Building schools in flux
Sacramento Bee 1/23/07
For almost a decade, the state and local districts have split the costs of building new schools 50-50. But the governor has proposed changing that formula to require that locals now cough up 60 percent of the costs.
That proposal has been met with uneasiness among local government and schools officials, and developers.
"It means either there is going to be fewer schools or the schools that are built will not have adequate facilities," said Tom Duffy, legislative director for the Coalition for Adequate Student Housing, an umbrella group representing both schools and builders. "Districts are already not receiving the 50 percent they are promised and now you are saying you want to cut it back to 40 percent?"
Schwarzenegger administration officials defended the proposal, saying that local governments are faring better now than in the past and that school districts are already slated to receive more General Fund money in the future.
"Since school districts are going to be getting a greater share of the state's General Fund in the coming years, and in a time when they are seeing a growth in the local property tax revenues, we believe that this adjustment to the sharing ratio is important," said H.D. Palmer, a spokesman for the Department of Finance.
Schwarzenegger also proposed flipping the ratio for funding school modernization, from 60-40, with the majority paid by the state, to 40-60, with the majority covered by locals.
Critics say the whole plan looks like a way to foist more costs on local government.
"It seems to be a cost shift from the state to the locals, and we think that is a bad idea," said Assemblyman Gene Mullin, D-South San Francisco, chair of the Assembly Education Committee. "I don't see any support for it from the Democratic side because it is going to cut into operating revenues and I don't see any Republican support either because it could cause local taxes to rise. I don't see where there would be an ounce of support from anybody."
But at least one powerful group, the California Teachers Association, which has spent millions in recent years to pass education bonds, is officially neutral on the issue, with a spokeswoman saying that lawyers for the teachers union are still reviewing the plan.
Still, Kevin Gordon, an education consultant whose clients include local school officials, says the plan is "such a significant change in policy and would have such significant implications for slowing school construction that I predict it will go down to a sound defeat."
"The proposal threatens to unravel the sensitive balance of the deal that was crafted in 1998," said Gordon, president of School Innovations & Advocacy, referring to the financing plan negotiated by then-Speaker and current Los Angeles Mayor Antonio Villaraigosa.
Since that landmark 1998 deal established a 50-50 cost-sharing split, with developer fees helping fund the local portion of the construction costs, California voters have approved nearly $45 billion in education bonds.
But the Republican governor, who campaigned for a $10.4 billion education bond last November, announced in his State of the State address earlier this month that still more was needed.
"That small child with the sticky hands starting the first day in kindergarten is the foundation of California's economic power and leadership," he said.
Schwarzenegger has proposed two more education bonds, in 2008 and 2010, valued at $11.6 billion.
And with the new revised funding formula, that bond money would go further toward new building schools.
In Schwarzenegger's proposed 2008 education bond, roughly $3 billion would be dedicated toward new schools. At the 50 percent match, that amounts to $6 billion of new buildings. But with the proposed 40 percent match, it totals a much more substantive $7.5 billion worth of new school construction -- with local districts and developers footing the bill for the difference.
But any such changes to the 1998 funding deal -- after which no statewide education bond has been rejected -- spark distrust.
"This has been a very successful infrastructure program," said Richard Lyon, senior lobbyist for the California Building Industry Association. "Any attempt to mess with a good thing would not be met very favorably by the building industry."