Advertisement

newsEducation

Five things to know about the record-setting 2020 Dallas ISD bond package

What is it? Will it raise my taxes? Didn’t DISD just ask for more money? What happens if it fails?

At the bottom of the ballot for many voters in Dallas County, there are five propositions from the Dallas Independent School District for the issuance of school bonds.

At nearly $3.7 billion, the package is the largest bond issuance from a local entity in state history, according to data from the Texas Bond Review Board.

Officials want to use the money to renovate or replace aging schools, buy more devices for students to learn virtually and create resource centers to help the neighborhoods most in need.

Advertisement

But some question whether such a large bond package is prudent during the economic uncertainty brought on by the coronavirus pandemic.

The Education Lab

Receive our in-depth coverage of education issues and stories that affect North Texans.

Or with:

Here are five things to know about the district’s bond package:

What is this special bond election?

Dallas ISD is asking for approval to issue nearly $3.7 billion in bonds for a slew of improvements across the district, which serves 150,000 students at 226 different campuses.

Advertisement

Bonds can be used only for capital projects, such as school construction or the purchase of costly items such as land, buses or technology.

Over half of the total amount — $1.9 billion — would go to improvements and modernizations at existing campuses. Roofs, plumbing and HVAC systems with less than five years of remaining life would be replaced. Classrooms would be modernized. Fences, facades and sidewalks would be improved. Secure vestibules would be created in schools that lack them.

Ten new campuses and 14 replacement schools would be constructed, at a cost of $1.1 billion. Nearly $100 million would be spent to add additional classrooms at eight existing schools.

Advertisement

Technology improvements — addressing issues such as student connectivity, infrastructure, communications and cybersecurity — would run $270 million.

Additionally, $124 million would be used to improve the district’s athletic facilities — installing field turf at high schools and renovating central site stadiums; $66 million would be set aside for a new performing arts center; and $235 million would create four career institutes for work skills training.

Guided by its racial equity efforts, DISD would also use $41 million for an innovative plan to create dedicated spaces at four of the district’s neediest campuses to provide social services for those communities, turning those schools into community hubs.

Right now, that’s the plan. In reality, however, any project would have to be approved by the school board at a later date, meaning those plans could change — with a few exceptions — depending on what’s needed in various school communities.

Using long-range facilities and technology master plans that the district created in 2018 and 2019, a 100-member citizens bond steering committee spent seven months constructing a plan of what the bond package would look like.

“This is a road map, and not necessarily an edict from on high, on how we are going to help 226 schools,” said Drexell Owusu, the senior vice president for education and workforce at the Dallas Regional Chamber and the co-chair of the citizens bond steering committee. “It’s not the only way from point A to point B.”

Didn’t DISD just ask for more money?

It’s been five years since the district asked voters for a bond for facilities, a pretty standard time period in between bond elections for major urban school districts in Texas.

Advertisement

In November 2018, the district did ask for a 13-cent increase in the district’s maintenance and operations tax rate, used for salaries and programs. There were also two $75 million bond proposals approved on the November 2018 ballot, refinancing some debt and helping to create the district’s new busing program.

In 2015, DISD won approval to issue $1.6 billion in debt, using that money at more than 100 campuses. Work continues from the 2015 bond, and the district has not issued all the debt, since it doesn’t sell bonds until the funds are needed. Nearly $300 million has yet to be issued from that bond package.

The biggest difference between the current bond package and those in previous years (2002, 2008 and 2015) is scope. The previous bonds all ranged from $1.35 billion to $1.6 billion.

Advertisement

Owusu said that one of the stated goals of the citizens bond steering committee was to maximize the bond’s impact without changing the current interest and sinking tax rate — which is the portion of the district’s rate that pays for the capital projects — at $0.2420 per $100 of taxable value.

And $3.7 billion is near the limit of that constraint.

DISD has nearly $6 billion in needs, according to assessments done in the master planning process, with hundreds of millions of dollars in deferred maintenance.

At its core, the bond would address those basic functional needs, Owusu said.

