When encountering figures involving public finances in the millions, billions and trillions of dollars, it’s hard to wrap your head around how much those numbers truly represent. Even our “contribution” to repayment of ISD 166 bond debt is difficult to realize…even when shown as the “per month” payments in a recent ISD 166 referendum ad.
At the beginning of this year ISD 166 had $7,831,000 in bond debt. Nearly $3 million dollars of that debt was incurred just last year. If you put that number into an amortization table at 2 percent interest with a term of 20 years, the principal and interest payment would be $475,389 each year…nearly $40,000 dollars a month. Of course this amount would vary depending on the actual interest rate and term length of individual bonds, but it gives a somewhat understandable picture of the sizable debt our school district holds.
The 20-year $6,500,000 general obligation bond on the November ballot will substantially add to the ISD 166 current debt load. Amortizing this additional bond debt at 2 percent and for its 20-year term, shows a principal and interest payment of $394,589 each year…about $33,000 a month.
Combined, a total of over $14 million of ISD 166 debt will be the result, with over $3 million of interest added to that total… more than $17 million to be repaid through property taxes. Principal and interest expenditure from the ISD 166 budget would be $869,978 annually for the next 20 years.
You likely won’t see ISD 166 advertise “Only $72,498 per month!” in a promotional ad.
Uncontrollable debt does not make “Strong Schools” or “Strong Communities.”
Bob LaMettry
Grand Marais
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