Vote No Houston Bonds November 6, 2012 pot

Vote No Houston Bonds November 6, 2012 Houston Community College $ 425,000,000.00 Houston Independent School District 1,900,000,000.00 Houston, City of 410,000,000.00 Chump Change $2,735,000,000.00 Vote No Houston Bonds Definition of a Bond (Webster’s New World Dictionary) 1) anything that binds, fastens, or unites 2) shackles 3) a binding agreement 4) an obligation imposed by a contract, promise, etc. 5) the status of goods kept in a warehouse until taxes or duties are paid 6) an interest-bearing certificate issued by a government or business, redeemable on a specific date… http://www.brb.state.tx.us Texas Local Debt in Perspective - Overview • Local governments in Texas issue debt to finance construction and renovation of government facilities (i.e., schools, public safety buildings, city halls and county courthouses), public infrastructure (i.e., roads, water and sewer systems) and various other projects authorized by law. Key factors that affect a government’s need and ability to borrow funds for infrastructure development include population changes, revenue sources, tax rates and levies, interest rates and construction costs. Local governments issue two main types of debt – tax (general obligation or GO) and revenue. General obligation debt is secured by the full faith and credit of the issuer’s tax revenue while revenue debt is secured by a specified revenue source. The BRB separates the local government issuances into seven categories: • Community Colleges (CCD) • Public School Districts (School Districts) • Cities, Towns, Villages (Cities) • Water Districts (WD) • Counties • Other Special Districts (OSD) • Health/Hospital Districts (HHD) Moody’s Long Term Obligation Ratings Total debt per capita (tax-supported and revenue) increased by 1.2 percent from $7,416 in FY 2010 to $7,507 in FY 2011. Debt per capita has increased by 72.2 percent ($3,148) since 2002; the state’s population has increased by 17.9 percent (3.9 million) over the past 10 years. Illustrates the local debt outstanding over the past 10 fiscal years. Debt Service • Debt service is paid from either an ad valorem tax or various revenue streams such as tuition, technology and miscellaneous fees or lease revenue. [...]... billion Houston Community College The Board of Trustees of the Houston Community College haven’t been good stewards of our tax dollars They have squandered away the hard earned resources we have already given them Don’t reward them with more money to waste Vote No on November 6 Texas Association of Community Colleges www.tacc.org HCC Enrollment 58,000 56,0 00 54,000 52,000 50,000 48,000 46,0 00 44,000... 50,000 48,000 46,0 00 44,000 42,000 2010 - 56,5 92 2011 - 51,613 2012 - 47,928 -15.3% Enrollment Decrease HCC Bonded Debt $1,200,000,000 $1,000,000,000 $800,000,000 $600,000,000 $400,000,000 $200,000,000 $0 2002 $180,453,487 2011 $635,813,210 2012 $1,060,813,210 HCC Bonded Debt Per Student $25,000 $20,000 $15,000 $10,000 $5,000 $0 2002 - $3,336 2011 - $12,319 2012 - $22,133 Tax Increase • Current rate...Capital Appreciation Bonds • Capital Appreciation Bonds are sold at a discounted price called the par amount Interest compounds semiannually and accumulates over the life of the bond, and the amount paid at the maturity is called the maturity value Interest rates for CABs are generally higher than bonds with current-pay interest This structure keeps payments... figures are understated to the extent that these bonds are reported at their par issuance price rather than their maturity value • Premium CABs provide a lower initial stated par amount and are issued to: (1) raise additional proceeds, (2) preserve debt limit, and (3) help local governments reach tax-rate targets Local governments issue more premium CABs than non-premium CABs Certificates of Obligation... materials, supplies, equipment, machinery, buildings, land, and rightsof-way; and to pay for professional services such as engineers, architects, attorneys and financial advisors Build America Bonds • Build America Bonds were created by the American Recovery and Reinvestment Act of 2009 and could be issued as Tax Credit BABs or Direct-Payment BABs Tax Credit BABs provide a federal subsidy to investors... $3,336 2011 - $12,319 2012 - $22,133 Tax Increase • Current rate per $100 is 0972220 • Proposed rate per $100 is 120122 0 23.6% Tax Increase Community College Districts • As of August 31, 2011 Community College Districts with tax-supported debt outstanding had a per student debt of $4,9 16, a decrease of 4.0 percent ($206) from FY 2010 Since fiscal year 2007, the state’s per student tax-supported debt... of 4.5 percent from FY 2010 Since FY 2007, the state’s per student revenue debt has decreased 3.4 percent from $1,669 to $1,613 per student Student Enrollment Declining • Fall 2010: 56,5 92 • Fall 2011: 53,480 • Fall 2012: 49, 541 12.5% decline in enrollment Federal and State funding are tied to enrollment Based on the continually declining enrollment, funds are also decreasing, leading to additional... governments issued $1.56 billion in Certificates of Obligation (CO) or approximately 6.3 percent of the total debt issued (Table 1.6) Debt service for COs is paid from ad-valorem taxes and/or revenues and do not require an election unless a valid petition requesting an election is presented • Certificates of Obligations are authorized by the Certificate of Obligation Act of 1971, Subchapter C of Chapter 271 . Vote No Houston Bonds November 6, 2012 Houston Community College $ 425,000,000.00 Houston Independent School District 1,900,000,000.00 Houston, . Houston, City of 410,000,000.00 Chump Change $2,735,000,000.00 Vote No Houston Bonds Definition of a Bond (Webster’s New World Dictionary) 1) anything