Determination: Mostly True
Analysis: The San Diego County Taxpayers Association has recently had a lot to say about why it’s not supporting the San Diego Unified School District’s $2.8 million bond.
Its latest argument against Proposition Z is documented in a commercial and a meme. Both feature what seems to be a pretty outrageous claim: that the school district used another bond approved four years ago to invest in $2,500 iPads that won’t be paid off for decades.
We decided to check the numbers. How much will the district really spend on the gear?
The school district used some money collected under Proposition S, the bond approved in 2008, to invest in classroom technology upgrades, including more than 21,500 iPads and nearly 77,800 laptops. More purchases are planned next year.
The district argues that anyone who criticizes the spending must also consider the impact new technologies such as iPads have in the classroom.
The upgrades have resulted in more student engagement and improvements to academic performance, district Chief of Staff Bernie Rhinerson said. “This was part of an overall transformation of the classroom to create a 21st century learning environment so when you look at (costs associated with the technology), you have to look at the value this creates for the students we’re educating today.”
(For more details on the technology program, check out this video on the district website.)
But the gear, including the iPads, is costly. And district officials didn’t just waltz into the Apple store — they had to free up the cash first.
Officials used costly capital appreciation bonds, or exotic bonds, that allow them to delay debt payments for up to 20 years.
The district has said it can’t access its Prop. S dollars without such long-term loans and that technology purchases were a priority given the planned i21 technology initiative touted in its 2008 bond.
The iPad purchases came in two phases.
First, the district used a series of highly controversial 40-year bonds to buy 10,729 iPads.
The district says each iPad cost $420 plus another $116.50 for three-year warranties and accessories.
After reviewing bond documents, we calculated that the district will pay an average of about 7.6 times that amount once the final bill comes due. That means a single iPad will cost $4,077.
The district’s second purchase of nearly 10,800 iPads will be less burdensome.
The next set of bonds came with a bill that’s an average of about 5.1 times the original cost.
Our math shows the district can expect to pay about $2,731 per device for iPads purchased in the second wave.
So how did the Taxpayer’s Association get its $2,500 figure?
Group President Lani Lutar referred to an April U-T San Diego story that cited a sticker price of $370 an iPad. (When asked about the discrepancy, Rhinerson acknowledged to VOSD that the cost ended up being higher.)
The Taxpayers Association then multiplied that number by seven based on other U-T San Diego reports that suggested the bonds would cost more than seven times the principal, Lutar said.
That got them to $2,590, which has since been rounded to $2,500.
Lutar stood by that figure.
“We’ve been communicating the ratio for some time and the district has never disputed that,” she said.
Lutar said the taxpayer’s group prefers to cite conservative figures because the district could issue additional bonds or the situation could change in some way.
The numbers she cites are mostly correct. The district will likely pay more than $2,500 for each iPad over the long haul, but the group’s numbers are a bit off so we decided to label the statement mostly true.
If you disagree with our determination or analysis, please express your thoughts in the comments section of this blog post. Explain your reasoning.
Update: U-T San Diego watchdog team editor Ricky Young made a point in the comment section we think is worth considering. He notes that the average consumer doesn’t consider interest part of a product’s sticker price.
“If you buy a house for $150,000 and it costs $300,000 with interest, you don’t tell people ‘I bought a house for $300,000’ or even ‘I paid $300,000 for my house.’ You say ‘I bought a house for $150,000.’” Young wrote.
Lisa Halverstadt is the newest reporter at Voice of San Diego. Know of something she should check out? You can contact her directly at firstname.lastname@example.org or 619.325.0528.
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