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

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. Continue reading this story

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