Frequently Asked Questions - Q25


Question:

Why are you so concerned about the City’s long-term debt? A Greater Houston Partnership task force reported in 2001 that the City could save considerable money by refinancing its debt and extending its maturities, thus even removing a need for an increase in the property tax rate.

Answer:

First, it should be recognized that the task force report addressed only the City’s tax-supported (public improvement) bonded debt, which is about 17% of the City’s long-term debt. The report did not address the City’s revenue bonds, which comprise most of the other 83% of the City’s long-term debt, or the City’s operational revenues and expenditures. Even so, the Partnership report exhibited real concern about the City’s overall finances and thus the Partnership should be very supportive of this charter amendment. The chairman of the task force force (Bill White, current mayoral candidate) was quoted in the Houston Chronicle’s June 24, 2001 editorial as saying “---Houston’s debt structure would not be tolerated by a private business---”. Further, the task force report pointed out that the benefits of the refinancing and extended maturities could be compromised without proper financial discipline relative to operations. This proposed charter amendment offers the proper financial discipline called for by the Greater Houston Partnership task force.



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