According to the district’s own website, Coppell ISD taxpayers currently owe more in interest payments than what has been borrowed to build new schools, athletic facilities, and other projects. CISD’s borrowing history suggests May’s $249,000,000 bond proposition—if approved—may end up costing more than half a billion dollars, and will more than double the district’s total debt on the books.
Below is the existing debt liability for taxpayers according to the Texas Bond Review Board. It shows taxpayers owe more in interest payments ($221 million) than in principal ($212 million), or $36,000 per student in total.
This circumstance is a direct result of decisions made by CISD school board members, who ultimately vote on how new debt is structured after voters approve bond propositions.
Unfortunately, “interest” is a sunk cost for taxpayers, resources that aren’t used to buy anything. Interest is simply the cost of borrowing. And it’s an enormous cost the board won’t disclose to voters until after the 2016 bond election is over.
Local voters aren’t told the interest cost on the ballot, in part because state law doesn’t require it to be disclosed. Even worse, school districts adamantly lobby the legislature against reforming the election process. Regardless, all debt payments are repaid with property taxes. The higher the debt, and the more costly the interest payments, the higher the property taxes will rise to repay it.
Consider how the size of interest payments determines how expensive projects ultimately are when financed with long-term debt.
CISD plans to pay Northstar Builders $51 million for the proposed middle school, or over $255 per square foot! While that price per foot is astronomically high in Texas, its cost is even higher when adding interest expense, based on CISD’s own borrowing history. The project could cost taxpayers double that amount, or over $500 per square foot.
If interest expense continues to be equal to what’s borrowed, you can safely double every project’s price tag.
This is precisely why debt should not be issued carelessly. If voters decide to approve May’s debt proposal, CISD’s total debt will more than double from $18,000 to over $38,000 per student, using today’s enrollment figures. With interest expense, approving the bond as-is will increase the total property-taxpayer liability to over $76,000 per student.
If voters believe a doubling of school debt in one election is too much, and vote to reject May’s bond proposal, the community will revisit its needs to find a better balance between its desires and what local taxpayers find reasonable. Traditionally, CISD voters have approved dramatically smaller proposals.