Bonds for school projects are very similar to a home mortgage. They are used by schools to finance construction projects or purchase land. While a home mortgage may be through a bank, a school district sells bonds to investors who will be paid principal and interest.
Most school districts in Texas use bonds to finance renovations, additions and construction of new facilities. CISD does not receive any money from the state for the construction of new school buildings or improvements. Since school buildings serve the community for 50 or more years, the issuance of bonds allows taxpayers to pay for them over a period of 30 years and not from the district's annual operating budget.
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 payroll, utilities, supplies, building maintenance, fuel, and insurance.
School districts are required by state law to ask their community voters for permission to sell bonds to investors in order to raise capital dollars 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 or home renovation. A school board calls a bond election so voters can decide whether or not they want to pay for the proposed facility projects.
The November 2, 2021 bond is for $68 million and is divided into two propositions.
Proposition A: $62.5 million for Renovation, New Construction & for Educational Facilities.
Proposition B: $5.5 million for a Multipurpose Facility
Throughout the Spring of 2021 presentations were made to various staff, program leaders and community groups about the district’s academic and program needs. In May of 2021, CISD invited over 75 community representatives to serve on a Facility Advisory Planning Committee. This committee represented a cross-section of the Commerce community and averaged over 50 members in attendance in their meetings. Their original charge was to tour each district campus, assess facility needs and reach a consensus on facility priorities. A recommendation was then made to the CISD Board of Trustees.
The Board of Trustees conducted a public workshop to receive and discuss the recommendation on August 2nd. This was followed by a special called board meeting on August 9, 2021 where the Commerce Board of Trustees unanimously called a bond election for November 2, 2021 to address these district’s facility needs.
Proposition A: The Proposed Projects include: building a new middle school north of the high school and a new agriculture facility, installing turf on the baseball and softball fields, building concessions and restrooms between the football field and the multipurpose building, and adding new parking at the baseball/softball fields.
Proposition B proposes to construct a multipurpose facility adjacent to the football field that would be utilized by all students, programs and by the community.
The committee also identified critical needs at Commerce Elementary School for a covered awning and to replace flooring at Commerce High School which CISD is addressing through local funds.
A school district’s tax rate is comprised of two parts. The first part is the Maintenance and Operations budget (M&O), which funds daily costs and recurring or consumable expenditures such as teacher and staff salaries, supplies, software and utilities. The second part is the Interest and Sinking budget (I&S), also known as Debt Service, and that is for longer-term capital improvements approved by voters through bond elections. I&S funds cannot be used to pay M&O expenses, which means that voter- approved bonds cannot be used to increase teacher salaries, pay for rising costs for utilities, services, etc.
If both propositions pass, the District’s projected total tax rate would be $1.4603. This represents a monthly increase of approximately $9.44 a month for a CISD home with a taxable value of $100,000 and $22.04 month increase on a $200,000 home.
If you have applied for and received the Age 65 Freeze on your homestead, by law, your school taxes cannot be raised above their frozen level. The appraised value can change and the tax rate can change, but the amount of school taxes on your homestead cannot increase. Normal repairs, maintenance and the economic impact of the market cannot increase the amount of taxes you will pay once a tax ceiling is in place on that homestead. Therefore, if this bond election is successful, it will not have an impact on the tax bill for homesteads that are receiving the senior citizen exemption or “FREEZE”, unless you make significant improvements to your home by adding square footage or additional structures.
Any registered voter that resides within the Commerce Independent School District boundaries. For specific questions, please contact your county elections office: Hunt County Elections (903) 454-5467 or Delta County Elections (903) 395-4400 ext. 222.
The deadline for voter registration is October 4, 2021. If you are not registered to vote by this deadline, then you are not eligible to vote in this election. You can pick up a registration card from your local post office or you can register online.
You should receive a Voter Registration Certificate within 30 days. On Election Day, please bring your certificate to your local polling place if you have it. However, all that is required is a valid form of photo ID.
The district will issue bonds to be paid in 30 years.
WHEN WILL THE TAX RATE GO INTO EFFECT, AND IF A RESIDENT TURNS 65 DURING THE YEAR THIS YEAR, DOES THAT MEAN THEY ARE EXEMPT FROM ANY INCREASE?
By law, tax statements are sent out the end of October and due the following January. If voters approve the bond referendum on November 2, 2021, they will see an impact on their tax bill in January 2023. The exemption is effective January 1 of the tax year in which the property owner becomes age 65. If a taxpayer had an over-65 exemption in place by December 31, 2021, there will be no impact from the increased rate. However, if a taxpayer turns 65 on or after January 1, 2021, they will not be exempt from the impact of the increased rate. Their "tax freeze" will be based on the 2022 values and the current school tax rate.
A specific timeline of projects will be finalized after a successful election. Tentatively, construction would begin a year after the election with a proposed completion in 2024 for all projects.