From the Department of Local Government Finance, I got this explanation of the actions of the school district:
The school borrowed $23 million from a private bank in 2007 in temporary loans. Instead of paying down this loan when they received tax distributions in 2007, 2008 and 2009 – they simply made payments on the loan interest. The school is now attempting to pay this loan off as quickly as possible over the next few years. The loan has not been converted to debt service debt but remains a temporary loan. Only the interest on the loan is included in the debt service fund, which is typical of all temporary loans. Keep in mind that the temp loans (with exception of interest) are being paid back within the limitations of the school “normal – maximum and cap rate” levies.
This debt – both the temp loan and interest – will not be treated similar to a referendum. An approved referendum project or tax levy would be outside of the circuit breaker caps. This debt – as it was not approved in a referendum vote – is still subject to the circuit breaker cap limitations.
The good news part, obviously, is that only the interest on the loan, 2.5%, can be paid from debt service, which is funded entirely from property taxes. The bad news is that Superintendent Don Stinson and the entire School Board, Dale Henson, Don Huffman, Doug Greenwald, Judy Collins and Cathy Wiseman, HAVEN'T PAID THIS BILL FOR 3 YEARS and are hoping to do so within the next 4.
These guys have been spending like sailors in port, and back when economic times were great they couldn't even pay off a tax anticipation warrant when it was due. Now, with the economy in the worst recession since the Great Depression, the chickens have come home to roost. They have no one to blame except themselves.