What is a Bond?

Why does the ballot language say “This is a property tax increase” despite Allen ISD saying the tax rate will not increase?


In compliance with a new state law, ballot propositions must include the following statement: THIS IS A PROPERTY TAX INCREASE. As a result of this new requirement, voters in Allen ISD will see this language on both propositions; however, the district’s tax rate will not increase as a result of the 2021 bond election.




Why will there be two propositions on the ballot?


Allen ISD is complying with a new state law that was passed during the last legislative session. Senate Bill 30 requires school districts to offer certain projects on separate propositions.




What if I am over 65 years old and receive the senior citizen exemption and my home values go up, will my taxes increase?


The appraised value 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, unless you make significant improvements to your home.





Finance

Can bond funds be used to increase teacher salaries?


Bond funds cannot be used for salaries or operating costs of the district such as utility bills, supplies, etc. These expenses must come from the district’s maintenance and operations budget.

Bond funds can only be used to finance new construction and additions, renovations, land purchase, large equipment replacement, technology infrastructure, etc. Bond funds come from the district’s interest and sinking budget.




If the bond proposal is approved, can the money be used for any other purpose than specified?


The district can only use bond funds for the purposes described in the bond proposal. Should there be a cost savings from projects, the Board of Trustees will consult with its legal counsel to determine how any excess funds may be lawfully spent.




What is the financial impact of the bond proposal?


Based on current projections, the District would not need to increase the tax rate regardless of the outcome of this bond election.




How is it possible to fund a bond without increasing the tax rate?


More than $468 million of new properties, both commercial and residential, are expected to be added to the tax rolls this year allowing the Allen ISD Board to maintain the tax rate while adding a new bond proposal and paying down the principal on existing bonds.




How does the district use taxpayer and bond money?


Public school taxes involve two figures, which divide the school district budget into two “buckets.” The first bucket is the Maintenance and Operations budget (M&O), which funds daily costs and recurring or consumable expenditures such as teacher and staff salaries, supplies, fuel and utilities. About 82 percent of the district’s M&O budget goes to teacher and staff salaries. The second bucket is the Interest and Sinking budget (I&S), also known as Debt Service, and that is used to repay debt for longer-term capital improvements approved by voters through bond elections.

Proceeds from a bond issue can be used for the construction and renovation of facilities, the acquisition of land and the purchase of capital items such as equipment, technology and transportation. I&S funds cannot by law be used to pay M&O expenses, which means that voter-approved bonds cannot be used to increase teacher salaries or pay rising costs for utilities and services.




How long does it take to pay bonds off?


School districts can only sell bonds if authorization is received by voters. A bond is a debt instrument in which an investor loans money to the District. The proceeds from the bond are used to finance capital projects and other long-term items. The District repays the principal of the bonds, along with interest, over a period of time. Typically, Allen ISD sells bonds that mature after 25 years. Assets financed by the bonds that have a shorter asset life (such as turf and track), are sold with shorter maturities that align with their expected lifespan.




Are bond funds subject to the state's recapture?


No. There are two parts to our district tax rate: the maintenance and operations side that pays for the everyday operations of the district and the interest and sinking part that pays back district bonds. While the recapture “Robin Hood” system requires districts like Allen ISD to share M&O taxes, 100 percent of every dollar of bond revenue stays in Allen ISD.




Will taxes for voters over 65 go up?


According to state law, the dollar amount of school taxes imposed on the residence homestead of a person 65 years of age or older cannot be increased above the amount paid in the first year after the person turned 65, regardless of changes in tax rate or property value unless significant improvements are made to the home. If you are 65 or older, you may file a homestead application at any time, or contact your local appraisal district to see if you already have the appropriate exemption on file.




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. Bonds cannot be used for salaries or operating costs such as utility bills, supplies, building maintenance, fuel and insurance.





Creation of a Bond Proposal

Can bond funds be used to increase teacher salaries?


Bond funds cannot be used for salaries or operating costs of the district such as utility bills, supplies, etc. These expenses must come from the district’s maintenance and operations budget.

Bond funds can only be used to finance new construction and additions, renovations, land purchase, large equipment replacement, technology infrastructure, etc. Bond funds come from the district’s interest and sinking budget.




If the bond proposal is approved, can the money be used for any other purpose than specified?


The district can only use bond funds for the purposes described in the bond proposal. Should there be a cost savings from projects, the Board of Trustees will consult with its legal counsel to determine how any excess funds may be lawfully spent.




What is the financial impact of the bond proposal?


Based on current projections, the District would not need to increase the tax rate regardless of the outcome of this bond election.




How is it possible to fund a bond without increasing the tax rate?


More than $468 million of new properties, both commercial and residential, are expected to be added to the tax rolls this year allowing the Allen ISD Board to maintain the tax rate while adding a new bond proposal and paying down the principal on existing bonds.




How does the district use taxpayer and bond money?


Public school taxes involve two figures, which divide the school district budget into two “buckets.” The first bucket is the Maintenance and Operations budget (M&O), which funds daily costs and recurring or consumable expenditures such as teacher and staff salaries, supplies, fuel and utilities. About 82 percent of the district’s M&O budget goes to teacher and staff salaries. The second bucket is the Interest and Sinking budget (I&S), also known as Debt Service, and that is used to repay debt for longer-term capital improvements approved by voters through bond elections.

Proceeds from a bond issue can be used for the construction and renovation of facilities, the acquisition of land and the purchase of capital items such as equipment, technology and transportation. I&S funds cannot by law be used to pay M&O expenses, which means that voter-approved bonds cannot be used to increase teacher salaries or pay rising costs for utilities and services.




How long does it take to pay bonds off?


