Says Texas has "the fourth-lowest debt per capita of any state in the nation, and we are the lowest of any of the big states."
Calling himself an unapologetic fiscal conservative, Gov. Rick Perry told the New Hampshire Union Leader the state’s fiscal efficiency matters most, adding that Texas "has, I believe, the fourth-lowest debt per capita of any state in the nation, and we are the lowest of any of the big states." Truth-O-Meter on. Some background: Last year, we rated True a claim by Democratic gubernatorial nominee Bill White that the state’s debt load had doubled in Perry’s then-nine-plus years as governor. According to the Texas Bond Review Board, which oversees the issuance of most state bonds, Texas had $34.08 billion in outstanding bonds and notes as of Aug. 31, 2009, the end of fiscal 2009. That figure increased 11 percent to $37.82 billion as of Aug. 31, 2010, primarily due to increased debt commitments by colleges and universities and transportation-related debt, the board’s 2010 annual report says. And how does the state’s debt boil out per resident? The report says that in 2007-08, according to U.S. Census Bureau data, Texas was home to the second-most residents among the states, but ranked ninth among the 10 most populous states in state debt per capita, at $1,369 per resident. The report says New York topped the most populous states with state per-capita debt of $5,861. Next, we asked the Census Bureau if it had more up-to-date figures. Spokeswoman Jenna Arnold pointed us to an online table listing each state’s debt in 2009. Drawing on the bureau’s 2009 population estimates for the states, we then calculated per-capita figures for the 10 most populous states that year. Texas’ per-capita state debt came out to $1,227, less than the per-capita debt of the nine other states. The other states: New York ($6,279 per capita); Illinois ($4,415); California ($3,642); Pennsylvania ($3,324); Michigan ($2,969); Ohio ($2,426); North Carolina ($2,121); Florida ($2,098); and Georgia ($1,374). Also, we peeked at a post by the Washington-based Tax Foundation listing a slightly different per-capita figure for the state’s fiscal 2009 debt level, $1,240, placing Texas 49th among the 50 states. Massachusetts, ranked No. 1, had per-capita debt of $11,357. For more perspective, we turned to the bond review board, whose executive director, Robert Kline, passed along a May 25, 2011, report by Moody’s Investors Service, which provides credit ratings and research covering debt instruments and securities. The report covers state debt levels in 2010, stating: "Two measures of state debt burden — debt per capita and debt as a percentage of personal income — are commonly used by analysts to compare the debt burden of one state to another. Debt burden is one of many factors that Moody’s uses to determine state credit quality. In considering debt burden, the focus is largely on net tax-supported debt, which Moody’s characterizes as debt secured by state resources." And Texas ranked 39th among the states, at $612 per capita, in net tax-supported debt, the report says. The national average for states was $1,404. The states with less debt than Texas were all less populous: Colorado, Idaho, Indiana, Montana, Arkansas, South Dakota, North Dakota, Wyoming, Iowa and Nebraska, which is listed as having the least per-capita net tax-supported debt among the states at $13. We noticed the Moody’s per-capita figures were smaller than those reached using the census data. That’s because the census bureau’s state debt totals wrap in more kinds of debt--for example, tuition revenue bonds issued on behalf of institutions of higher education. The bureau defines its debt tally as "long-term credit obligations of the government and its agencies whether backed by the governments' full faith and credit or non-guaranteed." By email, Perry spokeswoman Catherine Frazier said the governor, speaking off the top of his head in the newspaper interview, had based his debt claims on Moody’s information. "Texas does have the lowest debt per capita of the top 10 most populous states," Frazier said. Frazier said Perry’s other claim, about Texas having the fourth-lowest debt per capita among the states, ties to Moody’s calculation of each state’s ratio of debt to gross state product. By that measure, she said, Texas is sixth lowest among the states. Indeed, the Moody’s report says Texas has a ratio of 1.66 percent, lower than ratios for every state except Montana, Oklahoma, South Dakota, Wyoming and Nebraska. The national average is nearly 4.5 percent. The report says the ratio is useful for comparing different states and countries. In an interview, Moody’s analyst Nicole Johnson said that a relatively low ratio generally means a state has more flexibility to increase its debt than states with high ratios. So, Texas has the least state debt per capita among the most populous states, as Perry says, and by Moody’s accounting the 12th lowest of all states. Perry incorrectly said it was fourth-lowest of all states, but his meaning holds up; Texas is a relatively low-debt state. We rate the statement Mostly True.
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