By Tim Brown, County Information Program Senior Analyst
In Texas, all public securities issued by local debt issuers — such as counties — must be approved by the Public Finance Division of the Office of the Attorney General and registered with the Texas Comptroller of Public Accounts. The Texas Bond Review Board (BRB) collects local bond information from the Attorney General’s office, makes that information available on their website and prepares statistical reports on local bonds. While the bond information can be accessed on the agency’s website, the data is only for Aug. 31 of each year. At the time of this writing in late October, the August 31, 2018 data is not yet available from the BRB. However, with early filing fast approaching and the actual legislative session not far behind, it seems like a good time to review the level of debt that counties are obligated to repay.
The following analysis considers principal only; therefore, stated amounts do not include outstanding interest. In addition, while the amounts include commercial paper (short-term, unsecured notes maturing within 270 days) from Harris County, they do not include conduit debt (debt issued on behalf of another entity).
The map shows the per capita debt for each county that had debt outstanding as of August 31, 2017, as calculated by the County Information Program using the Census Bureau’s population estimates for 2017. The brown color indicates that those 82 counties had no debt at that time. While those counties are concentrated in the western half of the state — many in or near the panhandle — a number of them are spread throughout the state. Curiously, none of them show up on I-35 and only a small number are near that corridor (Coryell and Limestone are the closest). That green swath, signifying counties with debt, broadens south of San Antonio to encompass a large portion of South Texas, running along the international border from the Valley northwest to Maverick County.
The yellow color represents a single county, Loving, that is separated from the other counties that had debt because, at $145,896 per capita, it has significantly more debt per capita than any other county in the state. Naturally, given a population estimate of only 134 people, almost any amount of debt is going to result in a high per capita amount. Loving is such a huge outlier that the next highest per capita debt is only $10,025 in La Salle County. To put those numbers in perspective, only 24 of the remaining 172 counties that had debt had more than a thousand dollars of debt per capita at that time.
Total debt (not including interest) for the 172 counties that had debt as of August 31, 2017 reached $13.8 billion, including $11.7 billion in tax-supported debt, $2.1 billion in revenue debt, and $66 million in lease-purchase debt. Tax-supported debt is secured by the issuer’s ad valorem taxing power (property taxes). Counties secure revenue debt with a specified revenue stream, which can differ from issuer to issuer. And lease purchase debt is simply long-term financing for the purchase of an asset, such as a road grader.
The total of $13.8 billion sounds like a large sum — and it is. However, it accounts for only 6.3 percent of all local government principal debt in 2017. According to the BRB’s 2017 Local Government Annual Report, public school districts and cities accounted for the lion’s share of local debt, as seen in the accompanying pie chart. Those two types of entities accounted for 69.5 percent of all local debt, principal only, as of August 31, 2017. ✯