School bond funding better than ever expected when passed
L&T editor Earl Watt
Mr Craig’s letter relating to the school bond had a lot of good questions and unfortunately some misinformation about the school bond project which received overwhelming public support seven years ago and since it mentioned that the paper supports the project, I thought that it would be important to explain his inaccuracies and also to answer some of his questions.
Let’s start with the number of votes. Craig claims that only 1,200 votes were cast in the special election.
Visit Seward County’s website to go to the polls and the County Clerk Stacia Long does a good job of keeping all election records for at least 20 years or more. The Special Education Loan election is listed there, and the total number of votes cast was 2,581, a very strong turnout for any Seward County election. Of these, 2,033 supported the bond, which is 78.77 percent, and 548 opposed the bond, which was 21.23 percent.
Craig also said the bond replaced “all” schools in Liberal.
Again not true. Cottonwood Elementary, Sunflower Elementary, and Liberal High School continue to serve the students and were not built with the bond. Five new schools were built – two new middle schools and three new elementary schools. These schools replaced South Middle School, West Middle School, Garfield Elementary, Washington Elementary, Lincoln Elementary, McKinley Elementary, McDermott Elementary, and MacArthur Elementary. These eight locations were combined to form the five new schools.
Craig also wants to know to whom we owe the remaining $ 125 million in bonds.
Keep in mind that once the bond was approved, all existing school bonds were refinanced. The loans used to build Cottonwood and Sunflower schools, as well as the South and West Middle School expansions, still owed money. The new bonds made it possible to refinance that debt along with the new $ 128 million bond at a lower interest rate.
The district owes the bondholders. This is a general bond issue. To raise the money to build the schools, bonds were issued at a percentage rate, down from 4.02 percent seven years ago according to the budget posted by the school district on its website. A link to this budget is placed online with this column.
The bonds were originally intended for 25-year payouts to bondholders.
But the bonds have been refinanced twice since they were issued, including the January refinancing, which brought the interest rate down to 1.56 percent. This reduced the payout of the 25-year bond by around four years.
Craig, wanting to know what the bonds bought, bought five fully furnished new schools.
Mr. Craig might believe the county owes that money directly to the companies that built the school. It doesn’t. Similar to a loan to buy a car, the lot is paid in full while a bank or other credit institution borrows the money for the purchase and the car owner repays the bank or lender. It is no different when it comes to building schools. All contractors have been paid in full and the district pays the bondholders or bondholders.
Here’s the nice thing about the school bonds, and it’s gotten a lot better than those of us who supported the initiative ever imagined:
The state of Kansas had a timeframe to approve a bond and provide state aid before it ran out of funds. Our bond passed and qualified for state aid.
At the time we were working on the issue, it was estimated that about 50 percent of the bond payments would be funded by the state of Kansas, about 15 percent paid from half a cent sales tax, and the remaining 35 percent paid by property taxes.
For the 2019-2020 school year, the state paid 6.5 million
This year the state is expected to pay $ 7.3 million, sales tax is valued at $ 1.75 million, but it appears that it will actually be higher while the rest is accounted for by property tax which is roughly Should be 20 percent or possibly even lower.
It turns out that property tax doesn’t pay the expected 35 percent of the loan, but actually less. This is available on page 66 of the budget.
Does the state pay its share? Definitely, and even higher than expected, as the district’s poverty rate is co-established to determine the land’s share.
To say that the schools were approved on the premise of state aid is absolutely correct, and that state aid fulfills its promised and expected obligations.
Half a cent sales tax exceeded forecasts even in a pandemic, and that too reduces the property tax burden on bonds.
As someone who supported the bond, that support was not easy. I fully expected that I would reject the plan from the start.
But when I saw how the public had contributed to the plan, how the plan was limited in cost and scope, and the district had to sacrifice needs and when it was possible, the lion’s share of the cost to sources other than property tax, I supported it.
If I had to do it all over again, I would because we’d never get such a good deal today. And yes, I am proud of it.