Bonds and millages are different types of financing that school districts request from taxpayers by election. Residents pay through property taxes. Here are the differences:
Bonds are usually used for construction and renovation. Bonds can be thought of as loans that school districts request to finance major construction projects. Taxpayers repay them over a period of time. When the bonds are completely repaid, property taxes decrease.
Money from millages is used for normal operating costs and academic needs such as teacher salaries, and curriculum resources. There are typically fewer restrictions on the ways districts can spend millage revenue. When school districts request millage money, they typically ask for an operating millage lasting a year or two.
Unfortunately, the way bond money is viewed by many school boards and school district administrations is not necessarily in the public’s best interest of the public.
Rather than first determining a need for a particular project, and then requesting money from taxpayers to finance the project, a curious situation arises. As a bond from a construction project is set to expire, school board members and administrators begin to ask, “what project should we do next?”
Before the existing bond expires, they do some planning for their dream project. In order to avoid a future fight over a tax increase, school districts then request new bond money from taxpayers while informing them that the new bond will not increase their taxes.
The reason is that the new bond will issue at the same time the old bond expires, and the tax burden of the new bond magically matches that of the expiring bond. Hence, more revenue for the schools but no perceived tax hike for the taxpayer.
This is the situation all over Ottawa County. School board officials in all districts are keenly aware when their bonds are set to expire and when they should ask for additional money. The problem is that once taxes reduce, taxpayers don’t like to vote in increases. After Saugatuck School District voters saw a tax decrease, it took the school district three elections to get approval for a new bond.
In the case of Grand Haven Area Public Schools, district leaders don’t plan to let the existing bonds expire, but rather plan to refinance them with the new bond for an additional 20 years.
Currently GHAPS holds four bonds.
$9,390,000 issued on 12/4/2013 - end date 2025
$19,325,000 issued 6/19/2014 - end date 2025
$7,735,000 issued on 12/28/2017 - end date 2025
$10,780,00 issued on 6/5/2020 - end date 2024
Currently the highest GHAPS bond is $19 million, and this time district leaders are asking for a gargantuan $155 million!! If voters reject the bond proposal, property taxes will decrease.