WHAT'S THE DIFFERENCE BETWEEN A BOND AND LEVY?
A bond is like a mortgage, with funds available immediately and payments financed over 20 years to keep tax rates low and share costs with those who will benefit in the future.
- Bond funds are available immediately so projects can proceed quickly to realize the benefits sooner and meet urgent needs and minimize cost increases from inflation and cost escalation.
- A bond is the most common approach across the state for funding low-risk capital school projects.
- Bonds require a supermajority, 60% approval.
- Levy costs can be similar to bond interest.
- Funds are collected in increments with the full amount not available until the end, pushing out construction timelines and facing rapidly increasing building costs each year, all the while compounding problems and failing to meet the urgent needs.
- Buying power is reduced each year levy funds are collected. Building costs rise, yet levy income is flat.
- Rising costs and delays can make successive levies more expensive than bond interest.
- Levies often require borrowing.
- Levies require simple majority, 50% approval.
HOW IS THIS BOND DIFFERENT THAN THE LAST ONE PROPOSED IN APRIL 2018?
This bond is quite different from the last one, due in large part to the District responding to feedback from citizens as well as a re-evaluation of the Facilities Planning Committee priorities and most immediate needs at hand, to address the overcrowding driven by rapid growth and state-mandated K-3 class size reductions. This bond provides a sharp focus on complete solutions - no more band-aids.
Relieve elementary school overcrowding by completing 4 projects:
Relieve elementary school overcrowding by completing 4 projects:
- 2 additional schools for added capacity, and
- 2 replacements of the oldest, most expensive to maintain schools in the District.
What will this bond pay for?
- Two new elementary schools to relieve overcrowding.
- Replace two oldest elementary schools, Artondale & Evergreen, to improve functionality and safety.
- Emergent repairs to failing systems across the District.
How do our our tax rates compare to other districts?
We have the lowest school tax rate in Pierce County and 4th lowest in the Puget Sound.
Can a levy be used for construction and maintenance?
Yes they can, but Capital levies are rarely used for new construction and replacement projects, with the exception of large urban districts like Seattle and Tacoma. Big districts have a much larger commercial tax bases with billions of dollars in assessed property value due to the presence of companies like Amazon, Boeing, etc. These commercial landowners share the cost of building schools. Districts like ours have a much smaller commercial tax base, so costs are shared primarily by homeowners.
WHY WASN'T A levy used IF IT ONLY REQUIRES 50% APPROVAL?
A capital levy provides a guaranteed stream of revenue for six consecutive years. Under current regulations at the state level, it has a singular advantage over bond levies for the simple fact that it can be approved by a simple majority (50% plus one) of the voters instead of the supermajority (60%) required for a bond issue.
Unfortunately, the structure of a capital levy does not lend itself to funding the type of projects recommended. A six-year levy stream of financing generally does not provide the front funding required to build new schools. An exception can be found in the Seattle School District, where two large capital levies overlap and are renewed every three years. Other districts simply do not have the wealth to raise that much capital through the levy system.
Unfortunately, the structure of a capital levy does not lend itself to funding the type of projects recommended. A six-year levy stream of financing generally does not provide the front funding required to build new schools. An exception can be found in the Seattle School District, where two large capital levies overlap and are renewed every three years. Other districts simply do not have the wealth to raise that much capital through the levy system.
How will the District be held accountable for spending bond money?
Several checks are in place for this highly regulated process.
- Bond funds by law may only be used for construction and major repair work to facilities. They are not discretionary, and may not be used for salaries or programs.
- State OSPI “D” process.
- A citizen audit committee will be created, same as in 2003 when last bond was passed.
- All school board meetings are open to the public, and reports and transcripts of minutes, including twice yearly budget reports, are posted on District website for public review at any time. This has been in place for many years.
Where does the interest on bond payments go?
Bonds are sold to the public, and the purchasers receive the interest for their investment.
The leading buyers of municipal bonds are private individuals, typically older people looking for a safe investment. Far behind individuals, mutual funds and banks will also hold municipal bonds. Municipal bonds have certain tax advantages and are considered a conservative investment.
The leading buyers of municipal bonds are private individuals, typically older people looking for a safe investment. Far behind individuals, mutual funds and banks will also hold municipal bonds. Municipal bonds have certain tax advantages and are considered a conservative investment.
Can several smaller levies accomplish the same goals as one larger bond?
Construction costs are increasing 10% year over year in our community, far outpacing interest. Failing to pay for needed permanent classrooms today means we all pay more tomorrow. For instance, building an elementary school in 2013 would have cost taxpayers estimated $22.5 million. By 2018, it was estimated at $41 million. We can’t afford to keep putting this off with small investments that fail to tackle the district-wide problem. A smaller levy also requires more levies, further delaying solutions, compounding costs and raising taxes.
ARE THE SCHOOLS REALLY OVERCROWDED?
Yes. This bond addresses the overcrowding crisis in our elementary schools.
One-third of our elementary classrooms are in portables, for a total of 66 portable classrooms. This is the equivalent of more than two entire schools. Our schools are more than 1,000 students over permanent capacity.
The opposition claims we have an average of 18 students per classroom. This is FALSE for three reasons:
One-third of our elementary classrooms are in portables, for a total of 66 portable classrooms. This is the equivalent of more than two entire schools. Our schools are more than 1,000 students over permanent capacity.
The opposition claims we have an average of 18 students per classroom. This is FALSE for three reasons:
- They counted portables, which are NOT permanent classrooms.
