Local government debt continues to soar.
According to new data from the Bond Review Board, local debt service outstanding—or “the amount that is required to cover the repayment of principal and interest on a debt” held by political subdivisions in Texas—rose to more than $365 billion in FY 2019, which is an increase of almost $11 billion over the previous year. On a per capita basis, that much public debt means every man, woman, and child in Texas owes about $12,500 for his or her share.
Of the $365 billion owed, the most red ink belongs to school districts. In FY 2019, ISDs owed a staggering $137.9 billion, an increase of $4.7 billion from the prior year. City governments followed closely behind ISDs, owing a total of $113.5 billion.
Source: Texas Bond Review Board
The amount of public debt owed is concerning, but equally troubling is how quickly it is piling up. In just a few short years, local debt has grown by leaps and bounds, both in terms of aggregate size and on a per capita basis.
In FY 2017, local debt totaled $338.1 billion. Just two years later, Texas’ local debt had grown by $27.2 billion to $365.3 billion. And while it’s true Texas’ population grew during that period, the number of people added was less than 1 million, according to the Texas Demographer. Hence, local officials grew government debt by $28,700 for every net new Texan from 2017 to 2019.
On a per capita basis, total local debt per capita increased from $11,971 owed per person to $12,513 owed per person.
Source: Texas Bond Review Board
No matter how you slice the data, it’s quite clear that local governments are drowning in debt. This situation is clearly unsustainable and it begs for bold action at the statehouse. While state lawmakers got some good things done last session to get a handle on the problem, there’s plenty more to do in the coming session.