More Debt Analysis

We have examined the growth of debt in Georgetown over the last 10 years (10.48%).  We have observed that the debt payment (9.45%)is also in a strong growth trend.  The growth of property tax revenue has enabled the City to continue growing the debt.  The City focuses its budgetary effort on controlling the tax rate.  This is an intentional miss-direction as the important issue is the amount of money that is extracted from the property owners.  Here is a chart showing the revenue produced by the property tax.

Tax revenue of course is the product of assessed value times tax rate.  The compound annual growth rate of 9.76% significantly exceeds the population plus inflation rate of 6%.  Therefore there is opportunity to reduce the growth of the property tax revenues to be in line with population growth plus inflation.  This would also require reducing the growth of debt (currently at 10.48%).

Another measure of debt is the debt per capita.  The following chart from the City Debt Overview document shows the debt per capita for the property tax supported debt.

The latest data shows property tax backed debt of approximately $2300 per person.  The latest tax information from the Tax Foundation (FY 2011)shows the property tax collections state-wide per capita is $1557.  This makes Texas the 15th worst in the nation in terms of property tax burden.  So Georgetown is collecting substantially more property tax revenue than the state-wide average which includes school taxes.  Not a good place to be!

When the debt load per person for utilities ($72,153,351) is calculated ($1382) the total debt load per person totals $4677 for FY 2014.