School bond guarantee program starting up again
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The closure of the program was brought about when a sharp decline in the stock market dramatically decreased the value of the PSF. With that decrease in value, the capacity to back bonds fell as well. Now, as a result of the IRS ruling, the program can re-open. Thus the Texas Education Agency (TEA) must again open the application process for school districts, with the application evaluation process likely to start in late January 2010.
A PSF-backed school district bond gives the bond the equivalent of a AAA rating. The higher the bond rating, the better the interest rate when a school district sells its bonds. That can lead to the saving of millions of dollars. Since it began in 1983, the Bond Guarantee Program has backed more than $83 million in bonds.
The possible savings through the program comes at a time when more and more Texas school districts are reporting student population increases, and at a time when their facilities are not meeting the needs of the increased number of students in the districts. Just this week, the TEA released a report on enrollment in Texas public schools. The report notes that the student population in Texas public schools has increased by 795,137 students - or 20.1 percent - in the last 10 years. For 2008-09, public school enrollment was recorded at 4,749,571, compared to 3,954,434 in 1998-99. Statewide enrollment increased an average of 1.9 percent per year.
The National Center for Education Statistics projected a 10 percent increase nationally from 2005 to 2017. Texas is expected to experience the third largest increase among the states during that time, estimated to be 32.9 percent.
