No Tax Rate Increase Anticipated with Bond 2021
Preliminary Bond Election Capacity Analysis/Summary of Assumptions
The following information supports the Hays CISD statement that the district does not anticipate a tax rate increase should voters approve all or a portion of the 2021 bond propositions. This analysis outlines the district’s projected bonding capacity for the May 1, 2021 bond election:
- Assumes Net Frozen TAV for fiscal year 2021 (“FY2020”) is $8,723,670,495
- Assumes that levy from frozen values is $4,035,000 and remains constant thereafter (this amount is not included in the TAV above)
- Assumes TAV Grows at $600,000,000 per year in 2021/22 and 2022/23 and remains constant thereafter
- Assumes a tax collection rate of 99%.
- Assumes an interest rate equal to approximately 75 bps (3/4 of 1%) over current market rate on bonds issued in August 2021 and interest rate equal to approximately 100 bps over current market rates for bonds issued in August 2022. If bonds were issued today, we would expect interest rate would be below 2.5%.
- Assumes bonds with a maximum amortization of 25 years. Assumes authorized bonds are sold in August 2021 and August 2022.
If the assumptions are met, the district does not anticipate the need for a tax rate increase to pay debt service on bonds issued for bond projects approved by voters as part of the 2021 bond. However, whenever the district issues bonds, additional property taxes must be levied and collected to pay debt service on the bonds, and Section 45.003, Texas Education Code, requires that the following statement appear on the ballot for all school district bond propositions: “THIS IS A PROPERTY TAX INCREASE.”