Texas voters weigh $78.48 billion of bonds on May 2

Texas voters on Saturday will decide on $78.48 billion of general obligation bonds, including Dallas Independent School District's massive $6.24 billion proposal as well as measures in three cities on dropping Dallas Area Rapid Transit service and funding.

Cities, counties, school districts, and other issuers in the Lone Star State are allowed to head to the ballot box for bond authorizations twice a year: in May and November. While the amount of debt requested this May is the highest for that month, it is lower than a record nearly $93 billion in the November 2025 election when voters approved almost 90% of the debt, according to Texas Bond Review Board data. In May 2025, voters rejected just $3.746 billion or 9.67% of the $38.64 billion of bonds.

As of Aug. 30, Texas local governments had $368.3 billion of outstanding debt, 69.7% of which was backed by a GO pledge with school districts accounting for the largest portion, according to a Bond Review Board annual report.

In this week's election, municipal utility and other development-related districts are asking for $65 billion of debt. Their financing structure places the burden of paying for necessary infrastructure such as water, sewers, and roads on the property owners within the districts, without taxing people outside the districts.

Population growth, particularly in suburban communities, is driving bond proposals, according to Ajay Thomas, head of public finance at FHN Financial. 

"It is not surprising to me that translates to increased issuance by MUDs and (public improvement districts) in the state, as well as increased infrastructure spending from municipalities and counties," he said in an email. "It feels like we will see a customary high percentage approval rate for the bond package requests overall."  

MUDs and other water districts, which are created by the Texas Commission on Environmental Quality, a county commissioner's court, or the legislature, have an enormous stockpile of debt authorization.

Some of these districts are launched with "eligible voters" authorizing billions of dollars of bonds backed by property taxes. In the early stages of a project, those voters typically include only the developer. In the May 2025 election, $20.146 billion of such district debt was passed. 

This May, ballot measures from several MUDs are in the billions of dollars. Denton County MUD 7's four-part proposition has $3.313 billion of bonds for water, sewers, drainage, and roads, and nearly $5 billion in debt refunding authorization.

Public schools have 109 measures, totaling $11.57 billion on ballots. 

A four-part proposition for Dallas ISD, Texas' second-largest public school system, would allocate most of the $6.24 billion of bonds – $5.928 billion – for school construction and renovations, as well as security improvements, transportation, and energy efficiency. Another $144 million of bonds would finance technology upgrades and $26.25 million would pay for pool repairs and renovations.

The district is also seeking $143.34 million in authorization to refund as GOs outstanding debt backed by its maintenance and operations fund, according to Eduardo Ramos, Dallas ISD's deputy superintendent of business services.

"Moving it to the interest & sinking fund is a structural change that Texas law requires voters to authorize," he said in an email. "The refunding produces taxpayer savings, and operationally it frees up M&O dollars that currently go toward debt service and redirects an estimated $100 million to instructional student programs and other district needs."

In March, Fitch Ratings downgraded the district's AA-plus underlying rating to AA, citing elevated long-term liabilities that could be further exacerbated if voters approve all or some of the bonds on the May ballot.

Earlier this year, Dallas ISD sold $739.29 million of unlimited tax school building bonds and $277 million of multi-modal bonds, tapping the remaining authorization from $3.47 billion of debt voters approved in 2020. 

Arlington ISD is seeking $501 million of bonds with three propositions.

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In the May 2025 election, voters approved 89.5% of the $12.96 billion of school debt on ballots around the state. Bonds issued by school districts carry triple-A-ratings through the Texas Permanent School Fund's bond guarantee program, which had a projected available capacity of $35.85 billion as of Feb. 28. 

Five Texas cities are seeking a total of $1.685 billion of debt, with Fort Worth's six-part, $845 million proposal the largest. 

Most of Fort Worth's proposed bonds would finance streets and mobility infrastructure with other propositions allocating debt for parks and recreation, public libraries, public safety facilities, and animal care. The city's first affordable housing bond proposition totals $10 million.

Three of Dallas Area Rapid Transit's 13 member cities have ballot questions on withdrawing from the agency, which at one time faced a total of six potential city defections largely driven by an inequity between their sales tax contributions and transit services received.

Cities with withdrawal elections – Addison, Highland Park, and University Park – historically accounted for 3.66% of DART's sales tax revenue, which is expected to total $937.5 million in fiscal 2026. Any member that drops out of DART would still be on the hook for its share of the agency's outstanding debt.

In Round Rock north of Austin, voters are weighing a charter amendment backed by the city's firefighters' union to boost fire department staffing and response times. If passed, the city said it would need to add 207 firefighter positions over the next eight years.  

"The total cost for complying with the petition is $228.2 million — $48.7 million of one-time capital costs for three additional fire stations and $179.5 million in cumulative annual operating costs for staffing, operations, and maintenance," according to Round Rock's website.

Dallas is still dealing with the fallout from 2024's voter passage of a charter amendment placed on the ballot via a signature campaign. It requires the city to appropriate at least 50% of annual revenue increases over the previous year to fund public safety pensions, boost police starting pay, and maintain a police force of at least 4,000 full-time sworn police officers.

The measure led Moody's Ratings to revise its outlook on Dallas' A1 rating to negative from stable, while Texas Attorney General Ken Paxton sued the city in February over non-compliance with the charter amendment.