NATALIE GOTT
Associated Press

AUSTIN - Debt authorized by the state of Texas increased 200 percent in 10 years, the second-largest percentage increase among states, an Associated Press analysis shows.

In 1992, the debt was $8 billion, or $461 for each of the state's estimated 17.7 million residents. In 2002, the most recent statistics available, it was $24 billion, or $1,104 for each of the state's 22 million residents. The increase puts Texas among one of five states to double its per-capita debt during that period, the analysis showed.

Much of the debt is a result of bonds issued for a variety of projects, including prison construction, university construction and transportation, state records show.

The AP analysis was based on an annual federal survey of state government finances. The data are compiled by the Census Bureau, which collects statistics from state government audits, budgets and other financial reports.

The federal figures appear to vary only slightly from state debt figures.

A portion of Texas' debt includes short-term loans, used for such things as funding school districts, officials said. Those loans, whose amounts vary each year, are paid within the year they are issued.

"It is a lot of money, but it doesn't count for what most people consider debt," said James LeBas, chief revenue estimator at the state comptroller's office.

Republican Gov. Rick Perry's office is not concerned that debt is getting too high. Spokeswoman Kathy Walt said that the state is responsible for paying only about one-third of the debt. The rest is to be paid by the money generated from the programs and projects for which the bonds were needed.

She also noted the Texas Bond Review Board, which serves as "sort of a watchdog on state debt."

"Very few states have that kind of oversight body," Walt said. "Generally, the financial institutions that determine Texas' credit rating like that oversight that we have in the Bond Review Board."

Despite the increase, Texas' debt is far smaller than the debts of other large states. For example, debt authorized in New York was $89.8 billion and in California, the number was $71.2 billion at the end of 2002, according to the census figures. Even Massachusetts, with 6.4 million people in 2002, had authorized more debt at $45.2 billion.

Other Texas projects that used bonds were home and home improvement loans for veterans; low-income housing programs; mental health and mental retardation department projects; and parks and wildlife department projects.

Among the costly programs that used bonds was a large prison expansion that started in the late 1980s and continued through the 1990s. The nearly $2.3 billion project ended with an additional 108,597 prison beds, on top of the 45,180 the state already had, the Department of Criminal Justice said.

A recent report from the Legislative Budget Board indicates more prison beds will be needed soon. The report said that the prison system will have about 500 more inmates than it can handle by late summer 2005.

TDCJ spokesman Mike Viesca said the report "provides valuable information that gives us time to act accordingly. We will explore all options and determine which will enable us to maintain public safety while being cost effective."

Another high-ticket program is a Central Texas highway construction project that is under way. About $3.6 billion in bonds were obtained in 2002 for the project that is expected to add 106 miles of highway on three routes by 2007, said John Hurt, a spokesman with the Texas Department of Transporation.

All the projects are toll roads and will be paid for through the tolls.

"This way we've got the entire project under construction from end to end," Hurt said.

Mortgage Rates News, Mortgage News, Financial News