Merci beaucoup, Burbank!
Call me naïve (I only studied French for a year), but I have a hard time understanding why the Burbank City Council last month approved a private school — Lycee International de Los Angeles — using the city’s authority to sell $12 million in tax-exempt municipal bonds to buy the old GM training site in the Rancho District for a new campus.
I had the same problem with the Los Angeles City Council last week approving exclusive Buckley School, selling $40 million in tax-free bonds to expand its Sherman Oaks campus where tuition is more than $30,000 — nearly three times what Lycee charges to provide a “French education” to some 900 students at schools in Tarzana, Pasadena, Los Feliz and Santa Ana.
This is all being done at a time when public schools all over California are cutting summer programs and adult education, increasing class sizes and furloughing and laying off teachers.
So why would city officials help private schools reduce their costs of borrowing so they can expand to drain off more students from public schools? Why would they give up state and federal income tax revenue from the profits on the bonds — and in the case of “nonprofits” like Lycee and Buckley — sales and property taxes as well?
The easy answer is our officials don’t really know what they are doing, but that wouldn’t be completely true. It is more to the point that they don’t care because you don’t care enough to pay attention and, in Burbank’s case, there was the added benefit of pleasing the 60 or 70 residents of the Rancho District who said they prefer the school at the GM training site in their equestrian community to the 50 houses that they fought so hard to block.
Despite the loss of all that tax revenue, Finance Director Cindy Giraldo pitched the deal as fiscally responsible without risk or cost to the city since it is carried out through the California Municipal Finance Authority, which will even give the city 25% of its fee. The $7,000 commission hardly offsets all the revenue that other uses could have brought in.
The finance authority was founded as a joint powers agency in 2004 and now has more than 150 cities that have joined to provide cover for tax-exempt financing for all kinds of capital investments: Chevron USA got $250 million for pollution controls, Christian universities Biola and Azusa Pacific each got more than $100 million, while smaller Westmont College got $65 million and Catholic Mater Dei High School $25 million.
The list goes on and on into billions of dollars in tax-exempt bonds for private corporations, hospitals, schools, affordable housing and not-so-affordable housing — all carried out by a non-government agency accountable to no one, an agency that is free to pick and choose which projects to support by its own values as long as it can find a city or county to provide cover.
That’s why Assemblyman Mike Feuer (D-Los Angeles) demanded a full and complete state audit of the California Municipal Finance Authority and the much larger California Statewide Communities Development Authority, which has facilitated more than $40 billion in tax-exempt bonds since it was set up in 1988 by the League of California Cities and the California State Assn. of Counties. The audit is due next month.
State Treasurer Bill Lockyer said they amount to “a private business being run out of a government agency” and need “a thorough scrubbing of their books and their operations.”
(READ FULL STORY at Burbank Leader)
No City in LOS ANGELES COUNTY is safe to move to! That’s why I’m leaving not just L.A. city BUT L.A. COUNTY! The Pick-Pockets are loose in Malibu City too! They’re very busy dredging a wetland right now and tearing up PCH for shopping centers and ocean-view blocking new commercial development. Burbank is owned by King Zev I. and the other 4 royals on the Royal-Crown Supervisors Board, just like Malibu, Glendale and the like. The fiction is these “Cities” exists as INDEPENDENT entities is nothing but words on paper. They feel the need to cater to the 1% of people who can throw away money like that on private school. Eventually, that 1% of the population will see such a decline of living standard AROUND their CASTLES and FORTRESSES that they will move to places where the quality of life for the other 99% is far better. Wealthy people wont continue to live in a County where every corner has a four foot pothole to hit their $250,000 Bentleys with! Ventura, Santa Barbara, Riverside, and San Diego Counties will take all those big players away from L.A. County and the rest will flee California completely. L.A. County will become the official dumping ground for all of California’s “problems.” GET OUT NOW WHILE YOU STILL CAN.
WAYNE does US all a BIG FAVOR by writing in CAPS and lower case so that it is easy to spot his rantings, but very arduous to actually read them, and hence I can skip them the moment I recognize a WAYNE RANT. He isn’t forcing you to read his comments.
Ron,
Alarcon’s aide Jose Siglala and his wretched wife, Lisa Baca-Sigala, are up to their asses in the finances of this school. Why don’t you ask them?
Wayne: Does us all a big favor and leave LA. Your rants are getting really tiresome.
on the contrary, we appreciate commentary by Wayne…
for example, to Ron’s post of 6-20-12 re Garcetti,
Wayne’s response on 6-21-12 at 11:56 am was excellent…
to Ron’s post of 6-19-12 re Public Access,
Wayne’s response on 6-19-12 at 10:09 pm was genius…
thank you Ron and thank you Wayne,
please continue with your thought-provoking insights…
If you think snarky name calling makes thought provoking commentary, you aren’t interested in discussion, only people who agree with you.
Die Gedanken sind frei.
This is another case where a local government has not shared the financial impact with the general public and appears to have instead focused on one interest group. If that’s what the citizens of Burbank want, that’s fine, but did the council reach out to the broader population?
On the other hand, even if this had been publicized, how many people would have cared? Probably not many. Apathy trumps accountability.
In Economics 101 you learn about an “externality”, which is a cost or benefit that is incurred by a party that did not participate in the decision. In this case, the City of Burbank is the decision-maker that grants the School’s bonds tax-exempt status. And the parties bearing the cost of lost tax revenues are the Federal and State Governments. Of course a small portion of the tax revenue that was lost would have eventually trickled down to Burbank, but that’s small potatoes, so what does Burbank care?
On the other hand, if the State and Federal Governments made the City of Burbank bear some (or all) of the lost revenue by proportionally reducing whatever money Burbank gets from them, this kind of nonsense would automatically stop.
Those Rancho District residents are tough!
It is really quite simple to understand. The 1% have bought themselves city councils and tons of judges and after spending our good money to buy these public leaches, the 1% plan to use them to drain more blood from the tax payers for the benefit of the 1%.
What part of this scheme is hard to understand?
I am so glad I did not stay in Burbank after leaving school. It sure is not the great little city it used to be in the 60′s and 70′s.
It is easy to see what is going on here. The city council’s are getting “kick backs” under the table from the ones they are benefiting with their decissions. Plain and simple, it is a National epedemic and needs to be thwarted!