During the process of putting together Citizen Intelligence, I sometimes run into some things that are quite simple, but are worth remarking on. I’ve decided to put them up here as an irregular series.
Out of the ~89,000 governments in the United States, ~55,000 of them bond, or borrow money, about 61% of the total. That means 34,000 do not. Which of your governments live within their means and spend all their tax money on providing services and which of them have an invisible drain installed siphoning off unnecessary interest payments to Wall Street? How many of them could, with minimal inconvenience, add a few more percent in services or cut a few percent off their tax bills simply by not bonding or reducing their bonding to large capital items instead of borrowing for operations?
Note: Updated to make it clear that this is not about the classic large capital expenditure items that most would agree are legitimate projects for bond financing but rather borrowing that could be foregone and where, in some jurisdictions, they manage their cash flow well enough to do without the borrowing.
3 thoughts on “Citizen Intelligence curious fact of the day”
To list these governments would be a worthy effort.
A city is a capital intensive entity. Most of ts services such as roads and sewers are provided by capital investments. It is completely appropriate for long term investments to be paid for with borrowed money, and it is an ordinary part of both public and private finance.
VXXC – The Census has a list. They even have GIS compatible mapping files for some of the governments, but not all. What is missing is the software that will turn legal district descriptions to shapefiles so that whenever a district border change is filed, you just have to feed the new boundaries in as text and out will come a shapefile.
Robert Schwartz – I do not challenge that ‘good debt’ exists and if I was not clear that such things can legitimately be done for capital improvements, I probably should edit. However, is it realistic for citizens to do better oversight than “trust me” when it comes to municipal bonds? Are the fees for the placement of these instruments aligned with campaign contributions? Is the interest rate, perhaps a few points too high? Are voter approval rules being flouted splitting a capital project so on paper the project doesn’t trigger a referendum?
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