On February 9, 2015, the State Treasurer of Iowa, Michael L. Fitzgerald, released the report of outstanding debt obligations for state and local governments. This year’s report shows over $15 billion is owed by these entities, and this is money that has to be paid back with taxpayers’ dollars.
Given the Census Bureau’s estimate of the 2014 population for Iowa, this means that the average debt per man, woman, and child in Iowa is $4,828. This is an increase of 0.5 percent over last year’s average debt per person. So what does this debt mean to you as a taxpayer?
The debt that State Treasurer Fitzgerald is reporting on is the debt that is owed by cities, counties, schools, state agencies, and community colleges, to name a few. Outstanding Obligations for each public entity is $15 billion, which is an increase of 1.7 percent from the previous year.
For the current report 35.41 percent of the debt is held by cities, and the next largest portion of the debt is held by school districts at 22.92 percent. Thus, over 58 percent of all debt by public entities is held by cities and school boards. This means the remaining 41.67 percent is owed by the remaining six types of entities: state authorities, Board of Regents, state agencies, counties, community colleges, and other.
That doesn’t mean that all cities and schools are in a large amount of debt, but some are. If we look at the cities with the largest amount of debt per capita, they are: Coralville, Maharishi Vedic City, Arnolds Park, Okoboji, and Lohrville. Coralville has the highest debt per capita at $14,167.
While these are the cities with the highest debt per capita, they are not the cities with the highest debt load. That award goes to Des Moines with an outstanding debt of $464,246,254, but it has a population of 203,433, thus the debt per capita is only $2,282. While we have cities with high debt loads we also have many cities that have NO debt. Therefore the debt isn’t evenly shared among the cities.
School districts and Area Education Agencies (AEA) repeat the same extreme variation that we see with cities. Here are the top five school districts: Clear Creek Amana, Urbandale, Gilbert, Riverside, and Hubbard-Radcliffe. Clear Creek Amana has the highest debt per capita at $35,734.
While the Clear Creek Amana has the largest debt per capita, Des Moines Independent actually has the highest outstanding debt at $195,985,000. With their population, this makes the debt per capita only $6,046. There are also many school districts that do not have any debt. So, as you can start to see the debt for Cities and School Districts/AEAs is not evenly distributed, which should make you, the taxpayer, give pause and wonder why the debt isn’t more evenly spread out over all schools. If we expect some debt, we would expect to see it more evenly represented among the schools instead of many schools with no debt and a small number with a large amount of debt.
As we look at the debt over the past six years, public entities have increased their debt load. The only organizations to decrease over the last six years are the state authorities; they have decreased 10.4 percent. If we look at a one-year change from FY12 to FY13, we see that state authorities, state agencies, and counties have also decreased their debt load. The Board of Regents and school districts/AEAs had the largest percentage increase from last year to this year, with 7.1 percent and 8 percent respectively.
The taxpayers of Iowa are well aware of the new University of Iowa Children’s Hospital in Iowa City and the vast amount of money for the new state prison in Fort Madison, but I-JOBS is a large part of the debt that is being paid off with taxpayers’ dollars. We point this out because it is important to attend meetings when public entities are working on their budget to file with the state. I would encourage you to attend a meeting for your city, county, or school district, and watch what our elected officials are up to, because even though this debt isn’t going through the General Fund for the state of Iowa, it has a huge impact on your personal finances.