LA Times changes editorial page, still comes up winner

They cut back on the space and prominence of the Sunday opinion page, but still hit the home run:

http://www.latimes.com/news/opinion/la-ed-bonds3-2008aug03,0,2512179.story

Taxpayers, pay attention

Residents should know how government borrowing uses and potentially abuses their money.

August 3, 2008

Californians can be forgiven if they’re starting to feel nickeled-and-dimed to death. The Nov. 4 ballot is studded with requests by cities, counties, schools, transportation districts and other local governments to borrow money for projects by selling bonds. And when government borrows, the taxpayers become the collateral.

Investors buy general-obligation municipal bonds in part because interest earned on them is tax-free. But they also like such bonds because they are so safe — and they are safe in part because they are backed by tax revenues. That’s the reason they can be issued only on approval by voters: a majority vote for state bonds, and a two-thirds vote for local bonds (55% for many school bonds). Local bonds, especially, appeal to investors because everyone knows where the money will come from to repay them, with interest — the property tax bills of the residents of the city, county or special district.

But the money residents pay to back up all those bonds is part of a financial chain that links institutions far beyond statehouses or local city halls. At the far end are Wall Street firms, which often see cities, counties, school districts and states, and ultimately their taxpayers, as cash cows. Populaces are essentially sold to investors based on their willingness and ability to tax themselves.

Regardless of how or why we got to this point, let’s all look really closely at those ballot measures. We are paying, after all.

Paul