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School Facilities Bond Update

The School Bond Initiative submitted to the Secretary of State in March is on a fast track to full qualification.  It already has received 25 percent of the required signatures (a milestone in the initiative process) and it is expected to fully qualify by early July.  This initiative is a $9 billion state bond measure ($7 billion for K-12 facilities).  It continues the existing School Facilities Program and contains no major reforms.

Meanwhile, two Assembly Bills AB 148 (Holden) and AB 1088 (O’Donnell) passed out of Assembly Education Committee yesterday on a partisan 5-0 vote (Republicans not voting).  The bills next will be heard in fiscal committee – Assembly Appropriations.  On a parallel path, Senate Bill 114 (Lieu) was passed in Senate Education Committee and is now in the Senate Appropriations Committee.  All three of these bills are works in progress and will be refined as they move through the Legislative process.

How do these efforts merge?

  • Once the school facilities bond initiative qualifies, serious negotiations will occur – probably in the fall.  The initiative can be amended with the agreement of the sponsors of the initiative, the Legislature and the Administration.  If there is no agreement, the initiative can go forward as written with no changes.  We are hopeful there will be some compromise among the groups, placing a bond on a 2016 ballot with some reforms that satisfy the Legislature and Administration.

What are the potential impediments to a 2016 bond?

  • One time dollars from the Governor’s budget – One of the proposals from the Legislative Analyst is to use one time May Revise dollars to fund the backlog of projects beyond bond capacity.  Although LAO proposes $1.2 billion to fund the current backlog, this amount would set a new precedent and provide Prop 98 dollars for school facilities, absorbing funds that would typically be used for Prop 98 purposes, more specifically to fully fund the LCFF.  In addition, the LAO is suggesting projects in the pipeline re-establish new eligibility, which would knock many of them out of the funding queue (these projects are complete and have received CDE and DSA approvals).  One time dollars for this purpose could be used as an argument against a 2016 bond, as it could be perceived as solving a portion of the problem.
  • Other competing initiatives on the 2016 ballot – There is an effort by many, including CTA, to extend the temporary Prop 30 taxes – which expire in the near future.  It is perceived that a school bond initiative would compete with this effort, which could cause serious opposition from some very influential groups.

We are hopefully optimistic that despite some of the roadblocks, we will see a school bond on the ballot in 2016.  We will continue to monitor all efforts and will keep you informed as things progress.

Susan Stuart, Partner
Capitol Advisors Group, LLC