What is a Levy and What is a Bond?
As described in the Washington School Funding 101 article, there are four types of local property tax levies that a school district can use to raise additional needed funds. The two most common in our district are the Maintenance and Operations Levy and the Bond Levy. Each is described below.
What is a Levy?
When we say levy, we are referring to the Maintenance and Operation Levy. As the longer name implies, it is intended to cover on-going costs for the district. By asking the taxpayers to approve a levy, the district is saying that the funding from its other sources (state and federal funding) does not cover the cost of offering the quality of education that it wants to provide the community. It is asking the taxpayers to kick in additional funds to fill the gap.
The state limits the term of these levies to four (4) years, which means that the district will have to go back to the voters every few years to retain the same level of spending.
What is a Bond?
A bond levy is very limited in how it can be used. Specifically, it can be used to buy land or to build or renovate school facilities. These projects are understandably quite expensive and to fund them over the short term required by the other levy types would be cost prohibitive for the taxpayers. Therefore, the school district asks for approval from the taxpayers to essentially take out a loan (by issuing bonds) which the taxpayers will pay back over the life of the loan (typically 30 years).
So What Was the Difference, Again?
The following chart summarizes the differences: