FLYNN: Texas ISDs Owe Staggering $111.5 Billion in Debt

Capital Appreciation Bonds circumvent current spending borrowing limits Texas Insider Report: AUSTIN Texas Texans deserve transparency in local bond elections involving schools and other governmental bodies. Texans deserve the right to know how much debt there is and I hope my legislation will help shine light on this vital issue said State Rep. Dan Flynn (R-Van) presenting support for his Transparency Legislation HB 114 and HB 1378. The information appeared troubling to many in the audience when it was revealed that total school district municipal debt is more than $112 billion with 20 Texas ISDs carrying over a billion dollars in debt.    Flynns legislation would require transparency to ensure Texans are fully informed of each ISDs actual debt level its consequences as well as putting limits on Capital Appreciation Bonds. Those type of bonds are used often as a tool to help school districts but are also very susceptible to abuse.

Many Texans are concerned when they learn their ISDs are indebted in the billions of dollars. It appears the overuse of this tool (Capital Appreciation Bonds) could be an open invitation to get around current limits on spending and borrowing and there is an urgent need to reign in this type of abuse. said Flynn.

More worrisome Texas has extremely high levels of local debt. Some of the highest in the nation. According to the Texas Bond Review Board local governments have almost $200 billion in local outstanding bond debt comprising a full 83 of all public debt in Texas. According to Flynn

To ensure voters are adequately informed about any new debt they are being asked to approve transparency of the levels of debt payments and per capita burden need to be disclosed on a regular basis. These transparency requirements should apply to all political subdivisions including cities counties school districts and special taxing districts Flynn said.

HB 1378 and HB 114 seek to enhance the transparency of political subdivision debt obligations as a means to allow the citizens of Texas a method to see what they are voting for and what it does to debt on themselves and their child and grandchildren before they vote. State Rep. Dan Flynn is Chairman of the Texas Houses Pensions Committee and also serves as a member of the Investments & Financial Services Committee and the Investments & Financial Services Sub-Committee on Bond Indebtedness. Flynn has consistently been ranked as a Top 10 Conservative since being elected in 2000 and was named a Texas Taxpayer Hero" by Texans for Fiscal Responsibility.