Surprise: CA Education Tax Hike Will Go to Wall Street Cronies?

California voters passed their Proposition 30 that will increase taxes and fund education.

There's already enough questions going around as it is.

Now we see a study from some UC Berkeley students that call into question about where that new tax money might actually go !!

California Governor Jerry Brown hailed his signature tax-hike to fund education—known as Proposition 30—as a towering achievement that will ensure educational excellence in higher education and spare those trapped in poor and failing K-12 California public schools from budget cuts.

"I know a lot of people had some doubts and some questions: Can you really go to the people and ask them to vote for a tax?'' said Mr. Brown on election night. "Here we are...We have a vote of the people, I think the only state in the country that says let's raise our taxes, for our kids, for our schools, and for our California dream.''

But a new study by five UC Berkeley doctoral students titled “Swapping Our Future: How Taxpayers And Students Are Funding Risky UC Borrowing and Wall Street Profits” says that millions of dollars of the freshly raised revenues won’t go to California’s school children. Instead, they will go to wealthy Wall Street firms who bag three-quarters of a million dollars a month because of bad decisions made by Wall Street cronies serving on the UC Board of Regents. According to the study, UC Board of Regents’ risky decision to move the University of California’s financial practices to bond issuances hedged by interest rate swaps cost UC $57 million and helped doubled its debt in the period between May 2007 and the end of last year......

Surprise: CA Education Tax Hike Will Go to Wall Street Cronies

The study exposes the fact that many college regents are present and former **Bankers** !!

Makes us wonder if the nation's universities and colleges are engaged in speculative financial markets ?

More alarming might be the possibility that College administrators may be bought off to go along with the program ...

Looks like the heavy duty hungry muney mungers are everywhere !!

Now we know

More corruption...
It is everywhere now, I guess it isn't really new to education though.
Thanks OP.

reply to post by xuenchen

Good OP, xuenchen, but this is not as surprising or uncommon as one might think. Please don't think that my frustration, which comes through loud and clear, is pointed toward you. It's directed at the bumbling idiots we consistently vote into office, the general lack of apathy or caring by the general public (as long as their own kids are taken care of) and the inequity of a system which is so outdated as to be considered criminal in my opinion.

The study exposes the fact that many college regents are present and former **Bankers** !!

Not surprising considering that they're in on the knowledge of how the system works and how to use such knowledge to secure cushy regent posts and line their pockets with these funds.

Makes us wonder if the nation's universities and colleges are engaged in speculative financial markets ?

Well of course they are and probably always have been. I would be shocked to learn that they just take the tax $$ and put them in a no or low interest bearing account or - G*d forbid, government bonds that won't mature for 20+ years. Just like any other business, they look for the biggest possible bang for their buck. As sad as it is, even our educational system is a business - take a look at the high price of college loans, cost of educational materials, etc. if you have any doubt about this. Sometimes the risk pays off and sometimes is doesn't just the same as any other stock investment. The pitiful thing is that the majority of citizens who vote to pay these excess taxes out of their own pockets - those who think they are benefiting their own children - have no clue that these decisions are placed in the hands of people connected to or compromised in some way by Wall Street. I'm not advocating this system mind you, merely stating the obvious.

More alarming might be the possibility that College administrators may be bought off to go along with the program ...

Don't want to sound too cynical here but are we really shocked by this? Probably 99.9% of the population is corruptible in some way or another. Again, it's a disgusted commentary on our society but in my opinion, it's the truth nevertheless.

Also, just for the record, California is not the only state that has voted to supplement educational funding (not your mistake but the a result of the grandiosity of the Gov. of California). In 2010, Gov. Christopher Christie of New Jersey slashed funding for public education by $820 million and aid for colleges and universities by $175 million, among other cuts.

All of the statistics can be found here in an article published by The Daily Princetonian. Although the article highlights how a small portion of the counties were affected, I lived and raised my kids in Bergen Co. and can tell you that it was state-wide. According to the article:

“In New Jersey, each school district operates as a separate entity,” Keevey added. “It’s up to local school districts to see how they’ll deal with reductions.”

Well, how did we deal with it? By individual tax referendums which were voted on by each town's (or school district's) constituency. I remember having an educational accessment placed on my property taxes ranging anywhere from $1,500 to $7,500 in some cases. Unfortunately, the wealthier areas passed these referendums fairly easily whereas the poorer areas suffered greatly. Not only was Gov. Christie derelict in his actions, but so was the philosophy of "each school district for itself" which facilitated an inequity in privately provided funds. This was truly saddening.

Timidgal