WHAT IS A SCHOOL BOND?
A school bond is the primary method many school districts use to pay for capital improvements. It operates similar to a home mortgage. It is a contract to repay borrowed money with a stated interest rate over time. Bonds are sold by a school district to competing lenders to raise funds to pay for the costs to construct, improve, renovate and equip facilities and then spread the cost over the life, or portion of the life, of the capital improvement.
HOW CAN BOND FUNDS BE USED?
Bond funds can be used to pay for new buildings, additions and renovations to existing facilities, land acquisition, technology infrastructure, furniture and equipment for new or existing buildings. Bonds cannot be used for salaries, utilities and other such operating expenses.
WHAT IS A BOND ELECTION?
School districts are required by state law to ask voters for permission to sell bonds to investors in order to raise the capital dollars required for projects such as renovations to existing buildings or building a new facility. Essentially, the voters are giving permission for the District to take out a loan and pay that loan back over an extended period of time, much like a family takes out a mortgage loan for their home. A school board calls a bond election so voters can decide whether or not they want to pay for proposed facility projects.
WHY CAN’T THE SCHOOL PAY FOR IMPROVEMENTS OUT OF THE OPERATING BUDGET?
School districts in Texas operate under a budget consisting of two tax supported portions. One is the maintenance and operations fund and the other is the debt fund. Tax rates to support both funds are limited by State Law. The maintenance and operations fund support not only maintenance and operations of buildings but also teacher salaries, benefits and supporting programs. The I&S (debt fund) supports larger capital improvements where it is not feasible to pay for an improvement within a given fiscal budget year. The debt is spread out over an extended period much like a homeowner’s mortgage. Revenue from the debt service tax rate can be used only to retire bonds sold for specific purposes.
IF THE BOND ELECTION IS SUCCESSFUL, DOES THE SCHOOL DISTRICT IMMEDIATELY INCUR THE DEBT?
No. The bonds do not cost the district anything until they are sold. Voter approval is simply an authorization for the district to issue bonds. Bonds would be sold in the future as needed to fund the projects.
HOW WILL THIS BOND INCREASE MY TAXES?
If approved by voters, the 2022 Bond will produce NO TAX RATE INCREASE for Blanco ISD taxpayers. In addition, the Blanco ISD Board of Trustees approved a $0.0465 decrease to the district’s overall tax rate in August, bringing the total rate down from $1.0435 to $0.9970 for the current year.
HOW CAN BLANCO ISD AFFORD TO ISSUE BONDS WITHOUT AN INCREASE TO THE TAX RATE?
Increasing property value growth and declining annual debt obligation payments from paying down existing debt. Over the past 6 years, property values have grown approximately 66%.
THEN WHY DOES THE BALLOT SAY “THIS IS A PROPERTY TAX INCREASE”?
State law requires this language on all school district bond referendums. If economic conditions in the district became adverse, the district would be legally required to levy an I&S tax rate sufficient to repay the bonds.
WHY AM I PAYING MORE IN TAXES IF THE TAX RATE REMAINS UNCHANGED?
The amount of taxes paid by each taxpayer is calculated by multiplying the district tax rate by each $100 of taxable value of property. Therefore, if your assessed taxable value goes up, the amount you pay will go up even if the tax rate remains unchanged.
HOW WILL THIS BOND ELECTION AFFECT HOMEOWNERS WHO ARE OVER 65?
School district taxes on resident homesteads may be frozen in the year the taxpayer turns 65 years of age and will not increase as a result of a school bond election. If you qualify your residence homestead for an age 65 or older or disabled person homestead exemption for school district taxes, the school district taxes on that homestead cannot increase as long as you own or live in that home unless significant changes to the home are made.
WHO IS ELIGIBLE TO VOTE?
In order to vote in the May 7 Blanco ISD Bond Election, a qualified voter must be registered no later than Thursday, April 7. If you are not registered to vote by this deadline, then you are not eligible to vote in this election. Any registered voter that resides within the school district boundaries is eligible to vote in the bond election.
NOTE: THESE FAQ’S WILL CONTINUE TO BE UPDATED. PLEASE CHECK BACK FOR UPDATES AND CLARIFICATIONS.
The state of Texas requires all school districts to indicate “This is a property tax increase” on any bond proposition. However, Blanco ISD’s conservative financial stewardship allows the district to issue this bond WITHOUT an increase to the tax rate.
$0 TAX IMPACT