Calif. Finances Upgrades by Making the Next Generation Pay

Tuesday, February 12, 2013

School officials in Santa Ana were in a bind several years ago: they wanted to build hundreds of new classrooms, but feared that voters would rebel against tax increases to pay for the construction.

So in 2009, the Santa Ana Unified School District borrowed $35 million using an inventive if increasingly controversial method known as capital appreciation bonds, which pushed the cost of the construction on to future taxpayers. Not a cent is owed until 2026. But taxpayers will eventually have to pay $340 million to retire that $35 million debt.

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