Bond Levies

Bond levies are outside the property tax limitations. With student enrollments increasing, school facilities aging and maintenance costs escalating, voters are seeing more bond levy requests on the ballot.

Double majority requirement: Under Oregon law, voters must approve any increase in taxes – a bond levy or local option levy – in an election with at least a 50 percent voter turnout. The only exception is the November general election in even numbered years. There is no turnout requirement for that election. If districts meet the turnout requirement, then a simple majority, one more than 50 percent is required to approve the measure.

Bond levies are used to finance capital construction and improvements that are too expensive to be paid for from a district’s annual operating budget. However, bond proceeds can be used only for capital construction and improvements as defined by Article XI, Section 11 and 11b, of the Oregon Constitution. The constitutional definition specifically excludes reasonably anticipated maintenance and repair items, or supplies and equipment that are not intrinsically a part of the structure. Bond proceeds also can be used to pay the costs of issuing bonds.

A general obligation bond is a loan. An investor loans money to a municipality for specific capital projects. A bond normally carries a fixed rate of interest payable semiannually until it is paid off.

Bond proceeds can only be used for the purposes stated in the ballot title authorizing the issuance of the bonds and consistent with the Oregon constitution.

State law limits the amount of general obligation debt school districts may have outstanding at any one time. The debt limit is based on the district’s assessed value and the number and kinds of grades the district serves. Generally, for districts operating K-12 schools, the debt limit is 7.95 percent of the real market value of all property within the district minus any outstanding debt.

For complete information regarding the laws and regulations for bonded debt, see the OSBA's Oregon School Bond Manual.

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