What is a bond?
When a public agency or state government needs to raise money, it has the option of issuing bonds. A bond is a debt obligation that investors can trade on a secondary market. The money bond issuers collect from investors can be used for capital spending projects, such as new schools, roads, or other infrastructure, or simply used for general fund expenses. Investors in the bonds often receive a stream of interest payments that may be tax-exempt. At the maturity date, bondholders receive the face value of the bond. In many states, certain bond issues are subject to approval by voters, a process known as a bond election.
Bond debt can be compared to a home mortgage that is repaid over time, while operations and maintenance expenses are like the daily household expenditures that are paid for immediately, such as groceries. Like buying a house, major capital improvement projects, such as park or library improvements, have a long useful life, so their cost is spread out over many years and paid for by current and future citizens who use them.
What is a capital improvement?
A capital improvement is the addition of a permanent structural change or the restoration of some aspect of a property that will either enhance the property’s overall value, prolongs its useful life, or adapt it to new uses.
For CALS, additional funding will help us expand library services by:
- Adding a state-of-the-art bookmobile. CALS staff frequently visit schools, community centers, and rural areas where transportation and technology can be a barrier to accessing materials. This allows us to take our resources to them.
- Upgrading technology infrastructure including broadband internet services and other capabilities at library branches.
- Making needed interior renovations at the Main Library along with new teen areas and spaces to support early literacy and lowering shelving to allow more natural light at other libraries.
- Supporting the Butler Center to offer more genealogy resources and technology tools so patrons can learn and preserve their individual family history.
How much additional funding does CALS receive from refinance?
Refinancing the bonds will generate more than $22 million in additional funding for the library. CALS will use these funds to make much-needed improvements to library branches across the city.
How will this affect my taxes?
This proposal would reduce the current property tax rates for library capital improvements from 1.8 mills to 1.3 mills, a tax reduction of roughly 25%.
Didn’t I just vote to increase the millage?
Yes. The library is supported by separate funds for operations and capital improvements. Last November, we proposed a 0.5-mill increase to the local property-tax rate that supports our operations and maintenance. This was a two-part plan to extend and then reduce the overall tax; reducing the capital-improvement tax rate is the second part of that plan.
Why is this only on the ballot in Little Rock?
Little Rock residents went to the polls to vote on the operational millage last November because most of the library’s assets are in Little Rock and much of the population within the system’s service area resides in the city. The measure passed with roughly 71% of the vote. This is an opportunity for us to honor our campaign promise to lower taxes in Little Rock by refinancing our bonds.
What happens if the measure does not pass?
By passing this plan, we are able to get a significant lump sum to make large scale changes to the Main Library in a timely manner. We are planning to move the Darragh Center up to a currently unused space on the 5th floor and will rework the space that the Darragh Center currently occupies into an enhanced children’s area. Additionally, we are planning on expanding our Community Resources area. If the proposed millage rate does not pass, these two projects would have to be done on a much longer timeline and at a greatly reduced scope, leaving library spaces unusable for longer stretches of time. Worse case scenario, these might not happen at all or be set aside until we are able to raise the funds through other means.
Early Voting begins May 9 at several locations. View more information at https://www.pulaskiclerk.com/elections/.