As Bell County ISDs Seek New Bond Debt, Voters Deserve Real Numbers is a column that details current debt levels for both Belton ISD and Temple ISD. A prior article, Texas Sees Rise in Local Government Spending Fever, Affluenza Outbreaks; Bell County No Exception was written as a primer to this bond election season. It provides detailed information on bond debt as well as instruction on verifying debt information and searching the Texas Bond Review Board database to gather similar information on other entities. Temple, Texas School District Not Taking “No” For An Answer With Failure Of Bond Issue discusses Temple ISD’s new pass at a bond proposal package.

The podcast, Let’s Get Real About ISD Bond Elections, can be accessed below.

More getting real

My friend, Erin Anderson, has a great column out today at Texas Scorecard. Austin’s South by Southwest event is currently underway and with a desire to leave no ideologically liberal stone unturned, a SXSW Edu component has been added.

Without wanting to steal the thunder of Erin’s column, I’ll tease this:

Shaken by a drop in the pass rate for school bond propositions to an all-time low of 61 percent last November, Texas educrats got “artful” advice last week on ways to overcome voters’ resistance to approving big bonds that are paid for with property taxes.

One of the strategies proposed: confuse voters about property tax increases—by increasing tax rates.

The strategy was featured in The Art & Science Behind Passing a Bond Election, one of dozens of panels at last week’s SXSW EDU, an education conference that’s an offshoot of the South by Southwest festival in Austin.

It reveals a disconnect between the people who promote school bonds and the voters who are taxed to pay for them—with some being taxed out of their homes.

Ever thought bond election campaigns seemed contrived, formulaic, cookie-cutter? The presentation on which Erin reports offers great “behind the curtain” insight.

To learn more, check out Panel Exposes Disconnect Between School Bond Promoters and Property Taxpayers.

Lou Ann Anderson worked in central Texas talk radio as both a host and producer and currently hosts Political Pursuits: The Podcast. Her tenure as Watchdog Wire–Texas editor involved covering state news and coordinating the site’s citizen journalist network. As a past Policy Analyst with Americans for Prosperity–Texas, Lou Ann wrote and spoke on a variety of issues including the growing issue of probate abuse in which wills, trusts, guardianships and powers of attorney are used to loot assets from intended heirs or beneficiaries.

The post Let’s Get Real About ISD Bond Elections (Audio) appeared first on WB Daily.

Graphic by Alex Anderson for WBDaily.

Happy talk can be effective – especially in soft selling new debt. Rates can be promoted as a number of cents (maybe 10 or so) per $100 of taxable property value or as rates of “$1.48 per month increase in property taxes for a home valued at $100,000.” Many voters will respond positively to numbers that sound reasonable, modest. But are they getting the full picture?

While these amounts can be factually accurate, they simultaneously distract from a larger view of the real debt being assumed, how it impacts a local governments’ (i.e. taxpayers’) existing debt commitments and subsequently, their overall financial status. For those believing in fiscal responsibility, this can lead down a dangerous road.

Transparency anyone?

Don’t feel bad if you don’t know our current debt levels. Many taxpayers don’t. You’d think our local officials would – especially the ones asking for your approval of bond debt they’re promoting.

It doesn’t, however, always happen that way as demonstrated last year by Temple ISD Superintendent Bobby Ott during an exchange that took place at an Oct. 12 public meeting held weeks prior to the district’s November bond election.

Between two separate bond proposals, the district was seeking a total of $184.9 million in new bond principal (closer to $260 million with estimated interest). Wouldn’t discussing these proposals with regard to existing debt be a sensible move?  After all, with then-current debt at $264.7 million, this additional amount would have functionally doubled the district’s debt.

Did he truly not know the district’s current debt level? Or did he just not want to say? Either option has troubling implications and fails to inspire confidence or trust.

Both packages were rejected by voters. The smaller package was soundly defeated while the larger ultimately went down by at least two votes and perhaps a few more. TISD has been close-mouthed about the final numbers of a recount.

Note #1 to ALL school districts: include current debt loads in your bond campaign talking points. It may not be helpful in making your case, but it’s your duty and transparency that’s owed to the public.

Meanwhile, the May 7 election will have Belton ISD asking for approval of two bond packages totaling a base amount of $173.8 million. With an estimated 40% interest added, the number rises to approximately $243.3 million.

Temple ISD is back again with a slightly pared down $164.8 million package ($230.7 million with estimated interest).

Note #2 to ALL school districts: including estimated interest with the principal is another good add to the bond campaign talking points. Perhaps also not helpful to your case, but again, we’re either about transparency or we’re not.

And one final point. Doesn’t making a significant purchase often entail reviewing your overall financial status? Not just one piece? Prior to making a major home purchase (significant remodeling, furniture, appliances, etc.), don’t people often factor in how this additional cost might impact existing commitments such as a mortgage, car payment, student loans, insurance expenses, other consumer debt and more? Why would we not do the same when considering new local government bond debt?

Note #3 to ALL school districts: don’t be surprised when financially frustrated voters become more discerning and even demanding regarding “big picture” debt levels – especially as our current economic malaise shows no signs of retreat.

