A Roadmap to Better

7/30/2019 A Roadmap to Better

1/16

A Roadmapto Better.

Its Time to ChooseOur Fiscal Future

Texas, Its Your Money

Be in ormed.Be engaged. Take charge.

Susan Combs Texas Comptrollero Public Accounts


2/16

Susan Combs

Texas Comptrollerof Public Accounts

Your Money andTe axing Facts

A Texas, Its Your Moneyreport on who is taxingyou and why.

Susan Combs

Texas Comptrollerof Public Accounts

Your Money and Local Debt

A Texas, Its Your Moneyreport digging deeperinto state and localgovernment debt.

Susan Combs

Texas Comp trol lerof Public Accounts

Your Money andEducation Debt

A Texas, Its Your Moneyreport digging deeperinto public and highereducation debt.

Keeping A Sharp Eye On Public Pension Obligations

Susan Combs

Texas Comp trol lerof Public Accounts

Your Money andPension Obligations

A Texas, Its Your Moneyreport digging deeper intopublic pensions


To download the reports, visitwww.TexasItsYourMoney.org.


3/16

O ver the last year, Ive been traveling around our state, talking with peoplerom all walks o li eand doing a lot o listening. In 40 town hall meet-ings, a common theme has emerged about whats on our minds. Its prettysimple: Texans are worried about paying the bills. Not only our own householdbills, which can be challenging at times in the a termath o the recession, but theincredible bills being piled up by every level o governmentbills that are goingto come due, whether we like it or not.

This is about real amilies living real lives. Theyre worried about their kids andgrandkids. Theyre worried about the spiraling national debt, and the rapid growthin state health care costs, which will be accelerated by health care re orm. Theyreconcerned about an ever-growing array o special purpose districts across Texas

that adds to their taxes.

No one wants to su er the same ate as the poor proverbial rog in the pot o waterthat couldnt tell that the temperature was getting too hot be ore it was too late. Thats why weve taken the temperature o Texas public debt and pensions andexamined the various taxing entities that all take a toll on our take-home pay.

Our Texas, Its Your Money series o reports, summarized in this booklet, is anin-depth look at all the ways taxpayers wallets are a ected. Its our e ort to giveevery citizen the in ormation they needand deserveto make in ormed deci-sions. And its an acknowledgement that the temperature in those pots is climbinga little each day.

The question, as always, is What are we going to do about it? Thats a job or every Texan, taxpayer and elected o cial alike. Be in ormed. Be engaged. Take charge.

Texas has ared better economically than most o the country, and we want to keepit that way. We dont want to be like Illinois, Cali ornia or Greece, where attempts torein in decades o fscal mismanagement are proving bitter pills to swallow.

There will always be wants and needs, just as there will probably be those whowant to deliver bothdespite the harsh realities that it must all be paid or. Itsalways easier to say yes to every spending request or wish. But its ar more respon-sible to never orget that those credit card statements are still going to be in the

mailbox next month.

Smart people make smart decisionsand tough ones. They arm themselves withknowledge and meet the challenges head on. Let us know how we can help.

SUSAN COMBS 1


4/16

TEXANS PAY MORE TAXES EVERY YEAR

Your Money and the Taxing Facts examines all thevarious local entities that add to your tax bill, includ-ing cities, counties, special purpose districts and transitauthorities, and identi es trends in local taxation.

Since 1993,special purpose districts that levysales tax have increased by more than 1,900 percent , which means that more entities are taxing you. Inthat same time period, the number o special pur

pose districts that levy property tax has grownby more than 45 percent , with the creation o morethan 500 new districts o this type.

The increase in local sales tax and property tax has arexceeded either population or infation growth.

Your Money and

1993

SALES TAX

2011

0%

200%

COMBINED POPULATIONAND INFLATION GROWTH *

CUMULATIVE LOCALSALESTAX GROWTH

CUMULATIVE LOCALPROPERTY TAX GROWTH

1992

PROPERTY TAX

2010

0%

200%

COMBINED POPULATIONAND INFLATION GROWTH *

*While local sales taxes increased by almost 170 percent rom 1993 to 2011, property taxes grew by 188 percent rom 1992 to 2010. Compare that to slightlymore than 120 percent growth in combined population and infation during those years.


