CHICAGO -- A debate is raging in Michigan's public finance community over the increased use by school districts of capital appreciation bonds, which push debt service payments into future years, allow school officials to sidestep unpopular tax increases, and often are backed by the state's full faith and credit.

At last month's Michigan Treasurer's conference, Deputy State Treasurer Nick Khouri posed the question during one session as to whether the bonds were an "appropriate tool" for school districts or "a gimmick to delay interest and principal payments out to the future."

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