$10 billion school construction funding in line with $30 billion projected California state budget surplus

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Palm springs school
Palm Springs Unified School District Agua Caliente Elementary School: Image credit BakerNowicki Design Studio posted on the site of the California Office of Public School Construction

A projected $30 billion California state budget surplus could create an opportunity for a dedication of $10 billion to repair and expand Kindergarten to Grade 12 school facilities.

The Daily Democrat (DD) reports that the money “would put a big dent in building needs that have grown since voters defeated a $15 billion bond for K-12 schools and colleges in March 2020. These include an immediate need to modernize school buildings to accommodate transitional kindergarten and community schools.”

However, the funds allocation could derail a proposed $12 billion school building bond issue planned for a ballot later this year.

In addition to the K-12 schools funding, additional funds would go for university and college projects, with $10 billion for transportation projects, according to Phil Ting (D-San Francisco), who chairs the Assembly Budget Committee.

“How the money for transitional kindergarten to 12th grade would be distributed — whether through grants or tied to matching local contributions, as under the current facilities program”— would be negotiated in coming months with the Senate and Gov. Gavin Newsom, who will propose his version of the 2022-23 budget in January, the published report says.

“What’s also unclear is whether the surplus funding would supplement or substitute for a proposed $12 billion TK-12 and community college bond issue that the Assembly passed in June, with the intent of placing it before voters next year,” DD reported. “Ting said his inclination is that the $10 billion surplus appropriation could be “in lieu of” a school construction bond in 2022. It’s partly a matter of timing ­— determining the odds of passage of a bond on a crowded state ballot amid economic uncertainty; there’s been no decision on proceeding, Ting said.”

Assembly Bill 75, authored by Assemblyman Patrick O’Donnell, D-Long Beach, passed with a vote of 69-1, but it has yet to be heard in the Senate, which approved its own $15 billion school bond proposal in June: Senate Bill 22, authored by Sen. Steve Glazer, D-Orinda. It includes $6 billion for higher education facilities.

Voters rejected the most recent state education bond proposal on March 3, 2020, in what is described as the first rejection of a state construction bond in a quarter-century. The vote was just as the COVID-19 pandemic was starting, and voters may have confused the law with another Proposition 13, an anti-tax constitutional amendment passed in 1978.

A second challenge relates to the “Gann limit”, a provision limiting state and local government spending that passed in 1979. Infrastructure projects are exempted from the rules, limiting inflation-adjusted per-person government spending to 1978‑79 levels. “Once state tax revenue exceeds that level over a two-year period, the Legislature is required either to lower taxes or split the money between taxpayer rebates and additional funding for K-12 schools and community colleges,” DD reported.

“There’s a valid argument for investing one-time money for infrastructure projects and completing commitments made last year before adding new initiatives,” said Edgar Zazueta, senior director of policy and governmental relations for the Association of California School Administrators. However, he said that a school bond would also be popular, and he said he’s concerned the Assembly proposal might undermine support for it.

Troy Flint, chief information officer for the California School Boards Association, agreed, DD reported. “We already have, through bonds, a process for financing school facilities that has traditionally been popular and effective. We would be hesitant to restrict money for facilities instead of letting districts use Gann funding however it makes the most sense in their communities.”

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