Rogoff and Reinhert’s (must read-book) “This Time is Different” shows us that it is never different this time. They studied 266 financial crises over a period of 200 years. Guess what, they found? That you cannot solve a debt problem with more debt and that debt problems always end in pain and tears.
Although most citizens and businesses have stopped or reduced accumulating debt, our government is still borrowing and spending money like a drunken sailor.
How then is the Alice Independent School District (“AISD”) attempting to place an additional $13,500,000 (“$13.5M”) debt (plus another $13,000,000 in interest) totaling $26,500,000 in debt on the taxpayers of Alice.
The AISD already has approximately $45,000,000 in Bond Debt plus approximately $20,000,000 in deferred interest totaling a $65M debt, with annual payments of about $4,400,000.
When we add the new AISD proposed Bond of $13.5M (accured interest at 5 percent = $13M) to the existing $65M, the taxpayers of Alice will owe a GIGANTIC total of $91,500,000 in School Bonds.
When the AISD issued the last bonds, the voters were led to believe that State Funding would pay 70 percent of the cost, therefore it was “supposed to be” a good deal for the Taxpayers. NOW WE KNOW, “THAT WAS NOT TRUE.” In fact, the State has already reduced their part of our Bond payments to 37 percent, not the 70 percent the Taxpayers were “promised.”
With state budget shortfalls, the next thing that will happen is that the state will start paying much less than 37 percent and possibly none of our existing $65M bond payments (much less paying any of the schools’ new proposed $26.5M in new bonded debt), and the taxpayers will still be saddled with paying off all the school’s debts. Apparently, the school boards know that the taxpayers are obligated to pay off all these bonds regardless of whether or not the state pays anything. Why else would the school board have not conditioned the sale of the bonds on state funding (not even at the current level of 37 percent)?
Some have been led to believe that a new Salazar School is going to be built. That is not true. The new bonds are not specific as to what they are to be spent on, other than “completion of construction and equipping of Memorial Middle School and levying the Tax in payment thereof.”
“THE BOARD OF TRUSTEES IS AUTHORIZED TO LEVY AND COLLECT TAXES ON ALL TAXABLE PROPERTY IN THE AISD, SUFFICIENT, WITHOUT LIMIT, AS TO RATE OR AMOUNT, TO PAY THE PRINCIPAL AND INTEREST ON ALL BONDED DEBT. That means that all of our property is mortgaged, to pay 100 percent of the bond debt regardless of how much the state pays, if any.
IT IS UNFORTUNATE, THAT OUR SCHOOL BOARD IS ATTEMPTING TO PLACE ANOTHER “HUGE” LIABILITY ON THE TAXPAYERS. THEY LEAVE US NO CHOICE EXCEPT TO VOTE “AGAINST” THEIR NEW $13,500,000 SCHOOL BOND ON SATURDAY, MAY 14, 2011.
A VERY CONCERNED TAXPAYER,
Newell W. Atkinson III