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Uploaded: Monday, August 31, 2009, 8:53 PM

Palo Alto schools win lottery for tax-credit bonds
Palo Alto could qualify for up to $25 million in bonds subsidized by federal tax credits in lieu of interest to bond-holders

by Chris Kenrick
Palo Alto Online Staff

Posted by Interested parent, a resident of the College Terrace neighborhood, on Sep 1, 2009 at 7:40 am

Hallelujah! $25M in economic value from the Feds! This can't be interpreted as anything but a good thing, right? But why a "lottery" system?

Posted by hmm, a resident of the Community Center neighborhood, on Sep 1, 2009 at 10:44 am

altho i love PA, shouldn't those funds be going to districts that REALLY need financial help and support rather than rich places like PA and Portola Valley? I question the method here..

Posted by yuk, a resident of the Adobe-Meadows neighborhood, on Sep 1, 2009 at 11:01 am

because we have taken on a mantle of belief that public funds should be distributed by lottery, not by program merit or based on need.

it disgusts me when used for our "choice" lottery programs, and it disgusts me that tax dollars are used in this way as well.

in this case, even though it is accidental, at least for once tax dollars are going to be used by the people who have paid taxes, so I suppose that is a good thing.

Posted by Sara, a resident of the Old Palo Alto neighborhood, on Sep 1, 2009 at 11:07 am

The reason rich districts will benefit most from this is due to this being a tax credit for school districts whose voters were willing to tax themselves to raise money for bonds. These districts are not getting money, they are getting tax credits so the bonds they raise do not come with interest payments. That saves millions of dollars and enables the district to pay the bonds back more quickly. Wealthy districts tend to have more education voters that believe in taxing themselves to support schools. Poorer areas have a much more difficult time reaching the 65% threshold to pass bonds. Recently though the law allows infrastructure bonds for schools to pass at 55%. This may help, but for this round of money, it's not surprising it will help mostly rich districts.

I have mixed feelings about this. Even rich districts are having a difficult time keeping up their facilities, but it seems this tax credit only increases the inequalities.

Posted by Jon, a resident of Another Palo Alto neighborhood, on Sep 1, 2009 at 11:56 am

Leaving aside the lottery aspect for distributing funds, I wonder how the credits will be used ? I suspect paying back the bonds faster will not actually be what the district does....

Posted by Betty, a resident of the Greenmeadow neighborhood, on Sep 1, 2009 at 12:05 pm

This flat out will reduce the cost of borrowing by the Palo Alto Unified School District by $25 million. God knows the State has taken plenty of money away from education over the years; this is a bit of give-back.

Posted by Resident, a resident of Another Palo Alto neighborhood, on Sep 1, 2009 at 7:47 pm

The point is, PAUSD has got a windfall. The question is, what are they going to do with it?

Posted by flyonthewall, a resident of another community, on Sep 2, 2009 at 11:19 am

PAUSD could get a larger windfall just by spending the Measure A funds more wisely.

Posted by aroundtown, a resident of the University South neighborhood, on Sep 2, 2009 at 2:10 pm

I wonder if the district will use any of this money to fund things like technology?

Posted by jack lord, a resident of Atherton, on Sep 8, 2009 at 6:00 pm

$170 million of the $378 million bond measure is earmarked for Palo Alto's two high schools. Note that these two high schools are slated for $300 million in new construction between now and 2012. One or both high schools will receive:

aquatic arts center

media arts center

performing arts center

student activities center

theater

industrial arts building

additional classroom buildings

$12 million gym

$4 million building for language arts programs

This bond measure has nothing to do with the educational needs of the children, and everything to do with goosing area home values. It makes me sick.

Posted by Eric, a resident of the Community Center neighborhood, on Sep 11, 2009 at 11:21 pm

Jack Lord resident from Atherton: Many of these facilities are being built at Palo Alto's two High Schools so they can keep up with the extensive building program that is going on at Menlo/Atherton High School.

These high schools not only compete with each other on the athletic field, but there is also a bit of one upmanchip when it comes to facilities.