Ed chair’s facility bond fails passage in Senate
(Calif.) State support for building new schools could be nearing historic lows after Senate Republicans on Tuesday nixed a plan to seek voter approval for a bond measure that would help pay for construction and modernization costs.
Sen. Carol Liu’s SB 114 received support from all 27 Democrats in the upper house but failed to garner one, minority-party yes vote – all that was needed to meet the two-thirds approval threshold and move on to the Assembly.
“I have received strong support from school districts, homebuilders and other concerned parties in the Inland Empire and Central Valley, where aging schools need upgrades and growing areas will need new, modern school construction,” Liu, D-La Canada Flintridge and chair of the Senate Education Committee, said in an email to Cabinet Report.
“The Republicans who represent those areas should come to the table and articulate what they want to see in a bond bill. The bill at this time is simply a vehicle to continue discussions. I will amend an urgency clause into the bill, which will allow another floor vote in the future,” said Liu.
SB 114 comes as the need to replace aging schools and build new ones continues to increase while state money for facilities projects is all but gone.
School districts with the ability to pass local bonds often do but without the state match, between 40 and 60 percent depending on the project, those local dollars don’t have the same buying power.
Tuesday’s vote on the bill put all 14 Republican senators squarely in-line with Democratic Gov. Jerry Brown, who opposes a school facilities bond because the borrowing costs would add to the $2.5 billion in annual debt service the state already pays for prior facilities bonds. He has effectively blocked legislative attempts to put measures on both the 2012 and 2014 ballots, and has called for an overhaul of the School Facilities Program to reduce the state’s role.
“This is a general obligation bond, which means that it will be paid for by the General Fund, not the Prop. 98 side of the revenue sources so we’re taking care of schools though Prop. 98 and we’re also taking care of schools on our side of the equation by paying for their mortgage debt – so that’s a double-dip of sorts,” Sen. John Moorlach, R-Costa Mesa, said on the Senate floor Tuesday.
“I know that schools need bond financing to build but why are we paying it out of our limited funds when we know we’re going to get squeezed with higher CalPers contribution rates; with retiring medical payments,” he added. “If schools aren’t willing to pay the mortgage on debt on their bonds why should we? So I am opposed to this unless it is amended to have it paid with Prop. 98 funds.”
Schools are, in fact, receiving several billion more in funding this year under Proposition 98, a Constitutional guarantee that the largest chunk of state revenues be used for education. That money, however, has historically paid only for programming and operational expenses and does not cover facilities costs.
Both state and school officials have been trying for the last several years to figure out a way to salvage the state’s School Facility Program, which uses cash from the sale of voter-approved, general obligation bonds to match school district contributions for new construction, modernization or other types of facility projects such as seismic repair or overcrowding relief.
That program, administered through the Office of Public School Construction, has since 1998 doled out some $35 billion in matching grants to schools but the funds are now depleted. The last statewide school bond was passed in 2006.
Lawmakers and school facilities advocates have continued to lobby for a new bond, saying there’s no way schools can afford on their own to pay for all of their maintenance and construction needs, which number in the tens of billions of dollars.
Three separate bond bills were introduced this legislative session but only Liu’s has garnered the support to move this far.
SB 114 doesn’t specify a dollar amount for the bond, which would be determined by the Legislature, and would be used only to fund K-12 school projects. Past bonds have included funding for community college and university facilities.
The bill would also make several changes to the existing School Facility Program by requiring, among other things, that as a condition of receiving funding school districts commit to upkeep of their buildings by developing long-range facilities master plans and that they conduct an inventory of existing facilities.
Liu’s plan also calls for the various state agencies connected to the School Facility Program to work together “to streamline the program and identify a single entity within the California Department of Education to act as a full-service agency to assist school districts in navigating” the facilities program.
A motion to reconsider the bill was granted, and Liu indicated that she is likely to bring it back for another vote. That bill, like all others, must be passed out of its house of origin no later than tomorrow in order to stay alive.
Meanwhile, a separate effort by a coalition of school housing advocates and stakeholders to place a $9 billion statewide bond initiative on the November 2016 ballot continues.
CASH – or the Coalition for Adequate School Housing – is leading the referendum, along with the California Building Industry Association through a new political action committee called Californians for Quality Schools. The group’s measure was cleared in March by the Secretary of State’s office for circulation, meaning supporters have until Sept. 21 to collect some 366,000 valid voter signatures needed to qualify it for the ballot.
That initiative, the Kindergarten Through Community College Public Education Facilities Bond Act of 2016, would direct $3 billion for new construction and $3 billion for modernization of K-12 public school facilities; $1 billion for charter schools and vocational education facilities; and $2 billion for California Community Colleges facilities.
It is estimated that the state would pay a total of $17.6 billion in principal and interest – about $500 million annually – over a 35-year period for that proposal.