Ed bonds would raise taxes, but it’s hard to say how much
Why care? "We're anticipating there will be some impact to the tax rate," county Finance Director
What's coming?
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What are we talking about? General obligation bonds: Municipal bonds, long-term loans, 20 years in this case, backed by the credit and taxing power of the issuing government.
Why? So cities and counties can pay for expensive projects without using all their savings, or raising taxes a lot all at once, or cutting back on services.
Few middle-class families can put
So people buy on credit and pay interest. That way, they don't have to wait 20 years for a place to live, and the cost is broken up into payments that fit into their budgets -- when things go well.
Do they always lead to tax increases? No.
Would the proposed bonds raise taxes? Yes.
How much? Well -- it depends.
According to County Manager
The county recently sold
The proposed
"It's not going to cover the payments on that much debt," Hagood said.
Saying how much it could raise taxes is a moving target. Even the worst-case scenario depends on fluctuating interest rates. Hagood told the ACC trustees last year that a
"There's a lot of factors," Hagood said.
Factors include:
* Interest rates over the 20-year life of the bond;
* The timing of selling those bonds; and
* Revenue sources.
For one thing, the county will not sell
"If we were to sell them all at one time, that would be us having all the contractor bids in hand," Evans said, "and ready to break ground on all those projects at one time."
That's not likely, but "in reality, it may be very close together."
How would the county minimize tax increases?
* Timing: Hagood said county administrators would work with the school system to know when projects are likely to start and use that schedule to figure out when to sell bonds to get a maximum of the principal and interest payments in the regular debt-service payments.
* Revenue sources: The county can use sales taxes and lottery funds to pay down debt, which won't cover the whole cost, but might take the edge off.
"Between the timing and the varying funding resources to keep the tax impact low," Hagood said.
Big picture: The county has to do this while paying for things that aren't in the bonds, like the 38 buildings outside the school system and the court buildings. Hagood is talking about getting a financial-planning firm to work with the county on a long-term plan for all those expenses.
"We're looking at how do we plan for all of those needs," Hagood said.
Hagood is working on scenarios and estimates to show the commissioners.
What next? ABSS Superintendent
Which does what? That gives Hagood, Evans and many others the OK to go to the
What's LGC look at? A lot; it wants to see the county's:
* Outstanding debt;
* Tax collection record;
* Compliance with state finance law;
* Value of taxable property in the county; and
* Ability to collect additional taxes to pay debt;
It also wants to see that the project is necessary and that the amount of the bond isn't too much or too little.
Reporter
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