Though Texas has rightly earned kudos for its balanced budgets and its high-powered, business-friendly economic environment, it has an emerging debt problem. From money borrowed to build extravagant sports facilities to rising obligations for government workers’ pensions, Texas’s state and local debt is increasing at a faster rate than its gross state product, raising fears about the burden on future generations. On the cover of a recent report by state comptroller Susan Combs, a young child holds a sign: WILL WORK TO PAY PUBLIC DEBT.
While Texas’s state government debt is relatively modest—just $40 billion, or $1,577 per resident—local government debt is more than four times higher: $192 billion. That’s $7,505 per capita, according to Combs’s report—the second-highest sum in the nation, behind only New York’s municipalities and far ahead of third-place California’s. Over the last decade, moreover, local debt has increased 144 percent, much faster than the rate of population increase plus inflation.
Some of this debt stems from voters’ willingness to spend their prosperity on municipal-finance baubles, bangles, and beads. In Texas, that means huge expenditures by local school districts on athletic facilities. When I attended a legislative conference in Texas last summer, the talk was all about the $60 million high school stadium just opening in Allen, a Dallas suburb of 83,000 residents. The 18,000-seat facility, which boasts a massive, high-definition TV screen, was built with funds from a $119 million bond offering in a state where high school football is a consuming passion.
Continue reading at Deep in the Debt of Texas by Steven Malanga, City Journal Spring 2013.