Some East Texas government officials are defending the amount of debt their cities have. Some officials say, in many cases the debt may actually be saving the city money. They say it allows municpalities to cover the costs of mandated needs.
"There are unfunded mandates out there and the financing methods most of us have available is to issue debt," said Frank Johnson, City Manager in Marshall, Texas.
Johnson says 10 years ago, the Environmental Protection Agency issued mandated repairs to the city's water and sewage system. The city didn't have the cash to fund the project so they issued a bond debt to comply with the EPA.
"If we had not issued that debt and made those repairs to our sewer system, we would have been facing substantial fines."
Johnson says the project is one of the reasons the city has nearly $30 million in outstanding debt. But, they're not alone. State officials say local debt across Texas has doubled in the past decade.
"It's unfortunate but I'm not surprised to hear it.," said Johnson. "I think Marshall is a pretty typical example of that."
Johnson says, while being in debt is not ideal, it's the reality local governments are facing in order to fulfill needs and provide services. The recent construction of the police and fire stations also contributed to the city's debt. He says, cities just need to find a balance between monitoring the debt and maintaining the city's infrastructure.
"Government units need to be careful of avoiding issuing debt at the expense of their streets getting in a state of disrepair and then needing even more money to be taken care of at some point down the road."
Johnson says Marshall has not issued a debt bond since 2008. Currently, more than $12 million of the total debt is tax-supported debt, which were issued for things like the new police and fire stations. And revenue supported debt, or bonds for items such as mandated sewage repairs, is at nearly $17 million. Officials say they plan to pay it off within the next few years.