Financial Transparency
NEISD is committed to managing taxpayer resources responsibly and transparently. The District’s long-standing record of strong financial practices includes consistently earning the state’s highest financial integrity rating, reducing debt costs through refinancing and defeasance, and maintaining one of the lowest administrative cost ratios in Texas. The information below provides a clear picture of how NEISD manages debt and finances in comparison with other districts.
Click here to view more information about the District's finances.
Finance FAQs
What is FIRST?
The Financial Integrity Rating System of Texas (FIRST) evaluates how responsibly school districts manage public funds. Superior Achievement is the highest rating. NEISD has received a “Superior Achievement” rating on TEA’s Financial Integrity Rating System of Texas (FIRST) 23 years in a row.2
How NEISD Reduced Debt Costs
NEISD uses two primary strategies to lower long-term debt costs: defeasance and refunding. Defeasance works like making an extra mortgage payment—by setting aside funds early to pay down bonds before they mature, the District reduces the overall interest that taxpayers must cover. Refunding is similar to refinancing your home loan—when market conditions allow, older bonds with higher interest rates are replaced with new ones at lower rates. Since 2012, the district has paid over $150M of debt early and has refunded (refinanced) over $1.2B of debt—saving taxpayers $193M.
How will the proposed bond affect my taxes?
Through careful financial management, NEISD has lowered overall debt costs by strategically refinancing bonds at lower interest rates and using defeasance to retire higher-cost debt early. Since 2012, these practices have saved taxpayers nearly $193 million. By actively monitoring market conditions and responsibly managing repayment schedules, the District has reduced long-term obligations while continuing to invest in safe, modern facilities for students.
What is FIRST?
The Financial Integrity Rating System of Texas (FIRST) evaluates how responsibly school districts manage public funds. Superior Achievement is the highest rating.
NEISD has received a “Superior Achievement” rating on TEA’s Financial Integrity Rating System of Texas (FIRST) 22 years in a row (1)
What is defeasance?
Paying off or setting aside funds to retire higher-cost bonds earlier than scheduled to reduce interest costs.
Think of defeasance like making an extra mortgage payment. When a homeowner sends in extra payments, those funds go directly toward paying down the principal balance, which reduces the total interest owed over the life of the loan. Similarly, when NEISD uses defeasance, the District sets aside money early to retire higher-cost bonds ahead of schedule. This reduces the overall interest paid and saves taxpayers money in the long run.
What is refunding?
Replacing existing debt with new bonds at lower interest rates to save money over time.
Refunding bonds is like refinancing your home loan. Just as a homeowner might refinance their mortgage to take advantage of lower interest rates and reduce monthly payments, NEISD refinances bonds when market conditions allow. By replacing older, higher-interest debt with new bonds at lower rates, the District lowers the total cost of repayment and saves taxpayers money over time.
What is the administrative cost ratio?
A Texas Education Agency (TEA) metric used in the Financial Integrity Rating System of Texas (FIRST) which measures the percentage of their budget that Texas school districts spent on administration.
Footnotes:
- Texas Bond Review Board. (2022). Texas Bond Review Board. https://debtsearch.brb.texas.gov/bond_elections_search.aspx
- Agency, T. E. (2024, March 1). Financial Integrity Rating System of Texas (FIRST). Tea.texas.gov. https://tea.texas.gov/finance-and-grants/financial-compliance/financial-integrity-rating-system-of-texas-first