Texas earned a D grade for its fiscal health, according to an analysis by the nonprofit educational organization, Truth in Accounting (TIA).
In a separate analysis, Dallas, Houston, and San Antonio rank seventh through ninth worst among the top ten cities analyzed by TIA, with combined debt burdens costing Texans more than $73,000 each.
According to TIA’s 2019 Financial State of the States report, Texas' overall financial condition worsened in 2018 and its taxpayer burden measure fell for the fourth year in a row.
“Texas battened down the hatches on its income statement, raising taxes while keeping current expenses,” Bill Bergman, TIA Director of Research, told The Center Square. “But its calculations for long-term obligations owing for retiree pension and health care benefits deteriorated significantly.”
Comprehensive annual financial reports released by Dallas, Houston, and San Antonio exclude significant underlying data from major government entities like entire school districts, transit agencies, housing authorities, and others.
“Taxpayers are on the hook for the debts accrued by these underlying government entities, but you would not know it just by looking at the reported data for the city,” a city analysis shows.
TIA calculates the taxpayer burden according to the amount of money each taxpayer would have to pay for the state or city to pay all of its existing debt.
In order for the city of Dallas to pay off all its debt, each taxpayer would owe $21,600. However, adding Dallas County and city debts associated with the Dallas Independent School District, Dallas County Community College District, and the Dallas/Forth Worth International Airport, the taxpayer burden jumps to $23,390. When the state debt is added, it climbs even higher to $33,490.
Every Houston taxpayer owes $11,300 in order to pay the city’s debt. When factoring in Harris County’s and the city’s underlying government debts owed to the Houston Independent School District, Spring Branch ISD, Houston Community College, Metropolitan Transit Authority of Harris County, Port of Houston Authority of Harris County, each taxpayer owes $12,840.
The debt burden increases even higher when state debt is combined, totaling $22,940, more than double the city debt owed per taxpayer.
The city of San Antonio’s debt costs each taxpayer $3,200. However, when combined with unaccounted for city debt costs, county debt and state debt, the individual taxpayer burden increases more than five fold.
“How well do we know how much of the 'employee contribution' is actually contributed by the employee versus picked up by the government?” Bergman asks. “How widely varying are the practices and/or data quality across state and local governments? Should we trust government data on these questions?”
Many but not all states are in bad shape, according to the State of the States report; Utah, Tennessee, Nebraska and North Carolina “have good lessons to offer other states.”
The total debt of 50 state governments was $1.5 trillion in fiscal year 2018, according to the State of the States report.
The average taxpayer burden across all 50 states was $8,400 and 40 state governments were unable to pay their bills, posting varying degrees of debt.
“Our federal government is arguably in worse financial condition than even the worst states (New Jersey, Illinois, and Connecticut), despite, or perhaps because of, the fact that the federal government thinks it can print money,” Bergman adds.
The national debt, currently at $22.5 trillion, could become nearly twice the size of the economy by 2048 if steps are not taken to reduce it, according to Government Accountability Office predictions.