By A $4.4 billion bond proposal will be on the ballot this November, intended to support health, safety, and college or career readiness initiatives in Houston ISD schools. Notably, the bond will not result in a property tax increase for residents.
The district’s bond package would be the largest in Texas history, however, the district asserts the proposal can be implemented without raising taxes. During an interview with FOX26 Superintendent Mike Miles confirmed that the district has also secured multiple independent financial forecasts which confirm the District can borrow $4.4 billion without having to raise taxes on District taxpayers.
“We’ve had four different firms look at and analyze this proposal and each one of them says; we don’t have to increase taxes in this bond,” Miles said.
The firms include Raymond James, Estrada Hinojosa Investment Bankers, and RBC.
However, the ballot language may tell a different story, as required by law. Due to Texas House Bill 3, passed in 2019, the bond must be labeled a tax increase, even if it wouldn’t actually raise the tax rate.
This law mandates that school districts include the statement “This is a property tax increase” on all bond election ballots, even if the tax rate itself won’t rise. The reasoning behind this is that taxpayers might pay more in the future if their property values increase, despite the tax rate remaining the same. This reflects the potential for higher tax payments tied to growing property values, not an immediate tax rate hike.
HISD Received Highest Bond Rating
There are a range of financial and management factors that impact a potential bond, including forecasting future district revenues and expenses, projected enrollment, and how this proposed bond plan could fit into longer-term financial planning.
According to its 2024-25 budget presentation, the district’s existing debt from previous bonds will significantly decline by 2043 if no new debt is added. Without additional debt, HISD would eventually be required to lower its I&S tax rate. However, if the bond passed, the district would instead be able to take on new debt and continue to maintain its current I&S tax rate.
In addition, HISD has verified the District’s bond rating with the Moody’s rating agency. Moody’s confirmed HISD’s AAA (Triple A) bond rating – their highest rating. This means HISD can borrow at a reduced cost – a lower interest rate.
The District can also work with the Texas Permanent School Fund to act as a guarantor for HISD’s bond issues for as long as the District maintains a Triple A rating, which ensures the District can issue bonds at a lower interest rate.
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