Written By: Principal Andy Jordan, Ed.S.
Anytime that a school is seeking to do a bond it means that it is going to borrow money and go into debt. Typically, debt is considered a negative thing and if we can stay out of debt that is what we want to do. New construction would be one area that a school district might go into to debt in order to build a new school.
According to James Fritts Essentials of Illinois School Finance, “building bonds are used to fund land, building, and equipment costs for new schools, as well as alterations, additions, and repairs. They require a referendum.”
According to Principal Andy Jordan Illinois elementary and high school districts can borrow or be indebted up to 6.9% of their EAV (equalized assessed valuation) and unit districts can borrow up to 13.8% of their EAV. For example if you were a unit district and your EAV was ten million dollars you could borrow up to $1.38 million dollars.
Most schools that are looking to do a major building project should plan ahead of time and slowly start building up their operation and maintenance fund (40) to increase the amount of money they will have and lesson the burden on the tax payers. If you wanted to go for a larger project than what your borrowing capacity is you could do that and that is where the building bonds come into play.
In order to get a building bond passed you need to put it before the voters and they need to approve it through a referendum. Highlighting some of the negatives of what would happen if they don’t approve it and also highlighting the positives with pictures of what will happen if they approve it would be your best route to go. Some school districts hire a firm to promote the information of the building bond referendum which is legal as long as they are not using school funds to support one side of the cause. Superintendents that go out into the community and present the referendum and listen to the community tend to see more success with passing a referendum.
Passing a bond is tough. I have been fortunate enough to pass a 50 cent increase of the Ed Fund through my experience and it is no easy task. If you have any questions feel free to reach out to me on twitter @principa_andy or by email at firstname.lastname@example.org