On Tuesday, several mid-Michigan school districts will ask voters to approve local bond proposals.
Okemos Public Schools is seeking a nearly $25 million bond issue for a number of re-modeling projects, including a sizeable addition to Bennett Woods Elementary. It would also pay for security and technology upgrades, expanding its bus fleet and improving athletic facilities.
The district currently holds an A-1 credit rating from Moody’s Investors Service. That’s down one grade from this time a year ago.
Michigan State University economist Eric Scorsone says despite its liabilities, Okemos enjoys a strong tax base and growing enrollment.
“If you look at Okemos’ annual financial statements, they have $100 million kind of ‘in the hole’ long term, mostly because of pensions, retiree health care and some other obligations, and that’s true of a lot of school districts in Michigan,” Scorsone says. “That said, I think for this kind of thing, it probably makes sense.”
Charlotte Public Schools is seeking a nearly $28 million bond issue for similar expenses. The district’s A-2 credit rating is slightly lower than that of Okemos.
Scorsone says that’s due in part to its student count.
“They actually had some declining enrollment, whereas Okemos’ enrollment continues to grow and that’s a critical factor in any school district,” he says. “But neither one, I would say, is a major credit risk by any means.”