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Taxes for property owners may increase

August 15, 2009 9:15:46 AM PDT
Taxes for property owners may soon be increased. The L.A. Times reports under a provision that protects bondholders, the L.A. Unified School District can raise property taxes if income from property taxes is not enough to make payments on the bond debt.Critics are already saying any increase in property taxes could just add to the state's foreclosure crisis.

The L.A. Unified School District says it needs to raise taxes to help pay the debt for its massive school construction project. The recession has caused tax revenues to drop, creating a cash flow problem for the district, and funding from the state is being held up.

The L.A. Times reports that California officials are trying to arrange short-term borrowing to deal with the state's financial problems, and may owe the LAUSD about $1 billion in construction funds by the end of the year.

School district officials estimate property taxes could increase more than $200 for every $100,000 of assessed value.

LAUSD Superintendent Ramon Cortines put out a letter to the community earlier this month warning of the possible tax hikes.

"None of this bond money can or will be used to pay the salaries of LAUSD employees or cover other instructional and operational costs," Cortines said in the letter.

"These dollars can only be used for capital improvements to our students' school facilities."

The LAUSD has already built about 80 schools as part of the massive $20 billion construction project, and says it needs to build another 50.

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