Texas school districts account for our state’s largest share of outstanding local government debt, however, higher education is similarly rising as since 2001, state university and college enrollment increased by 32 percent while outstanding debt grew 246 percent.
As the third installment of her four-part “Texas, It’s Your Money” report series, Texas Comptroller Susan Combs today released “Your Money and Education Debt,” a detailed analysis of Texas education debt – including public schools and higher education.
“Local government debt is one of the most pressing issues facing Texas. This report is a breath of fresh air for taxpayers,” Peggy Venable, Texas director of Americans for Prosperity said. “The Comptroller points out that present day debt commitments will continue to affect Texans for decades.“
Noting Texas as second in local government debt only to California, “the Greece of America,” Venable warned “we are mortgaging our children’s future.”
Key findings of the report include:
- Public education debt per student has grown at a rate of four times faster than inflation.
- Per student debt in Texas is $13,334, an amount for which current and future taxpayers are responsible.
- The largest expenditure in public education is debt service, which increased over the past 10 years at twice the rate of ISD’s payroll. Debt service rose by 127 percent while overall expenditures grew 64 percent.
- Per student debt increased most among slower enrollment growth districts. Debt increased 257.6 percent in those districts compared to 138.4 percent growth in the fastest-growth districts.
- The most rapid debt service growth occurred immediately following the legislature providing property tax relief.
- Public universities have issued almost 43 percent of the state’s debt with the University of Texas System holding the most in outstanding debt at $7.3 billion or $35,000 per student, almost two times as much as Texas A&M University System. The University of Texas System debt includes medical schools.
In the report, Combs expresses her commitment to “making Texas state government transparent and our books open, accessible and understandable to our citizens. Government should not make it hard for you to see our books.” Per Combs, the information is helpful only if used by taxpayers and accurate information is needed for taxpayers to decide “whether public and higher education institutions are meeting the responsibility of managing debt as prudently and conservatively as possible.”
Combs used a conference call today to remind of a message delivered throughout her recent town hall tour of the state. At the first of the town hall meetings this past March in Temple, Combs asked “If the juggernaut from Washington is coming, how do we in Texas take any control over what we are doing?” and went on to counsel that local government spending, including the issuance of new debt, must be addressed. Before considering any new debt, she encouraged knowing current debt amounts – principal and interest. Today, she again emphasized how if federal debt problem continues as it is, at local levels we need to be more engaged in spending practices. On the call, Venable agreed cautioning “we’re throwing money at education, but not setting out good priorities.”
The report includes recommendations for greater public transparency and cost-savings. Full transparency of all funding sources for universities and incentives for use of architectural prototypes and cost effective construction/design practices as new educational facilities are built are two of the report’s recommendations.
Other recommendations include disclosing online bond program expenditures and data on existing facility capacity/usage as well as progress, cost and details of all construction and renovation projects.
Education delivery is evolving as education is entering a digital revolution which will include wider adoption of online learning and electronic textbooks. While such innovations may not eliminate the need for traditional school campuses, the size and number of future facilities will likely change. This could also lead to, as suggested by the report, school districts, community colleges and and higher education institutions developing dual-use facilities for additional efficiencies and cost savings.
“We at AFP support the recommendations made by the Comptroller,” Venable said. “We will encourage legislators to embrace these common-sense taxpayer protections.“
With the current lawsuit in which Texas school districts are suing Texas taxpayers over the issue of school finance, this indeed is important information which the public will hopefully study and use to advocate, as Venable says, more education for their dollars instead of more dollars for education.