Solutions & Impacts
- Proposed $245 million bond
- This money cannot be used for salaries or supplies
- $16.80 more per year on a $300,000 home
- Taxes for bond payments go down within a few years
Zions Bank has calculated the average homeowner will pay $16.80 more per year than they currently pay for bond payments. Within a few years, taxes for the proposed bond will go down and even dip below current levels. Zions Bank is advising us on bond financing and has provided these calculations.
In this graph, dark gray represents the old bond debt. As you can see that debt is decreasing rapidly. Because we are almost done paying off old bond debt, taxpayers will only see a tax increase for the first few years of the proposed bond. This is represented in light gray on the chart. Then taxes to pay off debt are expected to gradually go down.
So why do we bond?
Bonding is the cheapest option with the lowest interest rates available to taxpayers for financing new school construction. However it is not the only option.
- Many people have asked why we don’t use impact fees. Impact fees would burden taxpayers the least but they can’t be collected by school districts in Utah.
- Bonding is the second best option because it offers the lowest interest rates. It is the best school financing choice available to taxpayers.
- Traditional funding has higher interest rates than bonding. That means your taxes would have to go up to pay for the higher rates. Traditional funding is more costly for taxpayers because taxes go up but do not come back down as bond debt is paid off.
- Pay-as-you-go has the highest cost and is the most expensive for taxpayers, because construction inflation costs go up each year. We can use this option as money becomes available but other maintenance and upkeep projects on current buildings are delayed to invest in new construction. With pay-as-you-go, we will not be able to build schools fast enough to keep up with growth.