How is a Construction Bond different from a Capital Projects Levy?
While a levy authorizes the school district to collect a set amount of money through taxes for a set number of years, a Construction Bond provides a way for the school district to borrow money for capital improvements. Bonds are typically used for much larger projects, such as the building or modernization of a school. When voters approve a bond, they are essentially giving the school district the authority to borrow money through the municipal bond market and then repay that money to investors, plus interest, using money collected from property taxes. The payments to the investors, called debt service, are paid for a period of between 12 and 20 years, depending upon the terms of the bond agreement. Also, while approving a levy takes a simple majority of voters, it takes a supermajority of 60 percent of voters to approve a construction bond ballot measure.
The Northwest Educational Service District 189 has produced a short video that explains the difference between levies and bonds. You can watch the video HERE.
What does the difference mean to taxpayers?
The bond issue spreads the cost of the project over a greater number of years than a capital levy. Building a new elementary school can cost more than $30 million, for example, which would have a large impact on property taxes if it were collected over the six-year period of a capital levy. Instead, with the passage of a construction bond, that cost can be spread over 20 years and will keep property taxes much lower.
When was the last Construction Bond passed and how was it used?
Voters in the Mukilteo School approved construction bond measures in May 2000 and in February 2014. The most recent proposal asked for the authority to borrow $119.15 million, which will be used to provide space to accommodate enrollment growth, provide safety and security improvements, improve technology, modernize facilities, and install energy-efficiency projects. You can get more information about the progress of those projects on our Construction Information page.