Texas’ largest cities are drowning in debt.
The latest data from the Bond Review Board reveals that Texas’ five most populated cities owe a combined $57.7 billion. Here is how they compare individually.
Big City Debt
- Austin: $10.5 billion
- Dallas: $7 billion
- Fort Worth: $2.7 billion
- Houston: $20.2 billion
- San Antonio: $17.3 billion
There are consequences to borrowing this much too. Large debts require increased debt service requirements. In turn, each dollar that goes to servicing the debt is a dollar that cannot be used to pay for programs and services.
One reason why debt has skyrocketed in recent years is that local officials have become comfortable with spending money they don’t have. It is no longer viewed as a tool of last resort but has become rather routine. Roads? Check. Land acquisition? Check. A zany downtown subway system? Maybe.
The status quo needs changing. If a city must build a new facility or undertake a project, then budgeteers should work hard to find the financial resources necessary in their existing budget structure, or set aside a small amount of funding each fiscal year and save up for it. Owing awesome sums of money shouldn’t be the norm—especially given all the uncertainty today.
Tax revenues have fallen below expectations this year and are likely to be in decline next year as well. The local public finance landscape will be different moving forward, requiring tough choices and new paradigms.
It’s not just that local officials need to show more restraint either. The entire edifice is in need of reform. The system needs good government changes like minimum voter turnout requirements, consolidation of bonds and tax ratification elections in November, and a complete overhaul of certificates of obligation.
Attitudes and approaches alike need changing so that we can get a handle on cities’ growing government debt addiction. The time for action is now.