Eventually You Run Out of Other People’s Money

In this illuminating story from Monica Ortiz Uribe and the El Paso Times, headlined Texas tax burden is heaviest on El Paso’s poorest residents. Debt increases that burden., Ms. Uribe brings up the City of El Paso’s debt:

El Paso’s debt per capita is the highest among large cities in Texas. Debt per capita is what every resident in El Paso would have to pay in order to wipe out the city’s total debt outstanding (population divided by total debt outstanding). The city owed $1.4 billion in tax-supported debt as of August 2020. To pay that off, every person in El Paso would need to pay $2,071 over the life of the debt.

I believe that figure doesn’t include interest on the debt, so that’s the number that every person in El Paso would have to pay today to wipe out the debt, not over the life of the debt.

But that only includes tax debt. The City of El Paso has also incurred debt from Revenue Bonds.

You may be surprised to learn that the City has some departments that actually turn a profit. The airport, for instance. The International Bridges. Permits and licensing.

And the Public Service Board.

Debt that the PSB issues isn’t tax debt, but the taxpayers pay it anyway, via their water bills. As of Fiscal Year 2020, the latest year for which data is available from the Texas Bond Review Board’s website, the City of El Paso had run up their (our) debt to $2,232,141,000 in principal, and $975,688,955 in interest, for a total payment of $3,207,829,955.

That may seem like a lot of cheddar to you (it is), but that doesn’t include all the additional debt the City has added since August, 2020. You can probably add another $350 million to the $3.2 BILLION we’ll be paying out over the next 45 years.

Unless, of course, the City decides to issue even more debt.

If past experience is any indicator, it will.

Read the rest of the story at the ElPasoTimes.com, for some insight on the regressive nature of taxes in Texas.