School bond elections are held for voters to consider proposed construction and capital improvement projects. Similar to a family's mortgage, school districts issue loans, known as bonds, to pay for capital expenditures such as buildings, buses, technology improvements, etc. The district pays back the debt long-term, similar to a home mortgage. Like a mortgage, bonds allow the cost of facilities to be paid for over a timeline that approximates the useful life of the facilities. Bonds are sold by a school district in the public securities markets to raise funds to pay for the costs of constructions, renovations and equipment. Most school districts in Texas utilize bonds to finance renovations and new facilities. Districts repay the bonds through revenue generated from a debt service property tax. A district's voters must approve capital improvement bonds issued by a school district.
Under Texas law, bond funds may only be used to pay for non-recurring expenditures for items with a useful life of more than one year, such as new buildings, additions and renovations to existing facilities, purchasing land, and equipment for new or existing buildings. Bond funds CANNOT be used for employee salaries, operating costs such as utility bills, supplies, fuel, and insurance. The Marshall Independent School District, like all other districts in Texas, uses its Maintenance and Operations (M&O) budget to fund salaries, curriculum and other operating expenses.
The M&O budget includes annual expenditures such as payroll, utilities, supplies and other costs associated with the ongoing operations of the school district. While districts may be able to address smaller capital items using the M&O, or General Fund, school districts do not receive enough funding to cover the cost of large construction and/or renovation projects like those proposed in a bond program.
On May 9, 2015, voters in the Marshall Independent School District approved a bond package totaling $109,210,000. The bond package will fund the construction of new schools, renovations and grade-level realignment in the district. This bond allows MISD to build a new junior high school to serve students in grades 6-8; three new elementary schools to serve students in grades K-5; and provide renovations to repurpose the current Sam Houston Middle School into a grades K-5 STEM Academy.
All projects in this bond program are scheduled for completion in time to open in August 2017. For updates on the Legacy 2017 building program as part of the 2015 bond election, click here