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The 55% Solution: Local School Bonds Winning Easy Approval

California is on the verge of an unprecedented surge in school construction. State voters' willingness to lower the threshold of approval for local school bonds from two-thirds to 55% has drastically increased the number of bonds issued by districts. If state voters approve the two largest bonds in California history $13 billion in November and $12.5 billion in March 2004 school construction would take off. About 90% of local school bonds are passing these days. That figure cheers officials at school districts, which must provide a 50% match to be eligible for the state bond money. School supporters say the influx of money is the best thing to happen to educational facility development in decades. The money is building additional classrooms, libraries and auxiliary facilities, and is modernizing schools that have received minimal maintenance for decades. Some taxpayer advocates, however, warn that some school districts are using their new revenue-raising abilities recklessly and are accumulating huge amounts of debt. State Sen. Jack O'Connell (D-San Luis Obispo), who carried constitutional amendment legislation for 13 years to reduce the two-thirds voter approval requirement, said the state and local districts need to make up for decades of neglect. "We've lost a generation of students because of the burdensome, onerous two-thirds requirement," said O'Connell, who is running for state superintendent of public instruction. Lowering the voter threshold to 55% "has really revolutionized" school construction, he said. But Kris Vosburgh, executive director of the Howard Jarvis Taxpayers Association, said dropping the two-thirds requirement is burdening homeowners. "Bonds are passing almost regardless of merit," said Vosburgh, who complained that bonds are funding stadiums, culinary arts facilities and even a simulated golf driving range at one community college. "We're seeing a lot of nonsense and fluff incorporated into these bonds." Either way, the increased bond funding appears to be taking pressure off developers. With bond financing, school districts can replace portable classrooms with permanent capacity eliminating the basis for "Level II" development fees, said Jeanette C. Justus, a school facilities consultant for Southern California developers. Level II fees can run to about $6 per square foot about three times the current Level I fee. Plus, said Justus, good schools help developers sell houses. Starting in the early 1970s, local school bonds began to fail in large numbers. Those losses at the polls preceded the taxpayer revolt of 1978, when the state electorate approved Proposition 13 and essentially shut down local bonding. It was not until 1986 and the passage of Proposition 46 that local school bonds became feasible again. Still, the state constitution required two-thirds voter approval of local general obligation bonds a requirement that dates to the 19th century. From 1986 through 2000, about 60% of school bonds received the necessary two-thirds approval. The bonds were most likely to pass in wealthy communities and least likely to gain approval in poor areas. The system made school districts more and more dependent on the state for facilities funding, said Robert Corley, a Ventura-based school facilities and planning consultant. In March of 2000, voters rejected a state constitutional amendment that would have reduced the voter threshold for local school bonds to 50%. But eight months later, voters approved Proposition 39, which allows passage at 55% with some additional restrictions. The ability to pass bonds with a 55% vote has empowered school districts, Corley said. "When we look back in 50 years, the passage of Prop. 39 will be a date when things started to get better," Corley said. "It's a step in shifting the balance of power back to the locals." Since the first 55% elections in early 2001, school bonds have passed about 90% of the time and voters are now deciding more local school bonds than ever before. During the March 2002 election, K-12 and community college districts put forth 78 school bonds, including 73 that required only 55% approval. (Some school districts have not gone the 55% route because the lower threshold requires districts to more specifically identify how they will spend the money and requires establishment of a citizen oversight committee.) Voters approved 66 of the bonds, including 65 of the 73 at the 55% level, according to a report by the Coalition for Adequate School Housing. In total, voters approved $4.2 billion in bonds for K-12 districts, and $2.2 billion for community college districts. Most analysts expect at least as many local school bonds to appear on November ballots as were on the March ballot. The surge in local funding means that more districts can raise the 50% local match for construction projects, said Duwayne Brooks, director of school facilities for the state Department of Education. The higher passage rate of local bonds also means fewer districts are seeking hardship status, for which the state pays 100% of construction costs, he said. "It makes everybody's job easier. It results in more schools being built," Brooks said of Proposition 39. "We have been underfunded for so many years. $6.7 billion in 1998 sounded like a lot. But the bonds that were put before voters before that time were really just miniscule. And the kids just keep coming." Indeed, state officials expect to award the last $600 million of the $6.7 billion an amount voters approved for K-12 schools with passage of Proposition 1A in 1998 this summer. This November's state school bond would provide $4.8 billion simply to cover the backlog of approved but unfunded projects. The $13 billion state school bond earmarks $1.7 billion for "critically overcrowded" schools. This money is seen primarily as aid to the Los Angeles Unified School District, but other poor and urban districts could qualify. The remaining $6 billion will be awarded on the traditional first-come, first-served basis favored by many growing suburban districts (see CP&DR Public Development, June 2001). If voters reject the state bond, however, the whole system could fall apart. Vosburgh, of the Jarvis group, expects another voter revolt will occur at some point, especially as the same districts return to voters again and again with bond measures. "It may take a few years, but ultimately we think there is going to be enough anger out there that people with pursue an initiative to restore the two-thirds threshold," Vosburgh predicted. In the meantime, Vosburgh's group vows to file a standard ballot argument against any local 55% bond that does not have opposition. Contacts: State Sen. Jack O'Connell, (916) 445-5405. Duwayne Brooks, Department of Education, (916) 445-2144. Jeanette Justus, school facilities consultant, (949) 509-7761. Robert Corley, school facilities consultant, (805) 658-2995. Kris Vosburgh, Howard Jarvis Taxpayers Association, (213) 384-9656.