Senate budget writers on Wednesday bemoaned escalating state and local debt, although who’s to blame and how big of a deal it really is emerged as points of contention during the in-depth discussion.
The Senate Finance Committee kicked off its third budget hearing of the 140-day legislative session with a debt overview presentation from the Legislative Budget Board showing state debt as of last August was at $44.3 billion and local debt was at $205.3 billion. The state portion has more than doubled in the past decade, LBB Assistant Director John McGeady told committee members.
State Sen. Kevin Eltife, a Republican from Tyler who often harps on growing debt, and state Sen. Kirk Watson, D-Austin, placed blame on their fellow state lawmakers who they said have either transferred tough decisions onto bonds or local governments.
“It’s interesting to me that (in) the last 10 years we had all these people out there thumping their chest how we haven’t raised taxes in the state of Texas,” said Eltife, who profusely thanked Committee Chairwoman Jane Nelson for inciting what he described as an unprecedented discussion about debt.
“No, we haven’t raised taxes,” he continued. “We’ve doubled the state’s debt in the last 10 years,” which is “a tax on a future generation.”
Because of that, the assertion that the state has balanced its budget in the last decades is “just false,” Eltife said. “We haven’t. We’ve done it on the backs of bonds. And it’s not the conservative way to fund state government.”
“If you don’t have the money, you raise taxes to pay for it,” he said. “If you don’t want to raise taxes, don’t spend the money. But don’t go into debt.”
Watson had a similar message, but contended that state lawmakers in their refusal to raise taxes and increase state spending amid explosive population growth have shifted the burden onto local governments, particularly for things like transportation.
When cities or counties raise taxes to pay for roads, Watson said, “We sit in judgment of that, I think, sometimes in an inappropriate way.”
State Sen. Royce West, D-Dallas, somewhat tempered the discussion when he asked the LBB to confirm that the fastest growing type of state debt is “self-supporting,” meaning there is revenue available to pay it off and that “taxpayers aren’t on the hook” for it.
That didn’t much resonate with newly-minted state Sen. Lois Kolkhorst, a Republican from Brenham, who later asked the LBB to confirm where Texas ranks in terms of accrued local debt per capita among the 10 largest states.
“I’d like to have that confirmed … just to put in perspective where we are and where we may be heading with California falling off the fiscal cliff as a warning here.”
The answer? Second, behind New York. And ahead of California, which ranks third.
“Oh dear,” Nelson responded.
The Flower Mound Republican and state Rep. John Otto, R-Dayton, who is on the short list to chair the budget-writing House Appropriations Committee, have filed joint resolutions that — if approved by lawmakers and then Texas voters — would divert any excess money in the state’s rainy day fund into an account dedicated to pay off state debt.
“Our economy is producing more revenue than we can spend,” Nelson said in a statement sent out before the hearing. “We need to send part of it back to taxpayers, and reduce the obligations we are placing on future generations of Texans. They are not mutually exclusive — we can do both.”
Glimmers of bipartisan support have also have emerged this week during budget hearings for another joint resolution authored by Eltife and state Sen. Juan “Chuy” Hinojosa, D-McAllen, that would ban any spending to pay down state debt from counting toward the state’s constitutional spending cap. That also would require voter approval since it would amend the state constitution.