$10 billion school construction bond headed to Nov. 5 ballot: what’s in it?

Construction site at Murray Elementary in Dublin Unified in 2022.

Credit: Andrew Reed / EdSource

Legislators are poised to place a $10 billion construction bond for K-12 schools and community colleges on the Nov. 5 statewide ballot. If voters agree, the money will replenish a pool of state matching money that ran dry for building new schools and for fixing old ones – benefiting many districts.

With 34 authors and co-authors, Assembly Bill 247, laying out the details of the bond, is expected to pass easily. It will receive a hearing today, only two days after it was made public after weeks of negotiations. The Assembly and Senate are expected to approve it on Wednesday, the deadline for final wording for November initiatives.  Approval will require two-thirds majority support.

“California urgently needs a statewide school bond to repair dilapidated and unsafe school facilities and to invest in our children to meet 21st century educational and workforce needs,” stated Assemblymember Al Muratsuchi (D-Torrance), chair of the Assembly Education Committee and primary author of AB 247.

The last school construction bond, passed in 2016, was for $9 billion. Since then, needs have piled up. The Legislature has added a new grade, transitional kindergarten, and appropriated $4 billion to turn schools into community schools, demanding more space for services, from tutoring to mental health. Increasing threats from flooding, heat, and fires raise the need for climate-resilient responses, from shade structures to energy and air conditioning upgrades.

The bond will allow districts to use the money for all of those purposes and seek a supplemental grant to construct or renovate transitional kindergarten classrooms and build gyms, all-purpose rooms, or kitchens in schools that lack them. The bond would also set aside $150 million to remove lead from school water.

School districts must pass bonds through property taxes to take advantage of state subsidies. Critics have long charged that the formula for matching money—60% of any qualifying cost of a modernization project and 50% for new construction—has sharply disadvantaged school districts with low property values per student. With larger tax bases and the ability to spread the tax burden, property-rich districts can issue larger bonds, gobbling up a disproportionate share of the state-matching money.

The state’s $10 million bond will use a slightly different formula, offering a little more to districts with lower property rates.  But the system will remain largely intact – and unconstitutional, said reform advocate John Affeldt, managing attorney for the public interest law firm Public Advocates. In February, it filed a complaint with state officials, threatening a lawsuit on the grounds that the facilities program discriminates against students in low-wealth districts and denies them an opportunity for an equal education.

The bill’s authors have slightly modified the distribution formula. A sliding-scale system will give districts with high rates of low-income students and, to a lesser extent, low assessed property per student as much as an additional 5 percentage point match: 65% for renovations and 55% for new construction.

Public Advocates recommended using assessed property value per student, which it says is the most important variable when measuring capacity to raise local money to modernize schools, as the yardstick to determine the size of districts’ state match.

The bill creates a point system for rewarding extra money that emphasizes the percentage of low-income students, foster children, and English learners in a district. Affeldt said it likely will award Los Angeles Unified, with a high rate of poor students but above-average property tax wealth per student, extra undeserved state money.  

The maximum 65% match won’t help property-poor districts, from 3,500-student Del Norte Unified in the rural north to 46,000-student San Bernardino City Unified, highlighted in Public Advocates’ complaint. Districts like these districts would need an 80% to 90% state match to raise enough money to fix critical conditions and add facilities that property-wealthy districts take for granted – but there cannot be enough funding for them as long as every district is guaranteed a 60% state match, Affleld said.

Public Advocates will consult the property-poor districts it represents about what the next step will be, Affeldt said. “But what I can say is the Legislature could not have written a better roadmap to get sued.”

The $10 billion bond will be divided as follows:

$8.5 billion to K-12. Of that:

  • $3.3 billion for new construction, which will include seismic retrofits, climate measures, preschool and health facilities, and replacement of school buildings at least 75 years old; 
  • $4 billion for modernization, which would include replacing portables at least 20 years old and $115 million carved out for the lead in water abatement;
  • $600 million for qualifying charter schools;
  • $600 million for career technical education facilities.

$1.5 billion for community colleges.

The $8.5 billion will cover only a portion of districts’ needs, and a significant piece may already be spoken for. Under the current rules, districts whose projects have been vetted by the State Allocations Board, but have not received funding, have been put at the front of the line for the next state bond. It’s unclear from the wording of AB 247 if the $3.6 billion in approved but unfunded will get first dibs on the new money.

Funding for the state bond will be distributed, as in the past, on a first-come, first-served basis for those districts that can navigate the complex application process. Here, too, critics say favors large districts, which have full-time facilities staff who are well-versed in the system, and small property-wealthy districts that can afford consultants.

The authors of AB 247 have included two provisions to mitigate this. It will send the California Department of Education $5 million to provide technical expertise for completing applications for priority schools in small districts — those with fewer than 2,500 students with low assessed value per student and high numbers of low-income students.

Additionally, the bill calls for setting aside 10% of the new construction and modernization money for small districts and front them a piece of their expected award for grant management. However, the set-aside applies to all small districts, including property-wealthy districts that could consume a big share of the 10% total.

In another nod to fairness, the bond will expand financial hardship assistance in which the state covers the full cost of projects for districts too small to issue a bond; since 1998, these districts have received about 3% of state bond money. Eligibility would increase from a maximum of $5 million in bonding capacity to $15 million.

California has no regular or consistent method of helping with school facilities. Since 1998, when the current formula for sharing state bond proceeds took effect, voters have approved $54 billion in bonding. A string of successful bond approvals was broken in 2020 when voters defeated a proposed $15 billion bond measure, which, by bad luck of the draw, was Proposition 13. Voters may have confused it with the anti-tax measure of the same number in 1978.

Prop. 13 would have given CSU and UC $4 billion of the total. A bill competing with AB 247 would have, too. Weeks of negotiations settled with a smaller bond and no money for the universities. And that cleared the way for a separate $10 billion non-education bond that will appear on the Nov. 5 ballot. It will focus on climate change, with funding to shore up defenses against wildfires, floods, and rising sea levels.

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