by WES FERGUSON
Hays County carries one of the largest debt services per capita in Texas, a distinction that is drawing fire as the May 29 primary races heat up.
According to the Texas Bond Review Board, a state agency that monitors local government debt, the county’s outstanding debt service of $464 million amounts to about $1,800 per resident, the sixth-highest rate in Texas. Hays County’s ratio of debt service to assessed property value is the highest in Texas, at 4.2 percent, review board data shows.
“There’s a lot of spending that takes place that doesn’t have to take place,” said Sam Brannon, who is challenging Precinct 3 Commissioner Will Conley in the Republican primary. “Are we going to take a look at the facts and understand that debt is dangerous to us?”
Managing explosive population growth, Hays County incurred about a third of its debt when it issued a series of voter-approved bonds to build and widen roads, data from the review board shows. Another third of the debt comes from pass-through financing of roads projects, which are being reimbursed over time by the Texas Department of Transportation. Conley defended the arrangement with TxDOT.
“Whether you look at construction costs or the timeline for payback during the pass-through program, I think it is fair to say we are way ahead of schedule,” he said during Commissioners Court last week. “The partnership between Hays County and the state of Texas is working.”
Also during Commissioners Court, financial adviser Dan Wegmiller reported the county had received high marks from a pair of independent credit-rating agencies.
“Your rating is nearly as strong or stronger than any bond issuers out there,” said Wegmiller, managing director for Specialized Public Finance, the county’s bond adviser. “Management-wise, you’re very strong and doing the right things. Your economy is stable, and you’re growing and that reflects in the solid rating. … Hopefully with continued economic growth and projects being completed, we’ll be in good position next time to go back and push up that ladder.”
In its report, Standard & Poor’s Rating Service said Hays County has “very strong finances, supported by, what we consider, a low property tax rate that provides additional revenue-raising flexibility.”
S&P also noted that debt from overlapping entities, such as cities and school districts, accounts for some 75 percent of county residents’ debt burden. (The Texas Bond Review Board ranking is based solely on debt issued by the county government).
Hays County maintained its AA rating, the third-highest mark. What’s more, the county’s decision to refinance about 2 percent of its bond debt earlier this year will save taxpayers nearly $1 million over the next 12 years.
Taking advantage of a favorable market for financing government debt, the county was able to lower the interest rate by about two percentage points, to 2.3 percent, for about $9.75 million in bonds issued in 2003 and 2004 for a series of road and parks improvements.
Hays County’s property tax rate of 46.92 cents per $100 of property valuation is well below the state median of 50.16 cents, the Texas Bond Review Board data showed.
Debt service to assessed value
|Tax rate||Tax debt per capita|
|1. Maverick County||$0.4019||$5,378|
|2. Andrews County||$0.4429||$4,987|
|3. Zapata County||$0.7843||$2,829|
|4. Titus County||$0.3483||$2,089|
|5. Williamson County||$0.4900||$1,907|
|6. Hays County||$0.4691||$1,818|
|7. Shackelford County||$0.4233||$1,735|
|8. Somervell County||$0.3550||$1,632|
|9. Winkler County||$0.6714||$1,509|
|10. Garza County||$0.3600||$1,314|
Tax debt per capita
|Debt service||Tax debt service to assessed value|
|1. Hays County||$464,311,995||4.2%|
|2. Williamson County||$1,241,999,462||3.7%|
|3. Andrews County||$147,459,381||3.7%|
|4. Titus County||$106,881,848||3.7%|
|5. Childress County||$8,278,694||3.2%|
Source: Texas Bond Review Board