Editorial

No more school bonds until California fixes its system for funding school construction. No on Prop 51.

California’s school-construction needs are piling up while its matching-grant program to help build those projects has dwindled to practically nothing. But the grant program is emblematic of a state system for funding new and renovated schools that is badly outdated, inequitable and inefficient. The system needs to be fixed rather than perpetuated, which is why voters should reject Proposition 51 and press for a revamped measure to come before them in the next election.

Unlike all the other school-bond measures placed on the ballot since the State Facilities Grant Program began in 1998, this one wasn’t put there by the Legislature with the governor’s approval. In fact, Gov. Jerry Brown hasn’t had anything good to say about Proposition 51. “I am opposed to the developers’ $9-billion bond,” he told The Times in February, referring archly to the construction industry’s role as the proposition’s main financier. Brown also argued that it would promote sprawl and continue an inequitable system based on which school districts get to the application line fastest, not which ones need it the most.

The Legislative Analyst’s Office had an even more critical view of the current approach to funding school construction in its 2015-16 budget report. “Notably,” it said, “the existing program fails to treat school facility costs as an ongoing expense despite the recurring nature of facility needs, allows disparities based on school district property wealth, fails to target funding according to greatest need, results in excessive administrative complexity, and lacks adequate accountability mechanisms.” Ouch. But that was just the start. The report went on to point out that as long as there is money in the state fund, developers of big new housing projects don’t pay more than half the cost of building the schools necessary to serve those homes. That extra subsidy for new construction at a time when many existing schools are underutilized only encourages the sprawl that has been an environmental and resources drain on the state.

Meanwhile, local districts are in better shape to raise their own money because, with only a 55% approval margin needed, some 80% of local school-bond measures are approved, the Legislative Analyst noted.

And California is no longer in a state of frenzied enrollment growth. The student population is declining and projected to continue doing so over the next decade. The Legislative Analyst’s report suggested helping school districts catch up with the growing backlog of necessary school construction with a one-time allocation from Proposition 98 funds, while the state transitions to a better-planned system of ongoing grants. That sounds like a smarter way to go about it, though a statewide bond might ultimately  be required to supply the necessary funds.

For that matter, this isn’t the best time financially for the state to issue more bonds. Financial analysts recommend that state governments limit their annual debt payments to 6% of their general fund revenue. The state Treasurer’s Office reports that California was at 6.54% for the 2015-16 year. In other words, the state is at or even slightly past the level of indebtedness considered to be fiscally prudent.  That doesn't mean it couldn't afford the bond payments, if the bonds were sold selectively and responsibly over time, but it does mean that the state should be avoiding adding debt that doesn't meet an urgent need.

Yet even this bond wouldn’t come close to fulfilling the anticipated expenses for construction. Supporters are expected to bring an additional bond measure forward in 2020.

That doesn’t mean there isn’t already need for new and fixed-up schools in the state, and some of it is urgent. But California is past the situation that prevailed some 15 years ago, when schools were in dire condition statewide. It’s tempting to say, let’s just pass this bond and then fix the funding system. But as long as California keeps patching the problem with more of the same old bond measures, there will be less motivation to fix an inefficient and often unfair system while the state’s bonded indebtedness piles up. Better to get it right, first.

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