A $4.4 billion Houston ISD school bond proposal is on the November ballot. The bond proposal aims to fund health and safety improvements at all campuses and to rebuild some high-need campuses either partially or fully. It also includes funding for expanding pre-K programs and constructing career-focused centers to serve the district.
HISD says all this can be done “without increasing taxes.” Here’s what that means:
Current Tax Rate:
HISD’s current tax rate is $0.8683 per $100 of taxable value, split into:
- Maintenance and Operations (M&O): $0.7016, covering salaries and supplies.
- Interest and Sinking (I&S): $0.1667, used for paying off bond debt.
According to Texas law, HISD can’t issue bonds that will be paid with property taxes unless the voters in that district approve it in an election first.
Why No Tax Increase?
HISD states it will have a lot of its long-term debt paid down significantly by 2043. If the bond proposal passes, HISD could take on new debt while maintaining the current I&S tax rate of $0.1667.
Think of it like this: imagine you have a subscription to a streaming service that costs $10 a month. Over time, that subscription price drops to $5, but you still want to keep using the service. If you decide to add another service that also costs $5, your total monthly payment stays the same at $10.
In this case, HISD is saying that even if they add new “services” (the bond for school improvements), the overall cost (tax rate) won’t increase because their old “subscriptions” (existing debt) are getting cheaper. So, they can take on the new bond without raising taxes for everyone.
Financial forecasts indicate HISD can borrow $4.4 billion without raising taxes. Additionally, HISD holds a AAA bond rating, allowing them to secure better borrowing terms.
Then Why Does Ballot Language Say 'This is a Property Tax Increase'?:
Due to Texas law (House Bill 3), the ballot must state, “This is a property tax increase,” even if the tax rate remains unchanged. This is to inform voters that the entity is taking on new debt.