5/16

the Taxing FactsWhere We Fall Short The Comptrollers o ce has in ormationavailable online at https://ourcpa.cpa.state.tx.us/atj/addresslookup.jsp thatshows you which entities are levyingsales tax and at what rate; however thisin ormation is o ten not readily available

when you are shopping. With respect toproperty tax , there is no central source showing which entities can tax a particu-lar piece o property. Many Texans canfnd this in ormation via their appraisaldistrict website, but the in ormation isnot standardized or collected statewideon a single website. Some districts donot even have a website, orcing taxpay-ers to go to multiple sources to learnwho is taxing them.

How Texas Can Do BetterYou have a right to in ormation onwhos taxing you and why, includingdetails on the growing number o specialpurpose districts. To ensure this data isconsolidated into one statewide electron-ic resource or e cient access and review

by the public, Texas should require thetax assessor-collectors or chie appraiserso appraisal districts to report the tax ratein ormation to the Comptrollers o ceand require the Comptroller to publishall local tax rate in ormation (includinglocal property and sales tax rates) on onepublic website and to update the site atleast annually.

You have a right to know that specialpurpose districts are still providing theservice or which they were created,and that the taxes they collect are beingapplied exclusively to that purpose. Texas should institute a ormal reviewprocess , similar to that used by the TexasSunset Advisory Commission, to periodi-cally examine whether special taxingentities should be continued. This wouldprovide a much-needed check on theincrease o taxing authorities.

You have a right to accurate, up-to-date and use ul in ormation on the

revenues and expendituresincludingadministrative, legal and other costso the entities that tax you, with in orma-tion posted on a public website.

3*Data is reported to the Comptrollers o ce by local appraisal districts.

M ost C oMMon

P roPerty t ax

s PeCial P urPose

D istriCts by t yPe

MunicipalUtility District 637

EmergencyServicesDistrict 271

HospitalDistrict 129

WaterControl &ImprovementDistrict 109

WaterDistrict 64

CollegeDistrict 64

M ost C oMMon

s ales t ax

s PeCial P urPose

D istriCts by t yPe

Crime ControlDistrict 52

EmergencyServicesDistrict 52

MunicipalDevelopmentDistrict 20

Library Distric t 15

ImprovementDistrict 12


6/16

Your Money and Local Debt ocuses on the debtour local governments issue or purposes such ashospital construction, water in rastructure projectsand vehicle and technology purchases. Just likehousehold debt, this debt can spiral out o controli not watched and planned or care ully.

Our local governments more than doubledtheir debt load in the last decade, amassing more

than $7,500 in debt or every man, woman andchild in the state. Between 2001 and 2011, theoutstanding debt o Texas local governments rosemore than twice as ast as in ation and population growth rates combined.

Your Money and

TOTAL LOCAL OUTSTANDING DEBT BY FISCAL YEAR

( I N B I L L I ON

S )

$86.7$94.9 $102.6

$110.1$119.4

$127.4

$141.4

$160.3

$174.6$183.8

$192.7

150

10 0

50

0

$200

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

OTHER SPECIALPURPOSE DISTRICTS

WATER DISTRICTS/RIVER AUTHORITIES

PUBLIC SCHOOLDISTRICTS

HEALTH/HOSPITALDISTRICTS

COUNTIES

COMMUNITY AND JUNIOR COLLEGES

CITIES

SOURCE:Texas BondReview Board


7/16

Local DebtWhere We Fall ShortNew debt o ten is approved by a smallpercentage o voters, who must makevital decisions about new debt withlittle information about its implica-tions. And a large share o local debttotaling $12.7 billion since 2005is

issued through certi cates o obligation,generally, without any voter approval.

Furthermore, it is di cult or taxpayersto learn the ull scope o debt in theirarea. While some local debt is reportedto the Texas Bond Review Board, in-

ormation not reported includes bank loans and some lease-purchase ar-rangements. O ten, detailed re search inbudget and nancial reports is needed togather this additional detail.

How Texas Can Do BetterYou have a right to a ull and completedisclosure o public debt. All govern-ment entities should reveal all debtobligations on a public website, includ-ing the debts original stated purpose,the total amount o debt authorized, the

issued and unissued amounts o autho-rized debt, spent and unspent amountso issued debt and the per capita debtburden on taxpayers. Any ballot or newdebt should be accompanied by a simi-lar accounting.

You have a right to approve debtissued in your name. Texas shouldsignifcantly narrow public governmentsauthority to issue debt without voterapproval, and revise the petition processto make it easier or taxpayers to compela public vote on proposed debt.

