The largest school bond in state history, at $15 billion, is going to voters in March as supporters try to put a dent in a $100 billion backlog of failing boiler rooms, leaky roofs and new construction projects needed at K-12 schools and universities.
Proposition 13 — unrelated to the same-numbered 1978 tax measure — was placed on the ballot by the Legislature with bipartisan support.
Supporters, which include the education establishment as well as the construction industry, would allocate $9 billion to K-12 schools, $4 billion for California’s public universities and $2 billion for community colleges.
Prop. 13 would not increase individual property taxes, but instead require the state to make annual payments of $740 million out of the general fund budget, or about one-half of 1% of that budget. About $313 million of that on average would be interest on the bonds.
The state is already making $3.1 billion in annual payments on school and university bonds passed in prior years, including $1.56 billion in interest.
Critics question the high cost of borrowing the money, which would mean ultimately paying $11 billion in interest, almost as much as the entire bond.
“A lot of this is being driven by Wall Street,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association. “They make a ton of money off this. But is it really good for the citizens of California?”
School officials counter that borrowing via bonds is a standard practice for large public construction projects, spreading the cost over many years.
It’s a good public investment, said Dennis Meyers, assistant executive director of governmental relations at the California School Boards Association.
“You can’t educate students in old, rundown facilities,” he said.
Research shows that classroom conditions — noise levels, air temperature, lighting, air quality and other factors — impact student achievement, with a good environment resulting in a 5% to 17% increase in test scores and lower suspension rates, according to the California Department of Education.
Studies show “clean air, good light, and a small, quiet, comfortable, and safe learning environment are important for students’ academic achievement,” the department’s School Facilities Division reports. “Student achievement scores tend to decrease as the school building ages — to as high as 9 percent, depending on maintenance factors.”
A recent poll by the Public Policy Institute of California showed Prop. 13 with 53% support among likely voters. The measure requires only a simple majority to pass.
Supporters have raised nearly $9 million while the opposition listed no contributions as of the first week of February, according to the secretary of state.
To qualify for the Prop. 13 money, most school districts would need to pass a local facilities bond and then apply for matching state funds. Yet without the state’s help, cash-strapped districts are on their own to upgrade or build facilities, said Tony Wold, associate superintendent of West Contra Costa Unified.
“We have a billion dollars in need,” Wold said of the East Bay district with 32,000 students. “Every dollar that we have, we can leverage to make a difference for our students.”
Wold’s district will also ask voters in March to approve a $575 million school facilities bond, increasing local property taxes to pay for it.
The state money would help stretch the funding from that local bond, allowing the district to address critical needs at schools like Lake Elementary in San Pablo, where the boiler room is “held together with duct tape,” and wires hang from the ceiling at the front entrance, Wold said.
San Francisco school officials said that at least a dozen school sites, including Lincoln and Wallenberg high schools and Marina and Denman middle schools, would be eligible for Prop. 13 funds to help modernize buildings that are decades old. That could include upgrading technology, building science labs, renovating playgrounds, installing new lighting and replacing plumbing and wiring.
Prop. 13 would also allocate $500 million for charter schools and another $500 million for career-technical education.
In addition, the measure would require University of California and California State University officials to prioritize life-safety facility needs at their campuses when distributing the funds and create five-year plans to expand affordable housing options for students and consider those plans for bond-funded construction projects.
While university and college officials haven’t identified what specific projects would be funded with the bond, they highlighted seismic risks and overcrowding as issues facing the higher education systems. Six UC Berkeley buildings, including Moffitt Library, pose a “severe” risk to life in the event of an earthquake.
In the relatively small print of the measure, the fees school districts could levy against developers would be reduced by up to 20%, which would reduce the funds home builders contribute to school construction. Since 2002, school districts across the state have raised about $10 billion from these developer fees, which are meant to offset the impact on classrooms from new housing construction projects.
Coupal acknowledged the facilities needs at schools and colleges, but questioned whether it wouldn’t be more fiscally prudent to use some of the state’s estimated $7 billion budget surplus and $18 billion in rainy-day funds — to help pay for the projects, rather than doling out interest for the next 35 years.
“Should we not be paying for some of this on a pay-as-you-go basis?” he said. “It’s just so much more efficient.”
In addition to the concerns over interest costs, state facilities bonds for schools, including Proposition 51 in 2016, have been criticized for their first-come, first-served policy, meaning the distribution of funding wasn’t necessarily based on need or urgency, but rather the ability of districts to pass local bonds, meet other application requirements, and get in line quickly. The process has generally favored the larger and wealthier districts, which have more staff and expertise to navigate the process, as well as a larger tax base.
In some cases that has meant some districts have used state bond money to build state-of-the-art performing arts centers, while smaller or less wealthy communities continue to grapple with leaky roofs and broken heating systems.
Total amount in bond money available
K-12 share. This includes $500 million for charter schools and $500 million for career-technical schools
UC and CSU share
California community colleges share
State general fund annual debt payment on the bonds
Estimated total interest the state would pay on the bonds
Supporters say Prop. 13 addresses this by prioritizing more urgent projects, including those related to health and safety of students, while also ensuring low-income communities or small districts that might struggle to raise their own bond money are still eligible.
“It’s not the full amount we need,” Meyers said, “but it’s a good way to distribute these funds.”
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