2 Bills Clash on Funding New Classrooms

Early this year, the state’s housing developers launched a drive to rein in what they considered to be outrageous fees for school construction which, in fast-growing areas such as Brea or Huntington Beach in Orange County, can add $9,000 or more to the price of a new home.

That effort got a boost from Assembly Republicans, who backed a school construction bond proposal that included a cap on developer fees. But it went nowhere in the state Senate, where the Democratic majority supported a competing school bond measure sought by education groups.

Since then, however, two factors have altered the political equation and, in the waning days of the legislative session that ends Saturday, reignited the debate over the bills as well as over the broader issue of how the state finances the construction of public schools and colleges.

The first was the state’s launch in July of a $1-billion effort to reduce class size to 20 students in the primary grades, compounding the already daunting problem of finding room for 600,000 new students expected to swell school rolls statewide in the next five years.

And the second was a political power play by a group of Democratic legislators from Los Angeles County who, at the behest of the Los Angeles district and its teachers union, broke ranks with education groups who opposed any limit on developer fees.

By doing so, the Los Angeles district won a guarantee from conservative Republicans that it would receive as much as $300 million if voters approve a bond measure that also limits the ability of local school districts to set their own developer fees.

That deal added enough political clout to the bill, sponsored by Sen. Bill Leonard (R-Upland), to nudge it one step closer to a place on the November ballot.

“It was real clear that nothing was happening until the L.A. delegation took the position that there would be no bonds until L.A. and other districts like L.A. had more of a say,” said state Sen. Richard Polanco (D-Los Angeles), who organized his colleagues and became a co-sponsor of the Leonard bill.

But it also outraged school districts up and down the state. The districts charge that the giant Los Angeles system with using its political muscle to cut to the front of the line in the tight competition for school building money.

Those districts and other education groups, including representatives of the state’s colleges and universities, favor a competing bill, sponsored by Sen. Leroy Greene (D-Carmichael), that would put a $3.9-billion bond on the November ballot.

Greene has offered to set aside money for urban school districts and make some concessions to the building industry, which contends that high developer fees unfairly punish new home buyers.

“Their complaint is that if you’re building low-income housing, when you add the fees, it diminishes the number of people who can afford to buy,” Greene said. “But they always leave out the other side of the coin, which is that if there is no school there you can’t sell houses to families with children.”

The fate of both school bond proposals, which need to garner two-thirds majorities of each house, remains uncertain. But education groups hope that the need to provide classroom space for the highly popular effort to reduce class size will force many legislators to get on board before the deadline to get the issue on the November ballot.

The Leonard bill is opposed by just about every education group and district in the state, except for the Los Angeles Unified School District.

Not only were colleges and universities cut out of the action when amendments reduced the size of the bond by half, to $2 billion. They also oppose its limitations on developer fees, and its set-aside for Los Angeles also was seen by many as an effort to compensate for the district’s own miscues.

“This is a developer-relief bill buried in a bond,” said Owen Waters, a lobbyist for the influential California Teachers Assn. “While I love L.A., there are other urban school districts. It was a very poor deal and . . . it has nothing to do with what’s good for all the young people in the state.”

Currently, residential developers are supposed to be charged a maximum of $1.84 per square foot to pay for new schools. But court rulings have allowed school districts to charge far more if they can show that amount is insufficient to provide enough new classrooms. The builders want those rulings nullified, and in return, have offered to raise the limit to $2.84. Education groups want that amount raised even higher in return for giving up the right for local districts to charge more.

“We don’t like the Leonard bill at all because it removes any ability to use leverage with developers,” said James A. Fleming, superintendent of the Capistrano Unified School District in Orange County.

Unlike suburban districts, where there are vast tracts of open land yet to be developed, Los Angeles has little space for large residential projects, so has little stake in such fees. LAUSD lobbyist Ron Prescott said the district is more concerned with getting the $3.1 billion it needs to pay for school construction and modernization, particularly since it received only $30 million from the last bond issue, approved by voters in March.

“We’re not trying to hurt anyone else in the state but we have to worry about the kids in Los Angeles,” Prescott said.

But critics charge that the district failed to get a fair share of the last bond because it was late in applying for the funds, and they oppose setting money aside specifically for Los Angeles.

“The system has been set up to reward districts that are persistent and follow the rules,” said Mike Vail, senior director of facilities for the Santa Ana Unified School District. “Now districts which have waited for years to get to the top of the list may find that funding isn’t available because so much of it under this provision would be set aside for one district.”

Tim Coyle, the lobbyist for the California Building Industry Assn., said the willingness of the Los Angeles district to consider a cap on developer fees helped get talks moving.

“They’re saying, ‘Look, we’ve got unhoused kids and we don’t have a lot of time to fuss about this fee issue,’ particularly when it doesn’t benefit them,” Coyle said.

But Coyle said the true issue was far broader. In order to raise the massive amount of money needed for school construction--estimated at $17 billion even before the class size reduction program was announced, which created the need for 60,000 more classrooms--all sources of money need to be tapped, because developer fees alone won’t meet that demand.

That is why the builders favor rules, now included in the Leonard legislation, that would require school districts to raise money through local bond measures to pay part of the cost of school construction.