In the midst of declining student enrollment, Grapevine-Colleyville ISD is asking voters in May to approve a $249 million all-or-nothing debt deal. If approved, GCISD’s total debt will increase by 78% to a level among the highest in the region—at over $44,000 per student excluding interest—according to the Texas Bond Review board.
School debt is supposed to be used to build new schools as enrollment grows. But many school boards have abused their borrowing authority. For example, GCISD doesn’t need new classrooms—its student body has declined 3% since 2004.
But that isn’t to say the entire bond is “bad.”
As was the case with McKinney ISD, the GCISD school board nefariously lumped unrelated projects into a single, all-or-nothing ballot proposition. In order for voters to get “safety upgrades” for classrooms, they’re forced to approve every other unrelated project, such as a multi-purpose sports complex.
The second wasteful decision was the board’s choice to purchase short-term consumables such as computers with long-term debt.
As with all local governments, school district debt is repaid through higher property taxes. But rapidly rising property values in Tarrant County have helped mask this problem, by allowing governments to collect more money at lower rates.
In the case of GCISD, however, taxpayers should expect their school tax rate to rise nearly 13 cents, the highest level since 2007.
Taxpayers currently owe $546.2 million in debt to GCISD, which includes $219 million in interest. A fact the district conveniently fails to admit is that May’s $249 million bond will actually cost taxpayers closer to $350 million when interest is included, pushing its total debt liability near $1 billion.
The amount voters see on the ballot is essentially a blank check, because board’s don’t agree to financing terms until the debt is issued, which is always after the bond election. And the more ambiguous the ballot language, the more flexibility the board has on how the debt is spent.
But to understand why refusing to disclose the interest cost matters, take a look at GCISD’s bond history provided by the Texas Bond Review Board.
GCISD still owes $640,000 in principal from a bond issued in 1994. But due to the way the bond’s financing was structured, taxpayers still owe $7.4 million in interest, or 11 times the amount borrowed.
Another bond from 1998 shows a remaining principal liability today of $28 million, but taxpayers will pay an additional $64.6 million in interest, or more than twice what was borrowed and spent.
By refusing to give voters a choice with separate ballot propositions, GCISD’s board is forcing voters to say “no” to the entire proposal, with the “needs” of the district held hostage to the “wants.” Not only do taxpayers need to vote in May, they need to hold their officials accountable before they vote to place a debt deal on the ballot.