Understanding the Vital Difference Between a  Levy and a Bond

Navigating the intricacies of public school funding can often feel like a complex puzzle. But these complex puzzles serve as vital pillars supporting educational initiatives. 

What is the difference between a levy and a bond? 

The easiest way to remember the difference between a bond and a levy is that bonds are for building, and levies are for learning. Bonds and levies provide schools with funds that must be used for specific purposes. *The statement “levies are for learning” primarily refers to EP&O levies, not capital levies, which support lifecycle renewals for construction and system maintenance for our buildings.  

A levy is a short-term (1-6 years) local property tax collected by school districts to fund the portion of educational programs and operations that are not funded by the state.  Levies require a 50% +1 simple majority to pass. 

A Bond is a long-term investment that authorizes the district to purchase property for schools, construct new schools, or modernize existing schools. Bonds are sold to investors and repaid with interest over time from property tax collections, between 12-20 years. Bonds require a 60% super majority to pass. 

While bonds lay the foundation for physical growth and development within the district, levies serve as the lifeblood of educational sustainability. Understanding this fundamental contrast empowers stakeholders to navigate the intricacies of public school funding with confidence and clarity, ensuring that every dollar allocated contributes meaningfully to the advancement of education. 

*It is important to note that money received for capital levies and bonds cannot be used for the general fund (which pays for curriculum, salaries, benefits, supplies, utilities, software, and insurance).