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Another School Bond? Why It’s Easy to Say No!

LA WATCHDOG--While it is not easy to say no to State’s nine million public school and higher education students, it is easy to say no to the educational-industrial complex that is expected to spend over $10 million to buy our approval of a ballot measure authorizing the issuance of $15 billion of general obligation bonds.  

This is in addition to the $54 billion of bonds* that have been authorized since 1998 and $17 billion of local bond measures that are on upcoming ballots.  

The proceeds from this Proposition 13* (not to be confused with the real Proposition 13 that protects our homes and businesses from massive tax increases) offers something for everybody, including $9 billion for K-12 facilities and $6 billion for facilities of community colleges, Cal State, and University of California. 

There are many reasons to reject this proposition. 

For openers, this appears to be another example of just throwing money at the problem without developing detailed and well thought out plans on how these funds will improve educational outcomes for millions of students.  And “trust me” is not a plan. 

It also encourages more bad behavior as almost 60% ($5.2 billion) of the K-12 money ($9 billion) is for the “renovation and reconstruction” of existing facilities.  What this really means is that these new funds will be used to fund deferred maintenance that should have been addressed in the school districts’ annual budgets. This bailout only encourages future deferrals and budget shenanigans.  

A prime example of no plan and deferred maintenance is our Los Angeles Unified School District, so much so that 54% of voters rejected Measure EE, its $500 million parcel tax, in June of 2019. 

The Official Voter Information Guide stated that the annual cost to pay off the bonds is about $740 million per year for the next 35 years.  But these bonds should be amortized over 25 years, a period more aligned with the useful life of the facilities that are being financed.  If amortized over 25 years, the annual cost would be about $1 billion. 

The proposed law also caps administrative costs at 5%. But 5% of $15 billion is $750 million, which works out to be $20 to $25 million a year, a staggering amount when you consider that there is already an existing organization overseeing the previous bond measures. 

There is also the issue of transparency.  How are we going to be able to understand the nuances of the 7,400 word ballot measure and the 30,500 word enabling legislation (AB 48 - The Public Preschool, K–12, and College Health and Safety Bond Act of 2020)? More than likely, there are numerous loopholes that the educational-industrial complex will be able to take advantage of that may not be in the best interests of the students and taxpayers. 

Furthermore, the ballot measure also does not provide meaningful independent oversight, exposing us to the inefficient use of our money.  

While the ballot measure reserves funds for smaller school districts, provides for a sliding scale of benefits for less fortunate school districts, and eliminates the first-come, first-served approach to awarding funds, there are other clauses that favor developers, limiting important fees payable to local school districts.  There are also clauses that favor projects that include the use of project labor agreements that drive up the costs and that allow for school districts to incur increased levels of debt. 

In addition to this $15 billion bond measure, that with interest will cost $27 billion (if not more), the political and educational establishments have placed the Split Roll on the November ballot.  This will eliminate the protections of the real Prop 13 and value commercial and industrial properties based on their market value, not the cost of the property.  This will raise $12 billion for local governments (of which about $5 billion will be allocated to local school districts), a cost that will be passed along to us via higher prices and rents. 

An alternative to this $15 billion bond measure is for the State to dedicate a portion of its surplus (say $1.5 billion a year for the next six years) to the K-12 school districts and community colleges while having Cal State and the University of California issue their own bonds.  

On or before Super Tuesday (March 3), say NO to the educational-industrial complex and other special interests and vote NO on Proposition 13.

 

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$54 Billion of State General Obligation Bonds for Education

  • 1998 (Prop 1A, $9.2 billion)
  • 2002 (Prop 47, $13.1 billion)
  • 2004 (Prop 55, $12.3 billion)
  • 2006 (Prop 1D, $10.4 billion)
  • 2106 (Prop 51, $9 billion) 

 

The official name of the proposition is Proposition 13: Authorizes Bonds for Facility Repair, Construction, and Modernization at Public Preschools, K-12 Schools, Community Colleges, and Universities.

 (Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and is the Budget and DWP representative for the Greater Wilshire Neighborhood Council.  He is a Neighborhood Council Budget Advocate.  He can be reached at:  lajack@gmail.com.)

-cw