North Texas has a series of heated elections concerning bonds across multiple counties. In Granbury, located in Hood County, a bond on the ballot will total $161,500,000. Keep in mind that this is a county of around 61,000 people. This bond will pay for 30 new buses, renovations, and building a new elementary school. All of which are worthy investments for any community. One side claims that a bond this size will not raise taxes, and the opposing side claims it will. Who is right? Some people involved are just trying to figure out what a bond is or what type of bond is on the ballot. Somehow, a Republican County chair got arrested over a bus; Hood County never fails to entertain.
A bond is an IOU, an issue of debt by a creditor to a debtor. There are many types of bonds, such as municipal bonds, Treasury bonds, corporate bonds, and many more. A school bond is almost always a general obligation bond. This type of bond requires voter approval to pass the bond and to gain the taxpayer's approval to raise taxes actually to pay for the bond. It is also worth noting that a general obligation bond is a form of long-term borrowing typically paid in semi-annual payments. One hundred sixty-one million for a small town and county is undoubtedly a long-term debt.
So now, to the spark that has ignited this tense fight in Granbury, will this raise property taxes? YES. General obligation bonds are repaid through raising property taxes, also called an Ad Valorem tax, which is either approved or disapproved by the voters through the election process. General obligation bonds are also exempt from SEC oversight when sold to the citizens. When a bond is issued, it is debt, and just like student loans or a mortgage, you have to pay your debt back. Sometimes, this can be done without raising property taxes, but given the size of Granbury and Hood County, this will be their best bet for making this bond work. If you are a citizen of Hood County and this passes, you should expect taxes to increase.
If anyone reading this is in Hood County, please go and vote however you wish to vote. However, please drop the politics and go about this election as if it is a business decision. Is a small town with a small school system going to benefit from a 161-million-dollar debt hanging over it? This large amount could affect future growth and force out those who are unable to pay taxes.
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