State legislators have introduced a number of bills designed to remedy these issues, including House Bill 14 and companion Senate Bill 14. Called "Transparency for Texas Taxpayers," the proposal would:
- Require cities, counties, school districts, community college districts, universities and special districts that levy taxes or issue debt to provide more financial transparency to the public. Special districts include water districts, transit authorities, hospital districts, etc.
- Ensure voters will be more informed when they vote on new debt and limits the ability of governments to issue debt without voter approval.
- Ensure that special-purpose taxing entities demonstrate they serve the purposes for which they were created.
- Put spending and debt information online: Under HB/SB 14, cities, counties, school districts, community college districts, universities and special districts must post revenue and expenditure information online annually to include details on long-term debt obligations.
- Gives more detail on the ballot for debt decisions: Voters are often not made fully aware of how new proposed debt fits into the total debt carried by their local government. HB/SB 14 requires ballots for new debt to include, at a minimum:
- Amount of proposed debt;
- Principal outstanding on current taxable debt (before proposed bond issuance);
- Estimated remaining interest on existing debt; and
- Estimated total debt service on existing debt.
- Limits debt issued without taxpayer approval: in Texas, local governments can issue debt without voter approval through Certificates of Obligation (CO’s). CO’s are now 16.6 percent of all debt issued by eligible entities.
- HB/SB 14 would prevent governments from issuing a CO to pay for a purpose voters have already rejected, and make it easier for voters to require a vote on a CO through a petition.
- Also limits local governments’ ability to issue CO’s without notice.
- Ensures a review of special purpose taxing districts: the bill requires special districts to conduct and publish a self-evaluation that demonstrates to local taxpayers that it is accomplishing the purpose for which it was created.
- Requires school facility inventories to inform taxpayer decisions on new debt: Because most education debt is for school construction, HB/SB 14 would require school districts and charter schools to post online inventories of their existing facilities, and report the cost of facilities being built or renovated, to better inform voters when deciding on new debt.
In case you are unfamiliar with Certificates of Obligation, read here.
Both House and Senate Finance Subcommittees will be meeting on Monday, March 18 at 9:00 A.M. If you support these measures, I urge you to attend to support Transparency for Texas Taxpayers. Attendees do not need to testify, but merely filling out a card in support will help demonstrate taxpayer support.
The House Subcommittee on Budget Transparency and Reform meeting will be in E1.030.
The Senate Subcommittee on Fiscal Matters meeting will be in E1.036.
Hope to see you there...