Bonds...More Bonds...

More bonds...more bonds...

My head is spinning with how many bonds are out there, approved, and are stacking up along with more and more debt for the state and various counties for future generations. It seems fairly simple; a bond is nothing more than borrowing money today against revenue tomorrow, regardless of the amount of revenue that will be there. The money is "borrowed" at a discount, so, the county will actually get less than they owe - sort of a like a home buyer in the last few years.

Then, later down the road (but let's not think about that right now), we will have to pay this money back. Where will the money come from? The General Fund or we may in fact have to raise another bond or taxes in order to pay off the former bond. And why? Because no one likes to say that we are raising taxes...when we are raising funds in the future to pay down the bond from collected tax money, which leaves less tax money for other things...which starts the cycle all over again and may require another bond, blah, blah, and more political blah.

How come no one is asking questions like, "Where is all that revenue from the California Lottery going?" I thought that was going to be the magic bullet that would solve all of our financial issues. But, instead we see that the Lottery only accounts for about 2% of K-12 spending. Additionally, we apparently cannot leave the decision in the hands of the Local School Boards as to where to allocate the funds. In 2005-06, they spent about 64% of the funds on salaries and benefits. Then, they want to ask the educators to take a pay cut because times are hard. Sheesh!

There is a lot more to this than I can write in a single entry, but I have friends that are teachers and they give me the low-down on what they go through just get books in the door. It is ridiculous.

So, why am I discussing this on a "real estate" blog? Because this all has to do with decreasing revenues from local property tax. More depreciation leads to wider gaps in budgeting - but, no one wants to give up new spending based on increased property tax revenues. So, pass a bond because the sheep won't understand that we still have to either raise taxes or cut spending in coming years in order to pay for it.

Well, there is one more option that I believe that they are all counting on; that is that revenues will increase because the housing market will bounce back like a Jack in the Box once the two boys on the hill (Bernanke and Paulson) stop turning the little crank. Good luck with that.

Frustration is nigh. I am done.