Consider Risks and Advantages of Controversial Funding Mechanism
Texas Insider Report: AUSTINTexas Some Texas school districts are turning to an alternative way of borrowing money to meet the demands of burgeoning enrollment according to the latest edition of Fiscal Notes a monthly Comptroller publication that provides Texans with timely information on the states economy and finances.
Traditionally Texas school districts have funded campus construction and renovation by issuing municipal bonds which are repaid over time with property taxes" Texas Comptroller Glenn Hegar said. To cope with rapid growth however some districts are using a different financial vehicle the capital appreciation bond or CAB. In this issue of Fiscal Notes we take a look at this increasingly popular but controversial option. CABs give school districts more financial freedom to expand but at a high price over the long run."
Fiscal Notes is an extension of the Comptrollers constitutional responsibilities to monitor the states economy and estimate state government revenues. It has been published periodically since 1975 featuring in-depth analysis concerning state finances and original research by subject-matter experts in the Comptrollers office.
Published monthly Fiscal Notes is online at comptroller.texas.gov/fiscalnotes and can also be received by subscribing via the Comptrollers website.
