AUSTIN Senator Kevin Sparks (R-Midland) announced on Tuesday a bill package aimed at reforming the ways local governments use their taxing authority to take on and approve local debt.
“Texas has one of the highest local bond indebtedness in the country, third to only New York and California,” Sparks said in the press release. “With more and more debt being taken on year over year, we’re quickly racing toward being the state with the most bond debt. Although I like the idea of Texas being #1, that’s one item that I think we should seek to rank toward the bottom.”
The first bill, S.B. 946, requires that bond and tax increase elections be held on the November uniform election date.
“No longer will voters have to keep track of multiple tax elections throughout the year,” Sparks said in the press release. “With bond and tax increase elections being held on the same date as all other elections, voters can more easily keep track of what affects their lives at the ballot box.
The second bill, S.B. 561, prohibits local governments from proposing bonds for personal property if the expected useful life of the property ends before the maturity date of the bond — such as using a 30-year bond to purchase computers which will only last a decade at most.
“Using long-term bonds to pay for property that itself doesn’t last long-term is an irresponsible use of tax dollars and violates every standard accounting principle in the book,” Sparks said in the press release. “Restricting the maturity life of a bond to more closely match the expected useful life of the property being purchased makes more sense and is more sustainable in the long-term.”
The flagship bill of the package, S.B. 1810, addresses tax anticipation notes and prohibits local governments from issuing TANs if a corresponding bond has been rejected by voters in the past five years. S.B. 1810 also limits the amount of TANs to 5% of the bonded debt currently incurred by the local government, and it provides a mechanism for taxpayers to petition against the passage of a TAN should one be proposed.
“Unless we do something to change course, Texans will continue to be mired in debt,” Sparks said in the press release. “This bill package seeks to reverse course to put Texas on a path of long-term sustainable growth, and I look forward to passing these bills for the good citizens of Senate District 31 and the whole state.”
