Texas School-Finance Overhaul Prompts Rush to Bond Market
Several Texas school districts that had planned bond sales this spring are scurrying to close the deals early to head off the legislature's April deadline for replacing the state's school-finance system.
Many districts that had planned bond sales in April and May have instead set their sights on March, said Jerry Turner, a lawyer representing the Austin Independent School District, which now hopes to close by March 19 a $37-million bond sale originally set for late April.
"I think everybody that has voted a bond authorization and has board-approved projects is trying to accelerate the process," said Mr. Turner, adding that the spring rush to the bond market may prove advantageous, since interest rates are low.
Gary Davis, the Austin district's assistant superintendent for finance, said the court's threat to shut off school funding this spring if the legislature does not adequately address school-fi4nance inequities prompted school officials to speed up their paperwork rather than put several construction projects in jeopardy.
The Austin district is not alone. According to the Municipal Advisory Council of Texas, a trade association of security dealers, bond sales that have averaged about $150 million a month recently jumped to nearly $500 million, with schools accounting for 90 percent of that amount, said Danny Burger, the group's executive director.
During the first three days of this week alone, bids were scheduled to open on 17 district projects totaling over $280 million, Mr. Burger said.
Bond-market observers said that despite the flurry of Texas districts entering the bond market, rates should not be affected because the sales should not create a glut. Further, officials said that so far the bond market has not flinched at the court's threatened school-aid cutoff.--lh