7 Things to Know by April 7-#1

7 Things to Know by April 7-#1
Posted on 01/26/2020
7 Things to Know by April 7-#1HOW IS IT POSSIBLE TO ISSUE SCHOOL BONDS WITHOUT RAISING TAXES?
From: Clinton School District Superintendent, Destry Brown

In early January, the Clinton School District Board of Education unanimously approved a resolution to place a $4,000,000 no-tax increase bond measure on the April 7, 2020 election ballot. This bond will allow for safety enhancements and much-needed renovations to school buildings and facilities across the district.

Since making this decision, I have heard many supportive comments from community members about the need to keep students safe and our buildings well-maintained. The Clinton School District is fortunate to have the support of caring community members, who have such great pride in the support of our students and our schools.

Along with those supportive comments, I have received several questions. The most common question so far is, “How does this work? How can a district pass a bond issue, without raising taxes?”. In this first installment of a 7-part series, I hope to shed some light on how a no-tax increase bond issue works and how it benefits students while also protecting your pocketbook.

Careful money management and good financial stewardship of taxpayer dollars is a priority for the Clinton School District’s Board of Education. Because of this commitment and determination by the Board of Education, the district is in a position to ask for a bond without raising the taxes of our community members. This is a result of paying off some existing debt and refinancing the rest for better rates. Because of these actions, we have room in our debt service levy to issue bonds to cover the cost of the proposed projects with no tax rate increase.

One could compare this to refinancing and remodeling your home. When interest rates are lower, a family will often refinance their home mortgage to take advantage of these lower interest rates. By refinancing, the family can access funds to do remodeling and renovation without adding to their payment. Although it adds to the length of the current home loan, the family is able to keep their payment the same.

Much like that family, the Board of Education has managed the District’s outstanding voter-approved bonds. The District has two small bonds that will pay-off in the next 18 months, and we will refinance the existing bonds at a lower interest rate. This will extend our bond pay off date from 2037 to 2040. As mentioned earlier, these actions by the Board allow us to place a no-tax increase bond measure on the April 7, 2020 ballot.

Others have asked, “What happens if the bond measure does not pass? Will my taxes go down?” The answer to this question is, no. The district would continue to pay out the current bonds in the same way that has been in place for the past 10 years. We may choose to refinance the bonds and keep the payment the same, reducing the number of years left to pay them off.

I am hopeful that this has helped clarify questions you may have regarding the workings of a no-tax increase bond issue. In the weeks ahead, watch for more information regarding this upcoming ballot measure. As always, if you have any questions or if you would like to have me speak to a group of your friends, please don’t hesitate to contact me at 660-885-2247.
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