Is Adding School Debt Just Like Refinancing Your Home?

A tax watchdog advocate and the senior legislative analyst at the Mackinac Center for Public Policy are questioning how the Eaton Rapids Public School District is describing a $25.1 million bond as being similar to a house “refinancing.”

On its website, Eaton Rapids described its $25.1 million bond like this: “The process is much like refinancing a home mortgage and seeks to save on interest costs.” (See FAQ number 11.)

Stay Engaged

Receive our weekly emails!

Wikipedia refers to “refinancing” as replacement of an existing debt obligation with a debt obligation under different terms. Often times, a homeowner refinances at a lower interest rate to lower payments without increasing the debt owed. The Eaton Rapids website says the school is taking on an additional $25.1 million of debt in its bond proposal.

Jack McHugh, senior legislative analyst at the Mackinac Center, said it would be more accurate if the bond was compared to a “home improvement loan.”

Eaton Rapids School Board Chairman Jeff Allison and Superintendent Bill DeFrance didn’t return messages seeking comment. The bond will be voted upon Feb. 22.

Leon Drolet, chairman of the Michigan Taxpayers Alliance, said if the school is taking on new debt, it shouldn’t be compared to a refinancing.

“They are trying to trick voters into believing that they are not taking on new debt when they use that kind of language,” Drolet said.  “By suggesting it is a refinance as opposed to taking on new debt … it’s a bald-faced lie.”


See also:

Similar ‘Fiscal Malpractice’ Ballot Language Used by Schools Seeking Borrowed Dollars

Magic Words’ Not Enough to Get Berkley Schools’ in Election Law Hot Water

State rules that favorable statements from schools about ballot proposals do not break election law by expressly advocating for 'yes' votes

Schools That Break State Election Laws Face Just "Speeding Ticket" Fines

Supreme Court Okays Using Public Schools for Political Fundraising

School Advocacy in Bond Elections Questioned

School District Defends Its Neutrality in State House Race

Kent ISD Resources Used to Promote a 'Reception' for Democrat Congressional Candidate

School District Resources Used for Candidate Campaign Announcement 

Using Your Money to Get Your Money

Using Taxes To Lobby for Taxes