Glossary of Terms
This glossary defines every technical term used on this site. Definitions are written in everyday language. If you see an unfamiliar term anywhere in the eLearning Course or District Profiles, you can look it up here.
Assessed Value (Limited Property Value)
The official value of your property used to calculate your property tax bill. In Arizona, your assessed value is 10% of your home’s Limited Property Value (LPV). The LPV is a number set by the county assessor that grows by no more than 5% per year under Proposition 117, even if your home’s market value rises faster. Example: If your home’s LPV is $400,000, your assessed value is $40,000. That $40,000 figure is what the tax rate is applied to.
Average Daily Membership (ADM)
The number of students enrolled in a school district on an average day during the school year. Arizona uses ADM as the primary measure of enrollment for funding and capacity purposes. It is different from total enrollment because it accounts for students who enroll or leave during the year.
Bond Authorization
The maximum dollar amount that voters have approved a school district to borrow through bond issuance. Authorization gives the district permission to borrow up to that amount but does not require it to borrow every dollar. Unused authorization expires 10 years after the election.
Bond Counsel
A law firm hired by the school district to ensure that the bond issuance complies with state and federal law. Bond counsel drafts the legal documents, reviews the election procedures, and provides a formal legal opinion that the bonds are valid and that the interest is tax-exempt.
Bond Rating (Credit Rating)
A grade assigned to a school district’s bonds by an independent rating agency (such as Moody’s, S&P, or Fitch) that reflects the district’s financial health and ability to repay its debt. A higher rating means investors see the district as a reliable borrower, which typically results in a lower interest rate and lower borrowing costs for taxpayers.
Budget Override
A voter-approved measure that allows a school district to spend more than its state-calculated budget limit for a set number of years. Unlike bonds, overrides do not create debt. The additional revenue comes from the secondary property tax. Arizona has three types of overrides: maintenance and operations (M&O) overrides for general operating costs, capital overrides for equipment and buses, and special program overrides for specific programs. Overrides last up to 7 years and must be renewed by voters to continue.
Capital Expenditure
Spending on physical assets that have a useful life of at least five years. In Arizona school bond elections, capital expenditures include buildings, land, renovations, equipment, technology infrastructure, furniture, and school buses. Capital expenditures are the only type of spending that bond money can legally fund. Example: Building a new school gymnasium is a capital expenditure. Paying the coach who works in that gymnasium is an operational expenditure.
Debt Capacity (Bonding Limit)
The maximum amount of bond debt a school district is legally allowed to carry at any given time. In Arizona, unified school districts (K–12) can borrow up to 20% of their total assessed property value or $1,500 per student, whichever is greater. This limit includes all existing outstanding bonds.
Debt Service
The total annual payments a school district makes to repay its bonds, including both principal (the original amount borrowed) and interest (the cost of borrowing). Debt service is funded by the secondary property tax.
Full Cash Value (FCV)
An estimate of what your property would sell for on the open market, as determined by the county assessor. In Arizona, the full cash value is used to calculate the district’s bonding limit, but it is not used directly to calculate your property tax bill. Your tax bill is based on the Limited Property Value, which is usually lower than the full cash value.
General Obligation Bond
A type of bond that is backed by the full taxing power of the school district. When voters approve a general obligation bond, the district pledges to levy whatever secondary property tax rate is necessary to make the annual payments. This is the type of bond used in Arizona school bond elections.
Governing Board
The elected body that oversees a school district. In Arizona, school district governing boards typically have five members elected by voters within the district. The board sets policy, approves budgets, hires the superintendent, and votes on whether to place bond and override measures on the ballot. Board members serve four-year terms.
Informational Pamphlet
A document required by Arizona law to be mailed to every household with a registered voter in the school district before a bond or override election. The pamphlet includes the full text of the ballot question, a list of proposed projects with cost estimates, estimated tax impacts, the district’s current and projected debt schedules, and arguments for and against the measure.
Operational Expenditure
Spending on the day-to-day costs of running a school district. This includes teacher and staff salaries, classroom supplies, utility bills, insurance, transportation operations, and program costs. Bond money cannot be used for operational expenditures.
Primary Property Tax
The portion of your property tax bill that funds the basic operations of government, including the base budget for school districts, cities, counties, and community colleges. The primary tax rate is subject to constitutional limits. School bonds are not repaid through the primary tax.
Secondary Property Tax
The portion of your property tax bill that funds voter-approved debt and additional spending. School bond repayment, budget overrides, and certain special taxing districts are all funded through the secondary property tax. Unlike the primary tax, the secondary tax rate for bond repayment has no cap.
Special Interest Group (SIG)
An organization that raises and spends money to influence the outcome of an election. In school bond elections, SIGs may include political action committees, teacher unions, business associations, construction industry groups, or community organizations. Arizona law requires SIGs to file campaign finance reports disclosing their contributions and expenditures. SIG involvement is neither inherently positive nor negative; it reflects organized interest in the election outcome.
Tax Levy
The total amount of property tax revenue that a government entity (such as a school district) is authorized to collect in a given year. The levy is calculated by multiplying the tax rate by the total assessed value of all taxable property in the district.
Tax Rate (per $100 of Assessed Value)
The amount of tax owed for every $100 of your property’s assessed value. Arizona expresses property tax rates in this format. To calculate your tax, divide your assessed value by 100 and multiply by the rate.
Underwriting
The process by which an investment bank (called the underwriter) purchases bonds from a school district and resells them to investors. The underwriter takes on the risk of finding buyers and earns a fee for this service. The district receives the bond proceeds to fund its capital projects.
Unified School District
A school district that serves students in all grades from kindergarten through 12th grade. Arizona has three types of school districts: elementary districts (usually K–8), high school districts (usually 9–12), and unified districts (K–12). Chandler USD, Mesa USD, and Peoria USD are all unified districts. The bonding limit for unified districts (20% of assessed value) is higher than for non-unified districts (10%).