A tax watchdog advocate and the senior legislative analyst at the Mackinac Center for Public Policy are questioning how the Eaton Rapids Public School District is describing a $25.1 million bond as being similar to a house “refinancing.”
On its website, Eaton Rapids described its $25.1 million bond like this: “The process is much like refinancing a home mortgage and seeks to save on interest costs.” (See FAQ number 11.)
Wikipedia refers to “refinancing” as replacement of an existing debt obligation with a debt obligation under different terms. Often times, a homeowner refinances at a lower interest rate to lower payments without increasing the debt owed. The Eaton Rapids website says the school is taking on an additional $25.1 million of debt in its bond proposal.
Jack McHugh, senior legislative analyst at the Mackinac Center, said it would be more accurate if the bond was compared to a “home improvement loan.”
Eaton Rapids School Board Chairman Jeff Allison and Superintendent Bill DeFrance didn’t return messages seeking comment. The bond will be voted upon Feb. 22.
Leon Drolet, chairman of the Michigan Taxpayers Alliance, said if the school is taking on new debt, it shouldn’t be compared to a refinancing.
“They are trying to trick voters into believing that they are not taking on new debt when they use that kind of language,” Drolet said. “By suggesting it is a refinance as opposed to taking on new debt … it’s a bald-faced lie.”
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.