AUSTIN – Texas cities, counties, school districts, and special districts owed nearly $561 billion in combined principal and interest in fiscal year 2025, according to a new research paper from the Texas Public Policy Foundation. For reference, Texas’ local government debt was less than $332 billion in 2016. The current total comes out to $17,706 for every man, woman, and child in the state. 

The paper recommends four reforms to reduce the burden of increased local government debt through greater government transparency and accountability: 

  1. Require bond elections to be held in November, on the uniform election date, to maximize turnout and limit the influence of narrow special interests.
  2. Establish minimum voter turnout requirements for approving new bond propositions and tax ratification elections.
  3. Create a local debt limit barring new debt when annual property tax–supported debt service would exceed 10% of the average property tax collections over the prior three fiscal years.
  4. Strengthen the Voter Information Document created by HB 477 (2019) to prevent data manipulation that intentionally misleads voters, requiring disclosure of all underlying data, and requiring the document to be posted prominently online. 

“Texas taxpayers are now on the hook for more than half a trillion dollars in local debt, and that bill is growing nearly five times faster than the population paying for it,” said James Quintero, Policy Director for TPPF’s Taxpayer Protection Project. “As more local revenue goes to principal and interest, less funding remains for core services. The next Legislature should put guardrails in place so that borrowing goes back to being a tool of necessity rather than a routine habit.” 

The research draws on Texas Bond Review Board and U.S. Census Bureau data. Read the full paper, Tracking Local Government Debt in Texas: 2016-2025, for more information.

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