Why School Bonds Pass in the Post-Prop 13 World
In 1998, for the first time in a generation, school bonds are building more schools in California than any other funding source. Voter-approved schools are back, as are other tax measures for school operations and special programs.
This stands in sharp contrast to the first 15 years after Proposition 13. From 1978 to 1986, school bonds and taxes were not permitted on local ballots at all. After the Constitution was amended to once again allow school tax elections in 1986, school bonds and taxes began reappearing on the ballot - but most of them failed. Over time, both the number of school bonds and their frequency with which they pass has grown.
In the April elections, about 50 measures appeared on local ballots, and more than half of them passed with a two-thirds vote. (Even most that failed got at least 60% of the vote.) Overall since 1986, approximately 500 bond and tax measures have appeared, and about 40% have passed. Every school superintendent knows that a bond is in his or her future. The question is no longer whether to pursue a bond, but rather when, how much, and for which projects.
Like cities and counties, schools have become accustomed to a world dicated by certificates of approval, Mello-Roos bonds, developer fees, and capitalized redevelopment pass-throughs. School districts' capital needs have also brought them closer to cities and counties - because they often need the additional mitigation money available to them through local government planning processes.
At the same time, however, they've also learned how to win local bond elections. School bonds have caught on mainly because the school facility problem couldn't be ignored any longer. With resistance growing to more fees and user charges, other public agencies are likely to step up their attempts to win voter approval for debt. Schools may simply have been first. And this raises a whole series of questions about the future relationship between school districts and local governments about infrastructure funding.
Cities, counties, and special districts will inevitably start charting the waters of voter tolerance for higher taxes. But voters see taxes as a single bottom line, meaning bond and tax proposals compete with one another. What will this mean in the future: more cooperation, more competition - or simply greater reliance on state funding?
Even 20 years after Proposition 13, California still lacks a coherent philosophy about public infrastructure needs. Communities are becoming aware of the imbalance between growth areas needing new infrastructure and older areas requiring more maintenance. This battle is just beginning to emerge on the local government front, but it has been fought on the school front for several years, as urban and suburban school districts battle over whether state bond funds will go for modernization or new schools.
In the future, this competition will only intensify. Multiple agencies - cities, counties, school districts, park districts, water agencies, and others - may have to begin coordinating and balancing their competing needs. Poorer communities and areas with strong anti-tax voters may get left behind.
Here again, all public agencies facing these choices will benefit from the school experience. Take the issue of proposed state bonds for infrastructure construction - an oft-cited idea that is politically attractive because state bonds require only a simple majority vote rather than two-thirds. In the wake of Proposition 13, schools became far more dependent on the state for their capital funds, benefiting from several billion dollars in voter-approved school bonds since 1982. But they have paid a price. The state has ceased to be the schools' partner and has, instead, become their regulator and auditor. School districts must adhere to strict state design and construction guidelines and therefore have little independence.
At the local level, it seems that both developer and homebuyer tolerance for development fees has reached its maximum - for schools or anything else. This is especially true in the school arena, where it appears likely that the building industry's decade-long attempt to place a cap on school fees is likely to succeed in the near future. So more money will have to be raised from voter-approved bonds and parcel taxes. And it's unlikely that the state will lower the two-thirds requirement for any local debt issuance.
Therefore, local governments, like their school counterparts, will have to learn to win bond campaigns that require two-thirds vote. This may well lead to a faddish, pork-barrel approach to local bonds. Every voting block has its price in the form of a special goodie on the bond list. And it may lead local governments to work together with schools in shaping a community infrastructure strategy and seeking joint voter approval. Cooperating with schools on the local ballot is probably far less risky than competing with them. After all, few community symbols are as powerful as schools. Not many of us feel the same emotional bond to all those pipes under the street.