Growing Education: What’s the Difference Between a Levy and a Bond?

Money for school programs and buildings doesn’t grow on trees. Much like a seed, it starts as an investment, which grows into the structures and services communities rely on. These seeds of funding beyond the money that the state provides are referred to as local levies and bonds. So, what is the difference between a levy and a bond? A simple way to remember the difference is that levies are for learning, and bonds are for building. Bonds only pay for capital projects such as new construction or modernization of older buildings. Much like an old-growth forest, bonds financing stretches over long periods of time – usually twenty years. Bonds are sold to investors who are repaid with interest over time from property tax collections. A levy is a property tax that collects an approved dollar amount over a much shorter two to six-year span and comes in several garden varieties. Levies allow districts to provide more services than the state’s basic education funding allows. Levies grow things like teachers for smaller classes, counselors or nurses, student activities and sports, or pre-school programs. Levies may also sprout improvements such as technology, building security, and minor renovation projects or pay for new buses. Districts can also ask voters to approve a replacement levy – meaning they are renewing an expiring levy so the same services can continue to thrive. Another key difference between bonds and levies is how they are approved. While levies only require a simple majority to pass, bonds require a supermajority. Whether it is a levy or a bond, your district will outline exactly what the ballot measure would pay for and what the estimated tax impact would be, if approved. You can obtain this information from your local school district office. With local support your school district can provide the education kids need to grow and thrive.

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