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Ron Kaye: Where are the questions?

July 01, 2012

Merci beaucoup, Burbank!

Call me naïve (I only studied French for a year), but I have a hard time understanding why the Burbank City Council last month approved a private school — Lycee International de Los Angeles — using the city's authority to sell $12 million in tax-exempt municipal bonds to buy the old GM training site in the Rancho District for a new campus.

I had the same problem with the Los Angeles City Council last week approving exclusive Buckley School, selling $40 million in tax-free bonds to expand its Sherman Oaks campus where tuition is more than $30,000 — nearly three times what Lycee charges to provide a “French education” to some 900 students at schools in Tarzana, Pasadena, Los Feliz and Santa Ana.

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This is all being done at a time when public schools all over California are cutting summer programs and adult education, increasing class sizes and furloughing and laying off teachers.

So why would city officials help private schools reduce their costs of borrowing so they can expand to drain off more students from public schools? Why would they give up state and federal income tax revenue from the profits on the bonds — and in the case of “nonprofits” like Lycee and Buckley — sales and property taxes as well?

The easy answer is our officials don't really know what they are doing, but that wouldn't be completely true. It is more to the point that they don't care because you don't care enough to pay attention and, in Burbank's case, there was the added benefit of pleasing the 60 or 70 residents of the Rancho District who said they prefer the school at the GM training site in their equestrian community to the 50 houses that they fought so hard to block.

Despite the loss of all that tax revenue, Finance Director Cindy Giraldo pitched the deal as fiscally responsible without risk or cost to the city since it is carried out through the California Municipal Finance Authority, which will even give the city 25% of its fee. The $7,000 commission hardly offsets all the revenue that other uses could have brought in.

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