- They included middle school classrooms while the overcrowding is specific to elementary.
- They failed to account for special needs, full day kindergarten and many other federal and state mandated programs that are required by law to have smaller class sizes.
Does the District allow inter-district transfers?
Only where there is space or if required by law. Elementary level stopped accepting inter-district transfers three years ago. Of the roughly 200 inter-district transfers, the vast majority are high school, followed by middle school, where overcrowding is not as severe.
There are only 55 inter-district transfers at the elementary level, where the schools are severely overcrowded. These students were admitted on the basis of hardship, grandfathered from previous years, or are children of staff members, which the district is required by law to admit.
There are only 55 inter-district transfers at the elementary level, where the schools are severely overcrowded. These students were admitted on the basis of hardship, grandfathered from previous years, or are children of staff members, which the district is required by law to admit.
How do we know the District is fiscally responsible?
The District has an excellent credit rating, with over a decade of clean audits from the state. Superintendent Dr. Art Jarvis, was specifically hired for his decades of financial expertise and successful capital projects planning. Pierce County Assessor/Treasurer Mike Lonergan said, “...the Peninsula School District is more frugal than most and the local rate for schools is lower than most districts in the county or state." -KP News, Feb. 1, 2018
Can money from the state and the McCleary ruling be used for facilities?
State funds from the McCleary ruling are for salaries, programs and other components of “basic education.” While the District may use these funds for facilities, this would decimate the district’s operating budget for programs like special ed, highly capable, sports and music.
Bonds, by law, may only be used for construction and capital investments. By law, no money from a bond may be used for programs and salaries.
Bonds, by law, may only be used for construction and capital investments. By law, no money from a bond may be used for programs and salaries.
What was money from the last levy in 2016 used for?
As stated in the 2016 voters guide, the Continuing Educational Programs and Operations Levy would fund "Basic needs, approximately 24% of the District’s budget, including educational programs and services, over 50% of the facilities and maintenance budget, one-third of teachers and staff, and provides safety upgrades in all schools."
Click here for 2016 Levy Spending Plan Summary
Click here for 2016 Levy Facts
Click here for 2016 Levy Resolution
Click here for 2016 Levy Spending Plan Summary
Click here for 2016 Levy Facts
Click here for 2016 Levy Resolution
Did the District misdirect funds away from maintenance on past levies?
No. Levy money is being spent exactly as outlined in voter’s guides from 2012 and 2016. It was clearly stated that 85% of revenue raised would be used for classroom learning—not maintenance. And it’s been used to great effect—high quality teachers have been retained, counselors and substitutes have been hired, graduation rates have increased 11% and our District is now listed as the top 8th in the state for its Advanced Placement course offerings. Our Levy money has been used wisely and has helped position the Peninsula School District as one of the best in Washington. If the District were to shift funds away from classroom learning and use them instead for maintenance of buildings, it would violate the law as passed by voters in 2012 and 2016.
If McCleary is now funding teacher salaries, can our current levy be redirected to facilities?
The McCleary decision will only fund salaries defined as providing a Basic Education. This does not include pay for Special Ed, school counselors, security officers, extra curricular activities, textbooks, professional development for staff and more. Districts across the state like ours must still rely on levy dollars to fund these programs. Without this revenue, many of the successes we’ve seen, like higher graduation rates and top ratings in the state, will be put in jeopardy.
What was money from the last bond (2003) used for
The 2003 bond was used to fund a full modernization of Purdy, the final phase addition of HRMS, a partial modernization focused on the library and selected classrooms at PHS, and many other projects across the District like HVAC repairs and portable replacements. All projects were completed on time, and overall budget was maintained throughout.
Click here for 2003 Bond project closeout summary
Click here for 2003 Bond project closeout summary
IS our District ABLE TO managE MULTIPLE construction projects?
In 2003 voters passed the District’s last construction bond. Every single project identified in that bond was delivered on time. In fact, the District managed this process so well it not only refinanced the bond, saving taxpayer dollars, but also paid the bond off early, saving taxpayers even more money.
Superintendent Jarvis is one of the state’s foremost experts in financing and construction.
Superintendent Jarvis is one of the state’s foremost experts in financing and construction.
Why should retired people or those without kids pay taxes for schools?
Schools provide resources for the whole community - not just the kids who attend.
Tax payers and communities benefit from:
Tax payers and communities benefit from:
- Upward mobility
- Higher wages
- Availability of skilled trades
- Lower crime rates
- Lower unemployment
- Less reliance on government assistance
- Basic education is a requirement of the Washington state constitution.
- Investing in education provides the next generation with the greatest opportunity to succeed, as educated children are at the heart of a healthy, productive and prosperous community.
- Communities are judged by the care they take of their schools, as demonstrated by the direct correlation between the quality of a school district and home values.
Are there programs to help seniors and those on fixed incomes?
Yes. Pierce County offers a program for qualified seniors and/or disabled persons. The exemption freezes the value of the residence as of January 1 of the initial application year, exempts all excess levies and may exempt a portion of regular levies.
Click here for Pierce County program for seniors on fixed income
Click here for Pierce County program for seniors on fixed income
Why is passing a bond so difficult?
Supermajority 60% approval is a very high standard. The last bond in April had 59% support - a STRONG majority - but still did not pass. There is also a lot of misleading information being spread by an opposition campaign, and this has created contentious election conditions. The effects and cost of further delaying a solution are harming our whole community. Now more than ever, every YES vote of support matters!
Bonds are for Buildings.
|
Levies are for Learning.
|