Texas voters will decide more than $10 billion of local bond measures

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With a record voter turnout already assured, local governments and school districts across Texas await the verdict on $10.2 billion of bond proposals Tuesday.

This is the Lone Star State's only bond election in 2020 after the traditional election in May was canceled because of the COVID-19 pandemic.

Across Texas, the number of early votes cast exceeds the total turnout in the 2016 election.

Dallas ISD superintendent Michael Hinojosa said he welcomed a large turnout for the district’s $3.7 billion proposal, not only the district’s largest but the largest in Texas history. Nationally, the proposal ranks fifth in size behind bond requests in California and New York.

The previous record for a Texas bond issue was set in 2019 with a $3.5 billion proposal from the Metro Transit Authority of Harris County that voters approved.

Dallas ISD officials said they are asking voters for long-term bond authority that will not require an increase in property taxes.

“We are in a time of uncertainty, but what we know is that we need these schools to be modernized,” Hinojosa said in a town hall on May 13. “The cost of interest rates being so low, here’s a great opportunity to get authorization. And we can adjust going forward.”

The bonds, if approved, would be issued over a decade bearing 30-year maturities, officials said.

Chief Financial Officer Dwayne Thompson told the town hall that the district was keeping affordability in mind, projecting conservative property value growth and knowing that interest rates would affect issuance.

“We may have to revise our sales structure, as far as the dollar amount, but we wouldn’t propose anything to the board that would put us over the proposed tax rate,” Thompson said.

Another urban school district, San Antonio ISD is also seeking a record bond proposal of $1.3 billion at a time when the Alamo City’s tourism industry is largely shut down because of the COVID-19 pandemic.

Hector Matos, managing director at Raymond James in San Antonio, said the large bond issues are based on careful study not only of what the district needs but how receptive the district will be to a particular proposal.

“When it comes to school elections, the size of the bond election is determined by a process where you wouldn’t risk putting that number on the ballot unless you had a pretty good sense that it would pass,” said Matos, whose career included years in school districts, including San Antonio ISD.

“I doubt that Michael Hinojosa in Dallas ISD is taking this ballot without having done all the due diligence. Is it a sticker shock? Yes. But do you know how much a high school costs in this state? It’s close to $200 million. When you talk about a district like Dallas, $3 billion is not that much.”

Northwest ISD, which neighbors the San Antonio ISD, is also asking voters for nearly $986.6 million of bond authority, the third-largest request statewide. The proposals will be split into four under a new Texas law allowing voters to choose propositions and will come with a separate "Voter-Approval Tax Rate Election" that, if approved by NISD voters, will allow the district to access 13 additional cents on the maintenance and operations portion of the tax rate.

In the Houston area, the Lamar Consolidated ISD is seeking approval of $792.5 million of bonds in a four-part proposal. The bonds would fund repairs, technology upgrades, facility improvements and new projects including the district’s second football stadium, a new high school, a new junior high school and three elementary schools.

Missing from this year’s ballot will be bonds for the state’s largest district, Houston ISD, which had planned to call for a vote before a raid of the district’s offices in a financial investigation by the Federal Bureau of Investigation and the Internal Revenue Service.

Federal investigators say Southwest Wholesale LLC, which contracts with HISD for landscaping, overbilled the district hundreds of thousands of dollars annually from 2013 to February 2020, when the FBI raided the district's administration building and then-HISD Chief Operating Officer Brian Busby's home.

In far West Texas, El Paso ISD is seeking $242 million of bond authority for security upgrades, new air conditioners and LED lighting, and improved athletic facilities.

In 2016, the district’s voters approved a record $668.7 million bond proposal with about 55% in favor.

"Despite the significant investment, the consensus was that the [2016] bond, although large in value, only addressed half of the needs" EPISD chief quality officer Alan Wiernicki told the district’s board before the ballot measure was approved.

While most of the bond proposals come from school districts, the City of Austin is seeking $460 million of bond authority for traditional city projects such as sidewalks. But voters in the state capital are also considering Proposition A, $7.1 billion for Project Connect, a rail line and joint project of the city and the Capital Metro transit authority. About $3.85 billion would come from local property taxes.

While $7.1 billion is the total cost for Project Connect, only 20% of that funding would come from the ballot initiative's tax hike and 45% expected from the Federal Transit Authority Capital Investment Grants program.

Approval of Proposition A would dedicate 8.75 cents of the city’s property tax rate revenue to the Austin Transit Partnership to fund Project Connect. If approved by voters, the Project Connect portion of the City’s property tax rate would become part of the city’s property tax rate each year.

Austin failed to pass light rail investment measures in 2000 and 2014, and supporters don’t know how the pandemic, the presidential ballot and a record turnout will affect the outcome.

Some school districts that called off bond elections in May are sitting out the November vote.

“Under normal circumstances I would be able to make a compelling case for calling a November bond election,” Huntsville Independent School District superintendent Scott Sheppard told his board about a proposed $92 million bond in September. “It has been way too long since we have addressed our facility needs, but there’s no denying that we are not under normal circumstances. By holding off on calling an election, we will have opportunities for a larger outreach to the community.”

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