A bond is similar to a home mortgage. It is a contract to repay borrowed money with an interest rate over time. A school district sells bonds to competing lenders to raise funds to pay for construction, renovations, and equipment costs.
Why do school districts need to sell bonds?
Most school districts in Texas utilize bonds to finance renovations and new facilities. This bond would allow the district to fund improvements and new schools without cutting regular budget items like school programs, teachers, and staff. Since school buildings sometimes serve the community for 50 or more years, it is well reasoned that taxpayers would pay for them over 25 to 30 years and not from the district's annual operating budget.
How can bond funds be used?
Bond funds can be used to pay for new buildings, additions, renovations to existing facilities, land acquisition, technology infrastructure and equipment, new or existing buildings, and large-ticket items such as school buses. Bonds cannot be used for salaries or operating costs such as utility bills, supplies, building maintenance, fuel, and insurance.
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