Relating to the eligibility of certain school districts with outstanding debt for the guarantee of a bond by the permanent school fund.
Impact
The new criteria for bond guarantees will primarily impact districts with existing debt. By limiting the amount of debt that can be guaranteed, SB1382 aims to promote more prudent fiscal management among school districts. School districts that currently have high levels of outstanding debt or have seen significant decreases in enrollment could be disproportionately affected, potentially limiting their ability to access essential funding through bonds.
Summary
SB1382 seeks to modify the eligibility requirements for certain school districts in Texas to receive bond guarantees from the permanent school fund. The bill stipulates that the Texas commissioner may approve the guarantee of bonds issued by a school district only if the ratio of the district's total outstanding bonds to its enrollment does not exceed $10,000 per student. This legislative change is aimed at ensuring that school districts do not over-leverage themselves with debt relative to the number of students they serve.
Conclusion
The bill, which takes effect on September 1, 2025, is positioned as a safeguard for the state's education funding system. It seeks to establish a more responsible framework for bond issuance among school districts, ensuring that debt levels remain manageable relative to enrollment figures. Overall, SB1382 represents a significant shift in the way that Texas manages the financial health of its school districts through bond guarantees.
Contention
Opponents of the bill may raise concerns about its restrictive nature, as it might hinder the financial capabilities of school districts that legitimately require additional funding to support educational needs. Critics might argue that the bill does not consider variations in local economic conditions or the unique challenges faced by different districts. Proponents, however, would likely counter that the bill is designed to protect the financial integrity of the state’s education funding by preventing excessive borrowing that could jeopardize financial stability.
Relating to a local optional teacher designation system implemented by a school district, a security officer employed by a school district, the basic allotment and guaranteed yield under the public school finance system, and certain allotments under the Foundation School Program; making an appropriation.
Relating to the elimination of certain property taxes for school district maintenance and operations and the provision of public education funding by increasing the rates of certain state taxes.
Relating to the basic allotment and guaranteed yield under the public school finance system, certain allotments under the Foundation School Program, determination of a school district's assets to liabilities ratio under the public school financial accountability rating system, and credit for prepayment of the amount required to be paid by a school district for the purchase of attendance credit under the public school finance system.
Relating to a local optional teacher designation system implemented by a school district, the basic allotment and guaranteed yield under the public school finance system, and certain allotments under the Foundation School Program; making an appropriation.
Relating to requiring an open-enrollment charter school to conduct an efficiency audit before applying for designation as a charter district or for the guarantee of certain bonds.