Proposition 51: School Bonds. Funding for K-12 School and Community College Facilities.

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Passed
The Question: 

Should the state sell $9 billion in general obligation bonds to be used for upgrading public education facilities?

The Situation: 

The state funds school projects through general obligation bonds, all of which must be approved by voters. During 1998-2006, voters approved $40 billion of such bonds. The state’s 2016-17 payment to service debts from those previous bonds amounts to $2.4 billion for K-12 schools and $300 million for community colleges. Virtually all of the funds from those previously-issued bonds have been spent.

Under the state’s existing School Facilities Program, schools submit project proposals to the state.  The proposals may be to buy land, construct buildings, and/or renovate existing buildings. In most cases, schools that receive state funding must contribute local funding.  Local funding is either 40 or 50 percent of project costs, depending on the type of project.  Schools that lack sufficient funding may apply for additional grant funding, up to 100 percent of the project cost. There is no similar grant funding structure for community colleges.                                                                                                           

School and community college districts may sell local general obligation bonds to help cover the cost of facility projects, which also must be approved by local voters. Since 1998, school and community college districts have sold about $64 billion and $21 billion, respectively, in local general obligation bonds for facility projects.

The Proposal: 

Prop. 51 would authorize the state to sell $9 billion in general obligation bonds: $6 billion to modernize old, or to construct new, K-12 public school facilities; $2 billion for community college facilities; and $1 billion for charter schools and vocational facilities.

Fiscal Effect: 

The state likely would issue these bonds over a period of about five years and make payments from the General Fund over a period of about 35 years. If the bonds were sold at an average interest rate of five percent, the total cost to pay off the bonds would be $17.6 billion, including principal and interest. The average payment per year would be about $500 million, less than half of one percent of the state’s current General Fund budget. 

Given the availability of additional state funds, some local school and community college districts might raise and spend more locally, while others might raise and spend less locally.

What a YES or NO Vote Means
A YES Vote Means: 

The state could sell $9 billion in general obligation bonds for education facilities ($7 billion for K-12 public school facilities and $2 billion for community college facilities).

A NO Vote Means: 

The state would not have the authority to sell new general obligation bonds for K-12 public school and community college facilities.

Support & Opposition
Supporters Say: 
  • A statewide bond is the best option for meeting California’s school construction needs. Local voters will still be in control of how the bond funds are spent.
  • Many schools and community colleges throughout the state have outdated facilities and need repairs to meet basic health and safety standards.                                               
Opponents Say: 
  • Local school bond measures work better than statewide bonds. Local control is the best way to minimize government waste. 
  • Prop. 51 funding would go to those first in line.  Large, wealthy districts would receive the lion’s share of funding, because they have the resources to quickly apply for the funding.