Issaquah SD February 11th 2025 Bond Info
This page focuses on the estimated cost impacts for property owners and renters.
The chart below shows the expected taxes the district will collect from local taxpayers each year for the 11 year repayment schedule of the new proposed bond to cover bond principal, bond interest, and fees. It also shows the expected remaining payments (taxes to collect) for the existing bond debt.
Figure 1
This next chart shows the estimated obligated bond costs for the owner of an example property with a 2024 AV (assessed value) of $1,000,000. This chart assumes zero new construction which is the conservative case. School districts should be conservative with other people's money.
Figure 2
This next chart shows the estimated average annual taxes for just this 2025 bond for local property taxpayers. The worst case scenario for taxpayers is usually the assumption of zero new construction. Another reasonable scenario to consider is continued new construction (despite high interest rates) for each tax collection year of this one bond at the same pace as 2024.
Figure 3
District’s cost analysis snapshot
Figure 4
An analysis of the district's cost analysis:
Future tax rates are bogus. Future tax rates are just guesses based on the district’s guesses for future Total AVs (Assessed Values) of all taxable properties (including homes, apartments and businesses) in the school district’s tax area.
Future guesstimated tax rates are meaningless. They can be almost anything. Future guesstimated tax rates should not be any part of a cost analysis for voters/taxpayers to consider.
The Issaquah SD is assuming an 8.8% increase in Total AV for 2025 and then 5% compounded annual increases in Total AV for 2026 through and including 2035.
Let’s say the district assumed 0% Total AV increases each year for a case 1 and then assumed 10% annual increases in Total AV for each year for a case 2 over the next 11 years. The calculated future tax rates would of course be different for those 2 cases. But the amount in dollars that property taxpayers would pay would be the same for each case. This is because property taxpayers pay a proportional amount of school district bond taxes – so the ratio of their property’s AV to the Total AV. Voters are voting on amounts in dollars – not someone’s guesstimated future tax rates.
Figure 5
The district’s logic and therefore math error is assuming 5% annual increases in Total AV for the next 11 years but not allowing individual properties’ AVs to increase at that same assumed pace. This is a common error that most school districts make in their bond campaign materials. This is why a TILA (Truth In Lending Act) type of policy should apply to school district bonds and levies.
Instead of 5% Total AV increases, the district should have assumed 0% or maybe 0.6%, attributable to new construction. 0.6% was the new construction pace for 2024. This would be the conservative case. School districts should be conservative with other people’s money.
To better understand how guesstimated future tax rates are meaningless and how they can lead to underestimating actual future taxes in dollars, see the Version 2 teaching calculator at this next link:
https://schooldataproject.com/table_issaquah_bond_20250211
The teaching calculator should help convince the interested reader that only new construction affects what property taxpayers will pay in future years. The rise and fall (say in a recession) of AVs on existing properties do not change what property taxpayers will pay in future years.
Local property taxpayers (including renters who pay property taxes in their rents) are already obligated to continue payments on a massive existing bond debt on the order of $750M in payments (taxes to collect) from now until 2033. And those taxes to collect have been designed to have escalating payments unlike a normal home mortgage.
Figure 6
This new bond would add to the existing bond debt. And this new bond has been designed with a balloon type of payment schedule. This type of debt payment schedule (balloon) racks up even more total interest since bond buyers are having to wait years to receive their repayment. Students should be learning about this in their math and financial literacy courses.
Figure 7
The Issaquah SD should not be running any more bonds at all. If anything, the district should follow the lead of the Seattle SD and only run 6 Year Capital Levies (sequentially as necessary but frugally) for new buildings and, preferably where possible, refurbishing existing buildings. Capital Levies do not have any interest for taxpayers to pay.
District's bond management company's bond/levy projection datasheet
Figure 8