The Texas Public Policy Foundation’s (TPPF) Center for Local Governance Senior Analyst Jess Fields testified before the Texas House Committee on Investments and Financial Services—Subcommittee on Bond Indebtedness on House Bill 1750, which would prohibit the issuance of capital appreciation bonds that are secured by property taxes. Fields also testified on House Bill 3344, which would prohibit local governments from issuing bonds whose maturity is longer than the useful life of the item.
“Texas’ local governments are deep in debt, and the situation is only getting worse thanks to exotic public financing devices like capital appreciation bonds (CABs) that allow local governments to borrow now and shift oversized debt payments onto future generations of taxpayers,” said Fields. “It’s critical that the legislature take steps to prohibit, or at the least severely restrict, the use of capital appreciation bonds by local governments.
“Additionally, some local governments are issuing long-term bonds to pay for short-term items. This is undoubtedly an inappropriate use of bond funds, and HB 3344 would address this by ensuring that bond maturities do not exceed the useful life of the items being purchased.”
To schedule an interview with Mr. Fields, please contact Caroline Espinosa at firstname.lastname@example.org or 512-472-2700.
The Hon. Jess Fields is the Senior Policy Analyst in the Center for Local Governance at the Texas Public Policy Foundation and a former College Station City Councilman.
The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin, Texas.