Local Government Debt = Your Personal Debt

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Property owners in McCulloch pay taxes to support at least six local government institutions. Depending on where they live within McCulloch County, they pay varying amounts.

Some people feel that they don't own property and therefore don't pay to support local government. They are wrong. Local taxes are part of the cost of doing business in McCulloch County. They get passed through to non-property owners in the form of higher living costs and lower wages. Every citizen who lives in McCulloch county pays these taxes directly or indirectly. Everyone has a personal stake in responsible local government spending. There is no such thing as a free lunch.

Like individuals and households, local governments have vital needs that must be paid for now that current income and savings won't cover. For an individual, that might be a car. For a local government, it might be a new facility of some kind. When that happens, both individuals and local governments borrow money. It must be repaid in the future. In effect, borrowing allows immediate purchase at the cost of lower future disposable income. Used wisely, credit is a wonderful thing. Used foolishly, credit is a terrible thing that wipes out any hope of future prosperity.

One way local governments finance new facilities is by issuing Municipal Bonds or Certificates of Obligation. It is like an individual having a home mortgage so they can live in a home while paying for it instead of having to save up the purchase price before buying it. It is not the only way local governments borrow money. They also use consumer finance to buy vehicles and equipment and revolving credit extended by merchants.

In order of long term debt outstanding, here is a list of what local governments have borrowed in your name as of the beginning of the current fiscal year:

Look around and decide for yourself if taking on this debt was wise or foolish.

Reference Source: Texas Bond Review Board

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Created: 20 August 2012