SPRINGFIELD — The district is asking for $168 million, but here is what taxpayers could be looking at if it passes.
“Proposition S” is a $168 million dollar bond proposal that would go towards 39 renovation or rebuilding projects across Springfield Public Schools.
The district expects the projects to be completed by 2022, but the bond could take about 20 years to pay back.
WHY THE DISTRICT IS ASKING FOR THE BOND
In Missouri, the state assists in every day costs for education – things like supplies, food, bus fuel, staff salaries, and lots of things in between.
However, when it comes to renovations and rebuilds, that is left up to local governments to take care of through a debt service levy.
SPS Superintendant Carol Embree explains how Springfield is struggling to make due.
“In our region Springfield Public Schools has the lowest debt service levy at $0.55 per $100 of assessed valuation. If you compare to the region, you’ll see that Nixa for instance, has approximatley $1.07,” Embree says.
A district that has a similar demographic to SPS is North Kansas City which carries a $1.29 debt service levy.
Proposition S would raise the SPS debt service levy by 18 cents, bringing it from $0.55 to $0.73.
So, to see how that would effect a taxpayer, let’s use a nice round number.
For a resident who owns a $100,000 in assets, you’ll pay an extra $2.85 a month, or $34.20 annually on top of what you already pay for property taxes.
For commercial properties — let’s say a property owner has $500,000 in assets. That will be about $288 dollars more in taxes per year.
We spoke with Financial Wealth Planner Stephen Evans, who says the only way for school districts to raise this kind of money is through these bond issues.
“It’s how we finance stuff like this. There is no other way for us to go out there and raise $168 Million. We could save for it, but that would take us forever,” Evans says.
That number — $168 Million — would go towards the 39 projects Springfield Public Schools has, but they also have to pay interest on that money.
“The interest rate, would likely be between 3.5% to 4% based on today’s market,” Embree says.
So how much will the bonds really cost when you include the principal ($168 million), plus the interest?
It’s tough to say, but here are some things to consider:
- Let’s say they get a 4% interest rate.
- 4% of $168 million… comes out to about $6.7 million in interest for the first year.
- As they pay back the principal ($168 million), the number they owe on it will shrink every year.
- As the principal ($168 million) shrinks, the interest rate of 4% will be a smaller number every year too.
- After 10 years, they can negotiate a smaller interest rate as well.
With all of these factors, it’s hard to nail it down to an exact number, but total costs on the bond will likely exceed $200 million in total.
What this means for taxpayer, we will continue to pay this bond until the bond is paid off, which could potentially be 20 years.
However, tax payers will never see an increase to the $0.73 debt service levy.
Embree says the money from Springfield residents will go far, even if they don’t have kids in the district.
“Having great public schools equates to a great community, and certainly the value of homes can be significantly impacted by a robust school system.”
Evans, who also owns several rental houses, echoed the effect better schools have on home values.
“If there is no demand for that school, people don’t want to live around that school. But, if there’s high demand, it’s going to cause people to want to move there, and when more people want to buy houses, values go up.”
Springfield Public Schools has a plan in place to improve their district as a whole, but it all comes down to what voters have to say in April.
The district needs 4/7ths of the vote to pass Proposition S, which comes out to 57.14%