Lone Star College Bond Proposal: Give Me Liberty or Give Me Debt by Kyle Scott

By Kyle Scott, PhD

In 2008, Lone Star College System (LSCS) administrators and the board of trustees asked voters to approve a bond of more than $400 million. And now they are asking voters to add an additional $500 million in new debt. This would run the total new bond debt to almost $1 billion in only five years. And before any new debt is added, LSCS currently has more than $590 billion in both bond and taxpayer supported debt outstanding.

According to LSCS, the need for new revenue is in anticipation of rapid growth. But LSCS has overestimated the rate of growth it will experience in order to secure more funding. LSCS expects enrollment to reach 110,000 students by 2018 while the Texas Higher Education Coordinating Board expects enrollment to only be at 81,000 by 2020.
Keep in mind that LSCS can only justify the bond if it anticipates a high growth rate. We also must recognize that as our economy improves, fewer people will be going back to school—because they will remain in the workforce—thus diminishing the rate of growth LSCS has seen over the previous five years in our down economy.

Even if there is rapid growth, which there probably will not be, rapid growth does not require rapid spending or rapid borrowing. Smart and creative solutions to budgetary problems should be pursued before issuing new debt since servicing public debt forces governments to make cuts in other services, constrains policy options and limits the growth of the economy as resources are redirected from the private sector to the government.

There are alternatives to piling up debt. First, the college system needs to pursue the option of selling naming rights for its facilities.

Professional sports teams and large research universities do this frequently and there is no reason to think it is not a viable option for LSCS. With roughly 77,000 students visiting its campuses throughout the semester, companies have a lot to gain by way of exposure and community goodwill while the college would get additional revenue without accumulating more debt or increasing the tax rate or student fees.

Second, most of the money from the proposed bond is earmarked for new facilities that are simply not needed at this time. The demand for traditional brick and mortar facilities will continue to diminish as instruction delivery shifts from traditional settings to online and hybrid classes. The LSCS should encourage this shift–rather than spend millions on new buildings–as online and hybrid classes will help reach more students at a lower cost without compromising the education students receive.

Furthermore, policymakers can make better use of the space currently available to them. Most classrooms and parking spaces sit empty on the weekends and during unpopular class times. LSCS can capitalize on its unused time and space by renting it out to interested businesses and community organizations for training events and conferences. Also, LSCS can reduce fees for students willing to take classes during unpopular times and days. Providing an incentive to students willing to sign up for unpopular class times will reduce the number of students on campus at peak times thus eliminating the need for additional facilities.

If voters keep approving bond issues the board and the administration will keep asking for them. There is no limit to the amount of money that can be spent. And if we look at debt-riddled governments, we can see the constraints debt puts on policymakers, taxpayers and the economy.

With history and contemporary events as our guide, we know that to pay back debt a government must either cut its spending or raise taxes. The ad valorem tax rate for the Lone Star College District has increased 2.89 percent from $0.1176 per $100 of valuation in 2011 to $0.1210 per $100 in valuation for 2012 while the total tax revenue in that time has increased by $6 million. Anyone who argues that tax rates will not increase, or have not increased, for the voters within the Lone Star College District is wrong on the facts.

Also, student fees and tuition have been on a steady incline since 2003 with a 17 percent increase coming between 2010 and 2011. For these reasons, the May 11 election is more important than most people realize.

It is the words of Thomas Jefferson written in 1816 that clearly delineate the choices before voters. “To preserve independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty or profusion and servitude.”

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