A recent front page story in the Los Angeles Times raised the curtain on a dirty little secret that local school officials don’t want the public to know. Many school boards throughout California have indulged in a process that can best be described as “bribery and money laundering” which grossly inflates the cost of bond debt — the result of which is higher taxes on homeowners.
Here is how it works. A school board determines it wants to pass a bond that will be paid for by property owners. Because government officials are prohibited from using taxpayer dollars to promote a ballot measure, they cut a deal with a bond underwriter to fund the effort and provide expert campaign assistance. In return, the underwriter is guaranteed the commission on the sale of the bonds. Continue reading