the city up from those debt payments has enabled it to make better use of its surpluses, paying for major projects like two new fire stations and a new parking garage with cold hard cash, Tyler Assistant City Manager Susan Guthrie said.”

As the Tribune’s report shows, debt and taxation aren’t just Washington things. A big part of every American’s tax burden is levied at the state, county and local level — and that’s why even mid-term elections are important.

On Nov. 4, Texans will be electing a new governor and a new lieutenant governor — the office-holders who will help shape the state’s budget and tax policy for the coming biennium. We’ll elect the entire Texas House, and one-third of the Texas Senate.

In Smith County, we’ll also be electing board members to the Emergency Services District No. 2. These board members will set a tax rate for fire services in many parts of the county.

As the Tribune report shows, local-, county- and state-level election results matter as much as what happens in Washington.