On Michigan's Primary Election Day Voters In The Colon School District Decide On "Sinking Funds"
Some Michigan residents will vote Tuesday in primary elections. Many ballots will have bond proposals for schools and municipalities.
Voters in the Colon Community Schools District will vote on something called “a sinking fund. “
Building and Site Sinking Funds are less common than bonds. The difference between them is sort of like the difference between a credit card and a checking account.
For a bond, district residents agree to pay a certain amount in property taxes. Then the school borrows against that future income and uses the taxes to pay back the loans.
David Martell is with Michigan Schools Business Officials. He says when voters approve a sinking fund, and property owners pay, it’s very different from bonds.
“Sinking fund is kind of the opposite of that. It’s where you set money aside to have available to do major projects or minor projects” said Martell.
Sinking funds can’t be used for really big projects. They also can’t be used for salaries, for school vehicles, for general building maintenance, or for teaching materials. Sinking funds can be used for building and grounds repairs or updates, security systems, or technology upgrades.
Colon Community Schools is voting to continue a 1.3 mill tax levy that was previously part of a bond. It would instead be paid into a sinking fund for the next eight years.