AUSTIN – The Texas Public Policy Foundation today released the paper Reducing the Burden of Texas’ State Liabilities on Current and Future Generations by the Center for Fiscal Policy’s director The Honorable Talmadge Heflin, economist Dr. Vance Ginn, and research associate Melissa Schlosberg. The paper explains the rising burden of state liabilities (i.e., debt and pensions) on Texans and makes recommendations to alleviate this burden.
“As Texas families must limit their reliance on debt, so must the Texas Legislature,” said Mr. Heflin. “Although state government performs relatively well in measures of financial stability, there are increasingly signs of fragility regarding the growth of state debt and rise of unfunded liabilities in state pensions. Passing ballot box transparency for issuances of state debt, converting pensions to defined-contribution plans, and prioritizing surplus funds to cut taxes will best serve Texans.”
“Texas’ state debt service outstanding, which includes the principal and interest owed over the life of debts, amounts to $80.8 billion in FY 2016, or almost $3,000 owed per Texan,” said Dr. Ginn. “The state’s two largest pension systems of TRS and ERS have combined unfunded liabilities of $41 billion that will put an additional burden on taxpayers if not fully funded. These state liabilities represent a rising burden on Texans that must be addressed by increasing debt transparency and assuring pension sustainability by moving to defined-contribution plans.”