By Joel Thurtell
In spite of all the uproar about high-interest Capital Appreciation Bonds and 1000-percent interest rates in California schools, the California Legislature has not outlawed these taxpayer ripoffs and may only limit their use.
In Texas, meanwhile, a bill has been introduced into the Legislature to ban CABs outright.
It seems that in Texas, as in California, schools are borrowing at 1000-percent interest rates.
According to The Associated Press, “A bill to eliminate the option has cleared a state Senate committee, and if passed by the Legislature, will allow Texas to join Michigan as the only two states to bar school districts from using the bonds.”
Michigan banned CABs in 1994, following publication by the Detroit Free Press of my April 5, 1993 investigation of Michigan schools; use of CABs.
The story of California’s CAB scam was broken on this blog starting on April 27, 2012.
I’ll be speaking about how I uncovered the Michigan CAB scandal at the annual conference May 10 of the California League of Bond Oversight Committees in Sacramento.
