A bond is similar to a home mortgage. It is a contract to repay borrowed money with an interest rate over time. Bonds are sold by a school district to competing lenders to raise funds to pay for the costs of construction, renovations, and equipment.

School districts are required by state law to ask voters for permission to sell bonds to investors in order to raise the capital dollars required to renovate existing buildings or build a new school. Essentially, it’s permission to take out a loan to build, renovate, and pay that loan back over an extended period of time, much like a family takes out a mortgage loan for their home. A school board calls a bond election so voters can decide whether or not they want to pay for proposed facility projects.

Most school districts in Texas utilize bonds to finance renovations and new facilities. This bond would allow the district to finance additions and renovations without impacting the District’s regular budget items such as school programs, teachers, and staff.

Bond funds can be used to pay for new buildings, additions and renovations to existing facilities, land acquisition, technology infrastructure and equipment, for new or existing buildings, and large-ticket items such as school buses. Bonds cannot be used for salaries or operating costs such as utility bills, supplies, building maintenance, fuel, and insurance.

A "bond" is like a home mortgage - it's a loan that needs to be repaid over time with interest. Just as with a $200,000 mortgage for a home, the total payments on a school bond, like the proposed $9,100,000 for MMISD, will exceed the initial amount due to interest charges. We can estimate the interest based on current rates, but the exact cost won't be known until the bonds are sold to investors.

Nationwide, about 70% of municipal bonds are owned by individual investors, either directly or through mutual funds or similar investments. Other municipal bond investors include businesses, primarily property and casualty life insurance companies, and banks

If the election is successful, residents of Morgan Mill ISD would be able to purchase a portion of the bonds and earn interest on their investment. Municipal bond interest payments are exempt from federal income taxes, as well as from state income taxes if the investor lives in the state where the bonds were issued.