West Ada taps state funds to build two schools without raising taxes

With help from the Legislature, Idaho’s largest school district has the lowest property tax rate in the state and can build two new buildings over the next year without increasing its local tax burden.

At a time when bonds and levies are hard to pass, West Ada School District trustees on Monday night approved a complicated loan agreement that will give the district $56.4 million in cash. The money will help the district turn a vacant warehouse into a career and technical education center on Locust Grove and rebuild Lake Hazel Elementary, with both projects expected to open in fall 2027. The district will pay the loan off over 15 years with ongoing state facilities funding.

West Ada CFO Dave Roberts said the district expects at least $35.8 million in sales tax every year from House Bill 292, passed in 2023. The bill was designed to reduce school districts’ property tax burden. A fraction of that annual appropriation, $5.3 million, will pay off the loan without increasing property taxes.

“It’s possible that with this type of funding that West Ada may be able to build buildings without ever going to taxpayers again,” Roberts told EdNews on Tuesday.

The projects follow the district’s recent completion of Independence Elementary in Star, which was built with state modernization funds from House Bill 521 and without an increase in property taxes.

West Ada trustee David Binetti used props to show the relative tax rates and test scores between West Ada and Boise school districts at a June 8, 2026, school board meeting in Meridian. West Ada has the lowest tax rate in the state and may be able to build new schools without ever going to taxpayers again. (Sean Dolan/EdNews)

The money comes from a complicated process called certificate of participation financing. But it’s basically just a loan.

If all goes according to plan, investors, pension funds and insurance companies in October will be able to buy certificates of participation in a public offering. Roberts said it’s the same market that buys municipal bonds. The investors would essentially buy shares in a lease of the two buildings.

State law requires school districts to ask voters before going into debt, but the certificate of participation process is not debt. The school board for the next 15 years must approve the lease and make payments annually. If trustees for some reason decide not to renew or skip a payment, the district would be evicted from the two buildings.

“That’s the gymnastics you have to go through to make that legal in the state’s eyes and the constitution’s eyes,” he said.

The 15-year loan comes with a 4.56% interest rate, which is expected to total $22.7 million by the end of the term on the $56.4 million loan.

But interest rates are tricky these days.

Eric Heringer — managing director of Piper Sandler’s Idaho office, the loan’s underwriter — presented trustees on Monday with interest rates as of Sept. 21, one week before the meeting.

“Unfortunately, interest rates have continued to go up,” Heringer told trustees. “So this is a little bit dated.”

He said the country is in a “challenging market environment” and the investment bank is not in a position to lock in interest rates quite yet. He said rates are above average, due to inflation and oil prices.

“The concern is inflation is not going away,” Heringer said. “And as we get bad inflation information, we see higher rates throughout the market.”

But regardless of interest rates, Heringer said the facilities funding from HB 292 has made the financing arrangement possible without going to voters. Passing any kind of funding election these days, he said, is “tough sledding.”

“Thankfully, you’ve got these school facility fund monies coming in, which provide that revenue to finance something now without a vote,” he said.

Roberts said the district is conservatively estimating that HB 292 will provide at least $38.5 million for West Ada as long as the Legislature keeps the program alive.

“The purpose of 292 was property tax relief for our taxpayers, and in West Ada, our taxpayers are getting maybe the best property tax relief in the state of Idaho because they’re having no property tax to pay because of it,” Roberts said.

Heringer’s presentation on Monday showed West Ada’s tax burden is just $1.17 per $100,000 of taxable value, the lowest in Idaho. For regional comparisons, Kuna levies $48, Vallivue levies $142 and Boise levies $313 per $100,000.

Property tax rates also vary among Idaho school districts because of other factors, including property values and population.

A comparison of the 20 largest school districts by property tax rates, from a Piper Sandler presentation to the West Ada school board.

West Ada benefits from close relationships with leadership at the Statehouse. Speaker of the House Mike Moyle, R-Star, Senate Majority Leader Lori Den Hartog and House Majority Leader Jason Monks, both R-Meridian, represent part of the district.

Roberts said West Ada leaders were able to lobby the Legislature last year to rewrite HB 292 to specifically allow the certificate of participation financing. He said the district is thankful to the leadership that provided that support.

“It’s not necessarily that West Ada did it,” Roberts said. “The Legislature has put the provisions in place to allow us to do this and provide these facilities tax free.”