California school districts face huge debt on risky bonds (LA Times)

This article is a little on the sensational side, as is usually the case when reporters encounter algebra.

November 28, 2012 – Two hundred school districts across California have borrowed billions of dollars using a costly and risky form of financing that has saddled them with staggering debt, according to a Times analysis. Schools and community colleges have turned increasingly to so-called capital appreciation bonds in the economic downturn, which depressed property values and made it harder for districts to raise money for new classrooms, auditoriums and sports facilities. Unlike conventional shorter-term bonds that require payments to begin immediately, this type of borrowing lets districts postpone the start of payments for decades. Some districts are gambling the economic picture will improve in the decades ahead, with local tax collections increasingly enough to repay the notes.

Link to Full Article: http://www.latimes.com/news/local/la-me-school-bond-20121129,0,2358068.story

Link to Associated School List: http://spreadsheets.latimes.com/capital-appreciation-bonds/

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State of California – Analyst Resources

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