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LEAGUE OF WOMEN VOTERS OF CALIFORNIA EDUCATION FUND	Nonpartisan Pros & Cons of Proposition 1A CLASS SIZE REDUCTION KINDERGARTEN-UNIVERSITY PUBLIC EDUCATION FACILITIES BOND ACT OF 1998.
	Legislative Constitutional Amendment

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?

THE SITUATION

The Department of Education estimates that in the next ten years $41 billion will be needed for K-12 schools and $13 billion for higher education facilities.

Since 1986, the voters have approved $8.8 billion in general obligation bonds for K-12 school construction and renovation, and nearly $3.4 billion 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.

Local funds for K-12 school facilities come from three sources:

• local general obligation bonds, which were the traditional sources of local funding until Proposition 13 was passed in 1978. Since then many school districts have been unable to get the required 2/3 voter approval for bond issues

• special assessment districts, which cities, counties, special districts, and school districts form to levy special taxes to fund a wide variety of facilities and services

• development fees--school districts can impose a direct fee on residential and commercial development of $1.93 and $0.31 , respectively.

As a result of a series of appellate court decisions in 1988, called the Mira cases, school districts can also reject new developments because of inadequate school facilities.

PROVISIONS

• During the next four years, Proposition 1A would provide a total of $6.7 billion for schools, specifically for K-12:
  • $2.9 billion for new construction related to growth
  • $2.1 billion for rehabilitation of older schools
  • $700 million for class size reduction
  • $1 billion for hardship situations.

• The total amount spent for public school construction would be $10.1 billion: $6.7 in Proposition 1A funds and $3.4 in local matching funds.

• The Act would also provide $2.5 billion for higher education facilities, including $165 million for new campuses.

• Districts would have to provide local matching funds to pay for half of the cost of new construction, and 20 percent of the cost for most modernization projects.

• Developer fees would be capped at the present rate of $1.93 per square foot for new homes, with exceptions permitted under certain conditions, including a district's reasonable efforts to obtain funding from other sources.

• The power of school districts to turn down construction projects because of inadequate financing for schools (Mira powers) would be suspended for eight years.

• State funds would also be provided to offset all or part of the cost of some developer fees for homebuyers in high unemployment areas, buyers of homes costing less than $100,000, low-income or very low-income first-time homebuyers, and developers of rental housing for very low-income tenants.

• A majority vote is required for passage of Proposition 1A.

The Legislative Analyst estimates that the cost for debt payments would be $15.2 billion over 25 years or about $600 million per year. In addition, the homebuyer and renter assistance program would cost $40 million a year for four years ($160 million).

SUPPORTERS SAY

• Essential school buildings and higher education facilities would be built and renovated without raising taxes.
• School districts would have to demonstrate community support by raising matching funds.

• Proposition 1A is three times larger than the largest bond measure in California's history.
• This measure obligates a family of four to repay $2,000 in taxes to retire this debt.

(Nonpartisan analysis prepared by the League of Women Voters of California Education Fund.)

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Last updated: September 7, 1998
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