Bonds and levies are completely different revenue sources
Over the past few months many people have asked me what the primary difference is between a bond and a levy. Though both are thrown around synonymously, they are, in many cases, worlds apart.
Bonds and levies serve as two different ways for municipalities, special districts, school districts, and other entities to raise revenue.
A bond is debt, offered to the public, which must eventually be repaid with interest. By contrast, a levy is a tax that towns, counties, and similar districts impose on local property owners in order to raise money for services. Municipal governments will often have different requirements for levies than for bonds.
A levy refers to the act of imposing a tax to raise revenue. For example, a city that needs to raise money will often levy an extra tax on property owners within the city. The city will define the dollar amount it needs. Then it will spread this amount over the city's property owners, assessing the levy on each in proportion to the size and value of their property.
But bonds and levies have strict rules and guidelines about how funds can be used and for what purposes.
Let's look at local example of each:
Gresham-Barlow School District Bond: In November 2016 the voters of Gresham-Barlow School District approved a capital construction bond in the amount of $291.17 million. In this case, the bond projects went to increase safety, improve access to modern technology, and address chronic overcrowding through upgrades made to schools and classrooms throughout the district. All tangibles.
By contrast, in November 2020 voters in Portland approved their Parks Local Option Levy ballot measure. This levy will raise approximately $48 million per year for five years, starting in fall of 2021.This funding will provide operational funding for the Portland Park and Recreation parks system and programs that provide recreation services and help conserve parks, nature, and clean water in Portland. All Services.
Both the Gresham-Barlow School District Bond in 2016 and Portland's Local Parks Option Levy in 2020 were ways to raise revenue for different purposes passed by voters in both communities.
Though different in what they do, both bonds and levies play an important role in how government is funded, by how much, and how it may be used.
Bonds: One specific amount of money over an approved number of years for tangible objects such as buildings.
Levy: A specific amount of money each year for 5 years for services.
You count on us to stay informed and we depend on you to fund our efforts. Quality local journalism takes time and money. Please support us to protect the future of community journalism.