February 15, 2011
Debt has become a critical crutch for those in control of Texas’ budget. In the last 10 years, the state’s debt service payments – the amount of taxpayer money spent paying off debt – have skyrocketed by roughly 250 percent.
One component of this debt is a form of short-term obligations known as Tax Revenue Anticipation Notes. These allow the state to take out debt, repaid within a couple of months, to cover cash obligations over a fiscal year. Obviously, the amount of short-term debt that Texas takes out meshes pretty closely with the state’s immediate needs and situation, right?
Well, the committee that authorizes how much short-term debt the state can take out is known as the Cash Management Committee. It’s comprised of the Governor, Lieutenant Governor, Speaker of the House, and Comptroller.
And it hardly ever meets. The committee’s last meeting was in 2009. At that point, the panel approved a short-term debt limit for 2010 based on information that was very out-of-date by the time last year’s burgeoning budget crisis actually arrived.
My bill would require the committee to hold a public hearing and take testimony on the state’s cash flow situation and Texas’ overall economic condition. Furthermore, the Comptroller would not be allowed to seek short-term TRAN debt without reporting to the committee – and getting the committee’s permission – no more than 60 days before taking out the debt.