School Bonds and the Two-Thirds Rule

A levy is permission to tax for a set time. A bond is a loan, and the levy that repays it stays on tax bills until the last payment, often 20 years or more. Idaho makes that loan the hardest thing a school district can ask its voters for. This lesson covers why, how a bond moves from idea to tax bill, what the numbers on the ballot mean, and what the record of recent Idaho bond elections shows. For the overview and the general obligation versus revenue bond comparison, see Levies and Bonds in the local government course.

The constitutional rule

Article VIII, Section 3 of the Idaho Constitution is the anchor. It says no county, city, board of education, school district or other subdivision "shall incur any indebtedness, or liability, in any manner, or for any purpose, exceeding in that year, the income and revenue provided for it for such year, without the assent of two-thirds of the qualified electors thereof voting at an election to be held for that purpose." It adds two conditions: before or when the debt is incurred, there must be provision for an annual tax to pay the interest and to build a sinking fund that retires the principal "within thirty years." And it has teeth: "Any indebtedness or liability incurred contrary to this provision shall be void."

The exceptions, in the same section:

Exception	Who	Vote
Ordinary and necessary expenses authorized by the general laws of the state	Any subdivision, including school districts	None
Revenue bonds for off-street parking, public recreation and airport facilities, repaid only from user rates and charges	Cities	Two-thirds
Revenue bonds for water systems, sewage collection, water and sewage treatment plants, and rehabilitating existing electric generating facilities, repaid only from rates and charges	Cities and other political subdivisions	Majority
Revenue bonds repaid from port revenues other than property tax	Port districts	None

None of the revenue bond exceptions helps a school district, which has no user fees that could repay a building. So a school building financed over many years needs either two-thirds of voters or money the district already has.

The narrow "ordinary and necessary" door

Districts and cities have tried for decades to fit multi-year commitments through the ordinary and necessary exception. The Idaho Supreme Court has kept that door narrow. In City of Boise v. Frazier, 137 P.3d 388 (2006), the court revived an 1897 reading that an expense qualifies only if there is a necessity to make it in that year, according to an analysis by the Idaho firm Hawley Troxell. Before Frazier, the exception had been read to cover repairs and some replacement of obsolete or unsafe facilities. The practical lesson for school boards: a new school paid over 20 years is debt, whatever the contract calls it, and needs the vote.

What the statutes add

Title 33, Chapter 11 is the school bond chapter. Its key sections:

• Purposes, 33-1102. Bonds may buy or improve sites, build schools and other buildings, demolish buildings, add to, remodel or repair existing buildings, furnish and equip them, buy school buses, and build renewable energy systems. Salaries and operating costs are not on the list.
• Calling the election, 33-1103. A majority of the board may submit the question of issuing bonds "in an amount and for a period of time to be named in the notice of election." The election is run under Title 34, and the question passes only with the percentage "set by the constitution," which today is two-thirds.
• Debt limit, 33-1103(3). An elementary district with at least six teachers, or a district running both elementary and secondary schools (or bonding to acquire a secondary school), may issue bonds up to 5 percent of market value for assessment purposes, less aggregate outstanding indebtedness. Every other district is held to 2 percent. Market value here includes property exempt under the homeowner exemption (63-602G), measured on the date voters approve the bonds.
• Amortization, 33-1107. No bond without an amortization plan. The first principal payment must come due within two years. Payments must be met by an equal annual tax levy over the term, within 10 percent of a level payment for the issue or for all the district's bonds combined, or paid off faster than level. A different plan needs the state superintendent's approval. Each issue must be paid in full within 30 years, interest is paid twice a year, and bonds may not be sold below par.
• The levy, 33-802A. Each year the board levies enough, with what is left in the bond interest and redemption fund, to cover at least the next 12 months of payments and no more than 120 percent of them.
• The backstop, 33-1114. If a board fails to certify the bond levy, the county commissioners must set one big enough to pay the year's bond, interest and judgment obligations. Bondholders get paid either way.
• Refunding, 33-1121. A board may issue refunding bonds to pay off old ones, with no election if the new bonds add no term and no total principal and interest.

The ballot statement: 34-913

Idaho Code 34-913, in effect since July 1, 2021, requires a brief official statement on the ballot, above where the voter marks it, and in the official election notice. In simple language it must give:

1. the purpose, including a description of the facility or project, the election date and the principal amount;
2. the anticipated interest rate based on current market rates, and the maximum rate if the question sets one;
3. the total to be repaid, split into principal, interest and the sum of both;
4. the estimated average annual cost: "A tax of $___ per $100,000 of taxable assessed value, per year, based on current conditions";
5. the payoff period in months or years;
6. the district's total existing indebtedness, including interest accrued; and
7. the state relief rule: state tax relief funds, including school district facilities funds, may be mentioned only if a specific dollar amount is guaranteed, and then with the words "such state tax relief funds are currently only guaranteed through" and the year.

