School District Can’t Legally Pay Bond Firms for Pre-Election Campaign Activity, Attorney General Opines

A school district or community college district that contracts with an entity for services related to a bond election campaign is in violation of the California Constitution and statutory restrictions on the use of tax dollars if the services can be fairly characterized as campaign activity, Attorney General Kamala Harris stated in a formal opinion published January 26.

Opinion No. 13-304 answers five questions related to school districts’ use of tax dollars on pre-election services, and takes a dim view of the common practice in which districts contract with third-party firms that provide free or discounted pre-election services – including polling likely voters, arranging community forums, providing information to the election campaign, and preparing the ballot question itself – in exchange for the district’s promise to select the firm to provide bond services if the bonds are approved by voters.

“A school or community college district violates prohibitions against using public funds to advocate passage of a bond measure if the district enters into an agreement with a municipal finance firm under which the district obtains pre-election services (of any sort) in return for guaranteeing the firm an exclusive contract to provide bond-sale services if the election is successful, under circumstances where (a) the district enters into the agreement for the purpose (sole or partial) of inducing the firm to support the contemplated bond-election campaign or (b) the firm’s fee for the bond-sale services is inflated to account for the firm’s campaign contributions and the district fails to take reasonable steps to ensure the fee was not inflated,” the attorney general stated.

The opinion was requested by State Treasurer John Chiang.

February 4, 2016

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