How the growing-loan pile was built

In short: years ago the district used loans that grow before they are paid, which pushed costs onto later taxpayers.

The short version

• A growing loan (a capital appreciation bond, or CAB) pays nothing for years. The interest builds up and all comes due at the end.
• LISD used these loans before 2008 and kept using them through 2014. The 2006 sale borrowed about $125 million and promised about $535 million back. The last payments are due in 2045.¹
• The biggest one was sold in 2014. It brought in about $189 million and promised about $997 million back between 2032 and 2049. In 2016 LISD refinanced all of it; those bonds were paid off from escrow in 2024, and the cost now sits in newer bonds. The 2016A bonds still carried about $99 million of growing-loan balance on June 30, 2025.²³⁴ In Sept. 2026 the district refinanced about $11.6 million of that, leaving the 2016A growing loans that come due 2026–2033 and 2040–2044.⁵
• LISD still has more of this debt than any other Texas district. It has been first every year from 2016 to 2025.⁶
• In 2015 the state limited these loans. New ones can now last no more than 20 years.⁷

In short

A growing loan pays nothing for years, then comes due with a big balloon. Leander used these loans through 2014. The 2006 sale borrowed about $125 million and promised about $535 million back.¹ Leander still has more of this debt than any other Texas district.⁶

Why it matters to your tax bill: the balloon payments are paid by the debt tax, years after the money was borrowed.

Related: growing loans · refinancing · interest · all school loans

The short answer

Most loans are paid down a little every year. A growing loan is different: nothing is paid for a long time, so the amount owed keeps growing. At the end, one big payment comes due.

This made new schools cheap to pay for at first. The cost moved to later years, and later taxpayers.

Layer 1: What a growing loan is

Think of two ways to borrow $100:

• A normal loan: you pay some back every year. The interest stays small because the balance shrinks.
• A growing loan: you pay nothing for 20 or 30 years. Interest is added to the balance every year, so it keeps growing. At the end you owe far more than $100.

Districts liked growing loans because they kept the yearly debt tax low now. Before selling bonds, a Texas district must pass a state test. It must show it could pay all its bond debt with a debt tax of no more than 50 cents per $100 of property value. This is called the “50-cent test.” Loans with no payments in the early years made that test easier to pass.⁸

Layer 2: How LISD built the pile

It started before 2008. Each of LISD’s five bond sales from 2003 to 2007 was partly growing loans.⁹ The district was growing fast: fall enrollment rose from about 11,800 students in 1998-99 to about 26,400 in 2007-08, and to about 35,400 by 2013-14.¹⁰

Sale	Money received	Promised back	Ratio (basis named)
2003	about $6.0 million borrowed	about $12.6 million11	promised back ÷ amount borrowed: about 2.111
2004	about $43 million	about $198 million1	promised back ÷ money received: about 4.61
2005	about $56.0 million borrowed	about $177.2 million (last due 2034)11	promised back ÷ amount borrowed: about 3.211
2006	about $125 million	about $535 million (last due 2045)1	promised back ÷ money received: about 4.31
2007	about $90.8 million borrowed	about $285.2 million (last due 2042)11	promised back ÷ amount borrowed: about 3.111

It peaked in 2014. Part of the 2014 sale (called Series 2014C) brought in $189.4 million. That was $187.5 million in loans plus $1.8 million extra that buyers paid. When sold, it promised $996.7 million back between 2032 and 2049.²

How you measure that depends on what you compare:

Comparison	Ratio
Promised back ÷ money received	5.26 (the state Bond Review Board uses this)
Promised back ÷ amount borrowed	5.32
Interest only ÷ amount borrowed	4.32 ($809 million of interest on $187.5 million)

All three come from the same official bond papers. They differ only in what goes on each side of the comparison.¹² When you see one of these numbers, check which comparison it uses.

The banks that sold the 2014C bonds were paid about $1.16 million for doing it.¹³

The other side

• Growing loans were allowed by state law at the time. Their payments start small, so they let the district open schools when students arrived, without a big tax jump right away.
• The district stopped using them, and has refinanced some of the old ones to cut the cost (see refinancing).

Questions to ask

• Can the district post the board orders for its older loans?
• Where can the public find what the adviser was paid on older deals?