School districts can only sell bonds if authorization is received by voters. A bond is a debt instrument in which an investor loans money to the District. The proceeds from the bond are used to finance capital projects and other long-term items. The District repays the principal of the bonds, along with interest, over a period of time. Typically, Allen ISD sells bonds that mature after 25 years. Assets financed by the bonds that have a shorter asset life (such as turf and track), are sold with shorter maturities that align with their expected lifespan.




Are bond funds subject to the state's recapture?


No. There are two parts to our district tax rate: the maintenance and operations side that pays for the everyday operations of the district and the interest and sinking part that pays back district bonds. While the recapture “Robin Hood” system requires districts like Allen ISD to share M&O taxes, 100 percent of every dollar of bond revenue stays in Allen ISD.




Will taxes for voters over 65 go up?


According to state law, the dollar amount of school taxes imposed on the residence homestead of a person 65 years of age or older cannot be increased above the amount paid in the first year after the person turned 65, regardless of changes in tax rate or property value unless significant improvements are made to the home. If you are 65 or older, you may file a homestead application at any time, or contact your local appraisal district to see if you already have the appropriate exemption on file.




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. Bonds cannot be used for salaries or operating costs such as utility bills, supplies, building maintenance, fuel and insurance.





Voting

Who is eligible to vote in the bond election?


Any registered voter who resides within the Allen ISD boundaries. If you don’t know if you’re eligible to vote in the Allen ISD bond election, click here and use the login to check your voter registration status, elections on your ballot, poll location, early voting locations, and key election dates.




Is there a deadline to register?


Yes. The deadline for voter registration is Monday, October 4, 2021. If you are not registered to vote by this deadline, then you are not eligible to vote in this election. The Texas Voter Registration Application can be found here.




Can I vote on both propositions?


Yes. Voters should record their vote in each of the bond propositions on the ballot.





Ballot Specific Questions

Why does the ballot language say “This is a property tax increase” despite Allen ISD saying the tax rate will not increase?


In compliance with a new state law, ballot propositions must include the following statement: THIS IS A PROPERTY TAX INCREASE. As a result of this new requirement, voters in Allen ISD will see this language on both propositions; however, the district’s tax rate will not increase as a result of the 2021 bond election.




Why will there be two propositions on the ballot?


Allen ISD is complying with a new state law that was passed during the last legislative session. Senate Bill 30 requires school districts to offer certain projects on separate propositions.




What if I am over 65 years old and receive the senior citizen exemption and my home values go up, will my taxes increase?


The appraised value 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, unless you make significant improvements to your home.





Selling Bonds

Can bond funds be used to increase teacher salaries?


Bond funds cannot be used for salaries or operating costs of the district such as utility bills, supplies, etc. These expenses must come from the district’s maintenance and operations budget.

Bond funds can only be used to finance new construction and additions, renovations, land purchase, large equipment replacement, technology infrastructure, etc. Bond funds come from the district’s interest and sinking budget.




If the bond proposal is approved, can the money be used for any other purpose than specified?


The district can only use bond funds for the purposes described in the bond proposal. Should there be a cost savings from projects, the Board of Trustees will consult with its legal counsel to determine how any excess funds may be lawfully spent.




What is the financial impact of the bond proposal?


Based on current projections, the District would not need to increase the tax rate regardless of the outcome of this bond election.




How is it possible to fund a bond without increasing the tax rate?


More than $468 million of new properties, both commercial and residential, are expected to be added to the tax rolls this year allowing the Allen ISD Board to maintain the tax rate while adding a new bond proposal and paying down the principal on existing bonds.




How does the district use taxpayer and bond money?


Public school taxes involve two figures, which divide the school district budget into two “buckets.” The first bucket is the Maintenance and Operations budget (M&O), which funds daily costs and recurring or consumable expenditures such as teacher and staff salaries, supplies, fuel and utilities. About 82 percent of the district’s M&O budget goes to teacher and staff salaries. The second bucket is the Interest and Sinking budget (I&S), also known as Debt Service, and that is used to repay debt for longer-term capital improvements approved by voters through bond elections.

Proceeds from a bond issue can be used for the construction and renovation of facilities, the acquisition of land and the purchase of capital items such as equipment, technology and transportation. I&S funds cannot by law be used to pay M&O expenses, which means that voter-approved bonds cannot be used to increase teacher salaries or pay rising costs for utilities and services.




How long does it take to pay bonds off?


School districts can only sell bonds if authorization is received by voters. A bond is a debt instrument in which an investor loans money to the District. The proceeds from the bond are used to finance capital projects and other long-term items. The District repays the principal of the bonds, along with interest, over a period of time. Typically, Allen ISD sells bonds that mature after 25 years. Assets financed by the bonds that have a shorter asset life (such as turf and track), are sold with shorter maturities that align with their expected lifespan.




Are bond funds subject to the state's recapture?


No. There are two parts to our district tax rate: the maintenance and operations side that pays for the everyday operations of the district and the interest and sinking part that pays back district bonds. While the recapture “Robin Hood” system requires districts like Allen ISD to share M&O taxes, 100 percent of every dollar of bond revenue stays in Allen ISD.




Will taxes for voters over 65 go up?


According to state law, the dollar amount of school taxes imposed on the residence homestead of a person 65 years of age or older cannot be increased above the amount paid in the first year after the person turned 65, regardless of changes in tax rate or property value unless significant improvements are made to the home. If you are 65 or older, you may file a homestead application at any time, or contact your local appraisal district to see if you already have the appropriate exemption on file.




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. Bonds cannot be used for salaries or operating costs such as utility bills, supplies, building maintenance, fuel and insurance.





 

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