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Commentary: Doubling down on debt, San Antonio bond will make poor city poorer

By   /   March 2, 2017  /   No Comments

Part 7 of 8 in the series City in bondage
Photo by Kenric Ward

MONEY MAGNET: Bordered by a glitzy convention center along the River Walk, San Antonio’s downtown Hemisfair Park is in line for $25 million more in bond money. Elsewhere, crumbling streets go without lights or sidewalks — signs of decades of neglect in the poor, high-tax city.

 

City Hall brags about a AAA credit rating while San Antonio’s per capita income ranks 460th in Texas, behind virtually every other large metro in the state.

A proposed $850 million bond package will drive the poor city deeper into debt.

The gold-plated credit rating contrasts with the city’s rising red ink. Truth in Accounting, a nonpartisan organization that analyzes public-sector finances, conservatively calculates the Alamo City’s debt at $1.2 billion, or $3,300 per taxpayer.

Throwing some shade on City Hall’s shiny credit score, TIA President Sheila Weinberg cautioned, “Credit ratings have very little to do with a government’s ability to pay off its overall debt. Only 10 percent has anything to do with the government’s overall financial situation. Ninety percent of the rating is related to the ability to pay off the bonds.”

“Because bond holders are first in line for payment, they don’t care about municipal services or whether pensions are funded,” Weinberg told Watchdog.org.

With the record $850 million bond – at an estimated cost of $1.3 billion, including interest – San Antonio is literally doubling down on its taxpayer-funded debt. (Including capital budgets, the total debt obligation secured by property taxes runs to $1,595,530,000.)

Voting unanimously to put the six-part bond package on the May 6 ballot, City Council members say passage is essential to repair crumbling roads, lay sidewalks, improve parks, update infrastructure and spruce up derelict neighborhoods.

City Manager Sheryl Sculley has said the city could use $2 billion. But a $2 billion ask would boost tax rates — not a winning proposition in a year when all council seats are also on the ballot.

With much cheerleading, a group called One SA is raising $600,000-plus to push the bond across the finish line.

One SA, headed by veteran campaign consultant Christian Archer, asserts that no reasonable or responsible San Antonian should oppose the bond. The combative Archer derides skeptics as CAVErs – Citizens Against Virtually Everything.

But City Hall politicians and bureaucrats protest too much when they try to plead poverty.

From 2013 to 2016, residential property tax revenues in the city swelled 35 percent, according to the Bexar County Appraisal District. That’s better than a 10 percent annual increase totaling $140,182,000. Last year’s levy yielded $540,237,000 from residential properties alone. And there’s no sign of that slowing down.

Taking new construction out of the equation, San Antonio raised $31,448,056 more in tax proceeds last year from existing residences. Riding higher appraised values, the city can boast it did not raise the tax rate. By “holding the line,” tens of millions of dollars in additional property tax revenue roll into city coffers each year.

The only poor people in San Antonio are beleaguered homeowners who pay ever-escalating tax bills, and renters whose quality of life erodes with higher rents. In other words, just about everyone outside the City Hall bubble.

Spending every dime — and then some — San Antonio politicians want to smear the public with more red ink. They say taking on debt is the only way to accommodate the million new residents expected in the coming decade. Having spun up growth through forced annexations, the bureaucratic-political machine now whines for more.

Photo by Kenric Ward

DEM MOVES RIGHT: Mayoral candidate Manuel Medina says the city could lop $200 million of its bond package.

Only one mayoral candidate has questioned the bond. Manuel Medina says city leaders should have lopped $200 million off the package and rescheduled it for the November ballot.

“We’re maxing out our credit card with this bond,” said Medina, a businessman and chairman of the Bexar County Democratic Party.

Note the irony: A Democratic Party boss and “proud progressive” running to the right of City Hall on fiscal issues.

Pointing out that San Antonio carries a higher per capita debt than the liberal bastion of Austin, Weinberg expands on Medina’s metaphor.

“The city has charged up its retirement [$1.3 billion] and health-care [$910 million] credit card,” she said. “With no cash on hand to cover those future obligations, do San Antonio’s taxpayers want to add another mortgage?”

Kenric Ward reports for the Texas Bureau of Watchdog.org. Contact him at [email protected] and follow him on Twitter @Kenricward.

Part of 8 in the series City in bondage

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Kenric Ward was a former San Antonio-based reporter for Watchdog.org.