School District Bond Elections Galore: $633 million

by Howard Stephenson

Six Utah school districts will be holding bond elections on June 27th in conjunction with the primary elections as outlined in the accompanying

chart. The total value of these bonds, if approved would total $633 million. School boards seem bent on ensuring low voter turnout by holding the elections when the fewest voters traditionally participate.

Why not November?

Most school districts continue to avoid holding bond elections in November, when voter turnout is highest and the impact of district employees on the election’s outcome is less disproportionate. Last November, only one school district had a bond election (Uintah). So far, only one district is planning to have a bond election this November (Alpine).

Until two years ago, local governments could hold bond elections in February, May, June, August, and November. Districts argued that they needed the option of holding elections in February, May, and August in order to take advantage of changes in interest rates, even though evidence proved that timing of school districts bond elections in previous years was not based on short-term fluctuations (peaks and
valleys) in interest rates. Moreover, due to the lag time inherent in the bonding process and the uncertainty of interest rate movements over a short period of time, school districts are not able to accurately time minor fluctuations in interest rates several months in advance.

Finally, since most of these bonds are issued in parts over a period of several years, holding the bond election in a given month does not impact the interest rate of a bond issued five or ten years later.
Having bond elections once a year – in November – does not prevent school districts from issuing bonds during periods of sustained low interest rates, such as during recessions.

Two years ago, the Legislature eliminated the February, May, and August options because massive bonds were being approved with voter turnout of less than 10% in many cases.

When districts propose holding bond elections in June, the Utah Taxpayers Association asks why the district does not hold the election in November. Usually, the districts respond that the previous November was too early (“We didn’t have enough time to get ready for last
November”) and the upcoming November would be too late (“We need the schools now. We can’t wait five months.”). Somehow, June is rarely too early or too late. Interestingly, district officials no longer argue that the June election is necessary because interest rates will be lower than they were last November and lower than they will be this November.
If school officials were that good at predicting interest rates they would probably be in a different line of work.