Mike Norman

February 20, 2014

Arlington school bonds can withstand opposition

Anti-debt argument can be expected but doesn’t hold water.

Arlington school board members must have known opposition would come before they voted last week to put a $663.1 million bond proposition on the May 10 ballot.

Voters should know it, too.

Expect to hear opposition based on the simplistic assertion that local, state and federal governments already owe too much money and should not be taking on any more debt — for anything whatsoever.

That line of argument became popular last year, pushed by an Austin-based political action committee called Accountability First. The PAC is funded primarily by nine successful businessmen.

The group financed opposition to several tax rate and bond elections across Texas last year, including the Fort Worth school district’s $490 million bond package.

In the end, the Fort Worth school bonds passed handily.

But the PAC has reorganized and refocused its efforts this year. It’s helping to finance campaigns in opposition to several legislative incumbents in the March 4 primary elections.

That includes contributions to Tony Tinderholt, who aims to unseat four-term Texas House incumbent Diane Patrick of Arlington. That means Arlington is on the Accountability First radar, and a $663.1 million bond package shows up brightly.

So how much substance is there to a too-much-debt-already argument in Arlinton ISD?

The district has been a miser when it comes to bond elections. Its most recent, a $197.5 million package, was in 2009. Before that, the last time was a $261.5 million proposal in 1999.

Some other districts comparable in size to Arlington — the district has more than 64,000 students and is the state’s ninth-largest — called three or as many as five bond elections in that same period.

Still, what can Arlington ISD afford?

Bonds for some projects are paid off in as little as five years, but investments in schools and other facilities usually are on the books for at least a 25-year payout.

Arlington ISD currently owes $445 million from previous debt issues. That’s around $7,000 per student. The state comptroller’s website ranks that third-lowest among 10 comparable districts.

The highest are North East ISD in San Antonio at $19,010 per student and Katy ISD near Houston at $18,036 per student. Lowest is Aldine ISD at $6,362.

Still, how much more can Arlington pay?

The Tarrant Appraisal District shows that net taxable values in Arlington grew from $16.5 billion in 2001 to $20.6 billion last year. That’s almost 25 percent. Last year’s values were up almost 4 percent from the previous year.

So during the period in which Arlington has been taking on comparably little debt, its ability to pay has been increasing sharply.

Ultimately, the individual taxpayer decides whether to pay for the new bond package. That means looking at how much that individual’s taxes might go up if the $663.1 million package is approved.

To conservatively estimate that figure, district financial experts slash projected growth in the tax base in half, and within a few years drop it to zero.

The experts say under that scenario the district’s tax rate for debt service could go up as much as 15 cents from 2016 through 2020. That’s about $126 per year on a $100,000 home.

Not excessive, as bond packages go. The no-more-debt argument doesn’t have much going for it.

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