Bond Approvals Signal New Day For School Construction

Paul Shigley on
Apr 1, 2004

California voters approved $20 billion worth of bonds for school construction and rehabilitation in March. In addition to the $12.3 billion for schools contained in Proposition 55, voters in 52 school districts approved $7.9 billion worth of local school bonds.

Since 1998, state voters have approved three school bonds worth a combined $34 billion for everything from kindergarten classrooms to university research facilities. And since voters lowered the threshold for approving local school bonds from two-thirds to 55%, local bonds have passed at an unprecedented rate, with more billions becoming available for school construction every election cycle.

The new capital investment in schools has occurred at a remarkably rapid rate. As recently at the late 1990s, funding for school buildings was a difficult question. Now, the system as a whole is close to having the amount of money it needs to keep pace with student needs, said Kim Rueben, a research fellow with the Public Policy Institute of California.

"We’re finishing off the backlog, but we’re also building schools for the next decade," Rueben said.

The turning point in the school capital improvement system might have been approval of SB 50 in 1998 (see CP&DR, September 1998). That legislation capped school impact fees that are levied on developers and made local districts responsible for half the cost of new schools. But the legislation also made local bonds a routine part of the process. With the cap on fees in place, the building industry has been willing to support — or, at least, not oppose — state and local school bonds.

"Part of the reason there is so much activity on the part of local districts is that to get your state money, you have got to have the local match," Rueben added.

The next phase in the evolution of school facility finance was state voters’ approval of Proposition 39 in November 2000, lowering the vote requirement to 55% for nearly all local school bonds. Since then, more than 80% of local school bonds have passed. Under the two-thirds requirement, only about 60% of local school bonds were approved, and there were far fewer bond measures on the ballot than there are these days.

Although the focus is often on elementary and high school districts, since April 2001, community college districts have placed 47 bonds before voters. Even though they are often far larger than any other local bond on the ballot, the community college measures have passed all but four times.

"If it were a two-thirds requirement, it would be very, very difficult to pass," said Cheryl Fong, a spokeswoman for the California Community Colleges Chancellor’s Office. Indeed, only 10 of the 47 bonds since April 2001 have received at least two-thirds voter approval.

The March 2 election was fairly representative of the school bond picture nowadays, although the total dollar amount might have been the largest ever. School districts placed 64 bonds on the ballot, and voters approved 52 (81%) of the measures. Thirty-six of the measures that passed received more than 55% of the vote, but less than two-thirds, according to statistics compiled by the Coalition for Adequate School Housing. The bonds ranged in size from $3.87 billion in the Los Angeles Unified School District (LAUSD) to $400,000 in the Washington Colony Elementary School District in Fresno County.

Community college districts in March received approval for 10 bond measures worth $2.28 billion. Only two community college bond measures failed.

Of course, many eyes were on Proposition 55, the $12.3 billion state bond that succeeded with only 50.9% voter support. Much like Proposition 1A in 1998 and Proposition 47 in 2002, Proposition 55 provides money for new K through 16 facilities, as well as rehabilitation projects. Like Proposition 47, the latest measure also has money earmarked for "critically overcrowded schools," which are primarily in urban districts such as LAUSD. Proposition 55 has $2.44 billion for critically overcrowded schools.

The provision for urban school districts helps answer concerns about the equitable distribution of money for school facilities, said Rueben. Prior to 2000, when advocates for LAUSD sued to get some of the Proposition 1A money and the Department of Education changed its allocation system, most money went to school districts in wealthy communities or in areas that were fast-growing, Rueben said. Now, money flows to all sorts of districts, with the state providing hardship grants to the worst-off districts.

Proposition 55 contains a total of $5.2 billion for new construction, an amount that should take four of five years for the state to allocate, said Duwayne Brooks, director of school facilities for the Department of Education.

The state has nearly exhausted the $13 billion provided by Proposition 47 in only about a year and half. The state and could start awarding Proposition 55 money to school districts as early as this month, Brooks said. Districts have already submitted applications, and districts eligible for $350 million worth of facility modernization money have already had their applications approved, he said.

Contacts:
Duwayne Brooks, Department of Education, (916) 445-2144.
Kim Rueben, Public Policy Institute of California, (415) 291-4400.
Cheryl Fong, California Community Colleges Chancellor’s Office, (916) 323-5954.

20 Largest Local School Bonds on March 2 Ballot

District -- County -- Amount -- Vote
Los Angeles USD -- L.A. -- $3.87 billion -- 63% (pass)
Chabot-Las Positas CCD -- Alameda/CoCo -- $498 million -- 59% (pass)
Sierra JCCD -- Nevada/Placer/Sacramento -- $394 million -- 54% (fail)
Riverside CCD -- Riverside -- $350 million -- 60% (pass)
Desert CCD -- Riverside -- $346 million -- 69% (pass)
Grossmont UHSD -- SD -- $274 million -- 60% (pass)
San Joaquin Delta CCD -- Alameda/Calaveras/Sac./SJ -- $250 million -- 57% (pass)
Rio Hondo CCD -- L.A. -- $245 million -- 62% (pass)
Huntington Beach USD -- Orange -- $238 million -- 58% (pass)
Cerritos CCD -- L.A. -- $210 million -- 57% (pass)
Orange USD -- Orange -- $200 million -- 48% (fail)
Saddleback Valley USD -- Orange -- $180 million -- 59% (pass)
Clovis USD -- Fresno -- $168 million -- 62% (pass)
Simi Valley SD -- Ventura -- $145 million -- 62% (pass)
San Bernardino USD -- San Bernardino -- $140 million -- 60% (pass)
Citrus CCD -- L.A. -- $121 million -- 57% (pass)
Cabrillo CCD -- Monterey/Santa Cruz -- $118.5 million -- 60% (pass)
Gavilan CCD -- Santa Clara -- $108 million -- 56% (pass)
Santa Maria JUHSD -- Santa Barbara -- $98 million -- 50% (fail)
College of the Sequoias CCD -- Fresno/Kings/Tulare -- $95 million -- 52% (fail)