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Debt and Taxation Bill could Prevent Districts from Building Schools
You are encouraged to contact your lawmakers to share concerns regarding House Bill 19, a debt and taxation bill that if passed in its current state would prevent school districts from building future schools. The bill applies to cities and other entities as well, but the impact is much graver for school districts as it places extreme limits on what we can pay in debt service (or the debt we owe on projects approved by bonds).
Key concerns regarding HB 19:
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Detrimentally prevents school districts from obtaining debt to build, expand, renovate, or maintain schools and facilities. HB 19 prevents annual debt service from exceeding 20% of the average property tax collections from the past three years. NISD would have very limited debt capacity and potentially would not be able to build another school for 30 years under this 20% debt limit.
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The state already limits how much debt a school district can obtain. Our I&S tax rate (the portion of the tax rate used to pay for bonds and debt service), is already capped by the state at $0.50. With this cap already in place to limit debt, we question why additional limitations are necessary.
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Restricts bond elections to be held only in November. Requiring all districts and local governments to issue bonds at the same time would flood the bond market, driving up interest rates and increasing borrowing costs. Additionally, as a fast-growth school district, we strategically consider the timing of building projects. Limiting to one election window a year reduces flexibility for local needs and could delay projects.
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Restricts issuing debt if a bond proposition for the same purpose failed during the previous five years. This restriction ignores local context and removes the ability to address critical needs which could delay urgent projects. This would tie the hands of local officials, reducing local flexibility to meet local needs.
Northwest ISD has been working closely with the Fast Growth School Coalition and Texas School Coalition regarding HB 19, which was left pending in the House Ways and Means Committee on April 21. However, none of the suggested language changes or revisions were made in the committee substitute. As one of the Governor’s emergency priority items, it is anticipated that this bill could be voted out of committee and then be considered on the House floor soon.
Please advocate against the damaging effects of HB 19 on fast-growth districts by contacting NISD’s seven House of Representatives. As a reminder, Rep. Capriglione, who is a coauthor of this bill, is one of our local NISD House members. He also serves on the House Ways and Means committee where this bill could be heard and voted out to the House.
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