To the editor,

Large efforts have been made to achieve two school referendum plans and the marketing has been top notch but a number of legitimate questions/concerns have been raised and remain unanswered to the best of my knowledge.  The heating system is overdue for an upgrade and should be addressed as a priority.  One has to wonder, though, why the project is being addressed right now in arguably the worst economic conditions we have experienced since 2008.  The Ag2School program has been in place since 2017 and continues for the foreseeable future.  One can only presume the same issues facing the school today were more or less present and known in 2017, with the main difference now being considerably higher interest rates.  

Currently we are facing a potentially difficult and uncertain economy and Fed Chairman Powell appears committed to further economic tightening.  Some, even though they have done the math as it currently exists and support the referendum, could be “caught out” with financial hardship and inability to pay through no fault of their own.   For example, MN teacher’s pensions are reportedly invested in commercial real estate (through the Minnesota State Board of Investment in Blackstone Real Estate Partners X, “BREP X”) which could unwind to a value unknown and leave teachers short of expected pension funds without some fancy financial footwork or taxpayer bailout (Blackstone Dumping Toxic Real Estate Debt into Pension Funds ).  BREP X has reportedly moved away from extremely risky office and mall CRE but is keeping multi-family rental housing, logistics, hospitality and has added data centers in the new $30B fund.  Perhaps that is more stable.  Insurance companies in general are also heavily invested in CRE as are numerous small and regional banks. Perhaps some have better ability and luck than others to maneuver in periods of high volatility.  Perhaps Henning is somehow exempt from these wider considerations, but anyone who has looked into shadow banking/unfunded liabilities is exercising extreme caution in the current climate and expecting further shocks to the system. 

For a fairly comprehensive overview, it is worth listening to Danielle DiMartino Booth’s recent presentation “Money Supply Is Falling by Most Since Great Depression” ( ).  Beginning at the 10:41 mark, she states that public pension funds have been deployed to prop up private debt markets.   “Again, these are the vestiges of public pensions having to deploy, or being told they need to deploy, money and that’s what we typically see when we’re at the beginning of an unwind cycle….you don’t know how big the write downs are going to be you just know they’re going to be written down…. if (interest) rates are maintained….at some point there will be a mark to market moment at least on the public pension side and it ain’t gonna be pretty.”  She further states that pensions own 69 percent of the holdings of the private debt market.  On a public forum, DDB’s answer to the question “How in the world are they (Blackstone) able to raise $30bn for another CRE fund?” is “…if you choose to NOT re-up as a veteran investor, i.e. a public pension, you might not get invited back in the future…think polite extortion.”

People might wish to consider these larger issues.  Although I personally object to people’s pension funds being deployed (“deployed” sounds suggestively like war terminology) in such a cavalier fashion, my opinion doesn’t really matter.  It does not bode well for wider implications (think bankruptcies, layoffs, underwater mortgages, etc) in the state and nation, particularly if taxpayers are then pegged to address pension losses.  Ability to pay in such a volatile economy becomes a very difficult thing to determine, even with the best “due diligence.”   I submit that it would be prudent and responsible to wait until some semblance of stability returns to the economy before asking the public to commit to a 23 year bond.  There is an ethical consideration for the 2nd vote as one literally cannot get blood from a stone even if the stone is willing.

The public can and should think for themselves.


Randi Claassen,