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Pressure Is On IBM To Forgive Millions In IT Debt
coondoggie writes to tell us that several California state legislators are pressuring IBM to release the Costa school district from some $5 million of long-standing debt as a charitable donation. "The back story on this tale is that the school district owes IBM for computers ordered in the late 1980s and early 1990s. For one reason or another the computers were never used and no one now seems to be able to locate either the paperwork or the hardware. The school district experienced hard financial times and ultimately never paid Big Blue for the computers. In 1993 the district and IBM negotiated a long-term settlement that said the school district would pay the first of four $1.25 million installments beginning in 2008. Payments were deferred until then because 2008 was the year the district was scheduled to finish making state loan repayments under its previous loan plan, according to the Contra Costa story."
as mentioned in the comment section of the network world article:
"of course, it's worth pointing out that Contra Costa County is the predominant county and tax base for the East Bay -- a sprawling set of towns/cities full of people that work in downtown San Francisco, Oakland, and Silicon Valley. It's the same county where median home prices for most of the towns are well north of $500,000.
To quote the Contra Costa website: "Due to the presence of relatively high-wage skilled jobs and relatively wealthy residents, the County achieves high rankings among all California counties on a variety of income measurements."
This isn't the story of an impoverish[ed] county begging for debt relief from an evil corporation. Move along."
The basic problem is, in 1992, they got a superintendant who was going to revolutionize everything. New schools, new ways of doing things, the works.
He turned out to be a corrupt bastard, but he disappeared without ever having to pay or atone for anything, and the people who use the schools have been paying for it ever since.
The school district is broke as hell, and quite honestly, will probably go bankrupt before they pay IBM (if by 'pay' you mean 'pay in the next 50 years').
All the other comments here seem to be going 'lol pay up already', but it's not that simple. IBM should forgive the debt, and everyone should learn a lesson from this:
Don't let public institutions pay with credit. The people who make decisions are not held responsible, and thus do not make responsible decisions. They will rip you off, and rip off the people they are supposed to be representing.
The problem with giving money to schools is that school administrators tend to *always* spend it on glossy paint, then when the money is gone they turn around and complain about the books that they didn't buy when they had the money.
A perfect example of this is the recent teacher pay raise in Utah. The teachers union (and basically everyone else) complained about teacher salaries so $100 million was raised to bump every teacher's salary by $2500 and give them a $1000 bonus. The school districts immediately began planning to spend that money on everything but pay increases. This has forced the legislature to audit the various districts to ensure that the teachers actually receive the money.
I am sure that the school districts planned to simply continue doing the same thing that they have done for years. The plan undoubtedly was to complain about teacher pay, get more money from the legislature, and then spend the new funds on everything but teach salaries allowing them to complain about teacher pay the next year.
What we really need are school vouchers. If there is one thing that public schools across the country continue to prove it is that the government does a poor job of providing education.