Contact: Ron Roach (916) 441-0490
February 15, 1996
The debate on school construction bonds usually falls along these lines: Quality and quantity of classrooms for a growing number of students versus magnitude of bonded indebtedness.
These arguments are surfacing as voters ponder Proposition 203 on the March 26 statewide ballot. In the final analysis, however, there is overriding need for better education facilities in California, and this $3 billion bond measure would help meet that need.
This is the situation:
General obligation bonds, issued with the backing of the state's general tax revenues, reduce the amount for discretionary spending in the more than $40 billion state general fund (5.1% of the general fund is now needed to service bond debt, an amount that would decline to 4.6% in 1998-99 if no additional bonds are sold).
If sold at 7% interest over 20 years, the state would have to commit an average of $260 million a year in principal and interest to retire the bonds.
The school bond measure -- $2 billion for K-12 and $1 billion for community colleges and universities -- is among a package of $7.8 billion in bonds proposed by Governor Pete Wilson for the March and November statewide ballots.
Critics say the state's credit rating is down; that it is foolish to undertake additional debt.
However, good schools clearly are necessary to keep California competitive in the global marketplace. In fact, bond rating firms are known to include in their rating criteria a state's commitment to creating and maintaining needed public infrastructure -- including education -- that is conducive to economic growth.
Options for financing public schools are limited, and there are obvious reasons for maintaining statewide uniformity of funding to provide equity for all districts.
If statewide education bonds continue to be rejected by voters, greater pressure will be exerted on local school bonding with inequitable results. Small, high-income school districts are more likely to gain voter approval of these bonds. Larger, more diverse and poorer districts will have difficulty achieving the necessary two-thirds local vote. The education community will be compelled at this point to seek constitutional change to reduce local vote requirements, which may aggravate the problem of equality in school facilities funding.
To answer one frequently asked question, general obligation bonds at the state level do not necessarily trigger tax increases. Policy makers in Sacramento should be expected to redirect available resources to make ends meet. That is what they are elected to do. Economists taking a long-range look at the state's current economic recovery see added revenues available for infrastructure investments such as Proposition 203.
On the other hand, a local school construction bond measure directly impacts tax rates on property. Therefore, local bond measures should be, and are under current law, more difficult to pass.
Proposition 203 is supported by business in communities around the state as a worthwhile, essential investment in the future. As companies provide jobs, they must have an educated, qualified work force.
Better school buildings, of course, do not guarantee higher quality of education. New and modern classrooms should be part of an overall strategy to enhance performance of public schools.