AUSTIN— Yesterday, Travis County Commissioners approved the sale of $328 million in Certificates of Obligation—public debt that is not approved by the voters responsible for paying it—for the construction of a new courthouse facility. Three years ago, voters turned down a similar proposal.
“Travis County Commissioners are moving forward on a project rejected by the vote of the people by approving these COs,” says James Quintero, director of Think Local Liberty project at the Texas Public Policy Foundation. “Voters rejected a less expensive package for a new facility in 2015. If the new plan is substantially better, why not put it before the voters again? The old courthouse has been in use since 1931; why is there suddenly a rush to get financing without voter approval?”
Unlike General Obligation bonds, Certificates of Obligation can be issued by a governmental body without voter approval. While COs were originally created to give local governments a tool for emergency spending, there’s a growing body of evidence suggesting that nonvoter-approved debt is being issued for capital improvement projects that are either controversial or discretionary. As a result, CO debt is on the rise.
“Certificates of Obligation should not be used for non-emergency items. The Texas Legislature needs to rein in the use of COs so that voters are respected,” says Quintero.