School district takes $105 million loan, will have to pay $877 million in interest.

Last year the Poway Unified School District made a deal: It borrowed $105 million from investors to fund a final push in its decade-long effort to revamp aging schools.

But Poway Unified’s deal was far from normal.

With advice from an Orange County financial consultant, the district borrowed the money over 40 years in a controversial loan called a capital appreciation bond. The key point for the district: It won’t make any payments on the debt for 20 years.

"This is way worse than loan sharking," said Michael Turnipseed, executive director of the Kern County Taxpayers Association in central California, which has lobbied the state Legislature to tighten laws on school district borrowing. "And Poway is the poster child. What they have done is absolutely insane."
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So, to be able to afford its debt payments 20 years from now, the total assessed value of property within the taxed area would have to quadruple.

Of course, many of the residents who voted on Proposition C will be long gone by then. They’ll be dead, or living somewhere else.

With advice from an Orange County financial consultant, the district borrowed the money over 40 years in a controversial loan called a capital appreciation bond.

According to my napkin, that's about 5.5% interest. Seems really dumb for a state institution to be borrowing at that kind of rate right now, when interest rates are absurdly low. Then again, those terms would be absurd themselves if there were an option for early repayment.

In other words, they're borrowing money at a moderate interest rate and foisting it onto the next generation. I wouldn't call this a scandal, but rather business as usual.

Haha, what idiots.

How about you fire some overpaid lazy teachers?

That's a nice generalization.

I have had almost all great teachers who cared and I went to crappy NYC school system. But that's just me.

Crappy NYC school system? Do you have any idea how much money that 'crappy' NYC school system taxes and spends per year, and how many legions of teachers are on its payroll?