In response to a Public Information Act request, the Bond Review Board (BRB) recently provided TPPF analysts with new local government debt data for fiscal year 2021—and the figures are simply stunning.
According to the BRB, cities, counties, school districts, and special districts owed a grand total of $389.7 billion in FY 2021, up from $375.7 billion in the prior year. That’s a $14 billion increase from one year to the next. On a per capita basis, local governments have now borrowed so much that each man, woman, and child in the Lone Star State effectively owes $13,500 for his or her share.
As in previous years, school districts continue to owe the most of any type of local government. Collectively, ISDs have borrowed a total of $146.3 billion or more than $27,000 for every student currently enrolled. Municipalities owe the next highest amount ($118.5 billion) followed by special districts ($103.7 billion) and counties ($21.2 billion).
Of course, massive indebtedness is not without consequence. Texas’ local government borrowing binge is setting the stage to “saddle future generations with enormous obligations, unleash higher taxes, slow economic growth and business investment, and trigger credit rating downgrades.”
It’s critical that policymakers act soon to mitigate some of the worst impacts.
Now is the time to enact strong local debt reforms that protect taxpayers, promote transparency and accountability, and put a stop to local officials’ rampant excesses.