The cost per $100,000 uses a formula written into 34-913(2): ((bond total / taxable value) x 100,000) / duration, where bond total is the full repayment with interest, taxable value comes from the county treasurer or assessor, and duration is the payoff period in years. A bond question without the full statement is not binding. Under subsection (5), every district mailing to 20 or more voters and every poster, web page or social post the district presents about the bond must carry items (b) through (g). If a court finds the district did not comply, it must declare the result invalid and award costs and fees to the winning side. What else a district may and may not say about its own bond is the subject of lesson 8.

From idea to tax bill

1. Facility study and enrollment projections. Most districts start with a building condition assessment and enrollment forecast, often with a citizen committee. Since 2024, every district taking modernization money must also have a ten-year facilities plan on file with the Department of Education under 33-918 (see lesson 6).
2. Financing plan. The district's municipal advisor and bond counsel size the bond, model interest rates and estimate the levy. The district checks its 33-1103 debt limit.
3. Board resolution. A majority of trustees votes to call the election, naming the amount and term, at a noticed public meeting under the Open Meeting Law.
4. Ballot language to the county clerk by 5 p.m. on the tenth Friday before the election (34-106(8)), with the full 34-913 statement. For the May 18, 2027 election that is March 12, 2027.
5. Notice and campaign. The county clerk publishes the election notice with the statement. The district may inform but not advocate (lesson 8); private committees may campaign and must register and report under the Sunshine Law.
6. Election and canvass. On the third Tuesday in May or the Tuesday after the first Monday in November. The county canvasses the results; two-thirds of those voting on the question must say yes.
7. Guaranty and rating. After the vote, the district may apply to the State Treasurer for the School Bond Guaranty and seek a credit rating.
8. Sale and closing. Bonds are sold, at par or better, under an amortization plan that meets 33-1107. Bonds may be issued "at any time after the date of such election" (33-1103(5)).
9. Levy. Each September the board certifies a bond levy under 33-802A, after applying facilities fund money first under 33-911.

The numbers on the ballot

Same $40M bond	Annual payment	Total repaid	Total interest	34-913 cost per $100,000
20 years at 4.25%	$3,008,793	$60,175,868	$20,175,868	$94.02
20 years at 4.00%	$2,943,270	$58,865,400	$18,865,400	$91.98
30 years at 4.25%	$2,383,930	$71,517,896	$31,517,896	$74.50

Read across the rows. Stretching the term from 20 to 30 years lowers the yearly cost by about $20 per $100,000 and adds about $11.3 million in interest. And a quarter point of interest on a $40 million, 20-year bond is worth $60,175,868 - $58,865,400 = $1,310,468 over the life of the loan, which is why districts care so much about credit ratings and the state guaranty.

The School Bond Guaranty and credit ratings

Since 1999, the Idaho School Bond Guaranty Act has let districts borrow on the state's credit. Under 33-5303 the state pledges its sales tax to guarantee "full and timely payment" of principal and interest on qualifying voter-approved bonds. Under 33-5304 a district applies to the State Treasurer after voters approve the bonds; the Superintendent of Public Instruction reviews the district's fiscal solvency on request; and the Treasurer issues a certificate of eligibility unless guaranteeing the district would be imprudent or would hurt the state's credit. The Treasurer may charge an application fee of the greater of processing costs or $500, and a transaction fee of up to 0.05 percent of total principal and interest. A district whose bonds were ever paid by the state cannot get another guarantee until it repays the state and the Treasurer certifies it solvent. The chapter also sets up an intercept of state payments to the district if the state ever has to step in.

The State Treasurer's page says state enhancement alone may allow an Aa1 rating from Moody's or AA from S&P, and that a second layer from the Endowment Fund Investment Board may allow Aaa or AAA, with EFIB enhancement capped at $40 million per district. The EFIB program is a commitment that the Treasurer may borrow from the Public School Endowment Fund to make a payment if neither the district nor the state guaranty does. A district may skip the guaranty by leaving the act's name off its bonds.

Refinancing, leases and other roads

Refunding. When rates fall, districts refinance. Under 33-1121, a refunding needs no election if the refunding bonds do not run longer than the old ones (with a 60-day allowance to fit guaranty rules) and the total principal and interest does not exceed the old bonds'. An advance refunding, done before the old bonds can be called, must also have a lower net interest cost.

