State Missing a Bet on School Bonds

For such bold gamblers, this Capitol crowd sure has been bumbling around on bonds.

Mumbling too. No clear voice.

They’ve quietly agreed to ask California voters to approve the largest school construction bond issue in history next year, a risky move during a recession. But until Wednesday, they hadn’t decided on which ballot. They still haven’t figured out precisely how big a bond or the vital spending details--specifically, how to resolve L.A.’s problem.

Put simply, by the time L.A. can acquire scarce land for a new school and apply for state construction money, all the funds usually have been gobbled up by suburban or rural districts where property is no problem. That has been frustrating L.A. for years.

The first decision--which ballot--suddenly was made for the procrastinating pols by the calendar. It’s now too late to place a school bond on the March primary ballot. So the proposal will go to voters in November.

Oh, if the Legislature had reported back to Sacramento on Monday and if it had passed a bond measure by next Wednesday--and if Gov. Gray Davis had then won a lawsuit against Secretary of State Bill Jones, who insists the deadline was Nov. 26--there could have been a March school bond measure. But everybody gave up.

Too bad. A modest $4-billion school bond combined with Senate Leader John Burton’s $2-billion bond to finance affordable housing could have been pitched in March as an economic stimulus package. Then a second $6-billion school bond could have been offered voters in November. Davis passed the word to legislators last Friday that’s what he wanted. Much too late.

Many legislators viewed Davis’ pronouncement as pure posturing--trying to look like he was doing something to stimulate the economy while buffing his image as an education governor, mitigating his cuts in school funds forced by a gaping budget deficit.

Except for lame-duck Assembly Speaker Bob Hertzberg (D-Sherman Oaks)--author of the school bond bill--there was little interest by legislators in returning to Sacramento before January.

More important, the California Teachers Assn.--the cash cow for any school bond campaign--was leery of the conservative electorate that a hard-fought Republican gubernatorial primary would produce.

“The bottom line is: We’re missing an opportunity,” says a Davis advisor. “But it’s not the end of the world.”

Davis now is proposing a 10-10-10 scheme: a $10-billion bond next November, followed by $10-billion ballot measures in 2004 and 2006. The Legislature would approve all three bonds in one bill.

Education interests earlier had been suggesting a bond in the $20-billion range. In September, before it recessed, the Legislature was contemplating two $11.4-billion bonds.

To me, even $10 billion seems to be pushing voters.

Some perspective: The biggest previous school bond was $9.2 billion in 1998, which passed with 62% of the vote. Before that, the largest total of all bonds on one ballot was $5.9 billion in June 1994, when California was emerging from recession. All the bonds failed, including a $1-billion school measure.

The CTA has a poll showing that voters aren’t bothered so much by the size of a school bond; they just want to make sure it’s justified. It’s not the money, it’s the message.

Myself, I’m skeptical. A double-digit bond seems too risky a gamble for crammed schools. I’d go with a proven commodity: $9.2 billion. Better yet, no decimals: $9 billion even. Then maybe $10 billion in 2004 and $11 billion in 2006.

Dollars do matter. So does psychology. There’s a reason why merchants price items at $9.90 rather than $11.40.

Davis would prefer a single-digit bond. But that’s a minority view at the Capitol. The other players are bigger gamblers.

The governor, however, is insisting that the total of all bonds next year not exceed $15 billion. It’s long-term borrowing, but repayment does burden the cash account--draining up to $70 million annually for a $1-billion bond.

The need is indisputable: an estimated $24 billion for K-12 facilities over the next five years. California must build almost one school a day to keep up. That old $9.2-billion bond issue will run out next summer.

L.A. lawmakers are pushing for a special pot of money for urban districts with expensive, scant land.

“Everybody in L.A. has had it,” says Assemblywoman Jackie Goldberg (D-Los Angeles), a former school board member who is on the bond negotiating committee. “If this next bond doesn’t begin to address the needs of L.A., it won’t pass. The party’s over.”

In truth, they’re only about one week away from reaching a compromise. But that’s where they were in September. And it’s probably where they’ll be next June.