TEA's bond guarantee program in danger

Unless Texas can convince the IRS to raise TEA's bond cap, school districts will be facing some potentially prohibitive costs. When a school district is granted a guarantee, it is allowed to finance its bonds as if it had a top financial rating of AAA - comparable to a consumer with a credit score in the 800s.

If the program is drained, officials said, districts still will approve bonds and build schools. But the cost of their bonds will increase because they will have to buy insurance to bump their bonds up to the higher ratings or they'll have to sell their bonds at higher interest rates. The interest rate for some school districts could increase by about one-quarter of a percent.

With more than $7.6 billion in capital improvement bonds among 60 school districts across the state on the Nov. 6 ballot, there is an increased sense of urgency to secure the cap increase.