Cypress-Fairbanks ISD Asks for Record-Breaking $1.76 Billion

On May 4, 2019, Texas’ third largest school district will ask voters to approve the largest school bond debt package in state history.

Cypress-Fairbanks ISD, located northwest of Houston, reports a student enrollment of 116,249 for 2018-19.  The district has grown significantly over the past few decades, although growth has slowed recently, with an increase of about 3,000 since the district’s last bond election in 2014.  CFISD officials predict the district will grow by another 3,000 to 4,000 students by 2025.

Earlier this year, the CFISD Board of Trustees voted unanimously to hold a new bond election requesting a record-setting $1.76 billion in new debt.  If approved, CFISD ballot language states that the funds will be used for a variety of construction and renovation projects, purchases of land and buses, as well as improvements to security infrastructure.  The CFISD website indicates that the bond package will only fund two new schools, but also a new performance center and an instructional support center.

Despite the unprecedented amount of tax-payer debt requested, there does not seem to be any organized opposition to the nearly $1.8 billion proposal.  The district seems to be promoting the bond with its taxpayer-funded website, and as with the 2014 bond election, a number of contractors, businesses, and individuals have funded a political action committee entitled “Say Yes for CFISD Kids” in order to pay for campaign materials promoting passage.  Many of the 2014 contributors are again listed on the PAC’s 2019 website, and some of those 2014 supporters were awarded ISD contracts related to the previous bond.  ICI Construction Inc. listed as a 2014 “Say Yes for CFISD Kids” PAC contributor, was awarded $16.87 million in contracts by the district just last September.

The 2014 CFISD bond set records at the time, successfully obtaining approval for $1.2 billion in new debt.  As of February 2019, the district had yet to issue $158.8 million from that package, but chief financial officer Stuart Snow indicated the district would sell the remaining amounts in the fall of 2019.

CFISD’s 2014 bond was infamous for more than breaking the billion dollar mark; the board of trustees authorized the use of controversial “rolling polling,” which significantly suppressed voter turnout and provoked state scrutiny.  During early voting, the district moved voting locations daily, creating an inconvenient and chaotic scenario for citizen participation.   Consequently only 7,266 of more than 200,000 registered voters participated in that election (with only 5,909 voting to approve.)

The controversial strategy used by both the Cypress-Fairbanks and Frisco districts prompted the Texas Legislature to outlaw so-called “rolling polling” the following year.  As bill sponsor Greg Bonnen (R-Pearland) noted in 2015, the practice could allow school districts to “essentially harvest votes.”  Bonnen stated, “That did not seem consistent with giving all the voters an equal stake in the election.”

While pro-taxpayer advocates successfully banned CFISD’s problematic election structure, state bills proposed to improve transparency and voter participation have not prevailed.  Texas school districts and other local government entities are not required to display existing outstanding debt information, including principal and interest.  There is also no ballot language requirement for displaying estimated principal and interest of the proposed bond, nor the estimated tax impact.

Even without a ballot language requirement, such information is difficult to find.  The Texas Comptroller’s “Debt At A Glance” site is woefully out of date, and only includes data from August 31, 2017.  The site does note that a portion of the district’s debt is due to capital appreciation bonds: controversial and costly non-voter-approved borrowing that was finally restricted by the state in 2015.  CFISD’s CAB debt includes a principal amount of $505,000, but a maturity amount of a staggering $6.64 million.

The Texas Bond Review Board site is a little more helpful, reporting the following for CFISD, fiscal year 2018:

          Principal:  $2,517,955,000 ($2.5 billion)
          Interest:  $1,338,864,254 ($1.3 billion)
          Total Payment: $3,856,819,254 ($3.8 billion)

Reformers argue that any business or individual seeking loans would have such information scrutinized by lenders, but Texas does not require similar information to be provided to voters.  Nor is relevant debt data readily discoverable on the CFISD website, although the 2018-19 summary of the proposed budget does report that debt service will be more than $205 million this year alone.

Supporters of the bond have produced the usual arguments about increases in student enrollment and need for updates.  No doubt these are legitimate concerns.  But fiscal responsibility advocates note that while Texas student enrollment has increased 48%, the number of teachers increased by 56% and non-teaching staff by 66% over the same period.  Watchdog groups also note that many school districts have spent generously on upscale stadiums, performance centers, and even water parks.  (CFISD spent $84 million on the touted Berry Center stadium in 2006.)  They note that such spending increases do not correlate to improved student outcomes.  CFISD’s archives indicate Grade 3-8 reading and writing achievements have actually declined slightly since 2014, and the Texas Education Agency reports that in 2018 43% of the district’s students were performing “below grade level.”  While the bipartisan Texas House Bill 3 calls for districts to conduct third-party “efficiency audits,” CFISD is currently not obligated to provide such an efficiency-in-spending audit to the public.

While claiming need for increased spending and debt, CFISD continues to use taxpayer funds to lobby against expansion of charter schools, which often help districts absorb student growth and can be more successful in improving student outcomes, all while spending less per pupil.  CFISD also spends taxpayer money to lobby for dismantling the state’s new school accountability ratings and reducing objective student achievement measures like standardized tests.

Due to the anticipated low voter participation rates typical of May elections, along with PAC spending on promotional campaign activities, and a lack of organized opposition, CFISD’s record-setting bond is likely to pass.  As with the 2014 bond package, the district has tried to reassure voters that they will issue bonds slowly and to try to mitigate the inevitable tax rate increases.  They are also counting on rising property values and growth in the tax base to increase revenues, but there are no guarantees regarding future tax increases.  Even if the Texas Legislature comes through with currently proposed reforms, both the 2014 and 2019 bond packages give CFISD the leeway to increase taxes to pay for its ever-growing debt burden.

Find voting information for the CFISD 2019 Bond Election:

Early Voting:  April 22-30, 2019

Election Day:  May 4, 2019

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