The city of Amarillo wants voters to approve a big new bond package — but is it really needed or are officials confusing wants with needs?
Based on what’s actually in the package, it looks to be more like the latter.
Among the different projects included in Amarillo’s $340 million bond package are some pretty head-scratching public expenditures, like a $1.1 million expense for “four splash pads,” $5 million to be spent on helping to “refurbish Liberty Theater,” and a requested $7.4 million to cover the cost of park and roadway improvements, including a “skate park expansion, dog park improvements … (and) a synthetic surface for multi-sports leagues.”
Splash pads, skate parks, and fake grass can hardly be called “needs,” but it’s the city’s longing for aquatic excitement that really takes the cake. Buried in one of the propositions is a $4.5 million project to construct “a 4,400 square foot leisure pool with play features … and water slides.”
It goes without saying that the purpose of government is not to provide water slides, but rather to protect and promote life, liberty and property rights. And quite obviously, this does none of that.
This might not be something to get worked up about except that the stakes are high. By taking on so much new debt, the city is inviting fiscal problems and pinching the pocketbooks of everyday Amarilloans in a big way.
According to the Texas Bond Review Board’s latest information, the city of Amarillo’s outstanding debts are right now fairly manageable, with the principal amount owed standing at $185 million or $931 owed per person. This is about on par with other similarly-sized cities. But should the city’s $340 million bond package be approved, then its local debt outstanding could soar by nearly 200 percent to $525 million or $2,641 owed per person.
Taking on that much debt exposes Amarillo to greater credit rating risks, which could lead to higher borrowing costs in the future. It also could limit the city’s fiscal flexibility, because as debt grows so too does the amount needed to service it, much in the same way that as a person’s credit card balance grows so too do the monthly payments increase.
That could leave other budget necessities, like roads, public safety, and community services, without the money needed to operate.
Then there are the tax implications. According to Amarillo’s own figures, the average person living in Randall or Potter counties can expect to see their tax bill grow annually by $248 over the next few years. That’s a tax increase of 9.25 percent and 8.27 percent, respectively.
Of course as taxes grow, the local economy stands to lose. People will have less money in their pockets to spend, businesses may think twice about relocating to the area, and the burden of government — which rarely, if ever, diminishes — will grow all that much more quickly.
None of this is to say that Amarillo should avoid all debt, all the time. Debt is a tool for communities to use under the right circumstances for the right projects — and that criteria is clearly not being met in this case.
Amarilloans currently enjoy a low tax and spend environment, and it’s hard to see how sacrificing that for waterslides, splash pads, and dog parks makes much sense. If there are truly things that the community needs, the city council should first purge its project list of all those wants.
James Quintero is the director of the Center for Local Governance at the Texas Public Policy Foundation. Contact him at [email protected].