From Zeeland to Novi, about two-dozen schools are asking voters to approve bonds in the Nov. 4 election.
Like operating millages and sinking funds, school bonds rely on local property taxes (also known as “millages”).
Bonds differ from school operating millages in a few key ways, including:
- Bond millages are not limited to commercial properties and secondary residences. Most homeowners also have to pay taxes from bonds.
- The money from a bond cannot directly go to teacher salaries, utility payments, and other general costs. Districts have to use it for “capital projects.”
Examples of capital projects include constructing new buildings or renovating and maintaining old ones. Schools could also use these methods to buy new security equipment, classroom technology, or school buses.
A bond is basically a loan that gives districts all the money needed for large projects at once, allowing them to start and finish those projects faster. A millage is collected to pay back the loan over time.
Unlike sinking funds, schools cannot use bonds for smaller maintenance needs.
School bonds on your ballot give you a chance to decide if the district’s proposed projects are worth the tax on the community.
That ends up being an opportunity for school leaders and community members to work out what a district’s priorities should be, said David Arsen. He’s a professor emeritus in education policy at Michigan State University who has studied the state’s school finance system.
While bonds can’t be used to directly pay salaries and electricity bills, Arsen said some districts end up having to use operating budget money for the sorts of things that bonds can pay for.
“They're taking money that could be used to reduce class size, that could be used to increase teacher salaries,” he said. “So in those situations, passing a facility bond could help. It's not a direct funding of those sorts of things, but it reduces the amount the district has to otherwise spend on those things too.”
Questions and answers to help you decide which bubble to fill in for school bond requests on your ballot:
Click on a question to go directly to the answer.
Where can I learn about what a bond will be used for?
How can I make sure a district uses funds appropriately?
Can bonds be paid with existing taxes?
Is it a big deal when bond proposals fail?
Where can I learn about what a bond will be used for?
Districts often have informational web pages about these proposals which include project details, timelines, budgets, pay off schedules and more. Some will even include images of the exact areas that need upgrades, replacements or repairs.
“You don't have to take hours, you know, ten minutes of searching on the website, you get a pretty good idea of what's being planned,” MSU professor emeritus David Arsen said. “And I think that's .. a good opportunity for citizens to get involved with things that matter in their communities.”
Arsen said there are typically a lot of opportunities for communities to get engaged through school board meetings and informational town halls as well as social media posts and videos.
“This is one area where we have local control and the proposals actually get a lot of vetting,” he said. “These don't get on the ballot without a lot of discussion in local communities … about what we need, what it should look like, where it should be.”
Local news outlets are also a great place to learn about these proposals, Arsen said.
How can I make sure a district uses funds appropriately?
The vetting process isn’t limited to community preferences, Arsen said. For bonds, that includes an application to the state treasurer that includes cost analyses, detailed construction plans, estimates of how many kids will use the new infrastructure and more.
In order to get approved, schools must show the state treasury department evidence that “the cost per square foot … will be reasonable in light of economic conditions” in the district’s area.
And the districts have to show that they will be able to pay the loan off in time. Districts also often detail efforts to find cheaper or more effective alternatives in information shared with the community.
After a bond is completed, there is an audit of how the funds are used to ensure that money was used in a way that fulfills the proposal’s promises and follows state law. You can find those audits on the state treasury website to review how funds were handled by your district in the past.
Can bonds be paid with existing taxes?
Yes and no. Districts can’t use their operating millage on a bond.
But, districts have been relying on bonds to handle facility needs for years. So, in some cases they can just ask voters to renew or extend an existing millage that was used to pay off a past bond.
Sometimes districts are asking for a new millage or an increase to an existing one.
Novi Community Schools in Oakland County, for example, is asking for a $425 million bond with a new millage.
But property owners in the district won’t necessarily be paying a higher tax rate because of this bond. The district is already paying off a bond that voters approved in 2019, which is currently charging $6.75 per $1,000 in taxable value.
That tax rate is expected to go down next year as the district makes progress toward paying off the old bond. So the new proposed bond can fill the gap, likely maintaining the 6.75 mill rate until 2038.
Novi district leaders say the new loan is needed because “supply chain” issues during the pandemic made it difficult for all goals of the old bond to be met.
New money from the proposal on the November ballot will be used to make significant updates to Novi High School, including a new “academic innovation hub,” upgraded athletic facilities, buses and other capital projects across the district.
Is it a big deal when bond or sinking fund proposals fail?
Bonds are failing more often in Michigan, according to a Michigan Public analysis, with half being rejected by voters in recent years.
“The fact that a bond fails is not a disaster. It means that there needs to be more discussion,” Arsen said. “Typically there'll be a reassessment … to try to get an idea of how can we focus this in a way that will win community approval and have a clearer idea of what the community needs are. And sometimes that means scaling back a project.”
Watervliet Public Schools in Berrien County is a good example of that process. In the May election, the district asked for a $13.5 million bond to make its school buildings more secure, improve classroom accessibility, expand a cafeteria and add classrooms for "hands-on learning" at its elementary schools.
Voters approved their proposal to extend the existing bond millage at the same rate so that the money which isn’t being used to pay off the old bond can start going to a new one.
The district expects to pay off both bonds by 2050, with a final combined rate under 3 mills.
Voters rejected a version of this proposal in 2023. The new version asked for less money "based on feedback provided by the community."
But it doesn’t always work out so cleanly.
In the same May election, Mason Consolidated Schools in Monroe County came to voters for a $16 million bond with a new millage of $2.69 per $1,000 in taxable value.
Voters rejected a previous attempt to pass a millage that was more than twice as large in 2020. After that failure, the district held listening sessions, sent informational mailers and did a survey.
That survey laid out four possible bond requests and asked over 500 participants for their feedback on each. All four proposals were much smaller than the version that failed and focused on different priorities.
A majority of the survey’s participants said they would vote to accept the second smallest proposal, which would use the money “solely” to address “critical facility needs and maintenance upgrades.” This included upgrading water and electrical systems that have "caused school closures in the past."
Nearly 90% of the people surveyed also said they believed the district needed to improve its facilities. Yet, at the ballot box, the bond failed with a nearly two-to-one vote.
Superintendent Kelly Tuller told Michigan Public there’s no risk that that district won’t be able to keep its buildings standing.
“But we will have times that I think … school could be shut down” due to electrical or sanitation issues, Tuller said. And the "disruption" to education could happen “more and more” as systems age.
Tuller said she’s not sure when the district may try to put forward another bond request.
“I continued to tell my team … that I would be okay with the outcome because we would go to work either way. We go to work on projects or we go to work on what's next,” she said. “That's where we're at right now, is what's next. We have to go back to our community.”
