An innovative new program that reduces the tax burden on future generations
CAB Restructuring Bonds® allow California school and community college districts to convert costly capital appreciation bonds (CABs) into lower-cost current interest bonds, saving taxpayers millions of dollars in future interest payments.
Although the State legislature prohibited California K-14 districts from issuing long-term capital appreciation bonds with debt ratios of at least 4-to-1, beginning in 2014, the legislation (AB 182) did not address the $3 billion of high-interest capital appreciation bonds already issued by more than 200 districts between 2001 and 2013.
This debt, which will balloon to nearly $20 billion over the next 40 years if left unchecked, falls squarely on the shoulders of future generations of California taxpayers for decades to come. DS&C’s proprietary CAB Restructuring Bonds® help districts mitigate this problem. The program has been successfully implemented and is already saving local taxpayers millions of dollars.