The Texas Legislature sets the cost to educate each student through the basic allotment and other weighted formulas. Until 2025, the basic allotment had not been adjusted since 2019, despite significant inflationary increases. The Legislature added $55 per student to the Basic Allotment, bringing the current funding to $6,215 per student. The number of students who show up each day, combined with the per student formula, determine the size of MISD’s overall base budget (i.e., money the district keeps).

School districts are required by state law to ask voters for permission to sell bonds to investors in order to raise the capital dollars required for projects such as renovations of existing buildings or building a new school. Essentially, the voters are giving permission for the District to take out a loan and pay that loan back over an extended period of time, much like a family takes out a mortgage loan for their home. A school board calls a bond election so voters can decide whether or not they want to pay for proposed capital projects to improve and build schools. Locally elected school boards then have the authority to sell bonds when the capital projects are needed.

Magnolia ISD enlists the services of a professional demographer to track and project student enrollment. The district is currently growing faster than the demographic projections. As a result, the district projects to soon be at or over capacity in the high schools and elementary schools.

• 2025-26 Projected growth 3.2%    |    Current growth   4.6%    |    670 students as of 1/20/26
• 2026-27 Projected growth 3.8%    |    587 students
• 2027-28 Projected growth 4.7%    |    750 students
• 2028-29 Projected growth 5.5%    |    920 students
• 2029-30 Projected growth 6.1%    |    1,074 students
• 2030-31 Projected growth 5.7%    |    1,060 students

The public school funding formula in Texas only provides funds for the day-to-day operations of school districts.  Magnolia ISD uses 86% of those funds for staff salaries, instructional supplies, ordinary contracted maintenance and repairs, utilities, insurance, and other miscellaneous expenditures.  Funds are not provided in the state formula for larger maintenance and capital expenditures, so school districts use bonds as the primary source of funds to construct, maintain, and upgrade facilities, and purchase capital equipment.

Bond funds can only be used for the construction and renovation of school buildings, the acquisition of land and the purchase of capital equipment such as technology and school buses. Bond funds cannot be used to directly pay for most ordinary operating costs such as salaries, supplies, utilities, etc.

No. Magnolia ISD is not proposing a change to the local school tax rate. Instead, the district will use tax collections under the existing tax rate to layer in new voter-approved debt. When possible, the district pays down bond debt early and saves taxpayers millions of dollars through financial planning and stewardship.

• MISD has had two bond rating upgrades in the past 15 years based on strong financial performance and fiscal prudence. 
• MISD currently maintains a Moody’s Aa2 rating, indicating high-quality, low-credit risk. The district is in the top 10% of Moody’s ratings for similarly-sized Texas school districts.
• A district’s bond rating functions similar to a personal credit rating; the higher the score, the less credit risk for lenders
• This means that when MISD enters the bond market, we are guaranteed to receive the best interest rates available.
• As a general industry standard; for every increase in bond ratings, entities can estimate interest rate savings of approximately 6 basis points
• Based on the two bond rating increases since 2010; the district has saved approximately $400,000 in interest on the two most recent bond issuances

In short, aggressively paying off debt early creates room for new debt (the ability to issue new debt without having to increase the tax rate). Although MISD does not benefit from housing developments and growth on the operating side of the budget, the growth in our community does generate additional tax funding to pay for voter-approved bond projects.

• Bond 2015 (approved by voters)    |    $92 million   |   tax rate $1.38
• Bond 2022 (approved by voters)   |    $228 million   |    tax rate $1.15
• Bond 2025 (rejected by voters)   |    $470 million   |    tax rate $0.96
• Bond 2026 (pending May 2)   |    $465.6 million   |    tax rate $0.96

The Magnolia ISD Tax Rate has decreased more than 42 cents in the last 10 years. All bond proposals were presented without an increase in the ISD tax rate.