General Obligation Bonds.  The board of directors of a school district may borrow money and issue bonds for any capital purpose.  The amount that may be borrowed is limited by the state constitution and state statutes.

The state constitution imposes a debt limit of 1.5 percent of the assessed value of property in the district. School districts may exceed this lower debt limit, up to the maximum limit of 5 percent indebtedness, plus an additional 5 percent for capital outlays, with approval of at least 60 percent of the voters. State statute imposes a lower threshold of 0.375 percent indebtedness, but allows districts to exceed this threshold to a total indebtedness of 2.5 percent, plus an additional 2.5 percent for capital outlays, with the approval of at least 60 percent of the voters voting.

Excess Levies.  The state constitution limits regular property tax levies to a maximum of 1 percent of the property's value.  Upon majority voter approval, school districts are authorized to collect excess levies above the 1 percent constitutional property tax limit for enrichment, transportation vehicles, and capital projects. 

Bond Levies.  School districts may also levy taxes above the 1 percent limit to make required payments of principal and interest on bonds issued for capital purposes if approved by at least 60 percent of the voters at an election where the total number of voters is at least 40 percent of the total at the last preceding general election.

Constitutional Amendment.  A proposed amendment to the state constitution must be approved by two-thirds of the members elected to each house of the Legislature, and then approved by a majority of the voters in the next general election.

A proposed constitutional amendment is submitted to the voters at the next general election to allow school districts to issue general obligation bonds for capital purposes, levy taxes to make payments on those bonds, and exceed the lower constitutional debt limit with 55 percent voter approval.