COMBINED STATE AND LOCAL OUTSTANDING DEBT BY FISCAL YEAR

5

2001 2011

STATE $13.7B $40.5B

LOCAL $86.7B $192.7B

0

50

100

150

200

$250

$221.6

$233.2

$100.3$112.1

$120.8$130.1

$140.8$150.7

$167.8

$191.3

$208.6

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

( I N B I L L I O N

S )

Note: Numbers may not sum due to rounding.SOURCE:Texas Bond Review Board


8/16

Your Money and Education Debt examines theindebtedness o our public schools and highereducation institutions. In scal 2011, our publicschool debt was $63.6 billion , or$13,530 or ev-ery Texas student in a school district carrying debt.And while state college and university debt islower, at $12.5 billion , that debt rose nearly eighttimes aster than enrollment in the last decade.

Your Money and

155.2%

26.5%21.0%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

0

50

100

150

200%

DEBT OUTSTANDING

INFLATION (CPI)

ENROLLMENT

SOURCES: Texas Bond ReviewBoard, TexasEducation Agency,Bureau o LaborStatistics

CUMULATIVE PERCENTAGE GROWTH OF SCHOOL DISTRICT DEBT

SOURCES: Texas Bond ReviewBoard, TexasHigher EducationCoordinatingBoard

STATE COLLEGE AND UNIVERSITY DEBT GROWTH EXCEEDS ENROLLMENT

26.5%32.5%

125.8%

246.5%

20022001 2005 2006 2007 2008 2009 2010 2011

0

50

100

150

200

250%

DEBT OUTSTANDING

TUITION AND FEESENROLLMENT

INFLATION (CPI)

20042003

In 2003, thelegislaturederegulateduniversitytuition , allowinginstitutions to settheir own tuitionrates and fees.


9/16

Education DebtWhere We Fall Short The bulk o Texas education debt sup-ports the construction or renovation o school acilities. Yet Texas has no central-ized source or in ormation on currentpublic school acilities, such as totalsquare ootage, square ootage per stu-

dent and total cost. To obtain such in or-mation, every district must be contactedindividually. Construction costs also arenot reported to any single entity, makingit almost impossible to identi y unreason-able costs on individual projects.

In additionas with other debtnewdebt o ten is approved by a small per-centage o voters . It also is di cult ortaxpayers to learn the ull dimensionso debt in their area.

How Texas Can Do Better

You have a right to ull and completein ormation on education debt . Every Texas school district should disclose onits website the cost and details o allconstruction and renovation projects,

including actual square ootage, totalcost per student, total cost per squareoot and square ootage per student.

Each district should also post an on-line inventory o all existing acilities,detailing available square ootage, totalstudent capacity and current studentenrollment or each campus.

All ballots or new education debtshould reveal all current and proposeddebt obligations , including the amounto outstanding debt, existing debt ser-vice, amount o new debt and the aver-age length o proposed debt obligations.

You have a right to know that educa-tion debt is being used prudently ande ciently . Texas should provide incen-tives or school districts to use morecost efective construction and designpractices , which can slash design costsand save millions per project . Suchincentives also could encourage schooldistricts, community colleges and uni-

versities to enter into dual-use acilityarrangements , to help reduce construc-tion costs and the need or new debt.

CUMULATIVE PERCENTAGE GROWTH OF COMMUNITY COLLEGE DEBT

26.5%

100.9%

58.9%

297.2%

20022001 2005 2006 2007 2008 2009 2010 2011

0

50

100

150

200

250

300%

DEBT OUTSTANDING

TUITION AND FEESENROLLMENT

INFLATION (CPI)

20042003

Note:: Tuition andee rate o growth

is assumed or2002-04 as data isnot available.

SOURCES: Texas Bond ReviewBoard, TexasHigher EducationCoordinatingBoard, Bureau o Labor Statistics

7


10/16

21.4%

16.2%

62.4%

REVENUES OF PUBLIC PENSION PLANS IN TEXAS

SOURCE:U.S. Census Bureau

2010 Revenue

Earnings on Investment $13.7B

Government Contribution $4.7B

Employee Contribution $3.6B

Total $22.0 Billion

Your Money and Pension Obligations spotlightsthe thorny issue o public pension plans acingshort alls. In some parts o the country, beneftspromised to public employees might not be metwithout additional revenue rom taxes and ees,because o lower-than-required investment reve-nue and employer/employee contributions. SomeCali ornia cities are already in bankruptcy. Weneed to keep an eye on pension expenditures

to make sure they stay manageable.

