California School District Will Spend $1 Billion to Borrow $100 Million

Considering all the dumb **** California does this does not surprise me.

California School District Will Spend $1 Billion to Borrow $100 Million | Fox Business
It’s being called a loan not even a subprime lender would make.
A school district north of San Diego, Poway Unified, borrowed $105 million over 40 years by selling a bond so unusual that the State of Michigan outlawed it years ago. Taxpayers in the area will end up with a nearly $1 billion bill at the end of this deal.
The Poway school district is not the only one — three other California school districts in San Diego are set to gouge taxpayers in similar fashion. The San Diego Unified School district borrowed $164 million up front, but will owe a whopping $1.3 billion at the end of its long-term bond. Oceanside Unified sold a $30 million bond, but will owe nearly ten times as much decades later, $280 million total. And Escondido Union School District likewise borrowed $27 million and will owe $247 million total. (Will Carless and Joel Thurtell at the Voice of San Diego, a local blogger, has been tracking these bond developments.)
The bonds are a "kick the can" move to avoid dinging taxpayers now with higher property taxes.
Oh, and the bonds are not callable -- they can’t be paid off early or refinanced.

The same with governmental entities selling the income for tollroads to foreign investors - a penny on the dollar in the long run.
This generation is completely selling out the children do less than leaving nothing - instead massive, unthinkable debts and all assets of the country sold off.

This is so fiscally irresponsible I would hope someone goes to jail. I know they won't, but I hope for change.

Think about this, the guy who will be Mayor of the city when that comes due, he is probably in high school right now.

Ouch, and we thought CO had school funding issues. I don't understand how something like this could even happen. Who okayed this? Who okayed the person who okayed this?

Poor California.









On a related note, yikes, S. E. Cupp has aged horribly in the last few months.

85% of the district revenue goes to pay salaries?

More insanity from Kalifornia. The school upgrades will be obsolete, and the place will be like Detroit long before their first payment is due.

The lender is just as dumb as the borrowers in this situation. Can you spell d-e-f-a-u-l-t?

And I heard the private sector was doing just fine.

But the number of upper bracket taxpayers, with $500,000 or more in annual incomes, dropped by a third from 2007 to 2009, leaving fewer to tax, the California Taxpayers Association notes based on data from the state’s Franchise Tax Board..

As of the 2009 tax year, California listed just 98,610 California tax returns with adjusted gross income of $500,000 or more, down 32.5% from the 146,221 in 2007.

Read more: California School District Will Spend $1 Billion to Borrow $100 Million | Fox Business

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This is the idiots in San Diego local government, not the California state government. I get pissed when cowards fund propositions on the state referendum with bonds, but this is ever so much worse.

RadicalModerate said:

Ouch, and we thought CO had school funding issues. I don't understand how something like this could even happen. Who okayed this? Who okayed the person who okayed this?

Poor California.









On a related note, yikes, S. E. Cupp has aged horribly in the last few months.

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This debunks the notion that the government--government agencies--don't need to be run like a business. Instances like this make it obvious that at least a little business savvy is required to be a member of the government.

jamesrage said:

Considering all the dumb **** California does this does not surprise me.

California School District Will Spend $1 Billion to Borrow $100 Million | Fox Business
It’s being called a loan not even a subprime lender would make.
A school district north of San Diego, Poway Unified, borrowed $105 million over 40 years by selling a bond so unusual that the State of Michigan outlawed it years ago. Taxpayers in the area will end up with a nearly $1 billion bill at the end of this deal.
The Poway school district is not the only one — three other California school districts in San Diego are set to gouge taxpayers in similar fashion. The San Diego Unified School district borrowed $164 million up front, but will owe a whopping $1.3 billion at the end of its long-term bond. Oceanside Unified sold a $30 million bond, but will owe nearly ten times as much decades later, $280 million total. And Escondido Union School District likewise borrowed $27 million and will owe $247 million total. (Will Carless and Joel Thurtell at the Voice of San Diego, a local blogger, has been tracking these bond developments.)
The bonds are a "kick the can" move to avoid dinging taxpayers now with higher property taxes.
Oh, and the bonds are not callable -- they can’t be paid off early or refinanced.

Read more: California School District Will Spend $1 Billion to Borrow $100 Million | Fox Business
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The school district is probably getting a great deal. Not sure who the knuckleheads are who would gamble that they will ever get their money back. The school district will declare bankruptcy before they pat this bond off.

A few notes...

The Poway school district might have not fully disclosed the financial information on this deal to the San Diego County Taxpayers Association, but that has not been fully determined yet. The SDCTA is the go-to analysis group for evaluating bond measures, some say they are just a front for local construction companies/interests who benefit from such measures, some say they are really the group looking deeply into these proposals that can be trusted, but the bottom line is that they did approve this measure before it was put to the voters. More information is still being released on much data they got from the District.

IF the rate of inflation continues on it's upward slope, by the time the payments actually begin the real amount is going to be significantly reduced and we should be in much better shape as far as revenues are concerned. The amount not covered by tax revenue will have to be made up in increased taxes, the "can down the road" that depends on those 2 variables. If revenues catch back up and inflation erodes the bonded amount, this might look brilliant, if not future tax payers could be hit hard.
This is not an endorsement for bonding on such a large scale for depreciating assets, just a open eyed assessment of the way it works.

I have said this before and I'll say it again....this all comes from the root problem, Prop 13. The state has had and will continue to have funding issues with this structure in place. It shifted the burden from existing home owners to new owners, away from corporations who scam the title transfer/assessment scheme with shell property transfers.....and to a revenue system very dependent on income taxation. When we have these boom-bust cycles, we always see these budget crises. It becomes compounded with the 2/3 budget passage rule, which has caused absolute stagnation by minority party politics.

I have no idea where Faux Noize got their "85%" nonsense from, Poway schools pay approx 40%-45% of the budget to teachers, and @ 5% to administration.
And CA is in the middle of the nation when it comes to spending per student, the last time I looked up 2011 we were at 26th place.

Where Borrowing $105 Million Will Cost $1 Billion: Poway Schools - Voice of San Diego: Education

Poway - Report on High School in Poway | Schools News