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
San Diego, a local blogger, has been tracking these bond developments.)