Let’s follow the data

Local government debt numbers supplied by the Texas Bond Review Board for FY 2021 (Sept. 1, 2020 through Aug. 31, 2021) were featured in a recent column on this subject. The article also pointed out that Texas taxpayers now have local government debt – debt from cities, counties, school districts, community/junior colleges and special districts – totaling $389.7 billion, a $14 billion increase from FY 2020.

Per the Texas Public Policy Foundation, “On a per capita basis, local governments have now borrowed so much that each man, woman, and child in the Lone Star State effectively owes $13,500 for his or her share.”

Bell County Area Local Government Bond Debt (FY 2021)

These numbers importantly reflect principal and interest because, as discussed above, government entities use bond campaigns to typically talk about principal with no interest mentioned. Indeed, the “ask” looks better as interest is additional (i.e., hidden) debt accrued from the cost of borrowing money. With bonds, interest is often an additional 40 to 50% of the principal. Principal-only figures create a deceptive view of actual debt levels proposed. The public deserves better.

The school districts

So how did our local districts fare with these new numbers?

Going into the May election, Belton ISD has $360.1 million existing debt. Passage of the proposed bond would increase that debt level to approximately $603.4 million.

Temple ISD has $244.9 million existing debt. Passage of the proposed package would increase its debt level to approximately $475.6.

Relatively speaking, these aren’t small increases. Amazing the difference inclusion of the interest makes. It’s a much-needed view of reality that shouldn’t be subjected to gamesmanship by educrats or any other government entities seeking bond or any other taxpayer approvals.

Moving on to the bigger picture

Using this data, many Bell County residents can determine their total local government debt burdens. For instance, taxpayers living in the City of Belton, Bell County, Belton ISD and Temple JCD have a total debt level of $780.2 million. With passage of the BISD bond, that debt level will likely grow to almost $1.02 billion.

A taxpayer living in the City of Temple, Bell County, Belton ISD and Temple JCD has a total debt level of $1.45 billion. With passage of the BISD bond, that debt level will likely become almost $1.7 billion.

Taxpayers in the City of Temple, Bell County, Temple ISD and Temple JCD have a total debt level of $1.33 billion. Passage of the TISD bond will see that debt level likely grow to almost $1.56 billion.

These numbers are significant and, in these turbulent economic times, voters need good information to determine their support or opposition to new government debt.

My column Texas Sees Rise In Local Government Spending Fever, Affluenza Outbreaks; Bell County No Exception was written as a primer to the upcoming bond election season. It remains timely and provides additional detailed information on bond debt as well as instruction on verifying debt information and searching the Texas Bond Review Board database to gather similar information on other entities.

For further perspective, Lynn Woolley’s Temple, Texas School District not taking “no” for an answer with failure of Bond Issue” column poses great questions applicable to most any school bond election.

The Affluenza column ended with these thoughts.

Governments don’t necessarily want taxpayers to know what’s being done in their name, with their dollars or at their alleged behest. With that, arming yourself and sharing this knowledge is the best path toward breaking spending fevers and quelling affluenza surges so as to ensure a healthy degree of fiscal responsibility within our local governments.

The thoughts are still quite relevant.

Lou Ann Anderson worked in central Texas talk radio as both a host and producer and currently hosts Political Pursuits: The Podcast. Her tenure as Watchdog Wire–Texas editor involved covering state news and coordinating the site’s citizen journalist network. As a past Policy Analyst with Americans for Prosperity–Texas, Lou Ann wrote and spoke on a variety of issues including the growing issue of probate abuse in which wills, trusts, guardianships and powers of attorney are used to loot assets from intended heirs or beneficiaries.

The post As Bell County ISDs Seek New Bond Debt, Voters Deserve Real Numbers appeared first on WB Daily.

Bell County Justice Center. Photo by Lou Ann Anderson for WBDaily.

From school districts to cities, from counties to community and junior colleges, many entities recognized how a virus positioned as a public health crisis, accompanied by lockdowns and followed by subsequent and predictably dire consequences made for a less-than-ideal time to seek more of taxpayers’ hard-earned dollars to fund new government projects.

So where does that leave us?

Cue the affluenza surge

For our general purposes, affluenza is “a social condition that arises from the desire to be more wealthy or successful.” It similarly applies when defined as “the inability of an individual to understand the consequences of their actions because of their social status or economic privilege.” An individual or perhaps an entity (i.e., government) viewing itself as possessing a high degree of social prominence and immunity from real accountability?

More specifically applied to government, fiscal affluenza appears to be a somewhat chronic condition in which local elected officials and associated bureaucrats rotate through an endless stream of “asks” seeking new dollars from taxpayers. Problems, however, surface as these theoretical upgrades to local government facilities, operations or other organizational accoutrements compound the debt burden carried by taxpayers while not necessarily yielding a good return rate or perceivable benefit based on the funds invested.

Governments embrace affluenza at taxpayer expense

In having no doubt that 2022 will bring more local government “asks,” I decided to look at current debt levels in my local area of Bell County. While this information will focus on larger Bell County entities, data sources are included such that any Texas taxpayer can create their own local debt level profile.

