Bond FAQs

What is a Bond?

A municipal bond is similar to a home mortgage. It is a contract to repay borrowed money with interest over time. Bonds are sold by a school district to competing investors to raise funds to pay for the costs of construction, renovations, and equipment.

What is a bond election?

School districts are required by state law to ask voters for permission to sell bonds to investors in order to raise the capital dollars required to renovate existing buildings or build a new school. Essentially, it’s permission to take out a loan to build, renovate, and pay that loan back over an extended period of time, much like a family takes out a mortgage loan for their home. A school board calls a bond election so voters can decide whether or not they want to pay for proposed facility projects.

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 finance additions and renovations without impacting the District’s regular budget items such as school programs, teachers, and staff.

How is the District’s tax rate configured?

A school district’s tax rate is comprised of two components: the Maintenance & Operations tax (M&O) and the Interest & Sinking tax (I&S). The M&O tax is used to operate the school district, including salaries, utilities, furniture, supplies, food, gas, etc. The I&S tax can only be used for the repayment of bonds. Bond sales only directly affect the I&S rate.

How can bond funds be used?

Bond funds can be used to pay for new buildings, additions and renovations to existing facilities, land acquisition, technology infrastructure and equipment, for 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.

For more information, contact 325.473.2511 or visit