The Tacoma School Board delivered Thursday night on a promise made to voters during the February bond campaign for new schools.
During the campaign, school district officials offered voters an incentive to cast their ballots in favor of the $500 million bond package, designed to finance 14 new and remodeled schools along with smaller projects throughout the district.
Voter approval of the bond would temporarily lower tax rates, district officials said. That’s because they promised to erase an estimated $70 million in tax collections still due from a six-year capital levy approved in 2010. They said they would instead finance two previously planned school construction projects – modernization of Washington-Hoyt Elementary School and a new Hunt Middle School – with money from the bonds. The bond package won approval from just over 70 percent of voters in February.
And Thursday night, the board approved a measure designed to accomplish its goal.
The board’s action will reduce collections on the capital levy in 2014, 2015 and 2016 by a total of $70 million – the estimated combined cost for Washington-Hoyt and Hunt. Instead of paying for the two projects with short-term capital levy dollars collected over six years, the school district will sell bonds with a 20-year payback period that will pay for those projects.
The net effect will mean reduced tax rates in the near term, although a gradual increase in rates over the life of the bond package. During the February campaign, district officials estimated the average annual cost of the entire bond package to be about 33 cents per $1,000 of assessed property value, or $58.24 per year for the average Tacoma homeowner, over 31 years. Fluctuations in property values over that time could alter the rate per $1,000.
In related money moves, the school board on Thursday also:
• Voted to redirect about $44 million of the $97 million the district expects to receive in state matching fund dollars. The $44 million will be used to pay for part of a 10-year technology plan. Passage of the February bond made the district eligible for the state match dollars.
• Voted to issue up to $100 million in bond anticipation notes, which are financial instruments issued in advance of a larger future bond sale. District Chief Financial Officer Ron Hack said that the short-term notes, which could have interest rates as low as 0.50 percent, will allow the school district to get started sooner on the list of construction projects.