Private companies gain millions by manipulating Texas school bond elections, study warns

Private companies are exploiting Texas school bond elections to the tune of millions of dollars, a new report reveals. 

The Texas Public Policy Foundation (TPPF) examined numerous local school bond elections and found a disturbing pattern: Private companies are funding pro-bond campaigns and then receiving millions of dollars in contracts with the school district.

“Numerous groups, including consultants, architectural firms, engineering firms, construction companies and nonprofits, have hijacked Texas’ school district capital bond process,” wrote Judge Shepard, a policy analyst for the foundation.

“These groups of profiteers, operating like cartels, have a vested interest in ensuring not only that bonds pass but that they keep passing, more frequently and in larger amounts.”

School bonds are loans school districts acquire, usually to fund large projects such as building or renovating campuses or purchasing land or equipment.

However, local voters get to approve or deny a bond since they are the ones who will be repaying the loan, plus interest.

Like any other election, school districts are legally forbidden from electioneering in favor of school bonds. But political action committees, or PACs, face no such restrictions.

When analyzing numerous 2023 school bond elections in Texas, TPPF found construction-related groups funded pro-bond PACs and then received millions in contracts after the bonds passed.

For example, in Conroe Independent School District, seven construction-related and consulting firms donated more than $27,000 to the bond campaign and later received more than $26 million from the district for work on bond-approved projects.

In Northwest Independent School District, five firms donated more than $24,000 – almost half of the PAC’s total budget. The same firms received nearly $30 million in contracts.

A similar pattern occurred in Denton Independent School District, where a single construction company gave $15,000 to the bond campaign and received a staggering $150 million contract after the bond passed.

And it is not just private companies.

The Texas Association of School Boards coaches school boards on how to promote bond proposals while “downplaying the reality that bonds are funded through increased property taxes,” the foundation added.

To remedy the situation, the foundation suggests several solutions: 

• Add language to local statutes forbidding entities from receiving a government contract if they were involved in pre-bond planning or similar services. Such laws already exist at the state level. 
• Raise the approval threshold from a simple majority to 60% of voters. 
• If a bond fails, require districts to wait one or two years before resubmitting the proposal to prevent voter fatigue. 

Currently, Texas localities carry more than $236 billion in school bond debt. Without significant reform, the situation will only worsen.

“Texas should be putting taxpayers first and can do this in simple, quick ways,” Shepard concluded. “By removing certain groups’ vested interests in ensuring that bond propositions pass and continue to pass, greater guardrails on school district bonds can lead to real savings at the local level.”