Your Money and Pe

All defned beneft public pension plans ultimately rely on two sources o revenue: contributions rom the employer and the salaries o covered publicemployees, both o which are supported by taxes and ees; and investmentearnings generated by the pension plans assets.

These unding sources determine the fnancial health o the plan, along with a

third actor: plan design the benefts to be provided and the ways in whichemployees will quali y to receive those benefts.


11/16

TEXAS LOCAL PUBLIC PENSIONPLANS EARNINGS ON INVESTMENTS

TEXAS STATEWIDE PUBLIC PENSIONPLANS EARNINGS ON INVESTMENTS

SOURCE:U.S. Census Bureau

nsion ObligationsWhere We Fall Short Too little public in ormation on publicpension fnances is readily available.Many plans do not report their actualinvestment returns to the states Pen-sion Review Board.

Several o the states largest pensionplans also have infnite amortizationperiods, meaning that they can nevereliminate their un unded liabilities ascurrently structured.

How Texas Can Do Better

You have a right to in ormation on

public pension fnances. Texas shouldrequire all public pensions to post

primary contact in ormation on a publicwebsite. Each plan should also post onlineand report to the Pension Review Boardbasic historical investment returns, includ-ing net investment returns or each o thelast 10 fscal years and one-year, three-year,fve-year, 10-year, 30-year, and since incep-tion rolling rates o returns. The reportshould also include the plans most currentassumed rate o return and assumed rateso return or the last 10 fscal years.

Texas should examine the fnancialhealth o public pension plans andtheir ability to meet long-term obliga-tions, considering their benefts, contri-butions and investment returns, recom-mending solutions to mitigate any risk o

ailing to meet those obligations.

$2.3BGAIN

$5.7B LOSS

2002 2004 2006 20082000

( I N

B I L L I O N S )

-$6

$0

$4

2010

$11.4BGAIN

$11.2B LOSS

2008

( I N

B I L L I O N S )

-$15

$0

$20

2002 2004 20062000 2010

U.S. Fiscal 2000-2010 U.S. Fiscal 2000-2010

Texas public pension plans cover 2.3 million active and retired members. Aswith most other investments globally, Texas public pension program earnings

ell during the recent recession . Although plan assets have rebounded since2010, overall they are still below pre-recession levels.

9


12/16

Taxpayers Need OneCentralized Place for

Taxing, Debt and PublicPension Information

There currently is no single look-uptool or those seeking all transparencydata on Texas state and local govern-ments. Taxpayers, instead, must look upin ormation rom various sources to geta ull picture.

To start bringing existing data andresources together, the Comptrollers o -fce launched several transparency Webtools in tandem with each report in theTexas, Its Your Money series:

Find interactive maps that providean overview o the entities thatassess property and sales taxes ineach o Texas 254 counties at www.texastransparency.org/yourmoney/localtax/entities.php .

Compare how your citys or countysdebt stacks up with other areas. Look

up debt issued by individual city,county, water district and otherspecial purpose districts using theComptrollers maps and look-up toolat www.texastransparency.org/yourmoney/localdebt .

See how your school districts orcolleges debt ranks. Look up debtissued by individual district by usingthe Comptrollers maps and look-uptool at www.texastransparency.org/yourmoney/edudebt .

Use the Texas Public Pension searchtool on to view and sort recent dataon Texas public pension plans, in-cluding key indicators.

ON THE WEB: OUTSTANDING DEBT PER RESIDENT, TEXAS CITIES, FISCAL 2011

INTERACT ONLINEGo to www.TexasTransparency.org

or interactive versions o these maps where youcan click to see more details on the outstandingdebt per city.

In the map at left, the darkest circles represent the citieswith the most outstanding debt per resident. Of cities withdebt, the debt per resident in 2011 ranged from $3.83 in thesmall town of Lyford in Willacy County to $21,900 in Westlake,a suburb of Fort Worth.

CORPUS CHRISTISAN ANTONIO - AUSTIN

DALLAS - FT. WORTH HOUSTON

EXAMPLE SEGUINTax Supported Debt: $41,915,000

Revenue Supported Debt: $22,600,000Lease Purchase Debt: $0Commercial Paper Debt: $0Total Debt Outstanding: $64,515,000Population: 25,175Total Debt Outstanding per Capita: $2,562.66

SOURCE:Texas Comptroller o Public Accounts

Key Takeaway :More Info1


13/16

Voters Should Be Toldthe Debt Facts

Unless voters have done research ontheir own or government entities haveshared in ormation about the currentoutstanding debt, voters are o ten not

ully in ormed be ore they walk into thevoting booth. In ormation on variousballot measures can be challenging toobtain. Ballot propositions currentlyofer no in ormation other than thedebt issue being considered .

rmation Still Needed.2

What a sample ballot might look like ikey in ormation was included, such as:

the amount of outstanding debt, debt service, per capita obligation as of the mostrecent annual fnancial report,

the amount of new debt, estimated debt service, and estimated per capita burden beingproposed.