Plant facilities levies. The main pay-as-you-go alternative, approved by 55, 60 or 66 2/3 percent depending on the district's debt load, for up to ten years (or twenty for safety fixes). Lesson 6 covers it.

Lease-purchase. Under 33-901 a plant facilities reserve fund may pay lease and lease-purchase agreements for building purposes, but no lease-purchase may run past the end of the levy that supports it. A multi-year lease paid from the general fund, with no voter-approved levy behind it, runs straight into Article VIII, Section 3 and the narrow reading in Frazier. The facilities fund in 33-911 lists lease-purchase payments among the uses for money left after bonds and levies are paid down.

State money. School District Facilities Fund money must pay existing bonds first, and leftover money may secure and pay a new facilities bond. The modernization fund sent districts $1 billion by February 2025. And for buildings found unsafe, the 33-909 cooperative program can pay for repairs, with the district repaying its share over up to 20 years. A district whose voters have failed within the past two years to approve a bond or plant facilities levy to fix unsafe buildings is among those that may apply.

Proposals to change the two-thirds rule

Because the rule is in the constitution, changing it takes a joint resolution passed by two-thirds of each chamber of the Legislature and then approval by a majority of voters at a general election. Bills to do it come up often and have not reached the ballot in recent years.

• 2017, HJR 3. Introduced by House Minority Leader Mat Erpelding of Boise to lower the bond threshold from two-thirds to 60 percent, according to the Spokesman-Review. The House Local Government Committee agreed to print it, with three members opposed. It did not reach voters.
• 2024, HJR 2. Sponsored by Rep. Rod Furniss of Rigby, it would have set 55 percent in years with statewide elections, such as presidential years, and kept two-thirds in years with only local elections, as ProPublica and the Idaho Statesman reported. The Legislature's record shows it introduced February 22, 2024, sent out of the House Education Committee with a do-pass recommendation, placed on General Orders and left there; it never got a floor vote.

The arguments are stable. Supporters of a lower threshold, including many superintendents and school board members, say two-thirds lets a little over a third of voters block projects most residents want, that repeated failures push districts into portable classrooms, higher construction prices and costlier repairs, and that Idaho is one of only two states with a two-thirds requirement for school bonds, as ProPublica and Idaho Education News report. Defenders of the rule, including taxpayer groups and many legislators, say long-term debt binds future owners and renters who did not vote, that a broad consensus should be required before a 20- or 30-year tax, that the state's new facilities money reduces the need for local debt, and that a rule written into the constitution should change only with the same broad agreement it demands of a bond. Both sides can use the same arithmetic: a bond with 60 percent yes is a majority that lost.

The recent record

We did not find an official statewide bond pass rate published by the State Department of Education, the Secretary of State or the Tax Commission for recent years. Idaho Education News, which reports every school measure after each election, gives the clearest picture. Its reporting shows that Salmon's May 2024 win broke a streak of 12 consecutive bond failures, and that no bond has passed since. EdNews also reported in September 2026 that the last bond to pass at a November election was in 2017, when Teton passed two.

District	Election	Bond	Yes vote	Result
Salmon	May 21, 2024	$20M, new K-8 to replace Pioneer Elementary	72%	Passed
Ririe	May 21, 2024	$1.5M	67%	Passed
Castleford	May 21, 2024	$8.25M	56%	Failed
Pocatello/Chubbuck	May 21, 2024	$33M	About 37% (63% opposed)	Failed
McCall	May 21, 2024	$14M	About 42% (58% opposed)	Failed
Camas County	May 21, 2024	$9M	About 37% (63% opposed)	Failed
Fremont County	Nov. 4, 2025	$17M	51%	Failed
Gooding	Nov. 4, 2025	$26.4M	43%	Failed
Camas County	Nov. 4, 2025	$1.75M	About 15%	Failed
Kimberly	May 19, 2026	$57.8M, 30 years	About 14% (unofficial)	Failed
Rockland	May 19, 2026	$3.8M, 10 years	About 34% (unofficial)	Failed

Sources: Idaho Education News results for May 2024, November 2025 and May 2026. Percentages shown as "about" were computed from the reported opposition share. Confirm with the county clerk's official abstract before citing a final figure.

Read the table two ways. Fremont County's 51 percent was a majority that lost. Kimberly's roughly 14 percent was not close under any threshold. Supporters of the two-thirds rule point to results like Kimberly's to show the rule is not what stops most bonds; supporters of a lower threshold point to Fremont, Castleford and the long failure streak. Ririe's 67 percent shows how thin the line is. In November 2022, Idaho Falls School District 91's $250 million bond also failed; the fight over the district's bond materials that followed is covered in course 46, lesson 7.