DallasNews.com, By EVA-MARIE AYALA, 06/15/13 – The rural Anna school district in Collin County had a trifecta of bad luck in 2009 that left officials with a half-built high school and few options to pay for its completion.
The aggressive growth that officials had projected stalled. Taxable property values dropped. And a state law capping school district tax rates hindered the district’s ability to sell new bonds.
“When you get to that point, and you’re stretched to the max … you have options, but none of them are good options,” Superintendent Larry Johnson said.
So the district turned to a controversial form of financing called capital appreciation bonds, or CABs. Because they don’t require periodic interest payments, as traditional current interest bonds do, they don’t count against the state tax rate cap until the payment is due. That could be decades later.