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The Cobb County School District passed a significant
milestone this week by making the final payment on $221
million in bond debt that has been a liability for the
District since 1995. With the bond officially retired, the
District has joined the ranks of a select group of school
districts in Georgia and the nation that can claim to be
entirely free of bond debt. The Cobb School District has
carried some form of bond debt for at least half a century.
“This is a historic day for the School District and for the
taxpayers of Cobb County,” said School Board Chairman Lindsey
Tippins. “Being entirely free of long-term debt is a powerful
statement about fiscal responsibility, and the credit belongs
with the taxpayers who initially approved SPLOST in 1998 and
then renewed the program in 2003.”
The Special Purpose Local Option Sales Tax (SPLOST) is a
one-cent tax on all retail goods sold in Cobb County. The
five-year sales tax was first approved by voters in a 1998
public referendum, and was renewed in 2003. Revenue from
SPLOST has been used to build 19 new schools, add hundreds of
new classrooms to existing schools, renovate deteriorating
school facilities, make technology and safety improvements,
and pay off the 1995 bond.
Until 1996, when school districts were first permitted to
use SPLOSTs, most – including Cobb – had funded capital
improvements with bonds. Records show the Cobb School District
has carried bond debt since at least 1950. The burden of
paying off the bond principal and interest fell to property
owners who were assessed additional property tax. The 1995
bond, for instance, required Cobb taxpayers to pay back the
$220,865,000 principal, plus more than $88 million in
interest. SPLOST, in contrast, incurs no long-term debt. An
added feature of SPLOST is that school districts with strong
credit ratings are able to borrow short-term against
anticipated SPLOST revenue at low interest rates, allowing
them to get a head start on construction projects. Eliminating
the bond debt will allow the District to maintain its current
credit ratings, which are the highest granted, and borrow
short term at the best interest rates available.
Revenue from the 1995 bond was used to build eight
elementary schools: Blackwell, Chalker, Cheatham Hill, Frey,
Green Acres, Nickajack, Sanders and Vaughan.
To celebrate the historic occasion of the debt retirement,
members of the Cobb County Board of Education and
Superintendent Fred Sanderson held a press conference on
Friday, Feb. 2 and released 221 green balloons, each
representing one million dollars of the 1995 bond. They were
joined by students and teachers from Cheatham Hill Elementary
and dozens of School District employees.
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Cheatham Hill Elementary students
were on hand for the District's debt retirement
celebration. Post 7 Board member Dr. Teresa Plenge is
pictured with the students she represents. |
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