Negotiations over the next few days between the Newsom administration, the Department of Finance and legislative leaders will determine whether there will be a California state bond for K-12 and community college construction on the March 2020 ballot, as well as the size of the bond and how the money will be distributed. One possibility is a combined bond for K-14 and higher education that contains less money for schools and community colleges than originally proposed.
With funding from the $9 billion bond that voters passed in 2016 either already spent or committed, Assemblyman Patrick O’Donnell, D-Long Beach, proposed Assembly Bill 48, with the full support of education groups like the California School Boards Association. The bill called for two bonds, the first for $13 billion in March, followed by a bond of undetermined size two years later.
The Legislature must pass a bill by the last day of the session on Sept. 13 and the governor must sign it within 30 days of receiving it, to put a measure on the March ballot. But the bill was sent to the Senate Rules Committee to provide time to negotiate the details with Newsom’s staff and the Department of Finance.
None of the parties involved in the talks would comment on the negotiations and the coalition of school groups that have been following the progress had not seen wording of an amended bill on Sept. 4. Eric Bakke, legislative advocate for the California School Boards Association, confirmed that discussions have continued with the hope of reaching terms for the March ballot.
Four years ago, then-Gov. Jerry Brown and education groups couldn’t reach an agreement on how to fund school construction. As a result, school groups and the Coalition for Adequate School Housing, or CASH — a joint school district and construction industry backed nonprofit — gathered enough voter signatures to put Proposition 51 on the 2016 ballot. There is not enough time, however, to do a signature drive for March at this point. The next chance would be the November general election, but it’s expected to be a crowded ballot with multiple tax measures. That is why education groups prefer March, when Democratic voters are expected to turn out in large numbers for the presidential primary election.
If Prop. 51 were a guide, $10 billion under AB 48 would likely go to K-12 districts and $3 billion to community colleges, with money set aside for charter school and preschool facilities. Prop. 51 split funding between new construction and school renovations. But, with a decline in school enrollment in many areas of the state, school groups want the next bond to devote a larger share to renovating and upgrading facilities.
Under the current system of matching funding, the state pays half of the cost of a new school and 60 percent of the cost of renovating a school or college campus.
The Department of Finance, under Brown, had criticized the current distribution formula, saying it favored property-wealthy over property-poor districts and that the first come, first served system for allocating money favored large districts, with sizable facilities staffs, over small districts. The majority of school districts in the state have fewer than 2,500 students.
O’Donnell proposed some fixes in AB 48. It would provide technical help and project management for small districts and increase the number of small districts qualifying for hardship aid, which goes to those that lack the tax base to issue a bond to fix a school or build a new one. At a hearing on his bill, O’Donnell promised to reexamine the overall funding system for the next bond. Newsom, however, may not commit now to a second bond that would further add to state debt — which may be why the Department of Finance may want fair funding issues on the table now.
In a study for the 2018 research project Getting Down to Facts, co-author Jeff Vincent, who co-directs the Center for Cities + Schools at UC Berkeley, concluded that the state’s system of matching funds creates fundamental inequities by failing to take into account a district’s taxable property and family incomes. Both determine how much money a district can realistically raise, through bonds, to pay for building needs. Districts with lower property values and lower family incomes will tend to issue smaller bonds, with less funding from the state.
He found inequity in the modernization allocations but not in new construction allocations, which have different rules for funding under the state’s School Facilities Program. In the bottom fifth of districts, the total taxable property — used to determine the size of a construction bond — averaged $900,000 per student. Those districts received an average of $661 per student in matching modernization aid from 1998-2017. The top fifth of districts, with an average of $2.4 million in taxable property per student, averaged eight times that much in modernization aid — $5,361 per student.
“Our analysis of the last 20 years of school facilities funding found tremendous inequities,” Vincent said. “Districts with higher property values, higher community incomes and fewer low-income students received the most state funding to modernize their schools.”
Between 1998 and 2016, the state provided $42 billion of the $166 billion that school districts raised for new construction and modernization, according to Vincent’s report.