TEXAS COMPTROLLER OF PUBLIC ACCOUNTS
nyone who follows the economy — or has a child — knows thateducation is vitally important for our kids’ success as well as for our stateas a whole. Virtually all of tomorrow’s jobs will require a quality educationand some degree of technical training.Education is not exempt from rising costs. Alongside the increasedexpense of delivering instruction, continued investments in classrooms, technology and other facilities, leaders in public schools, community and junior colleges, and the state’s public college and university systems have to make strategic decisions about how to pay for education. That has
included issuing new debt and renancing existing debt to take advantage
of improved interest rates or more advantageous terms.For
, the majority of debt service is supported directly by local property tax revenues, although the state’s Permanent SchoolFund is the guarantor for much of this debt, and state funds directlysupport annual debt service for almost half the school districts with debt.
, too, have local property tax levies as part of a broadspectrum of revenue.Overall, the debt incurred by schools, colleges and universities isincreasing, passing costs to future generations. Each school district,community college district and university has unique needs and mustgrapple with a broad array of challenges. The reasons for issuing debt,identifying available revenue, and other variables can affect how, why and when educational institutions spend money.Public education accounts for more than
of local governmentdebt in Texas. As citizens and taxpayers, you should ask questions of oureducation leaders and hold them accountable for their spending decisions to
ensure they are spending borrowed dollars efciently and effectively.
Public universities and colleges
don’t collect taxes directly, but rely onstate appropriations to service some debt, as well as drawing on revenuegenerated by state assets through the Public University Fund and HigherEducation Fund.To understand the issues surrounding public education debt, you need to understand the basic facts. This report highlights the numbers through
scal 2011 (the most recent available data). We hope it will provide a useful
basis for exploring education-related government debt.
THE COST OF EDUCATION: TODAY AND TOMORROW
WHAT IS DEBT?
can refer to debt issued oroutstanding debt.
AUTHORIZED BUT UNISSUEDDEBT
is debt available forborrowing without the need forfurther voter approval.
is the total amountof funds borrowed during a
specied time period.
is the totalprincipal owed over the remaininglife of all bond issues.
is the amountneeded to repay the principal andinterest on debt outstanding.
the purchase of an asset overtime through lease payments thatinclude principal and interest.
Lease purchases can be nanced
through a private vendor.
issecured by nontax revenues suchas tuition or admissions to athleticevents. This type of debt does notrequire voter approval.
is fundedby property tax levies within theschool or community collegedistrict’s boundaries. It must bevoter-approved.
WHO ISSUES DEBT?
PUBLIC SCHOOL DISTRICTS
may issue debt supported by localproperty taxes, state funds andother revenues.
COMMUNITY AND JUNIORCOLLEGE DISTRICTS
may issuedebt supported by local propertytaxes, tuition and fees, staterevenue and other revenues.
PUBLIC COLLEGES ANDUNIVERSITIES
may issue debtsupported by state generalrevenue, the Permanent UniversityFund’s revenue, tuition and fees orother revenues.
LOCAL GOVERNMENT DEBT OUTSTANDING – 2011
OUTSTANDING TOTAL$192.7 BILLION
PUBLIC SCHOOL DISTRICTS
COMMUNITY AND JUNIOR COLLEGES
OTHER SPECIAL PURPOSE DISTRICTS
WATER DISTRICTS/RIVER AUTHORITIES
Note: Total may not sum due to rounding.Source: Texas Bond Review Board