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March 16, 2004     (512) 463-0300

Senate Finance Committee Looks at Where the Money's Going

The Texas Legislature may not be in session, but legislators are still taking a close look at the state's tight budget. One example of that was today's meeting of the Senate Finance Committee. Today's agenda focused on exactly what state agencies are issuing revenue bonds.

Committee Chairman Steve Ogden said he intended to keep a very close eye on the practice, saying "There's a whole lot of debt out there and the goal of this committee is to get our arms around the total amount of state debt and how many entities are borrowing money and basically obligating the State of Texas to pay it back". Among the agencies testifying before the committee today included the Texas Education Agency, the University of Texas System, and the Texas A&M System.

Patrick Krishock of the Texas Bond Review Board was the first witness. He advised the committee that currently there is about $17.6 billion dollars in Texas bonds outstanding. This includes bonds that are self supporting, such as those being paid back by borrowers from the Veteran's Land Board, and non-self supporting, bonds that have to be paid back from the state's general fund. Kim Edwards from the Texas Public Finance Authority, the agency that actually issues most state bonds, explained that the bonds they issue are approved by the Bond Review Board.

Dr. Shirley Neeley, Texas Education Agency Commissioner, told the committee that the good reputation of Texas bonds helps local school districts sell their own bonds on a national level. She also told the members that school districts are building only when they have a certain need for new buildings, that facilities are not overbuilt.

Philip Aldridge from the University of Texas System, said that the UT 3.1 billion dollar debt portfolio is supported by distributions from the Permanent University Funds. He also said that UT benefits from having a low cost to issue bonds, at least in comparison to other state agencies, and yearly spends about $190 million total, to pay off these bonds.

Representatives from Texas A&M described which institutions in the A&M system are available for benefits from the Permanent University Fund and how the system determines which campus gets what money for construction and other uses.

The Senate Finance Committee is chaired by Senator Steve Ogden. Members include Senators Kip Averitt, Gonzalo Barrientos, Kim Brimer, Robert Duncan, Kyle Janek, Jane Nelson, Florence Shapiro, Eliot Shapleigh, Todd Staples, Royce West, John Whitmire and Tommy Williams. The Committee recessed subject to call of the chair.

Session video and all other webcast recordings can be accessed from the Senate website's audio and video archive pages.

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