Dollars and Cents: How Districts Fund Major Building Projects
What is the purpose of a bond referendum?
When voters approve a bond referendum, they are giving a school district permission to incur debt through the sale of General Obligation Bonds to the public to raise the funds needed for major capital projects, such as building renovations, new construction and large-scale facility upgrades. District taxpayers repay this debt over time through what is called a “debt levy.” This tax differs from the District’s operating tax levy, which is intended to cover day-to-day expenses such as staff salaries, classroom materials, transportation costs and utilities.
Passing bond referendums prevents the district from having to divert funds from instructional resources to pay for significant facility improvements, while allowing the District to address long-term infrastructure needs. (It is important to note that bond funds cannot be used to fund operating expenses.)
What is the District’s current debt levy, and what would it be if the District approved a new bond referendum?
The current debt levy is $0.5110 per $100 assessed value. With voter approval, the School District of Clayton would have the capacity to issue up to $135 million in additional General Obligation Bonds to fund facility improvements without increasing the debt levy. This financial position enables the District to move forward with essential facility improvements while maintaining its long-standing record of fiscal responsibility and stable tax rates for the community.
When was the last time the District asked voters to approve a bond referendum, and what was the result?
The most recent bond referendum presented to voters by the School District of Clayton was Prop W in 2010. The resulting $39.4 million bond issue funded the complete renovation of Wydown Middle School at its current site. Today, Wydown is ranked #1 in Missouri by Niche, and its student-centered learning spaces continue to meet the needs of Clayton students.
What happens if the Board decides not to pursue a bond referendum?
The District’s current residential tax rate will remain steady through 2029 due to ongoing payments of interest and principal on existing bond debt.
How could new state policies impact District funding?
The District is monitoring the Senior Property Tax Freeze program, which takes effect in 2025. For the 2025-2026 fiscal year, the tax freeze program will reduce District revenue by about $473,000. The District estimates a cumulative revenue loss of approximately $6-8 million over the next decade.
