Insanely expensive school bond practices abuse taxpayers - State schools chief unbothered

San Diego County appears to be ground zero for shoddy school finance practices that would yield Securities and Exchange Commission crackdowns in the private sector.

One such practice – the use of insanely expensive capital appreciation bonds, which cannot be repaid for their first 20 years while interest compounds – got national attention earlier this year after reports Poway Unified borrowed $105 million at a cost of $981 million. San Diego Unified borrowed $164 million at a long-term cost of $1.2 billion. State Treasurer Bill Lockyer warned bond underwriters that those responsible for these and other terrible bond deals will face repercussions from his office unless they are renegotiated.

But we were stunned to learn that another key state official appears to find nothing wrong with another egregious school financing practice employed by San Diego Unified and apparently many school districts around California: buying short-lived electronics and funding routine maintenance with “construction” bonds that will be paid back over 30 years – bonds that are supposed to be for long-term capital improvements. Using money from such a 2008 bond, San Diego Unified bought nearly 100,000 laptops and iPads, devices that taxpayers will be paying for until 2039.

When asked about this practice in an interview earlier this month with the U-T editorial board, state Superintendent of Public Instruction Tom Torlakson expressed more sympathy for the irresponsible officials who engaged in it than for the taxpayers who are brutalized by it. He cited the “stress” officials faced because of the state’s budget woes and implied it was understandable and reasonable for routine maintenance becoming a “capital improvement” cost paid for with bonds.

Torlakson declined to offer the slightest criticism of the folly that is 30-year borrowing to pay for products that will be broken in four years or less. His concession to appearances: “I’ve asked my staff on school construction to look into this and figure out where the line is on what’s eligible.”

But what we really need is something much more overarching than that: state leaders giving us an honest look at the big picture of education funding. If that were done, we would have two competing narratives in Sacramento about California’s public schools – not just the one that says school quality is a function of school spending, so let’s just keep raising taxes.

The second narrative would note that from 1983 to 2007, per-pupil spending in California rose far faster than the rate of inflation – but without the surge in test scores that the first narrative says should have happened. It would note that school districts that used to spend 75 percent of operating funds on compensation now spend 90 percent or more. And it would note this happened because of pay practices that in most years give teachers raises irrespective of their classroom performance – and irrespective of ...

http://www.utsandiego.com/news/2012/nov/24/state-schools-chief-unbothered-by-abuse-of/