Navarro Independent School District

A school bond is a formal promissory note issued by a school district to finance large-scale improvements that exceed the scope of the annual operating budget. By issuing a bond, the district borrows money from investors with the legal obligation to repay the principal plus interest over a set period.

To ensure fiscal responsibility and public transparency, the bonding process involves two primary levels of authorization:

• Approved by Voters: Before a district can incur bond debt, it must receive authorization through a public election. Local residents, who timely registered to vote, can vote on the specific amount of the debt and the intended purpose of the funds.
• Approved by the Attorney General: Once voters approve a measure, the legal proceedings and financial structures of the bond must be reviewed and certified by the state Attorney General to ensure compliance with state law and debt limits.

The structure of a school bond is defined by how the money is collected and how it is spent:

• Secured by Property Tax: These bonds are backed by the "full faith and credit" of the school district. This means the debt is secured by property tax revenues collected from homeowners and businesses within the district’s boundaries.
• Used for Capital Projects: Bond proceeds are legally restricted to capital projects. This includes the construction of new facilities, major renovations to existing buildings, land acquisition, and the purchase of long-lived equipment or technology. Under state law, these funds cannot be used for daily maintenance and operational expenses, such as staff salaries or utility bills.

The 2026 Navarro ISD Bond Election proposes a total of $65,000,000 dedicated to facility reinvestment, the expansion of the Junior High, and district support for buses and secured parking expansion for fleet and equipment. This proposal is structured to result in no increase to the school district’s current property tax rate. While the district’s specific tax rate will remain constant if the bond passes, an individual property owner’s total tax bill is subject to change based on the actions of the county appraisal district. If the appraised value of a home or plot of land increases, the final tax amount owed may rise even as the district's tax rate stays the same.

By law, ballot language requires the statement “THIS IS A PROPERTY TAX INCREASE.” on all school bonds even when no tax rate increase is anticpated.

Proposition A is designed to fund projects without increasing the current tax rate. This is possible due to the following three financial pillars:

1. Interest and Sinking (I&S) Tax Cap

Navarro ISD operates under two tax rates: Maintenance & Operations (M&O) and Interest & Sinking (I&S). The I&S portion is specifically used to pay off debt. (See more in FAQ 4)

• Our I&S rate is currently at the statutory cap of $0.50. Therefore, legally the district cannot raise this rate further. Any new bond must be structured to fit within the revenue generated by this existing $0.50 rate.

2. Projected Ad Valorem Revenue Growth

Ad valorem (property) taxes are calculated based on the total appraised value of property within the district.

• As new homes and businesses are built and property values rise, the $0.50 tax rate generates more total dollars than it did in previous years.
• The district’s financial advisors have calculated that this projected increase in total revenue—combined with the current tax collections—creates a "borrowing capacity" of $65 million.

3. Debt Management and Credit Rating

The district's history of fiscal responsibility plays a direct role in credit strength and refinancing/pay-off of bonds.

• Because the district has maintained an excellent rating by consistently paying down previous debt, it qualifies for lower interest rates.
• As older "shorter-term" debts are paid off, it creates "room" in the budget to take on new debt without requiring more tax revenue per dollar of property value.

The $65 million figure is the maximum amount recommended by financial experts that can be borrowed and repaid using the current $0.50 I&S tax rate. Because the district’s tax base is expanding and existing debt is being retired, the district can afford the payments on a new $65 million loan without asking voters for a rate increase.

In school finance, a district’s budget is divided into two distinct "buckets" that serve different purposes. These are legally separated to ensure that funds intended for daily operations are not confused with funds intended for long-term debt.

The Maintenance and Operations (M&O) bucket is often referred to as the "daily bucket." It funds the day-to-day costs of running a school district.

• Primary Use: The majority of this fund (typically 80% or more) is used for staff salaries and benefits. It also covers classroom supplies, utilities, fuel for buses, and routine building maintenance.
• Funding Source: This is funded through local property taxes and state revenue.
• Analogy: Think of this as a household’s monthly checking account, used to pay for groceries, electricity, and the people who keep the house running.

The Interest and Sinking (I&S) bucket is the "debt service bucket." This fund is generated specifically through voter-approved school bonds.

• Primary Use: This money is used exclusively for capital projects and the repayment of the promissory notes (debt) incurred to fund them. It pays for new construction, major renovations, land acquisition, and certain high-cost technology or equipment.
• Funding Source: These funds are secured by property tax and the district is legally required to set a tax rate sufficient to pay the debt.
• Analogy: Think of this as a mortgage payment. Just as a homeowner takes out a loan to buy a house and pays it back over 30 years, the district uses the I&S bucket to pay for its buildings and infrastructure.

The 2025-26 Long Range Facilities Master Planning Committee presented a formal recommendation to the Navarro ISD Board of Trustees during the December meeting. Following four months of data analysis, the committee proposed a $64.9 million single-proposition bond for the May 2026 election.

The proposal was developed through a consensus-based process by a committee composed of parents, alumni, staff, and community members. The primary objective was to address projected student enrollment increases over the next ten years. Click here to visit the Long-Range Facilities Planning website to read more.

When voters approve a bond, they are authorizing a specific maximum debt amount for a defined list of projects. However, the interval between a bond’s approval and the completion of construction can span several years, making the projects susceptible to economic shifts. To ensure the bond amount is realistic, the Long-Range Facilities Master Planning Committee follows a rigorous estimation process. This involves several layers of professional expertise:

• Professional Consultation: The committee consults with investment, construction, and architecture vendors throughout the planning phase. These experts provide market data, material costs, and labor trends.
• Benchmarking: Estimators look at the "cost per square foot" of recently completed similar facilities in the region.
• Escalation Factors: Because construction doesn’t happen overnight, professional estimators add a percentage to the current cost to account for anticipated inflation between the time of the vote and the start of construction.
• Contingency Funds: Most budgets include a "built-in" percentage of the total cost (often 5-10%) reserved specifically for unforeseen expenses or minor price fluctuations.

If inflation rises significantly higher than the projected "escalation factor," the district cannot simply increase the bond amount. The voter-approved dollar limit is legally binding. Instead, the district typically employs strategies such as value engineering, scope adjustment, phasing of construction and interest rate management to sell bonds when rates are favorable to save on debt service and make pay back faster.

Bond proceeds are legally restricted by the specific language presented to and approved by voters at the time of the election. This restriction ensures that the district remains accountable to the public for how the borrowed funds are used. Legally, the district is bound to those specific terms. Using funds from a previous bond to pay for a project later identified would violate the authorization granted by the voters during that election.

To cast a vote in a school bond election, an individual must satisfy the following requirements:

1. Voter Registration

• The individual must be a registered voter. Registration must typically be completed by a specific deadline (often 30 days) prior to the election date.

2. Residency Requirements

• The voter must legally reside within the geographic boundaries of the school district proposing the bond.
• Property Ownership vs. Residency: Owning property or paying ad valorem taxes within the district does not grant voting rights if the owner's primary legal residence is elsewhere.
• Non-Residents: Individuals living outside the district lines, even if they have children enrolled in the district via transfers, are not eligible to vote.

3. Age and Citizenship

In accordance with federal and state laws, the voter must be:

• A U.S. Citizen.
• At least 18 years of age on or before Election Day.

Election day is Saturday, May 2, 2026 from 7am to7pm

Early voting will be held on the following days and times:

April 20-24 from 8am to 5pm

April 25 from 10am to 6pm

April 27-28 from 7am to 7pm

The deadline to register to vote for the May 2 election is April 2

For list of polling locations click here to visit the Guadalupe County Elections Website