School Construction Bonds: A Matter of Fairness

Governor Jerry Brown announced in his recent budget proposal that California should stop issuing school construction bonds. This came as a bit of a surprise to many. School bonds generally cruise through the State Legislature and very rarely fail at the ballot box. The State Assembly unanimously passed a $9 billion bond initiative last year before it stalled with the Governor’s public opposition (Jim Miller, “California School Builders, Others to Gather Signatures for November 2016 Bond Measure,” Sacramento Bee. January 14, 2015). Since 2000, when school districts were first able to pass local school bonds with a 55% vote rather than a two-thirds vote, 80% of bond proposals have been successful (George Skelton, “Governor Should Bend on School Bonds,” editorial, Los Angeles Times. January 18, 2015). With such clear support for public education funding, school construction bonds seem like an unusual target for cutbacks.

Some have interpreted the move to mean the Governor is giving short shrift to public education out of fear of taking on more debt. After all, the state has issued some notably immense bonds in the past several years, including a $10 billion bond passed in 2008 for the state’s high-speed rail project and a $7.5 billion bond passed in 2014 primarily to help shore up the state’s water infrastructure.

But the move by the Governor is not about fear of debt. It is about eliminating another aspect of inequity that exists in state education funding and that works against struggling school districts with the most at-risk students.

The current policy of using state bonds to fund school construction projects involves little discretion over whether these funds go to districts where they are most needed, or would be put to the best use. In its essence, the policy is a first-come, first-served one, in which school districts that can afford to pay for facilities program managers to develop and oversee new construction projects are the winners, while districts unable to pay for such personnel—the ones in the most need of help from the state—lose out, and have to rely more heavily on local bonds and fees.

A dollar of state investment in poorer districts will have a greater impact than a dollar of state investment in wealthier ones. Poorer districts may be lacking in even basic needs such as sufficiently large classrooms, and state construction funds are a crucial source of money to address these issues. Getting state funding to where it is needed most is vital to ensuring that communities in population centers like Los Angeles or the East Bay do not fall behind. As the state’s economy becomes more and more service-oriented, human capital is becoming an increasingly critical resource. California must have a well-educated workforce to remain competitive, and that workforce cannot come solely from students in the best-funded districts.

The state has already come a long way. In the 1970s, Serrano vs. Priest struck down school financing based primarily on assessed valuation. And just last year, a Los Angeles Superior Court judge ruled that teachers assessed as incompetent in struggling districts are unable to receive tenure protections after as little as two years of work. With the governor’s new proposal, California has another opportunity to help its most in-need students.

Under the proposed system, every district would depend primarily on local bonds and fees to fund school construction projects. However, that doesn’t mean the state will step out of funding school construction entirely. Under the proposal, districts that are unable to sufficiently draw local dollars to fund projects would receive supplementary support from the state. From this perspective, the new policy is in the same spirit as the Governor’s ‘Local Control Funding Formula’ for K-12 education from last year’s budget. That shifts much of the responsibility for education spending onto school districts to help reduce unnecessary state spending, then applies state funds where needed to help the districts that receive too little local funding.

California has spent years trying to get its finances in order, and it still has a long way to go. Issuing more bonds moves the state farther away from that goal. State support for school districts is not in itself a problem, especially given the importance of educational attainment on broader economic growth, but the current system gives well-funded and well-organized school districts little incentive to draw funding from their local community. And schools that are poorly funded or poorly organized, and who stand to gain the most from state support, may not get the help they need. Governor Brown has put the onus on better-off school districts to support their own new construction. With local school bonds highly likely to pass the vote, it’s hard to believe these districts won’t continue to get all the funds they need.