How is a capital bond different from a capital projects levy?
While a levy authorizes the school district to collect a set amount of money through taxes for a set number of years, a construction, or capital, bond provides a way for the school district to borrow money for capital improvements. Bonds are typically used for much larger projects, such as the building or modernization of a school. When voters approve a bond, they are essentially giving the school district the authority to borrow money through the municipal bond market and then repay that money to investors, plus interest, using money collected from property taxes. The payments to the investors, called debt service, are paid for a period of between 12 and 20 years, depending upon the terms of the bond agreement. Also, while approving a levy takes a simple majority of voters, it takes a supermajority of 60 percent of voters to approve a construction bond ballot measure.
What does the difference mean to taxpayers?
The bond issue spreads the cost of the project over a greater number of years than a capital levy. Building a new elementary school can cost more than $30 million, for example, which would have a large impact on property taxes if it were collected over the six-year period of a capital levy. Instead, with the passage of a capital bond, that cost can be spread over 20 years and will keep property taxes much lower.
When was the last capital bond passed and how was it used?
Voters in the Mukilteo School approved construction bond measures in February 2014 and 2020. The most recent proposal asked for the authority to borrow $240 million, which is being used to provide space for students, provide safety and security improvements, improve technology, modernize facilities, and install energy-efficiency projects. You can get more information about the progress of those projects on our capital bond webpage.