In yesterday’s Wall Street Journal, Susan Combs asked Texas residents if they know how much debt their local governments are carrying. It is a good question in an even better article. We are going to cut and paste snippets below, but here is the link to the full article: Susan Combs: Debt Excess Even Lives in Texas. Susan Combs is the Texas Comptroller.
But too many taxpayers aren’t given the information they need to make informed decisions when they vote debt issues. Recently I spent several months holding about 40 town-hall meetings with Texans across our state. Each time, I asked the attendees if they could tell me how much debt their local governments are carrying. Not a single person in a single town had this information.
Do you know how much debt Grapevine has taken on that ultimately you as the taxpayer are responsible for? Here is a link to the proposed 2012/2013 Grapevine City Budget to help you out. Only, you will not find the answer in there. We should know the answer since we as Grapevine residents just approved two new government bonds totaling $70 million for an expanded Community Activities Center and new public safety building. The city sent out multiple fliers promoting voting yes on the debt. Did they not include information on how much the city already owes? Unfortunately, they left out that key piece of information.
How much debt does Grapevine have? It seems like an easy question. The answer is not so simple.
It often takes significant time and effort to find out. But even so: Wise up, folks. You need to know what government is doing, and how it spends your money. Ignorance is a luxury you can’t afford, not when tax increases and spiraling debt are taking away the very incentives that make people want to take risks and get ahead.
We used some of the information provided in the Susan Combs article and website to come up with our answer to the question. Using rough figures, Grapevine’s total debt outstanding is around $185 million (including the new $70 million for the CAC and public safety building). That is about $4,000 for every man, woman, and child in the city.
Combs goes on to write:
We should, for instance, strive to limit all the various mechanisms that governments have crafted to get around the usual requirement for voter approval of new debt. In Texas, we have an instrument called “certificates of obligation.”
We have mentioned it in previous articles that Grapevine is no stranger to certificates of obligation. The newly constructed Convention and Visitors Bureau was built on $11 million in certificates of obligation that the Grapevine taxpayer did not get to vote on. When the city issues debt, even these certificates, the debts are all ultimately backed by the Grapevine taxpayer.
Another recommendation from Combs:
Another key reform would make it impossible to vote on debt in a vacuum. Most people don’t have the first idea of how new proposed debt fits into the total debt being carried by their local governments. Every ballot in an election for new bonded indebtedness should state, at minimum, the current amount of outstanding debt and annual debt-service payments, and show how the proposed debt will affect the tally.
Yes, that would be nice and go a long way in creating a minimum level of transparency in our local government. As we mentioned, this did not happen last fall when Grapevine taxpayers were asked to vote on $70 million more in debt.
Combs finishes the article with this statement:
Unchecked and invisible debt and out-of-control spending are putting the nation in real jeopardy, and too many public officials seem happy to keep you in the dark. It’s up to you to demand that the lights be turned on—before it’s too late.
We recently asked the city to shed some light on the financials of local festivals Grapefest and Main Street Days. We thought this was a fairly simple request. As we reported in an earlier article, the request turned out not to be so simple. We received several letters from the city attorney denying our simple request to shed some light on a very small section of the city financials. We are happy to report Grapevine eventually provided us with the detail we requested. We received no explanation on why it was first denied, but at least it eventually got here.
We will end with this request to the city. Please provide more information on city debt. Please become more transparent. And when residents request more information on city financials, treat them with the courtesy and respect they deserve. After all, they are paying the bills you incur.
You can find more information on local debt in Texas at www.TexasItsYourMoney.com.