Changes to this page

• Nov. 4, 2026: Each row of the 2003–2007 table now points to its source note.
• Nov. 2, 2026: Added questions to ask.
• Nov. 2, 2026: Added the steps behind the figures to the notes.
• Nov. 2, 2026: We checked every figure against its source. We reworded the other-side points so they stick to what the sources show.

What you can do or watch next

• Watch each year’s debt payments in the budget, adopted each June.
• See growing loans for which loans are still being paid.
• You can ask about remaining growing loans during public comment at a board meeting.

What we still don’t know

• We have not seen what the district’s money adviser was paid for each of these older deals.
• We have not seen the board votes, by name, on the 2003–2014 loan orders. They are not online.

Layer 3: What it still costs, and what changed

It is still the biggest. In 2016, LISD owed about $2.2 billion of growing-loan debt, out of about $7.5 billion for all Texas districts. By 2025 it was down to about $536 million counting interest (about $27 million of original loans still unpaid), but that was still the most in the state. The next-highest district, Wylie ISD, had about $210 million.⁶

The interest shows up in the budget years later. In the 2026 budget, about $41.7 million is listed as growing-loan “interest.” By our math, about $34.3 million (82%) of that is extra cash buyers paid up front. They paid it when the loans were sold in 2015 to 2023. Only about $7.4 million is interest that built up.¹⁴

The state changed the rules in 2015. A new law, HB 114, says that new growing loans backed by taxes:⁷

• can last no more than 20 years;
• can be no more than 25% of all the district’s debt; and
• need a written estimate of the full cost before they are sold.

Not shown:

• whether HB 114 was written because of LISD;
• what each growing loan would have cost as a normal loan.

Sources

Numbers marked “our math” are our estimates, not official figures. The notes show the inputs and the steps.

Footnotes

1. 2004 and 2006 official statements (sources and uses), our arithmetic. Ratio = maturity value ÷ CAB proceeds. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶

2. Series 2014C official statement, sources and uses and maturity schedule (saved copy). Public copy on MSRB EMMA (https://emma.msrb.org/). ↩ ↩²

3. Series 2016A official statement, Schedule of Refunded Bonds: all 2014C maturities (2032–2049, $187,519,161.80) refunded; called Aug. 15, 2024 at $331,534,977.13 accreted value; 2014C is not listed as outstanding in the FY2018–FY2024 annual financial reports. No 2014C maturity is still unpaid. ↩

4. Annual financial report FY2025, Note 6, capital appreciation bonds: 2016A accreted value $99,262,087, maturities 2026–2044. This is before the 2026A partial refinancing. ↩

5. Series 2026A official statement, Schedule I: 2016A growing loans due 2034–2039 refunded, accreted value $11,586,215.71 on Sept. 28, 2026. ↩

6. Texas Bond Review Board local debt data, FY2016–FY2025. ↩ ↩² ↩³

7. HB 114, 84th Legislature (2015), enrolled text, Gov’t Code §1201.0245. https://capitol.texas.gov/tlodocs/84R/billtext/html/HB00114F.htm ↩ ↩²

8. Texas Education Code §45.0031 (statute); Texas Comptroller, Fiscal Notes, March 2016, “Capital Appreciation Bonds” (Comptroller article): CABs help districts “borrow money for decades without exceeding the 50-cent cap.” ↩

9. Series 2003–2007 official statement covers. Growing-loan par: 2003 $6.0M; 2004 $10.4M (plus $32.5M premium); 2005 $56.0M; 2006 $122.5M; 2007 $89.8M. ↩

10. TEA School District Profiles (Snapshot), fall total enrollment: 11,841 (1998-99), 26,443 (2007-08), 35,355 (2013-14). ↩

11. Series 2003, 2005 and 2007 official statement inside covers; our sums. Basis is the amount borrowed (principal), not money received. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶

12. Same official statement. $996,695,000 ÷ $189,353,161.80 = 5.26; ÷ $187,519,161.80 = 5.32; ($996,695,000 − $187,519,161.80) ÷ $187,519,161.80 = 4.32. ↩

13. Series 2014C official statement, underwriters’ discount $1,155,737.67. ↩

14. FY2026 debt service detail; our math (not a district figure) from the official statement pricing tables: $41,705,748 of $101,215,314 FY2026 interest; $34,317,775 premium, $7,387,973 built-up interest. $34,317,775 + $7,387,973 = $41,705,748. $34,317,775 ÷ $41,705,748 = 82%. ↩