No one disputes that passage of Proposition 55 will help our children. Many of our school facilities are old and need significant repairs. Some schools have bathrooms that don't work. Other schools have overcrowded classrooms. Many schools need to upgrade facilities to be able to use modern technology.

Our children and their teachers deserve facilities that promote learning. Prop. 55 would help. The $12.3 billion bond on the March ballot would fund part of the $16.3 billion in already approved school construction and repair projects. It would help modernize facilities, get rid of severe dilapidation and help build classrooms where they are most needed.

Matching funds

Voters in local school districts have taxed themselves to pass school bonds that depend on state matching funds. These districts need and deserve the matching funds that Prop. 55 will provide.

But Prop. 55 is just as important for the California economy.

Most of our job growth comes from the formation of new companies. And our economic growth depends particularly on attracting venture capital, entrepreneurs and highly talented people to start new businesses in California. Any business that is competing to attract talented and innovative people to work in California will ask two questions about education:

• Are the K-12 schools good enough that employees will feel comfortable enrolling their children?

• Does the public university system, including community colleges, support the workforce needs of my industry?

Modern school facilities are a critical part of a good educational system. Prop. 55 will help build modern facilities and provide funds for the expected rapid growth in higher education enrollment.

California cannot compete in the 21st century economy with school facilities that are below par. This is why major business groups support Prop. 55.

Some newspapers in California have urged readers to vote no on Prop. 55 because they favor Prop. 57, the deficit payback bond, and fear that the state cannot afford both bonds. I disagree.

A state should always invest for its future. Imagine if a company said, ``We would like to invest to keep our facilities competitive but we cannot afford to.'' In this case, not investing would be the road to bankruptcy. Similarly, imagine the joy we will bring to other states like Texas if we tell the worldwide investment community that California decides it ``cannot afford'' world-class educational facilities.

If both bonds pass, California would be at the high end of the prudent borrowing range, but not investing in educational facilities makes our kids the victims and is dangerous for the economy.

Postpone the bonds, we are told; postpone to a better time. But a year or two will make no difference in our debt capacity. Delay only hurts our kids and economy. The state treasurer, Phil Angelides, deals with Wall Street about California's bonds and debt and has said, ``California's economy is capable of supporting Prop. 55. It's a sound, prudent investment that will contribute to our future economic prosperity.'' I agree.

No Plan B for kids

Recently, there has been discussion of what ``Plan B'' is if the deficit payback bonds are not approved. The fact is that there are Plan B's if the deficit bond fails. The treasurer has proposed a Plan B, and the Legislature adopted a deficit bond plan in 2003. But there is no Plan B for our kids if we do not upgrade our school facilities.

This is an easy call. Vote yes on Prop. 55 for our kids and economy, however you choose to vote on Prop. 57.

STEPHEN LEVY is director of the Center for Continuing Study of the California Economy in Palo Alto. He wrote this column for the Mercury News.