News88th TXLege

Texas’ Largest Cities Continue to Burden Taxpayers With Debt

February 21, 2023
Jeramy Kitchen
Debt, Local Government, Spending, Truth in Accounting

The fiscal watchdog organization Truth in Accounting (TIA) recently published its latest Financial State of the Cities Report for 2023. The report analyzed the financial health of the top 75 cities in America.

“The report found that 50 cities did not have enough money to pay all of their bills” amounting to a combined debt of $266.5 billion. Of the 75 most populous cities, nine belong to Texas. Of those nine, six do not have enough money to pay ongoing expenses, and three are fiscally responsible enough to pay their bills.

Notably, all of the 75 cities analyzed have balanced budget amendments, meaning spending should not exceed revenue. The reality is, many cities avoid this metric by employing accounting tricks that include things like:

“Inflating revenue assumptions, counting borrowed money as income, understating the true costs of government, and delaying the payment of current bills until the start of the next fiscal year so they aren’t included in the calculations.”

Texas ‘Sinkhole Cities’

TIA labels cities that do not have enough money to pay their bills as “Sinkhole Cities.” They then divide the total burden owed among the estimated taxpayers in the city to show the burden carried by every citizen. Here are the burdens that each taxpayer in these Texas cities owes:

  • San Antonio, TX (37th)$707.7 million in debt ($1.7k/taxpayer)
  • El Paso, TX (38th)$386.6 million in debt ($1.9k/taxpayer)
  • Ft. Worth, TX (53rd)$1.8 billion in debt ($6.6k/taxpayer)
  • Houston, TX (57th)$6 billion in debt ($8.9k/taxpayer)
  • Austin, TX (60th)$2.7 billion in debt ($9.4k/taxpayer)
  • Dallas, TX (68th)$5.6 billion in debt ($14.7k/taxpayer)

A significant contributor to debt burdens in nearly every city is that of pension liabilities and promised retiree healthcare benefits. Local debt remains out of control in Texas and must be reined in. This can be done legislatively in the ongoing 88th Legislative Session.

Notably, one solution to runaway local spending has taken the form of legislation proposed by Texans for Fiscal Responsibility (TFR) Taxpayer Champion State Rep. Briscoe Cain (R-Deer Park), which seeks to impose a spending limit on city and county governments based on the increase of both population and inflation. Thus far, the bill has not been referred to a House committee for its consideration.

Texas ‘Sunshine Cities’

It is worth noting that Texas did have three “Sunshine Cities” in the report. These are cities that have enough money to pay their bills. The three Texas cities that were honored for their fiscal responsibility were:

  • Plano, TX (10th)$313.1 million in surplus ($3.7k/taxpayer)
  • Corpus Christi, TX (19th)$159.1 million in surplus ($1.7k/taxpayer)
  • Arlington, TX (23rd)$21.6 million in surplus ($200/taxpayer)

What Does It All Mean?

Texas taxpayers can never hope to fully eliminate things like property taxes or cut government spending when our local government jurisdictions continue to operate irresponsibly or when voters continue to overwhelmingly support new debt obligations on top of those that already exist.

Though the report incorporates the share of state debt per taxpayer in its calculation, it does not include the pure insanity that is federal debt, which recently surpassed $31 trillion, or the projected unfunded liabilities like Social Security and Medicare, which TIA projects at an additional nearly $96 trillion.

All of this debt combined with ongoing record inflation and increases in government spending makes the future look bleak. Without a renewed focus on fiscal sanity by Texas taxpayers, it is likely this behavior will continue and call future prosperity into question.

Texans for Fiscal Responsibility relies on the support of private donors across the Lone Star State in order to promote fiscal responsibility and pro-taxpayer government in Texas. Please consider supporting our efforts! Thank you!

Get The Fiscal Note! Our free weekly roll-up on all the current events that could impact your wallet. Subscribe today!