New Debt Data Shows Local Governments Awash in Red Ink

New data from the Texas Bond Review Board (BRB) shows continued growth in Texas’ already-substantial local government debt.

According to the BRB’s latest debt data for fiscal year (FY) 2013, local governments in Texas-including cities, counties, school districts, community colleges, junior colleges and special districts-have amassed a combined $200.2 billion in total debt outstanding. That’s an increase of $4.4 billion over the prior fiscal year and marks the continuation of a worrisome trend.

From FY 2009 to FY 2013, total local debt outstanding (principal only) jumped from $174.6 billion to $200.2 billion, an increase of $25.7 billion or about 15 percent. Total local debt service outstanding-an arguably more concerning figure because it accounts for the amount required to repay principal and interest-has grown from $298.3 billion in FY 2009 to $323.1 billion in FY 2012, an increase of $24.7 billion. No figures are yet available for FY 2013.

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And just which governmental bodies are most awash in red ink? According to the BRB, it’s cities then school districts then special purpose districts then counties then community colleges and junior colleges.

If the Texas Model of low taxes and limited government is to be sustained into the future, the growing challenge of local government debt is one that must be addressed. And soon. 

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