- California voters have said "yes" to Proposition 51, a bill that will provide a $9 billion bond to finance a statewide program of school construction projects, according to the Los Angeles Times.
- Passage of the measure will allow the state to match local funding for the billions of dollars in new school construction and repairs that are needed each year. The bill breaks down to $6 billion in general obligation bonds for K-12 construction and renovations, $1 billion for charters and vocational schools and $2 billion for community colleges.
- Prop 51 opponents, including California Gov. Jerry Brown, said the state already carried too much bond debt and could not afford the extra $500 million per-year payment. Principal and interest payments, at 5%, would total $17.6 billion over a 35-year pay-off period.
Critics of Prop 51 also said that it would unfairly benefit wealthy districts because the measure provides funding on a first-come, first-served basis. More affluent communities, they said, are more likely to be able to come up with matching funds before poorer areas can.
State officials have called the bill a "$9 billion down payment" on approximately $22 billion in projects. The California construction industry, as well as those in the education sector, supported the measure. Outgoing San Francisco Unified School District Superintendent Richard Carranza told the San Francisco Chronicle that even though the construction industry is backing Prop 51, that doesn't mean it isn't good for schools. The California Taxpayers Action Network said the measure was "created by the construction industry to benefit the construction industry."
Bonds are a common way to finance school construction, particularly with interest rates so low. For example, Baltimore recently announced a $1.1 billion school construction and renovation initiative backed by revenue bonds. The Maryland Stadium Authority has supervisory responsibilities for the program and will oversee the construction for seven school projects scheduled to begin this year. All together, the program will fund 28 new or renovated schools.
And just last month, the Chicago Board of Education approved an $840 million spend on new school construction. The costs of the bonds are expected to be higher than normal because of a recent Moody's downgrade of the board's bond rating, but support is strong, particularly from the construction industry.