Most Guilford County residents know that the May 17 primary election’s ballot has a $1.7 billion school bond referendum on it, but they may not realize that the amount taxpayers will have to pay back will be closer to $2.5 billion.

The $1.7 billion is the amount the county would receive from issuing the bonds and issuing bonds is simply the way the country borrows money. However, the payback – over a 20-year period – will be much higher, with the amount dependent on interest rates at the time the bonds are issued.

Guilford County government has a AAA rating from bond agencies – as good as it gets – so the county receives the very best rates on the bonds it issues.  However, that 3 percent or so rate still adds up to hundreds of millions of dollars over a 20-year payback period.

This year, Guilford County issued part of a $300 million school bond approved in a prior election and got an interest rate of about 2.5 percent, however, since then, interest rates have been on the rise.

Former Guilford County Commissioner Alan Branson has called for an investigation of Guilford County government’s alleged attempt to put a positive spin on the bond and its implications.  Branson, who’s seeking reelection to the board of commissioners, said this week that the county’s discussion of bonds is completely one-sided.  He said bond backers always talk about the benefits of better school facilities and fewer overcrowded classrooms, but they never point out that the county will be paying the money back for two decades – creating a tremendous upward pressure on the tax rate.

A school bond payback plan that county staff presented to the Board of Commissioners last month requires an additional $50 million in revenue each year to repay the $1.7 billion principal plus an estimated $719 million in interest.  Over and above that $50 million annually, the payback plan calls for the money that’s now being used to repay existing school bond debt to be put toward paying back the $1.7 billion once the old school debt is paid off.

If the $1.7 billion bond packages passes and interest rates are higher in 2023 or 2024 when the county begins issuing the new debt, the payoff amount will be higher as well.