By Joel Thurtell
The furor I sparked in California over capital appreciation bonds is not letting up.
The Orange County Register on February 15, 2013 published a very thorough report detailing the very kinds of CAB abuses I reported in Michigan back in 1993. Thanks to our Detroit Free Press reporting, the Michigan Legislature banned CABs in 1994 and required competitive bidding for municipal bonds.
Here’s what the Register wrote about me, aka “the Michigan Blogger,” and my 1993 Detroit Free Press reports:
NATIONAL UPROAR
There has been a growing furor over capital appreciation bonds issued by California schools since a Michigan blogger, Joel Thurtell, revealed last year that a district in San Diego County had issued $105 million in bonds that would cost taxpayers nearly $1 billion to repay. In relative terms, Placentia’s bonds are even more expensive than those sold by Poway Unified, which require repayments of $9 for each $1 borrowed.
Last month, state treasurer Lockyer and Tom Torlakson, state superintendant of public instruction, urged schools to stop issuing such bonds until the Legislature considers a bill to limit their use.
“The people running school districts are educators and not generally finance experts,” Lockyer said. “I don’t think they knew what they were getting themselves into.”
Michigan outlawed the bonds after Thurtell wrote about their cost in 1993 for the Detroit Free Press.
