Wednesday, September 9, 2009

The Bond Bomb | Howard Jarvis Taxpayers Association

The Bond Bomb | Howard Jarvis Taxpayers Association How many times have taxpayers heard the disengenuous phrase in a ballot argument: "this is not a tax and your taxes will not go up". But the dirty little secret is some has to pay for them sooner than later. As Jonathon Coupal points out,
The $200 billion in state debt includes about $35 billion in budget related liabilities -- read this as budget tricks used to paper over the deficit; about $69 billion in bond debt that must be repaid from the general fund; and more than $100 billion in unfunded liabilities for government employee pensions and health care.

While the unfunded liabilities are likely to become our most pressing problem, right now state services are being cut to meet the obligations voters created when they passed tens of billions of dollars in bonds in the last decade. Payments must be made to bond holders before one penny is spent on education, transportation, corrections or any other service that Californians deem important.

Bond debt gets repaid from the general fund. Local school bonds get paid from property assessments the drive up the price of living in a home. Renters don't pay them, landlords do, but they have to raise the price of rents. All those feel good votes with no assurance in improvement of test scores etc. just contribute to a bigger pot of debt. The article is worth reading. Howard Jarvis Taxpayer's Association is a good place for the straight scoop.

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