Two rural ISDs in Texas have $200 million in combined debt obligations on ballot for less than 750 students

(The Center Square) – Many small rural Independent School District residents in Utopia and Brackett say $200 million in combined bond obligations on the Nov. 7 ballot is unsustainable and taxpayers can’t afford it. The bond amounts also “don’t make sense” for less than 750 enrolled students, the majority of whom are economically disadvantaged, critics say.

There are at least 86 ISD bonds on the ballot Tuesday across Texas. The largest five total nearly $17 billion (principal only) or nearly $25 billion (total outstanding debt obligations) for roughly 186,000 students.

Utopia ISD and Brackettville ISD bond propositions are similar to the other 186 on ballots statewide. Their “notice of bond election[s]” state that if the bonds pass, districts would be “authorized to levy, impose and pledge, and cause to be assessed and collected, annual ad valorem taxes on all taxable property in the district sufficient, without limit as to rate or amount, to pay the principal of and interest on the bonds, and the costs of any credit agreements (including credit agreements executed or authorized in anticipation of, in relation to, or in connection with the bonds).”

The ballot language asks voters to approve or reject “the levy and imposition of taxes sufficient to pay the principal of and interest on the bonds and the costs of any credit agreements. This is a property tax increase.”

Utopia ISD and Brackett ISD have among the smallest number of enrolled students in the 2021-2022 school year – 212 and 531, respectively.

Utopia ISD’s bond proposition is $58 million (principal only). With an estimated interest of 5.5% over at least 30 years, taxpayers would owe nearly as much in interest – over $53 million. Combined, taxpayers would owe an estimated debt obligation of $111 million for roughly 200 students.

Utopia ISD students live in the rural counties of Bandera, Medina, Real, and Uvalde; 42.5% are economically disadvantaged.

The district claims the bond is needed for “safety and security,” to create a CTE (career training & education) facility and make structural building improvements. A district flyer states that bond will have “zero tax impact” on residents ages 65 and older and the disabled. It published a chart showing estimated tax amounts projected to go down but doesn’t state the reason is due to newly enacted legislative property tax reform.

Sydney Killough, a Utopia resident and retired teacher, who’s working with others to oppose the bond, says $100 million in new debt funded by property taxes “will increase rent for a lot of people in town who can barely afford to live.”

She told The Center Square: “Our schools are having trouble finding instructors in rural areas because they can’t afford to pay them. There is a huge discrepancy between what it will actually cost to build the buildings and what they are asking for. In this area, there are schools being built for half the cost.”

More troubling, she says, is there’s no need to build new buildings in the first place. “Our enrollment has stayed the same since the 1970s and is actually down. Currently, we have 203 students enrolled in our schools; 35 are bused in from other places so we can operate in the black.”

“There are no jobs here. Living in Utopia is too far to commute” to areas where there are jobs, she says. Most moving to Utopia “buying land here are retired.

“There are no factories, no jobs, no subdivisions, the number of school age children isn’t increasing. There’s nothing to indicate we’d need to double the size of the school. But there’s every indication that residents can’t afford $100 million in generational debt.”

She also pointed out that students’ test scores “are significantly down. We will not be B-rated this year,” she said, adding that “tax dollars would be better spent on teachers and education, not new buildings we can’t fill.”

In Kinney County, Brackett ISD proposed a $49 million bond. The 30-year bond at 5% interest will cost taxpayers almost as much as the principal, roughly $44 million, according to the district.

Meaning taxpayers will owe over $93 million for slightly more than 500 students. Nearly 62% are economically disadvantaged; 74% are Hispanic.

ISD board members said at a recent school board meeting the bond would be lowered to roughly $23 million in response to push back from some residents. But the ballot language hasn’t changed, specifically stating “not to exceed $49 million.”

Rhonda Marquardt, a retired Brackett ISD teacher and Dave Ramsey Financial Solutions coach, who opposes the bond, told The Center Square, “voting for this is debt bondage. It’s taking us from freedom to paying a debt that we cannot afford. Our small businesses and ranchers cannot afford this.”

The district’s enrollment is also less than it was when she retired in 2012. Plans to expand building construction, she says, “have nothing to do with improving learning.”

Proponents argue passing the bond is necessary for students’ “safety and security.” But Marquardt says mandating “generational debt is never good for children. After these students graduate high school, they’ll be responsible for paying the bond debt for decades. But they won’t, because they won’t be able to afford to live here.”