Second of two parts
My lifelong fiscal credo may be old-fashioned by today’s standards. Look at all of the credit and credit cards floating around, the glut of pre-approved loans being offered in mass advertising on television (“866-66 Faster… You've got the green light”). Payday loan agencies seem to be on every corner, begging to lend you the cash you deserve.
Borrowing Time
When it comes to leveraging your credit, I am a relic. If you don't use your credit line to finance your lifestyle, you are seen as leaving money on the table, not living to the fullest. Living on other people’s money seems to be expected.
Financial Neanderthal
I may be a fiscal fossil because I actually do save for something before I buy it. Not that I haven't changed and gone with the financial flow. My wife, Michael, has gotten me to use my one credit card for emergencies. If something special I have been saving for goes on sale, and I have quite a bit put away, I will use my credit card. But I make sure my card is paid off at the next billing cycle.
Fiscally Fickle
When I see our School Board considering issuing (actually borrowing) another $40 million or $50 million in general obligation bonds – with huge interest payments – part of me gets paranoid.
Here Is Why
When Measure T, our current $40M bond, finally is paid off in 2033, the total repayment cost will have been over $95M. Do the math. That is $55M of our money paid in interest, going someplace other than in helping our schools, $15M more in paid interest than the original $40M borrowed.
Parcel Tax vs. Bond Measure
A parcel tax, though regressive, is an interest-free way for our community to make annual payments directly to our local schools. No middle man or interest.
No Interest in Paying Interest
In comparison, our annual payment for Measure T continues to be $2.7M. This year it consisted of $1.9M in interest and about $800K for paying down on the principle. This seems fiscally idiotic to me.
Free and Clear
Couldn’t we, as a community, afford $350 from each parcel over 10 years to give our schools $4.5M a year free and clear, without paying huge sums of interest?
It would take a lot more planning to get what needs to be done at our schools. But just think of the multi-millions in interest we would be saving.
Signed,
Still Slightly Paranoid
Mr. Laase may be contacted at GMLaase@aol.com
