One of the most dominant issues in California’s local elections this year is a series of school bond measures. Across the state, individuals in 37 counties and 110 school districts will decide to pass or reject 114 school bond measures. These measures allow voters to decide whether school districts can issue municipal bonds in order to pay for a variety of school construction including building maintenance and renovation.
Why are there so many local measures on the ballot that attempt to solve what appears to be a statewide problem? Historically, the state has matched local school bond earnings with income from statewide bond measures, however recent bond depletion due to water related and high speed rail measures has limited Sacramento’s ability to contribute to local schools. Efforts to put a school construction bond measure (http://www.sacbee.com/2014/08/05/6604241/fearing-higher-fees-homebuilde…) on November’s statewide ballot failed to pass this year.
In 1998 a law overhauled California school construction to allow funding to come from a combination of local borrowing, school-impact fees charged on new homes, and state bonds. The law specified that if the state’s funds dissolved, impact fees would be raised. California voters last passed a statewide school bond measure (http://www.bloomberg.com/news/2014-08-19/california-4-billion-school-bo…) in 2006 however funds from this measure ran out in 2012. Still, impact fees were suspended at current levels as lawmakers attempted to negotiate a new school bond. The fee suspension expired on September 1st.
Municipal bonds for school districts bring many stakeholders to the table, spanning from the California Chamber of Commerce to the California Teachers Association. Interestingly, the California Building Industry Association, who represents those most hard hit by increases in school-impact fees, warned that inaction at the statewide level could have major setbacks not only on the status of education quality but also impact the state’s fragile housing recovery.
The Sacramento Bee reported (http://blogs.sacbee.com/capitolalertlatest/2014/06/california-school-bo…) that the State Allocation Board, which oversees that state’s school construction and modernization programs, estimates that California needs approximately $12 billion to build additional schools and almost $5 billion to update current constructions.
As the state has been reluctant to solve this funding crisis, this November, individual local districts will attempt to make up for these deficits through municipal bonds.