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Only in California: Borrow $100 Million to Owe $1 Billion

jb168 Wrote: Aug 08, 2012 11:01 AM
So it's really the investors who are insane, right? They will never see any of their money back. The bonds might just as well have been written in Greek. (And probably the Orange county consultant got his money from the bond buyers as commissions.) Ned6 has it right.

Poway California, population 47,811 as of 2010, has placed an enormous bet on rising home prices and tax revenues. Poway borrowed $105 million but will not start to pay that amount back until 2033 at which time they will owe $877 million in interest.

Clearly this would be fiscal insanity anywhere, but it is especially true in California given Proposition 13 that caps property taxes.

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

Last year the Poway Unified School District made a deal: It borrowed $105 million from investors to fund a...