But first, let’s start with the bigger picture and work our way to the local level. According to the U.S. Debt Clock, the U.S. National Debt sits at nearly $30 trillion. That translates to $89,000+ of debt per citizen, nearly $238,000 per taxpayer.

When the Texas Bond Review Board recently provided numbers for FY 2021 (Sept. 1, 2020 through Aug. 31, 2021), we learned that Texas taxpayers now have local government debt – debt from cities, counties, school districts, community/junior colleges and special districts – totaling $389.7 billion, a $14 billion increase from FY 2020. Per the Texas Public Policy Foundation, “On a per capita basis, local governments have now borrowed so much that each man, woman, and child in the Lone Star State effectively owes $13,500 for his or her share.”

TPPF further notes:

Of course, massive indebtedness is not without consequence. Texas’ local government borrowing binge is setting the stage to “saddle future generations with enormous obligations, unleash higher taxes, slow economic growth and business investment, and trigger credit rating downgrades.”

In its analysis of this information, The Texan identifies school districts as accounting for the majority of Texas accumulated local government debt. It further notes that ISDs collectively saw a slight increase from last year’s numbers while cities’ outstanding debt fell substantially.

The Texan also cites how since “cities and school districts are more numerous than the other taxing entities, they also hold more debt per capita than the others” and that “18 of the top 20 localities in terms of outstanding debt are either cities or ISDs.”

Let’s get local

With that backdrop, what kind of debt service are taxpayers responsible for when it comes to the Bell County local governments? Listed below are the county’s larger entities.

And it’s important to note how government entities use bond campaigns to purposefully talk only about principal, but with no interest mentioned. It makes the “ask” look better. Interest is additional debt accrued due to the cost of borrowing money and, with bonds, is often an additional 40 to 50% of the principal. These figures incorporate interest into the debt perspective and as you can see, figures without interest (principal only) create a deceptive view of real debt levels.

Bell County Area Local Government Bond Debt (FY 2021)

Using this data, many Bell County residents can determine their total local government debt burdens. For instance, taxpayers living in the City of Belton, Bell County, Belton ISD and Temple JCD have a total debt level of $780.4 million. Taxpayers living in the City of Killeen, Bell County and Killeen ISD have a total debt level of $1.08 billion. Taxpayers living in the City of Temple, Bell County, Temple ISD and Temple JCD have a total debt level of $1.33 billion.

Obviously, these cities support populations of varying size as also do the school districts such that context is required for further in-depth analysis. For instance, Belton ISD has 13,000+ students with 1,600+ employees (teachers and staff). Killeen ISD has 45,000+ students with 6,100+ employees while Temple ISD has 8,700+ students with 1,300+ employees.

These numbers do, however, well illustrate the difference that interest makes in calculating the real numbers when voters are asked to approve new bond debt. During Temple College’s May 2021 bond election, the advertised bond amount was $124.9 million. When speaking about that election, I discussed how local entities are disingenuous with voters as they use a principal only amount in bond election campaign materials opposed to using an amount that is principal plus estimated interest.

In the case of Temple College, my prediction was for the $124.9 million bond package to include approximately $50 million of interest (based on a 40% projection) for a total of closer to $175 million. Per Texas Bond Review Board, the bond issued includes a lowered principal amount of nearly $110 million principal (roughly $15 million less than what was approved), but $60 million interest for a total of $170 million. Undoubtedly $125 million is quite different from $170 million and reminds that the bond package numbers advertised are rarely reflective of what packages’ approval will truly cost taxpayers.

Do your homework

This article is a prequel to upcoming bond elections. The information presented here is in part to arm taxpayers with the tools to determine their local government debt load. As we move toward the next affluenza spending “ask” (probably in May), this knowledge becomes critically important – especially since our country’s current economic malaise shows little if any signs of relief.

Data for all local government entities is available using the Texas Bond Review Board Database Search. From this page, click on the Debt Tab/Searchable Databases/Local Debt Outstanding. Select the Fiscal Year and Issuer Type (City, Community/Junior College District, County, etc.) and from there select your specific entity.

Governments don’t necessarily want taxpayers to know what’s being done in their name, with their dollars or at their alleged behest. With that, arming yourself and sharing this knowledge is the best path toward breaking spending fevers and quelling affluenza surges so as to ensure a healthy degree of fiscal responsibility within our local governments.

Lou Ann Anderson worked in central Texas talk radio as both a host and producer and currently hosts Political Pursuits: The Podcast. Her tenure as Watchdog Wire–Texas editor involved covering state news and coordinating the site’s citizen journalist network. As a past Policy Analyst with Americans for Prosperity–Texas, Lou Ann wrote and spoke on a variety of issues including the growing issue of probate abuse in which wills, trusts, guardianships and powers of attorney are used to loot assets from intended heirs or beneficiaries.

The post Texas Sees Rise in Local Government Spending Fever, Affluenza Outbreaks; Bell County No Exception appeared first on WB Daily.