LWVC HOME - ELECTION '98 - VOTING Q&As - STATE PROPS - ABOUT LWV ON BALLOT MEASURES: ABOUT OUR ANALYSIS - LIST of PROPS - SMART VOTER

LEAGUE OF WOMEN VOTERS OF CALIFORNIA EDUCATION FUND Nonpartisan In Depth Analysis of Proposition 1A CLASS SIZE REDUCTION KINDERGARTEN-UNIVERSITY PUBLIC EDUCATION FACILITIES BOND ACT OF 1998.

See also: An Overview of State Bond Debt

THE QUESTION

Should the state sell $9.2 billion in general obligation bonds for construction and renovation of schools and higher education facilities and also place restrictions on sources of required local matching funds?

PROVISIONS

• Proposition 1A would provide over the next four years:
  • $6.7 billion for schools, K-12, broken down into
    • at least $2.9 billion for new construction related to growth
    • at least $2.1 billion for rehabilitation of older schools
    • up to $700 million for class size reduction
    • up to $1.0 billion for hardship situations

  • $2.5 billion for higher education facilities, including $165 million for new campuses.

• To qualify for a share of the bond money, districts would have to provide matching funds from local bonds, developer fees, or other local sources, to pay for half of the cost of new construction or 20 percent of the cost for most modernization projects.

• Developer fees would be capped at $1.93 per square foot of new homes they build.

• Exceptions to the developer fee cap are permitted if certain conditions are met; these include reasonable efforts to obtain funding from other sources, such as
  • attempting to pass a local school bond in the past four years—measure must have obtained more than 50 percent voter approval

  • passing local school bonds equal to 15 percent of district's bonding capacity.

• The power of cities and counties to turn down construction projects because of inadequate financing for schools would be suspended for eight years.

BACKGROUND

In the United States, responsibility for providing public education has traditionally rested with the states. In California, school districts obtained funds for buildings by incurring long-term debt in the form of local general obligation bonds repayable from property taxes assessed within the district. Passage of Proposition 13 in 1978 made this process more difficult and transferred responsibility for building school facilities to the state.

The State Department of Education estimates that $41 billion in K-12 school facilities are needed in the next ten years. The California Postsecondary Education Commission estimates that $13 billion in higher education facilities are needed in the next ten years.

Between 1986 and 1996, the voters of the state approved $8.8 billion in state general obligation bonds for K-12 school facilities programs. These funds have been used to fund the State School Building Lease- Purchase Program, which provides much of the money for school districts to buy land and construct or modernize school buildings in the state.

Since 1986 the voters approved nearly $3.3 billion in general obligation bonds for capital improvements at public higher education campuses. In addition, the Governor and the Legislature have provided about $2.4 billion for public higher education facilities from lease-payment bonds.

Developer fees

In 1986 the legislature authorized school districts to impose a direct fee on new residential development of $1.50 per square foot and on new commercial development of $0.25 a square foot. Adjusted for inflation these amounts are now $1.93 and $0.31 respectively. Proposition 1A caps developer fees at current amounts; it also specifies conditions where the cap could be exceeded.

In 1988 a series of appellate court decisions found that cities and counties are not bound by developer fee limitations and could deny development projects based on the inadequacy of school facilities. Some jurisdictions have negotiated developer fees as high as $9 a square foot. Proposition 1A would suspend the power to deny development because of inadequate schools for eight years.

Homebuyer and Renter Assistance

Legislation which placed Proposition 1A on the ballot will allocate $160 million over four years for programs to compensate homebuyers and renters for some of the costs of developer fees. These funds will assist homebuyers in areas of high unemployment, purchasers of homes costing less than $110,000, low- income first-time home buyers, and developers of rental housing for low-income tenants.

FISCAL EFFECT

The Legislative Analyst estimates that costs for debt payments would be $15.2 billion over 25 years, or $600 million per year.

A YES vote means the state could issue $9.2 billion in general obligation bonds for construction and renovation of schools and higher education facilities and establishes certain conditions for school districts to receive a share of the money.

A NO vote means the state would not be able to issue new bonds for construction and renovation of schools and higher education facilities.

SUPPORTERS SAY

• Proposition 1A ensures that essential school buildings and higher education facilities will be built and renovated.

• School districts would have to demonstrate community support by raising matching funds.

OPPONENTS SAY

• Proposition 1A provides a short term benefit for schools at the expense of a long-term gain for developers.

• This large bond measure is unnecessary given the surplus in the state budget.

SUPPORTERS AND OPPONENTS

Official ballot arguments in favor are signed by Larry McCarthy, President, California Taxpayers' Association; Lois Tinson, President, California Teachers Association; and Howard Owens, Director, Congress of California Seniors.

Official ballot arguments in opposition are signed by Assemblymember Tom McClintock; Lewis K. Uhler, President, National Tax Limitation Committee; and Edward J. "Ted" Costa, C.E.O., People's Advocate, Inc.

For more information:
Supporters: (916) 448-8577
Opponents: www.peoplesadvocate.org, (916) 448-9321

On Propositions: About our Analysis - List of Props - Smart Voter
LWVC Home - Election '98 - Voting Q&As - State Props - About Us

Last updated: September 13, 1998
Send comments and suggestions concerning this page to nvmk16b@prodigy.com