Financial Education
How school bonds work in Texas.
Texas separates money for daily operations from money for buildings and long-term capital. Here's why it matters.
General Operating
M&O Fund
Maintenance & Operations pays for the day-to-day work of running schools.
- Teacher and staff salaries
- Utilities and fuel
- Instructional programs
- Day-to-day operations
Debt Service
I&S Fund
Interest & Sinking pays down bonds used for long-term capital investment.
- New construction & renovations
- HVAC and roofing replacement
- Technology infrastructure
- Capital improvements
Bond funds cannot legally be used for teacher salaries or general operating expenses.
Texas law requires bond dollars to stay in the I&S fund for capital projects. That's why HVAC replacement paid from M&O — like the $1.2M Keller ISD used last year — pulls directly from classroom funding.
Why this matters for classrooms
When capital needs (like a failing HVAC) get paid from the operating budget, that's less money for teachers, programs, and daily operations. A bond can preserve classroom funding by moving those capital costs to the I&S fund where they legally belong.