Friday, October 19, 2007

"Taxpayers should wonder why we are asked to issue bonds when state government has a surplus...Voters shouldn't write a blank check to TxDOT."


More money for state?

Oct. 19, 2007

Fort Worth Star-Telegram
Copyright 2007

Taxpayers, it's time to open your wallets. November ballot initiatives total almost $10 billion in state spending. School districts are asking for almost $7 billion more in taxes, and local governments are seeking $9 billion in bonds.

Texans will be asked to consider shouldering considerable additional public debt with numerous measures on Nov. 6. Currently, the state's outstanding general-obligation bond debt is $7.5 billion. If passed, the state initiatives could more than double that.

Local governments -- including the 106 school districts seeking tax increases and the 52 school districts, 12 cities, seven counties and three colleges asking for bond approvals -- will hit taxpayers' pocketbooks even harder.

This building debt is particularly problematic because taxpayers already carry considerable government debt. The interest payments on local government debt in Texas total more than what local governments spend on police and fire protection combined.

Local governments have increased their spending at an unsustainable rate -- in 25 years, an astonishing 158 percent when per-person income increased by only 39 percent. Local government debt has grown at an even more alarming rate, increasing 270 percent in the same period.

That comes out to $132 billion in debt for local governments -- more than $5,700 for every man, woman and child in Texas.

Although local tax increases and bond initiatives are worthy of close public scrutiny, ballot issues dealing with state-issued bonds are the real problem for taxpayers. The Texas Constitution prohibits state debt. Voter approval will mean another amendment. Since 1874, voters have supported 69 percent of the Legislature's 634 proposed amendments.

Many ballot initiatives sound worthwhile, but taxpayers should wonder why we are asked to issue bonds when state government has a surplus. We hear a lot of talk about spending tax dollars for the children. But these spending measures are bad news for future taxpayers -- today's children.

Here is a list of what the November bond ballot initiatives will mean to our pocketbooks. The five general obligation bonds could commit Texas taxpayers to $9.75 billion, plus interest.

Proposition 2 will issue $500 million for student college loans. Though the program should pay for itself, taxpayers could end up bailing the program out if it becomes insolvent. The federal government and numerous private lenders already offer student loans.

Simply funding more loans while allowing tuition to climb won't make college more affordable, and requiring little fiscal accountability on how higher-education dollars are spent is not in the best interest of taxpayers or students.

Proposition 4 will issue $1 billion to pay for repair, maintenance, improvement and construction projects. Though $57 million in state funds have been obligated to pay for debt service, and many of these projects appear deserving of some funding, we have a state budget surplus.

Proposition 12 will allow for $5 billion for highway improvement projects. Yet the Texas Department of Transportation still has not drawn down $3 billion in bonds from a 2003 referendum. Voters shouldn't write a blank check to the department.

Because of a previous constitutional amendment, one-quarter of our state gasoline taxes go to education. This revenue should be redirected to transportation. With more fuel-efficient cars on the road, the gas tax does not provide enough funding to keep up with needed repairs. The state should be able to use dedicated funds and not obligate future state revenue and taxpayers.

Proposition 15 will authorize $3 billion for cancer research. Although Texans would agree that finding a cure for cancer is important, heart disease kills more people than cancer. Why fund just cancer research? Why Texas? Is it a state responsibility? And if it is so important, why not fund it from the state budget?

If medical research is a role of state government, the funds should come out of the taxes we already pay. Add to that price tag the $1.6 billion in interest costs that the bonds will reportedly generate. Texans want a cure for cancer, but we should question whether $3 billion-plus in public money is the real remedy.

Proposition 16 will allow the Water Development Board to issue up to $250 million in bonds to help distressed communities. The board has estimated a need for $5.4 billion and has $12 million more in remaining bond authority. The program appears to be a black hole with more outreach in unincorporated and hard-to-serve areas every time the opportunity for more money becomes available. Taxpayers can't afford to continue this program.

Perhaps we should call all bond initiatives a tax increase. Voters would think twice before voting "yes" on something that sounds good but costs too much. It's time for voters to just say "no" to more state spending.

Coming Monday

The Star-Telegram Editorial Board's recommendations on the 16 proposed amendments.
Peggy Venable is director of the 16,000-member Texas chapter of Americans for Prosperity.

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