Trey Bundy and Shane Shifflett, California Watch • http://www.sfgate.com • January 31, 2013
The Napa Valley Unified School District had a quandary: The district needed a new high school in American Canyon, but taxpayers appeared unwilling to take the financial hit required to build it.
So in 2009, the district took out an unusual loan: $22 million with no payments due for 21 years. By 2049, when the debt is paid, it will have cost taxpayers $154 million – seven times the amount borrowed.
…This form of borrowing has created billions of dollars in debt for taxpayers and hundreds of millions of dollars in revenue for financial advisers and underwriters. Voters are usually unaware of the bonds’ high interest. At least one state, Michigan, has banned their use.
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