With 100% of precincts counted, Measure O fails.                                        Board of Directors just wasted half a million dollars of taxpayer money on this election.                                        Criminal complaints against the district will continue to be pursued.                                        Criminal and FPPC complaints against the Astro-Turfers will continue to be pursued.                                        Your property taxes based on indebtedness will now go down, as they should.                                        

Perpetual Debt

The Board has, in a somewhat oblique way, revealed its plans for you -- to keep you in perpetual debt.

Measure O gives the school district the authority to assess properties $48.50 per $100,000 in assessed value, but the district says it will not go above $115, the current tax rate paid by Walnut and Diamond Bar homeowners, said board member Cindy Ruiz.

Why some are opposing Walnut Valley schools' $208 million bond, San Gabriel Valley Tribune, September 28, 2015

There you have it. You are currently paying taxes for other bonds you've agreed to in the past. The Board wants to make the amount you are paying now, a permanent tax keeping you in perpetual debt. Why would you vote to undermine the hard-fought protections of Proposition 13 that allow old people to pass their property on to family members and keep their taxes low?

The deceptive part of the Board's scheme is that it won't and can't guarantee Ruiz's statement, because the law does not permit it to. Once bonds are issued they are obligations that you must pay under the law. If the housing bubble bursts again and sales prices and assessed valuations go down (as they did in the savings and loan scandal of the late 1980's and the Wall Street financing scandal that led to the great recession), your share of the taxes on these bonds will go up, because you're agreeing to that if you vote for this measure.

There are tons of fine print in the statutes that are virtually unintelligble to the average voter. You are bound by those statutes, whether you know they exist or not.

Mortgage Analogy

In your lifetime, you will likely never issue a bond. The closest thing that you're familiar with, as a property owner (or prospective property owner), is a mortgage.

Measure O is a general obligation bond secured by your property. It's secured, meaning that your property is the collateral to make sure that the billionaire and millionaire investors get their "pound of flesh." (Shakespeare's The Merchant of Venice)

I used the calculator at Bankrate to provide you with the following two illustrations. These are based on the bond maturities that the district is allowed to use. I backed into the interest rate and the monthly payment based on the $208,000,000 face value of the bonds that the measure authorizes and the $485,866,750 that the Board says it will take for the debt service on the bonds.

Mortgage Illustration
Loan amount$208,000,000
Term40 years
Interest rate5.065%
Monthly payment (PI)$1,011,940
Total principal and interest payments$485,730,980
Total interest$277,730,980

Loan amount$208,000,000
Term30 years
Interest rate6.75%
Monthly payment (PI)$1,349,080
Total principal and interest payments$485,673,250
Total interest$277,673,250

NOTA BENE! THESE ILLUSTRATIONS DO NOT INCLUDE THE DISCOUNTS THAT THE FAT-CAT BANKERS, FINANCIERS, AND LAWYERS WILL GOUGE YOU WITH. What I'm talking about here is that when the Board issues a $1,000,000 bond, it does not get $1,000,000 dollars in the bank. The fees, commissions, costs, and expenses that the fat-cat bankers, financiers, lawyers, and other parasites who prepare and sell the bonds each take their cut before it hits the district bank acount. This amounts to tens of thousands of dollars for each bond that is issued and sold.

THINK! (I know, you may shudder at that word.)

Would you take out a loan for 5.1% or 6.75% on November 3rd? Your family and your friends would tell you that you're crazy, wouldn't they?

Why, then, would you even consider to vote for this bond measure?

Can you get 5.1% or 6.75% tax free income from your savings? How much risk would you have to take to achieve that kind of return after taxes. The wealthy gazillionaires are taking zero risk to put that kind of return in their pockets. That's how they got to be gazillionaires in the first place.

What will you get out of this deal? Nothing! What will your children get out of this deal? Nothing, but "a pocket full of mumbles, such are promises." (Simon and Garfunkel's, The Boxer, 1970.)

On the other hand, the school bond industry will get a pile of easy profits with overpriced materials and equipment that will be obsolete before your children are even out of school.


Copyright © 2015, Richard Michael. All Rights Reserved.