B e t a IS D

Bo n d El Ec t io n - n o VEM BER 0 6 , 2

0 1 2

DeB t OU t S t a NDING

PR INCIPa LR eMa

INING IN t eR eS t

t O t a L DeB t SeR VICe

Pa YMeN t

DeB t OU t S t a NDING

PeR Ca PI t a

AUG. 31, 201 2$65,030,343

$42, 742,000 $10 7, 7 72,343

$1,400. 76

PROPOSED ISSUE$25, 795,000

$18,200,000*$43,995,000*

$555.63

A ver Ag e l en g t h o f pr o po sed d eb t : 20

yeAr s

e x IS t ING a NNUa L DeB t

t a x R a t e$0.18 per $100

E x IS t In G A v ERAGE RESIDEn t IAl

DEb t SER vIc E t A x l E v y * *

$ 2 7 4. 9 7

PROPOSED n E w RA t E

If b On D PASSES$0.22 $100

ES t ImA t ED DEb t SER vIc E t A x l E v y

If b On D PASSES ASSUmIn G n O S t A t E

ASSIS t An c E

$336.08

% In c REASE22.2% % In c R

EASE 22.2%

* es im d in r s n d o l p ym n .

* * a v r g d b s r vic is c lcu l d

on h v r g 201 2 r s id n i l prop r

y v lu

in h ci y o f $15 2, 760.

PRO P O SI t IO n

t h e is s u An c e o f b O n DS In t h E A

m O Un t O f $ 2 5 , 7 9 5 ,0 0 0 f o r t h e c o ns t r u c t io n , r e n o

v A t io n ,

Ac q u is i t io n An d e q u ip m e n t o f s c

h o o l b u il d in g s , in c l u d in g t h e c

o n s t r u c t io n o f t h r e e

s c ie n c e c l As s r oo m s A t b e t A m id

d l e s c h o o l , r e hAb il i t A t io n o f t h

e p e r f o r m in g Ar t s c e n t e r

An d t h e m u l t ip ur p o s e s t Ad iu m A

t W .h . b e t A h ig h s c h o o l An d t h e

l e v y in g o f t h e tA x in p A y -

m e n t t h e r e o f .

NEW

11


14/16

Exercising Your PoBe informed. Find our Texas, Its Your Money report series at www.TexasItsYour

Money.org to learn more and access state and local governmenttransparency tools.

For a list of state debt issuers, recently approved state transactionsand a searchable database o all state debt , visit www.brb.state.tx.us/bfo/bfo.aspx . For a searchable database showing local governmentoutstanding debt , see www.brb.state.tx.us/lgs/lgs.aspx .

Visit www.thecb.state.tx.us or data and in ormation on Texas col-lege costs and expenditures , a general appropriations overview

and in ormation on school debt trends.

Visit the Pension Review Board at www.prb.state.tx.us/agency-information/publicationsreports.html or asset reports, pensionplan presentations and legislative reports and updates.

www.TexasItsYourMoney.org


15/16

wer as a TaxpayerBe engaged. Attend hearings and meetings of government entities that levy

taxes and issue debt in your name. Learn the acts and know thereasons and arguments behind these decisions. Let your govern-ment leaders know your concerns. Make your voice heard.

Visit the Pension Review Board at www.prb.state.tx.us or in orma-tion on pension board meetings, which are open to the public.

Take charge.

Ask or more transparency at every level o government.Make use o the transparency tools o ered to keep governmentaccountable. Let government know the in ormation you want tosee about your tax dollars. With better transparency, you can bemore in ormed and involved with just a ew clicks.

Register to vote in state and local elections by visiting the Texas

Secretary o States o ce at www.votetexas.gov . Exercise yourright to vote.

13


16/16

A Roadmapto Better.


Were committed to making Texas government

transparent and keeping our books open,

accessible and understandable.A ter all, its your money!

www.TexasItsYourMoney.org

Publication# 96-1730Printed December 2012

Susan Combs Texas Comptrollero Public Accounts

Documents

A Roadmap to Better