WHAT IS A BOND ELECTION?
The law provides that a school district must hold an election and get permission from voters to sell bonds and to levy taxes to pay for them. Bonds are sold to provide funding for capital improvements that last for a number of years. Such investments are too capital intensive to be included in annual operating budgets; school districts are not allowed under state law to accumulate cash for these projects. Just as an individual agrees to repay a new home loan, voters authorize the District to sell and repay bonds for making major capital improvements. School boards can only levy I&S taxes in the amount necessary to repay the bonds. If the amount needed to pay the bonds is less, the district taxes less.
Public schools rely on the support of local taxpayers to fund the operations and facilities of the school district.
Similar to homeowners borrowing money in the form of a mortgage, a school district borrows to finance the design, construction, expansion, and renovations of schools and facilities.
Voters must approve these funds through a bond election.
HOW CAN BOND MONEY BE USED?
Bond money will be used for new schools and facilities, expansion and renovations of existing facilities, furniture, technology infrastructure, equipment, buses, and new school sites.
WHY DO SCHOOL DISTRICTS HOLD BOND ELECTIONS?
Homeowners borrow money in the form of a mortgage to finance the purchase of a home. A school district borrows money in the form of bonds to finance new schools and renovation projects. Both are repaid over time, but in order for a school district to sell bonds (borrow money) it must go to the voters for approval. By law, bond funds may not be used to fund daily operating expenses or salaries. Bond funds may only be used for the projects described.
UNDERSTANDING THE BALLOT LANGUAGE
Ballot language will include the statement "THIS IS A PROPERTY TAX INCREASE." Legislation passed in the 2019 Texas Legislative Session requires that school districts include this language, regardless of the bond's impact on the district’s tax rate.
HOW AM I FINANCIALLY IMPACTED IF I’M OVER 65 YEARS OLD?
The State Property Tax Code allows for school property taxes on an individual homestead to be “frozen” at the age of 65. If you are 65 years of age or older and you have filed for the “Over 65 Homestead Exemption”, there is a ceiling on the amount of school taxes to be paid. The only exception is if improvements are made to a home. As such, a tax increase from a new bond program cannot increase the applicable tax ceiling of a taxpayer that has qualified for the “Over 65 Homestead Exemption.” For more information, go to fayettecad.org.