Explosive population growth has encouraged Texas localities to borrow, borrow, and borrow -- and the bill is coming due.
In November 2013, voters in the Katy Independent School District, which stretches 181 square miles in and around Houston, heatedly debated, and then voted down, a bond offering, the proceeds from which largely would have gone toward the construction of a controversial $70 million football stadium.
As Texas has grown, the number of municipalities and other government entities permitted to float debt in taxpayers' name has increased exponentially...
The intense debate followed the opening, a year earlier, of the most expensive high school stadium in the country, in the Dallas suburb of Allen; that $59.6 million gem sported a high-definition Jumbotron that thrilled local sports fans, though it appalled fiscal watchdogs.
Undaunted, Katy school officials came back in 2014 with a proposal for a smaller -- though, at $58 million, still-expensive -- facility. This time around, voters approved the project as part of a $748 million bond offering, which included funds to erect six new schools in the rapidly growing district. The stadium will open in 2017.
The battle over the Katy stadium offers a microcosm of a larger issue confronting Texas. Over the last decade, Katy's enrollment has increased by nearly 26,000 students, a striking 58% rise. To provide classroom space for all the new kids, the district has built and opened more than 20 schools and numerous support facilities, a dizzying rate of construction.
But Katy is far from alone in rapid growth, and how schools and municipalities manage it is provoking anxiety across Texas. As in Katy, localities have been borrowing heavily to finance the construction and have included in the bond deals extravagant amenities, such as the country's priciest high school athletic facilities.
Even more troubling: as Texas has grown, the number of municipalities and other government entities permitted to float debt in taxpayers' name has increased exponentially, which makes it tough to determine exactly how much some of these governments owe. What a worried Texas comptroller Susan Combs said in 2013 remains true: "I went to dozens of town hall meetings around the state, and when I asked, not a single member of the public knew just how much people in their towns were on the hook for."
Though Texas's state government has a reputation for fiscal moderation, its localities collectively...
Read the entire piece here at Investor's Business Daily
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Steven Malanga is the George M. Yeager Fellow at the Manhattan Institute and a senior editor at City Journal.
