Burgeoning Bond Debt
The increasing size of school bonds has prompted the Arlington School Board to violate a long-standing rule to fund bonds over 20 years. Now, the School Board is stretching bond payback out to 25 years. This is needed so that no more than 10 percent of the budget goes to bond servicing. The longer payback period requires less money each year to pay back the bond. However, it drives up the financing costs over a longer period.
While Vice Chair Libby Garvey asserts in the May 13 Alexandria Arlington Extra that "Over time, the bond debt will stop growing," the exact opposite will happen. In 20 years, there will be no bonds retiring because bonds have already been sold for a period of 25 years. In fact, for that year and the following five years there will be only more bond debt being added. Therefore, the School Board has managed to solve its current problem by transferring it 20 years into the future, for another school board and another generation to solve. Is this the type of leadership that is deserving of the recent 62 percent pay raise? Where is the Arlington County Board while all this is going on? How are board members fulfilling their state-mandated duty to supervise school expenses?
Bond debt will continue to grow since the bond packages are growing every year. Over the last 20 years, the schools have been issuing bonds at the rate of $25 million per year. However, the average of recent bond packages and current bond projections show that bond spending will be at the rate of $34 million per year. Any future estimates are extremely questionable, given that the recent cost estimates for the new Washington-Lee High School have increased by 80 percent to 100 percent in just a couple of months.
The School Board has created a problem that it could have avoided by funding some capital every year. Will the voters again be called upon to approve another large bond package to bail it out? Should the bonds be approved to create an even larger future problem?
Roger S. Morton
Arlington County Fiscal Affairs Advisory Committee