AUSTIN, TX – On Wednesday, Moody’s Investor Service downgraded the City of Dallas’ debt rating for its general obligation limited tax debt, citing the City’s “very large and growing unfunded pension liabilities, a high fixed cost burden, and basic infrastructure needs.” This is the second time Dallas’ bond rating has been downgraded in 12 years. The move came within hours of the Dallas City Council announcing that it would issue an additional $227 million in bonds.
“Dallas is drowning in debt,” said Allegra Hill, policy analyst with the Center for Local Governance at the Texas Public Policy Foundation. “The downgrade from Moody’s is just the latest evidence that Dallas’ local pension system is unsustainable, and that significant fiscal reform is needed.
“Dallas currently owes more than $6 billion in city debt, and has another $2 billion in unfunded pension liability. The City has already issued $200 million in pension-related bonds trying to maintain the facade that the system is working. Clearly, it is not working.”
To read more about city pensions and debt reform, please see the Texas Public Policy Foundation’s 2012 publication: Reforming Texas’ Public Pension Systems.
For more information or to request an interview with Ms. Hill, please contact Caroline Espinosa at [email protected] or 512-472-2700.
Allegra Hill is a Policy Analyst with the Center for Local Governance at the Texas Public Policy Foundation.
The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin, Texas.