Here is a follow-up to my May 11 post entitled Please Read This, Even If You Think Municipal Bonds Are Really BORING: We’re Setting Up the Next Generation of Californians to Pay Staggering Property Taxes.
A speaker at the California League of Bond Oversight Committees annual conference on May 11 mentioned that the State of Michigan banned Capital Appreciation Bonds (CABs) in the 1990s after a reporter for the Detroit Free Press named Joel Thurtell exposed the extent of the scheme to the public in his April 5, 1993 investigative article “Michigan Schools Load the Future With Debt.”
It turns out Mr. Thurtell has a personal blog called Joel on the Road, in which he has been tracking and opining on the excessive use of CABs in California, including the mind-boggling one at the Poway Unified School District in San Diego County. He has posted four articles about CAB abuses at California school districts in the past five days.
- CABs and Consequences
- Scouting for Graft: Look for Michigan in California
- CAB Scam in Poway
- Disaster Shadows Poway
I wrote the following comment on his blog in response to CABs and Consequences:
On Friday, May 11, I attended the annual conference of the California League of Bond Oversight Committees in Sacramento. The increasing use of Capital Appreciation Bonds (CABs) to fund construction in California school districts (and fund the funding of school construction) was extensively discussed. Your articles were briefly mentioned by one speaker as influential in banning CABs in Michigan. You may be the catalyst to get CABs banned in California before the next generation of property owners in this state is saddled with a huge burden for construction completed 30-40 years earlier, when the political culture in this state revolved around the principle of “spend now/let someone else pay later.” You need to do a speaking tour in California. I recommend contacting the California Association of County Treasurers and Tax Collectors, the California League of Bond Oversight Committees, and the Howard Jarvis Taxpayers Association.