Advertisement

What’s this going to do to my taxes?

It’s hard to fathom, but DISD is confident that it can issue $3.7 billion of new debt without changing its tax rate.

The debt would be sold incrementally over the next decade in 30- or 40-year bonds, with the last sale coming in 2031. During a June meeting, Dwyane Thompson, Dallas' chief financial officer, told trustees that the district had been conservative of its estimates on how the district would repay its debt, projecting minimal tax base value growth and higher interest rates in the future.

For perspective, when the city of Dallas discussed its budget in August, the city’s chief financial officer, Elizabeth Reich, said that the baseline forecast from the city’s economists showed continued property tax growth over the coming years, albeit at a slower rate. More than half of the 5.28% property tax growth for the current fiscal year came from new construction, Reich said.

Advertisement

That doesn’t mean, however, that a homeowner’s or business’s tax bill won’t be higher in 2021 — but it won’t be because of a rising DISD tax rate.

Regardless of the bond’s passage or failure, if the Dallas Central Appraisal District deems a property to be worth more, and exemptions don’t apply, the tax bill for that property will be higher.

When looking at a sample ballot, why is the bond broken up into five different propositions, all of which include the language “THIS IS A PROPERTY TAX INCREASE”?

Laws passed in the most recent Texas Legislature have added a layer of confusion.

Advertisement

School districts are now required to have separate ballot propositions if they are asking for bonds that fund construction or improvements at stadiums with 1,000 or more seats, natatoriums, performing arts facilities, recreational facilities, teacher housing, or technology improvements.

So, listed on the ballot are Dallas' five propositions, A through E:

  • $3.3 billion for school construction.
  • $270 million for technology.
  • $53 million for stadium improvements.
  • $66 million for a performing arts facility.
  • $34 million for improvements to the district’s natatoriums.

In addition, a provision added in the state’s landmark school finance bill now requires any ballot proposition in bond elections to include the language “THIS IS A PROPERTY TAX INCREASE,” regardless of whether districts are asking to change their tax rates.

Advertisement

Hypothetically, if DISD didn’t ask for the bond, the district could reduce its interest and sinking tax rate (which is used to pay debt). But that rate has held steady since 2013, with the district using any increase in tax collections to pay down its existing debt faster.

Is it prudent to approve such a large amount during a pandemic? And what happens if the bond fails?

While the board voted 8-0 to place the bond before voters, one trustee, Joyce Foreman, voiced concerns about moving forward with such a large package during the COVID-19 crisis.

“We need a bond, but maybe not this bond,” Foreman said during the Aug. 13 meeting, before stepping away from the boardroom when the vote was cast. “We’re calling an election for the largest bond ever during the greatest time of risk and uncertainty.”

Advertisement

Thompson and Superintendent Michael Hinojosa countered Foreman’s statements by saying that the district is only asking for approval to issue the debt. If conditions changed, and the district found itself in a much worse financial situation, the debt would not have to be sold, they argued.

A raft of community and business leaders — including U.S. Rep. Eddie Bernice Johnson, state Reps. Rafael Anchia and John Turner, and former mayors Ron Kirk and Mike Rawlings — have thrown their support behind the bond package.

While a few conservative think tanks and statewide political action groups have spoken out against the bond, there hasn’t been much in the way of organized opposition at the community level like there was before the 2015 vote.

Advertisement

If the bond fails, the needs of the district won’t go away. The average age of DISD schools is 51.7 years, more than seven years higher than the national average. It is unclear, however, when the district would approach voters again to ask for bond funding.

The DMN Education Lab deepens the coverage and conversation about urgent education issues critical to the future of North Texas.

The DMN Education Lab is a community-funded journalism initiative, with support from The Beck Group, Bobby and Lottye Lyle, The Communities Foundation of Texas, The Dallas Foundation, Dallas Regional Chamber, Deedie Rose, The Meadows Foundation, Solutions Journalism Network, Southern Methodist University and Todd A. Williams Family Foundation. The Dallas Morning News retains full editorial control of the Education Lab’s journalism.